Document:

exhibit1033_spa.htm

    Exhibit
10.33

    
    

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated as of
August 7, 2008, by and among Cytori Therapeutics, Inc., a Delaware corporation
(the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively,
the “Purchasers”).

     

    RECITALS

     

    A.           The
Company and each Purchaser is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 of Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.

     

    B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
to sell, upon the terms and conditions stated in this Agreement, that aggregate
number of (i) shares of common stock, par value $0.001 per share (the “Common Stock”), of the
Company, set forth below such Purchaser’s name on the signature page of this
Agreement (which aggregate amount for all Purchasers together shall
be 1,825,517 shares of Common Stock and shall be collectively referred to
herein as the “Shares”)
and (ii) warrants, in substantially the form attached hereto as Exhibit A (the “Warrants”), to acquire up to
that number of additional shares of Common Stock equal to 50% of the number of
Shares purchased by such Purchaser (rounded up to the nearest whole share) (the
shares of Common Stock issuable upon exercise of or otherwise pursuant to the
Warrants collectively are referred to herein as the “Warrant
Shares”).   The Shares, Warrants and Warrant Shares
collectively are referred to herein as the “Securities”.

     

                       C.           The
Company has engaged Piper Jaffray & Co. as its exclusive placement agent
(the “Placement Agent”)
for the offering of the Shares and Warrants on a “best efforts”
basis.

     

                  D.           Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit B (the
“Registration Rights
Agreement”), pursuant to which, among other things, the Company will
agree to provide certain registration rights with respect to the Shares and
Warrant Shares under the Securities Act and the rules and regulations
promulgated thereunder and applicable state securities laws.

     

                    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchasers hereby agree as
follows:

     

     

    ARTICLE
I.

    DEFINITIONS

     

                    1.1           Definitions. In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms shall have the meanings indicated in this
Section 1.1:

     

                         “Action” means any action,
suit, inquiry, notice of violation, proceeding (including any partial proceeding
such as a deposition) or investigation pending or, to the Company’s Knowledge,
threatened in writing against the Company, any Subsidiary or any of their
respective properties or any officer, director or employee of the Company or any
Subsidiary acting in his or her capacity as an officer, director or employee
before or by any federal, state, county, local or foreign court, arbitrator,
governmental or administrative agency, regulatory authority, stock market, stock
exchange or trading facility.

     

                         “Affiliate” means, with
respect to any Person, any other Person that, directly or indirectly through one
or more intermediaries, Controls, is controlled by or is under common control
with such Person, as such 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
terms
are used in and construed under Rule 405 under the Securities Act. With respect
to a Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser.

     

                         “Agreement” shall have the
meaning ascribed to such term in the Preamble.

     

                         “Business Day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business.

     

                         “Buy-In” has the meaning set
forth in Section 4.1(f).

     

                         “Buy-In Price” has the meaning
set forth in Section 4.1(f).

     

                         “Closing” means the closing of
the purchase and sale of the Shares and Warrants pursuant to this
Agreement.

     

                        “Closing Bid Price” means,
for any security as of any date, the last closing price for such security on the
Principal Trading Market, as reported by Bloomberg, or, if the Principal Trading
Market begins to operate on an extended hours basis and does not designate the
closing bid price then the last bid price of such security prior to
4:00:00 p.m., New York City Time, as reported by Bloomberg, or, if the
Principal Trading Market is not the principal securities exchange or trading
market for such security, the last closing price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price is reported for such security by Bloomberg, the average of the bid prices
of any market makers for such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price of such security on such date shall be
the fair market value as mutually determined by the Company and the holder. If
the Company and the holder are unable to agree upon the fair market value of
such security, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination to an independent, reputable
investment bank selected by the Company and approved by the holder or (b) the
disputed arithmetic calculation to the Company’s independent, outside
accountant. The Company shall cause at its expense the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than ten Business
Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

     

                         “Closing Date” means the
Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all of the conditions set forth
in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as
the parties may agree.

     

                         “Commission” has the meaning
set forth in the Recitals.

     

                         “Common Stock” has the meaning
set forth in the Recitals, and also includes any securities into which the
Common Stock may hereafter be reclassified or changed.

     

                         “Common Stock Equivalents”
means any securities of the Company or any Subsidiary which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.

     

                         “Company Counsel” means DLA
Piper US LLP.

     

                         “Company Deliverables” has the
meaning set forth in Section 2.2(a).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                         “Company’s Knowledge” means
with respect to any statement made to the knowledge of the Company, that the
statement is based upon the actual knowledge of the executive officers of the
Company having responsibility for the matter or matters that are the subject of
the statement.

     

                         “Control” (including the terms
“controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

     

                         “Disclosure Materials” has the
meaning set forth in Section 3.1(h).

     

                         “Effective Date” means the
date on which the initial Registration Statement required by Section 2(a) of the
Registration Rights Agreement is first declared effective by the
Commission.

     

                         “Effectiveness Deadline” means
the date on which the initial Registration Statement is required to be declared
effective by the Commission under the terms of the Registration Rights
Agreement.

     

                         “Environmental Laws” has the
meaning set forth in Section 3.1(l).

     

                         “Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.

     

                         “GAAP” means U.S. generally
accepted accounting principles, as applied by the Company.

     

                         “Indemnified Person” has the
meaning set forth in Section 4.9(b).

     

                         “Intellectual Property” has
the meaning set forth in Section 3.1(r).

     

                         “Irrevocable Transfer Agent
Instructions” means, with respect to the Company, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit F ,
executed by the Company and delivered to and acknowledged in writing by the
Transfer Agent.

     

                         “Lien” means any lien, charge,
claim, encumbrance, security interest, right of first refusal, preemptive right
or other restrictions of any kind.

     

                         “Material Adverse Effect”
means any of (i) a material and adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, business or financial condition of the
Company and the Subsidiaries, taken as a whole, or (iii) any adverse impairment
to the Company's ability to perform in any material respect on a timely basis
its obligations under any Transaction Document, except that any of the
following, either alone or in combination, shall not be deemed a Material
Adverse Effect: (A) effects caused by changes or circumstances affecting general
market conditions in the U.S. economy or which are generally applicable to the
industry in which the Company operates, (B) effects resulting from or relating
to the announcement or disclosure of the sale of the Securities or other
transactions contemplated by this Agreement, or (C) effects caused by any event,
occurrence or condition resulting from or relating to the taking of any action
in accordance with this Agreement.

     

                         “Material Contract” means any
contract of the Company that was filed (or should have been filed) as an exhibit
to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation
S-K.

     

                         “Material Permits” has the
meaning set forth in Section 3.1(p).

     

                         “New York Courts” means the
state and federal courts sitting in the City of New York, Borough of
Manhattan.

     

                         “Outside Date” means the
thirtieth day following the date of this Agreement; provided that if such day is
not a Business Day, the first day following such day that is a Business
Day.

     

                         “Person” means an individual,
corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                         “Principal Trading Market”
means the Trading Market on which the Common Stock is primarily listed on and
quoted for trading, which, as of the date of this Agreement and the Closing
Date, shall be the NASDAQ Global Market.

     

                         “Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

     

                         “Purchase Price” means $6.00
per unit.

     

                         “Purchaser Deliverables” has
the meaning set forth in Section 2.2(b).

     

                         “Purchaser Party” has the
meaning set forth in Section 4.9(a).

     

                         “Registration Rights
Agreement” has the meaning set forth in the Recitals.

     

                         “Registration Statement” means
a registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Purchasers of the Registrable
Securities (as defined in the Registration Rights Agreement).

     

                         “Required Approvals” has the
meaning set forth in Section 3.1(e).

     

                         “Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

     

                         “SEC Reports” has the meaning
set forth in Section 3.1(h).

     

                         “Secretary’s Certificate” has
the meaning set forth in Section 2.2(a)(vi).

     

                         “Securities Act” means the
Securities Act of 1933, as amended.

     

                         “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and
all types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in
Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated
brokers.

     

                         “Subscription Amount” means
with respect to each Purchaser, the aggregate amount to be paid for the Shares
and Warrants purchased hereunder as indicated on such Purchaser’s signature page
to this Agreement next to the heading “Aggregate Purchase Price (Subscription
Amount)”.

     

                         “Subsidiary” means any entity
in which the Company, directly or indirectly, owns sufficient capital stock or
holds a sufficient equity or similar interest such that it is consolidated with
the Company in the financial statements of the Company.

     

                         “Trading Affiliate” has the
meaning set forth in Section 3.2(h).

     

                         “Trading Day” means (i) a
day on which the Common Stock is listed or quoted and traded on its Principal
Trading Market (other than the OTC Bulletin Board), or (ii) if the Common
Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a
day on which the Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (iii) if the Common Stock is not
quoted on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or
any similar organization or agency succeeding to its functions of reporting
prices); provided ,
that in the event that the Common Stock is not listed or quoted as set forth in
(i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.

     

                         “Trading Market” means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or the OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                         “Transaction Documents” means
this Agreement, the schedules and exhibits attached hereto, the Warrants, the
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions and
any other documents or agreements executed in connection with the transactions
contemplated hereunder.

     

                         “Transfer Agent” means
Computershare Investor Services, or any successor transfer agent for the
Company.

     

      “Warrants” has the meaning set
forth in the Recitals to this Agreement.

     

           “Warrant Shares” has the
meaning set forth in the Recitals to this Agreement.

     

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1           Closing.

     

    (a)           Amount.  Subject
to the terms and conditions set forth in this Agreement, at the Closing the
Company shall issue and sell to each Purchaser, and each Purchaser shall,
severally and not jointly, purchase from the Company, such number of Shares
equal to the quotient resulting from dividing (i) the Subscription Amount for
such Purchaser by (ii) the Purchase Price, rounded down to the nearest whole
Share.  In addition, each Purchaser shall receive a Warrant to
purchase that number of Warrant Shares equal to 50% of the number of Shares
purchased by such Purchaser, as indicated below such Purchaser’s name on the
signature page to this Agreement.  The Warrants shall have an exercise
price equal to $8.50 per Warrant Share.

     

    (b)           Closing.  The
Closing of the purchase and sale of the Shares and Warrants shall take place at
the offices of Goodwin Procter LLP, The New York Times Building, 620 Eighth
Avenue, New York, New York, on the Closing Date or at such other locations or
remotely by facsimile transmission or other electronic means as the parties may
mutually agree.

     

    (c)           Form of Payment;
Escrow.  Unless otherwise agreed to by the Company and a
Purchaser (as to itself only), on or prior to the Business Day immediately prior
to the Closing Date, each Purchaser shall wire its Subscription Amount, in
United States dollars and in immediately available funds, to a non-interest
bearing escrow account established by the Company and the Placement Agent with
JPMorgan Chase Bank, N.A. (the “Escrow Agent”) as set forth
on Exhibit H
hereto (the aggregate amounts received being held in escrow by the Escrow Agent
are referred to herein as the “Escrow
Amount”).  Unless otherwise agreed to by the Company and a
Purchaser (as to itself only), on the Closing Date, (a) the Company and the
Placement Agent shall instruct the Escrow Agent to deliver, in immediately
available funds, the Escrow Amount constituting the aggregate purchase price as
follows: (1) to the Placement Agent, the fees and reimbursable expenses payable
to the Placement Agent (which fees and expenses shall be set forth in such
instructions), and (2) the balance of the aggregate purchase price to the
Company, (b) the Company shall irrevocably instruct the Transfer Agent to
deliver to each Purchaser one or more stock certificates, free and clear of all
restrictive and other legends (except as expressly provided in Section 4.1(b)
hereof), evidencing the number of Shares such Purchaser is purchasing as is set
forth on such Purchaser’s signature page to this Agreement next to the heading
“Number of Shares to be Acquired”, within three (3) Business Days after the
Closing and (c) the Company shall issue to each Purchaser a Warrant pursuant to
which such Purchaser shall have the right to acquire such number of Warrant
Shares as is set forth on such Purchaser’s signature page to this Agreement next
to the heading “Underlying Shares Subject to Warrant”, in each case duly
executed on behalf of the Company and registered in the name of such
Purchaser.

     

    2.2           Closing Deliveries.
  

     

                                    (a)            On
or prior to the Closing, the Company shall issue, deliver or cause to be
delivered to each Purchaser the following (the “Company
Deliverables”):

     

    
      	
                             

            	
              (i) 

            	
              this
      Agreement, duly executed by the
Company;

            

    

     

    
      	
                             

            	
              (ii) 

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

            

    

     

    
      	
                             

            	
              (iii) 

            	
              a
      legal opinion of Company Counsel, dated as of the Closing Date and in the
      form attached hereto as Exhibit D
      , executed by such counsel and addressed to the Purchasers and the
      Placement Agent;

            

    

     

    
      	
                             

            	
              (iv) 

            	
              the
      Registration Rights Agreement, duly executed by the
    Company;

            

    

     

    
      	
                             

            	
              (v) 

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

            

    

     

    
      	
                             

            	
              (vi) 

            	
              a
      certificate of the Secretary of the Company (the “Secretary’s
      Certificate”), dated as of the Closing Date, (a) certifying
      the resolutions adopted by the Board of Directors of the Company or a duly
      authorized committee thereof approving the transactions contemplated by
      this Agreement and the other Transaction Documents and the issuance of the
      Securities, (b) certifying the current versions of the certificate or
      articles of incorporation, as amended, and by-laws of the Company and
      (c) certifying as to the signatures and authority of persons signing
      the Transaction Documents and related documents on behalf of the Company,
      in the form attached hereto as Exhibit F
      ;

            

    

     

    
      	
                             

            	
              (vii) 

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

            

    

     

    
      	
                             

            	
              (viii) 

            	
              a
      Warrant, executed by the Company and registered in the name of such
      Purchaser as set forth on the Stock Certificate and Warrant Questionnaire
      included as Exhibit C-2
      hereto, pursuant to which such Purchaser shall have the right to acquire
      such number of Warrant Shares equal to 50% of the number of Shares
      issuable to such Purchaser pursuant to this Agreement, rounded up to the
      nearest whole share, on the terms set forth
  therein;

            

    

     

    
      
        	
                               

              	
                (ix) 

              	
                a
      certificate evidencing the formation and good standing of the Company in
      its jurisdiction of formation issued by the Secretary of State (or
      comparable office) of such jurisdiction, as of a date within five
      (5) Business Days of the Closing
Date;

              

      

       

    

    
      	
                             

            	
              (x) 

            	
              a
      certificate evidencing the Company’s qualification as a foreign
      corporation and good standing issued by the Secretary of State of the
      State of California, as of a date within ten (10) Business Days of the
      Closing Date; and

            

    

     

    
      	
                             

            	
              (xi) 

            	
              a
      certified copy of the Certificate of Incorporation, as certified by the
      Secretary of State of the State (or comparable office) of such entity’s
      jurisdiction of formation, as of a date within ten (10) Business Days
      of the Closing Date.

            

    

     

                                    (b)            On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered
to the Company the following (the “Purchaser
Deliverables”):

     

    
      	
                             

            	
              (i) 

            	
              this
      Agreement, duly executed by such
Purchaser;

            

    

     

    
      	
                             

            	
              (ii) 

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

            

    

     

    
      	
                             

            	
              (iii) 

            	
              the
      Registration Rights Agreement, duly executed by such
      Purchaser;

            

    

     

    
      	
                             

            	
              (iv) 

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

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
                             

            	
              (v) 

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

            

    

     

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

                    3.1           Representations and
Warranties of the Company. The Company hereby represents and warrants as
of the date hereof and the Closing Date (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date), to each of the Purchasers and to the Placement Agent that, except as set
forth in the Schedules delivered herewith or disclosed in the SEC
Reports:

     

                                    (a)           Subsidiaries. The
Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a)
hereto. Except as disclosed in Schedule 3.1(a)
hereto, the Company owns, directly or indirectly, all of the capital stock or
comparable equity interests of each Subsidiary free and clear of any and all
Liens which could reasonably be expected to have a Material Adverse Effect, and
all the issued and outstanding shares of capital stock or comparable equity
interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.

     

                                    (b)           Organization and
Qualification. The Company and each of its Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite corporate power and authority to own or lease
and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. The Company and each of its
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have a Material Adverse Effect.

     

                                    (c)           Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by each of the
Transaction Documents to which it is a party and otherwise to carry out its
obligations hereunder and thereunder. The Company’s execution and delivery of
each of the Transaction Documents to which it is a party and the consummation by
it of the transactions contemplated hereby and thereby (including, but not
limited to, the sale and delivery of the Securities and the reservation for
issuance and the subsequent issuance of the Warrant Shares upon exercise of the
Warrants) have been duly authorized by all necessary corporate action on the
part of the Company, and no further corporate action is required by the Company,
its Board of Directors or its stockholders in connection therewith other than in
connection with the Required Approvals. Each of the Transaction Documents to
which it is a party has been (or upon delivery will have been) duly executed by
the Company and is, or when delivered in accordance with the terms hereof, will
constitute the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law. Except for Material Contracts and the items
identified on Schedule
3.1(g) hereto, there are no stockholder agreements, voting agreements, or
other similar arrangements with respect to the Company’s capital stock to which
the Company is a party or, to the Company’s Knowledge, between or among any of
the Company’s stockholders.

     

                                    (d)           No Conflicts. The
execution, delivery and performance by the Company of the Transaction Documents
to which it is a party and the consummation by the Company of the transactions
contemplated hereby or thereby (including, without limitation, the issuance of
the Securities and the reservation for issuance and issuance of the Warrant
Shares) do not and will not (i) conflict with or violate 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    any
provisions of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or otherwise result in a violation of the organizational
documents of the Company, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would result in a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any Material Contract, or (iii) subject to the Required Approvals, conflict with
or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including federal and state securities laws and
regulations and the rules and regulations, assuming the correctness of the
representations and warranties made by the Purchasers herein, of any
self-regulatory organization to which the Company or its securities are subject,
including all applicable Trading Markets), or by which any property or asset of
the Company is bound or affected, except in the case of clauses (ii) and
(iii) such as would not, individually or in the aggregate, have a Material
Adverse Effect.

     

                                    (e)           Filings, Consents and
Approvals. Neither the Company nor any of its Subsidiaries is required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents
(including, without limitation, the issuance of the Securities and the
reservation for issuance and issuance of the Warrant Shares), other than
(i) the filing with the Commission of one or more Registration Statements
in accordance with the requirements of the Registration Rights Agreement,
(ii) filings required by applicable state securities laws, (iii) the
filing of a Notice of Sale of Securities on Form D with the Commission
under Regulation D of the Securities Act, (iv) the filing of any
requisite notices and/or application(s) to the Principal Trading Market for the
issuance and sale of the Common Stock and the listing of the Common Stock for
trading or quotation, as the case may be, thereon in the time and manner
required thereby, (v) the filings required in accordance with Section 4.6
of this Agreement and (vi) those that have been made or obtained prior to
the date of this Agreement (collectively, the “Required
Approvals”).

     

                                    (f)           Issuance of the
Securities. The Shares have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable and free and clear of all
Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights.  The Warrants have been duly authorized
and, when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, free and clear of all Liens, other
than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights of stockholders. The Warrant Shares issuable upon exercise of the
Warrants have been duly authorized and, when issued and paid for in accordance
with the terms of the Transaction Documents and the Warrants will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens, other
than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights of stockholders.  Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the
Securities will be issued in compliance with all applicable federal and state
securities laws.  As of the Closing Date, the Company shall have
reserved from its duly authorized capital stock the number of shares of Common
Stock issuable upon exercise of the Warrants (without taking into account any
limitations on the exercise of the Warrants set forth in the
Warrants).  The Company shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued capital stock, solely for the purpose of effecting the
exercise of the Warrants, 100% of the number of shares of Common Stock issuable
upon exercise of the outstanding Warrants (without taking into account any
limitations on the exercise of the outstanding Warrants set forth in the
Warrants).

     

                                    (g)           Capitalization. The
number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) has been set forth in the SEC Reports or in Schedule 3.1(g)
hereto and, except as set forth in Schedule 3.1(g)
hereto, has changed since the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    date of
such SEC Reports only due to stock grants or other equity awards or stock option
and warrant exercises that do not, individually or in the aggregate, have a
material effect on the issued and outstanding capital stock, options and other
securities. All of the outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and non-assessable, have been issued
in compliance in all material respects with all applicable federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase any capital
stock of the Company. Except as specified in the SEC Reports and in Schedule 3.1(g)
hereto: (i) no shares of the Company’s outstanding capital stock are
subject to preemptive rights or any other similar rights; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company, other than those issued or granted pursuant to
Material Contracts or equity or incentive plans or arrangements described in the
SEC Reports; (iii) there are no material outstanding debt securities,
notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing indebtedness of the Company or
by which the Company is bound; (iv) to the Company’s Knowledge, there are
no financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company;
(v) except as identified in Schedule 3.1(y)
hereto and the Registration Rights Agreement, there are no agreements or
arrangements under which the Company is obligated to register the sale of any of
their securities under the Securities Act; (vi) there are no outstanding
securities or instruments of the Company or which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem a security of
the Company; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; (viii) the Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement; and
(ix) the Company has no liabilities or obligations required to be disclosed
in the SEC Reports but not so disclosed in the SEC Reports, other than those
incurred in the ordinary course of the Company’s businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect.

     

                                    (h)           SEC Reports; Disclosure
Materials. Except as set forth in Schedule 3.1(h)-1
hereto, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the
date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports” and together
with this Agreement and the Schedules to this Agreement, and including the items
set forth in Schedule
3.1(h)-2 and Schedule 3.1(h)-3
hereto the “Disclosure
Materials”), on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective filing dates, or to the extent corrected
by a subsequent restatement or subsequent filings, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and, except as corrected by subsequent filings, none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The Company has never been an issuer
subject to Rule 144(i) under the Securities Act.

     

                                    (i)           Financial Statements.
The financial statements of the Company included in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing (or to the extent corrected by a subsequent restatement). Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries taken as a whole as of
and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments.

     

                                    (j)           Tax Matters. The
Company (i) has prepared and filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith, with respect to which adequate reserves have been set aside on the
books of the Company and (iii) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply, except, in the
case of clauses (i) and (ii) above, where the failure to so pay or
file any such tax, assessment, charge or return would not have a Material
Adverse Effect.

     

                                    (k)           Material Changes.
Since the date of the latest financial statements included within the SEC
Reports, except as specifically disclosed in the SEC Reports or in the items
identified in Schedule
3.1(h)-2 hereto or as set forth in Schedule 3.1(g)
hereto, (i) there have been no events, occurrences or developments that
have had or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, (ii) the Company has not incurred any
material liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary course
of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission, (iii) the
Company has not altered materially its method of accounting or the manner in
which it keeps its accounting books and records, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock (other than in connection with repurchases of
unvested stock issued to employees of the Company), (v) the Company has not
issued any equity securities to any officer, director or Affiliate, except
Common Stock (A) issued in the ordinary course as dividends on outstanding
preferred stock or (B) issued pursuant to existing Company stock option or stock
purchase plans or executive and director corporate arrangements disclosed in the
SEC Reports or (C) issued pursuant to other existing agreements disclosed in the
SEC Reports and (vi) there has not been any material change or amendment
to, or any waiver of any material right by the Company under, any Material
Contract under which the Company or any of its Subsidiaries is bound or subject.
Except for the transactions contemplated by this Agreement and by the items set
forth in Schedule 3.1(g)
hereto, no event, liability or development has occurred or exists with respect
to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made
that has not been publicly disclosed at least one Trading Day prior to the date
that this representation is made.

     

                                    (l)           Environmental
Matters. To the Company’s Knowledge, neither the Company nor any of its
Subsidiaries (i) is in violation of any statute, rule, regulation, decision
or order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “Environmental Laws”),
(ii) owns or operates any real property contaminated with any substance
that is in violation of any Environmental Laws, (iii) is liable for any
off-site disposal or contamination pursuant to any Environmental Laws, or
(iv) is subject to any claim relating to any Environmental Laws; which
violation, contamination, liability or claim has had or would have, individually
or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge,
there is no pending or threatened investigation that might lead to such a
claim.

     

                                    (m)           Litigation. To the
Company’s Knowledge, there is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as specifically disclosed in the
SEC Reports, is reasonably likely to have a Material Adverse Effect,
individually or in the aggregate, if there were an unfavorable decision. Neither
the Company 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any of its Subsidiaries under the
Exchange Act or the Securities Act.

     

                                    (n)           Employment Matters.
No material labor dispute exists or, to the Company’s Knowledge, is imminent
with respect to any of the employees of the Company which would have a Material
Adverse Effect. None of the Company’s employees is a member of a union that
relates to such employee’s relationship with the Company, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and each Subsidiary believes that its relationship
with its employees is good. No executive officer of the Company (as defined in
Rule 501(f) of the 1933 Act) has notified the Company that such officer intends
to leave the Company or otherwise terminate such officer’s employment with the
Company. To the Company’s Knowledge, no executive officer is, or is now expected
to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of a third party, and to the Company’s Knowledge, the
continued employment of each such executive officer does not subject the Company
or any Subsidiary to any liability with respect to any of the foregoing matters.
To the Company’s Knowledge, it is in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance would not, individually or
in the aggregate, have a Material Adverse Effect.

     

                                    (o)           Compliance. Neither
the Company nor any of its Subsidiaries (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
of its Subsidiaries under), nor has the Company or any of its Subsidiaries
received written notice of a claim that it is in default under or that it is in
violation of, any Material Contract (whether or not such default or violation
has been waived), (ii) is in violation of any order of which the Company
has been made aware in writing of any court, arbitrator or governmental body
having jurisdiction over the Company or its properties or assets, or
(iii) is in violation of, or in receipt of written notice that it is in
violation of, any statute, rule or regulation of any governmental authority
applicable to the Company, except in each case as would not, individually or in
the aggregate, have a Material Adverse Effect.

     

                                    (p)           Regulatory Permits.
The Company possesses or has applied for all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business as currently conducted and as
described in the SEC Reports, except where the failure to possess such permits,
individually or in the aggregate, has not and would not have, individually or in
the aggregate, a Material Adverse Effect (“Material Permits”), and
(i) neither the Company nor any of its Subsidiaries has received any notice
in writing of proceedings relating to the revocation or material adverse
modification of any such Material Permits and (ii) the Company is unaware
of any facts or circumstances that would give rise to the revocation or material
adverse modification of any Material Permits.

     

                                    (q)           Title to Assets. The
Company and its Subsidiaries do not own any real property. The Company and its
Subsidiaries have good and marketable title to all tangible personal property
owned by them which is material to the business of the Company and its
Subsidiaries, taken as whole, in each case free and clear of all Liens except
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries. Any real property and facilities held under lease by
the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

     

                                    (r)           Patents and
Trademarks. To the Company’s Knowledge, except as set forth in Schedule 3.1(r)
hereto, the Company and its Subsidiaries own, possess, license or have other
rights to use all foreign and domestic patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
inventions, trade secrets, technology, Internet domain names, know-

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    how and
other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of their respective businesses as now conducted or as
proposed to be conducted in the SEC Reports. Except as set forth in the SEC
Reports and except where such violations or infringements would not have, either
individually or in the aggregate, a Material Adverse Effect, (a) to the
Company’s Knowledge, there are no rights of third parties to any such
Intellectual Property; (b) to the Company’s Knowledge, there is no
infringement by third parties of any such Intellectual Property; (c) to the
Company’s Knowledge, there is no pending or threatened action, suit, proceeding
or claim by others challenging the Company’s and its Subsidiaries’ rights in or
to any such Intellectual Property; (d) to the Company’s Knowledge, there is no
pending or threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property; and (e) to the
Company’s Knowledge, there is no pending or threatened action, suit, proceeding
or claim by others that the Company and/or any Subsidiary infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others.

     

                                    (s)           Insurance. The
Company and each of the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
the Company believes to be prudent and customary in the businesses and locations
in which the Company and the Subsidiaries are engaged. Neither the Company nor
any of its Subsidiaries has received any notice of cancellation of any such
insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable
to renew their respective existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business.

     

                                    (t)           Transactions With Affiliates
and Employees. Except as set forth in the SEC Reports and other than the
grant of stock options or other equity awards that are not individually or in
the aggregate material in amount, none of the officers or directors of the
Company and, to the Company’s Knowledge, none of the employees of the Company,
is presently a party to any transaction with the Company or to a presently
contemplated transaction (other than for services as employees, officers and
directors) that would be required to be disclosed pursuant to Item 404 of
Regulation S-K promulgated under the Securities Act.

     

                                    (u)           Internal Accounting
Controls. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is
permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and in the Company’s good faith judgment appropriate action is taken
with respect to any differences.

     

                                    (v)           Sarbanes-Oxley; Disclosure
Controls. To the Company’s Knowledge, the Company is in compliance in all
material respects with all of the provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it, except where such noncompliance would not have,
individually or in the aggregate, a Material Adverse Effect. The Company
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act).

     

                                    (w)           Certain Fees. Except
as identified in Schedule 3.1(w)
hereto, no person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or a Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Company, other than the Placement Agent with respect to the offer
and sale of the Shares and Warrants (which placement agent fees are being paid
by the Company). The Company shall indemnify, pay, and hold each Purchaser
harmless against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
right, interest or claim.

     

                                    (x)           Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 3.2 of this Agreement and the accuracy of the information
disclosed in the Accredited Investor Questionnaires, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers under the Transaction Documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                                    (y)           Registration Rights.
Other than as set forth in the SEC Reports and other than each of the Purchasers
or as set forth in Schedule 3.1(y)
hereto, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company other than those
securities which are currently registered on an effective registration statement
on file with the Commission.

     

                                    (z)           No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, none of the Company, its Subsidiaries
nor, to the Company’s Knowledge, any of its Affiliates or any
Person acting on its behalf has, directly or indirectly, at any time within the
past six months, made any offers or sales of any Company security or solicited
any offers to buy any security under circumstances that would (i) eliminate
the availability of the exemption from registration under Regulation D
under the Securities Act in connection with the offer and sale by the Company of
the Shares and Warrants as contemplated hereby or (ii) except as identified in
Schedule
3.1(g), cause the offering of the Shares and Warrants pursuant to the
Transaction Documents to be integrated with prior offerings by the Company for
purposes of any applicable law, regulation or stockholder approval provisions,
including, without limitation, under the rules and regulations of any Trading
Market on which any of the securities of the Company are listed or
designated.

     

                                    (aa)           Listing and Maintenance
Requirements. The Company’s Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to terminate the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the
12 months preceding the date hereof, received written notice from any
Trading Market on which the Common Stock is listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is in compliance in all material respects with
the listing and maintenance requirements for continued trading of the Common
Stock on the Principal Trading Market.

     

                                    (bb)           Investment Company.
Neither the Company nor any of its Subsidiaries is required to be registered as,
and is not an Affiliate of, and immediately following the Closing will not be
required to register as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

     

                                    (cc)           Questionable
Payments. To the Company’s Knowledge, neither the Company nor any of its
Subsidiaries, nor any directors, officers, employees, agents or other Persons
acting at the direction of the Company has, in the course of its actions for, or
on behalf of, the Company: (a) directly or indirectly, used any material
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to foreign or domestic political activity; (b) made
any material direct or indirect unlawful payments to any foreign or domestic
governmental officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds; (c) violated in any material
respect any provision of the Foreign Corrupt Practices Act of 1977, as amended,
or (d) made any other material unlawful bribe, rebate, payoff, influence
payment, kickback or other material unlawful payment to any foreign or domestic
government official or employee.

     

                                    (dd)           Application of Takeover
Protections; Rights Agreements. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company’s charter documents or the laws of its state of incorporation
that is applicable to any of the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, the Company’s issuance of
the Shares and Warrant Shares and the Purchasers’ ownership of the Shares and
Warrant Shares. Except as disclosed in the SEC Reports, the Company has not
adopted any other stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

     

                                    (ee)           Disclosure. The
Company confirms that neither it nor any of its officers or directors nor any
other Person acting on its or their behalf has provided, and it has not
authorized the Placement Agent 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    to
provide, any Purchaser or its respective agents or counsel with any information
that it believes constitutes or could reasonably be expected to constitute
material, non-public information except as set forth in Schedule 3.1(h)-2 and
the agreement identified in Schedule 3.1(g)
hereto and except insofar as the existence, provisions and terms of the
Transaction Documents and the proposed transactions hereunder may constitute
such information, all of which will be disclosed by the Company in the Press
Release(s) as contemplated by Section 4.6 hereof. To the Company’s Knowledge, no
event or circumstance has occurred or information exists with respect to the
Company or any of its Subsidiaries or its or their business, properties,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed (assuming for this purpose that
the Company’s reports filed under the Exchange Act are being incorporated into
an effective registration statement filed by the Company under the Securities
Act), except for the announcement of (i) this Agreement
and related transactions and as may be disclosed on the Form 8-K filed pursuant
to Section 4.6 and (ii) the items identified in Schedule 3.1(g)
hereto.

     

                                    (ff)           Off Balance Sheet
Arrangements. There is no transaction, arrangement, or other relationship
between the Company (or any Subsidiary) and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in its
Exchange Act filings and is not so disclosed and would have a Material Adverse
Effect.

     

                                    (gg)           Acknowledgment Regarding
Purchasers’ Purchase of Shares and Warrants.  The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby.  The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Shares and
Warrants. 

     

                                    (hh)           Regulation M
Compliance.  In the last thirty days, the Company has not, and to
the Company’s Knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
securities of the Company or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii) compensation
paid to the Placement Agent and the persons identified on Schedule 3.1(w)
hereto in connection with the placement of the Shares and Warrants.

     

                                    (ii)           OFAC. Neither the
Company nor any Subsidiary nor, to the Company’s Knowledge, any director,
officer, agent, employee, Affiliate or Person acting on behalf of the Company or
any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not knowingly directly or indirectly use the proceeds of the sale of the
Securities, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person or entity, towards any sales
or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country
sanctioned by OFAC or for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.

     

                                    (jj)           Money Laundering
Laws. To the Company’s Knowledge, the operations of each of the Company
and any Subsidiary are and have been conducted at all times in compliance with
the money laundering statutes of applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any applicable governmental
agency (collectively, the “Money Laundering Laws”) and
to the Company’s Knowledge, no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Company and/or any Subsidiary with respect to the Money Laundering Laws is
pending or threatened.

     

                                    (kk)           FDA.   To
the Company’s Knowledge, there is no pending, completed or threatened, action
(including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    complaint,
or investigation) against the Company or any of its Subsidiaries, and none of
the Company or any of its Subsidiaries has received any notice, warning letter
or other communication from the U.S. Food and Drug Administration (“FDA”) or any other
governmental entity, which (i) contests the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any product subject to the jurisdiction of the FDA under the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder that is manufactured, packaged, labeled, tested,
distributed, sold, and/or marketed by the Company or any of its Subsidiaries
(each such product, a “Pharmaceutical Product”),
(ii) imposes a clinical hold on any clinical investigation by the Company or any
of its Subsidiaries, (iii) enjoins production at any facility of the
Company or any of its Subsidiaries, (iv) enters or proposes to enter into a
consent decree of permanent injunction with the Company or any of its
Subsidiaries, or (v) otherwise alleges any violation of any laws, rules or
regulations by the Company or any of its Subsidiaries, and which, either
individually or in the aggregate, would have a Material Adverse Effect. 
The Company has not been informed in writing by the FDA that the FDA will
prohibit the marketing, sale, license or use in the United States of any product
proposed to be developed, produced or marketed by the Company.

     

                                    (ll)           No Additional
Agreements. The Company does not have any agreement or understanding with
any Purchaser with respect to the transactions contemplated by the Transaction
Documents other than as specified in the Transaction Documents.

     

                    3.2           Representations and
Warranties of the Purchasers. Each Purchaser hereby, for itself and for
no other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:

     

                                    (a)           Organization;
Authority. Such Purchaser is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with
the requisite corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the applicable Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The
execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or, if such Purchaser is not a corporation, such partnership, limited
liability company or other applicable like action, on the part of such
Purchaser. Each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

     

                                    (b)           No Conflicts. The
execution, delivery and performance by such Purchaser of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a
violation of the organizational documents of such Purchaser, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Purchaser is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Purchaser, except in the
case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Purchaser to perform its obligations hereunder.

     

                                    (c)           Investment Intent.
Such Purchaser understands that the Shares and Warrants are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Shares and Warrants as
principal for its own account and not with a view to, or for distributing or
reselling such Shares or Warrants or any part thereof in violation of the
Securities Act or any applicable state securities laws, provided, however , that by
making the representations herein, such Purchaser does not agree to hold any of
the Shares or Warrants for any minimum period of time and reserves 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    the
right, subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of
such Shares or Warrants pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration
and in compliance with applicable federal and state securities laws. Such
Purchaser is acquiring the Shares and Warrants hereunder in the ordinary course
of its business. Such Purchaser does not presently have any agreement, plan or
understanding, directly or indirectly, with any Person to distribute or effect
any distribution of any of the Shares or Warrants (or any securities which are
derivatives thereof) to or through any person or entity.

     

                                    (d)           Purchaser Status. At
the time such Purchaser was offered the Shares and Warrants, it was, and at the
date hereof it is, an “accredited investor” as defined in Rule 501(a) under the
Securities Act.

     

                                    (e)           General Solicitation.
Such Purchaser is not purchasing the Shares and Warrants as a result of any
advertisement, article, notice or other communication regarding the Shares and
Warrants published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
advertisement.

     

                                    (f)           Experience of Such
Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares and Warrants, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Shares and Warrants and, at the present time, is
able to afford a complete loss of such investment.

     

                                    (g)           Access to
Information. Such Purchaser acknowledges that it has had the opportunity
to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and Warrants and the merits and risks of investing
in the Shares and Warrants; (ii) access to information about the Company
and the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed decision with respect to its acquisition of the
Shares and Warrants.

     

                                    (h)           Certain Trading
Activities. Other than with respect to the transactions contemplated
herein, since the time that such Purchaser was first contacted by the Company,
the Placement Agent or any other Person regarding the transactions contemplated
hereby, neither the Purchaser nor any Affiliate of such Purchaser which
(x) had knowledge of the transactions contemplated hereby, (y) has or
shares discretion relating to such Purchaser’s investments or trading or
information concerning such Purchaser’s investments, including in respect of the
Shares and Warrants, and (z) is subject to such Purchaser’s review or input
concerning such Affiliate’s investments or trading (collectively, “ Trading Affiliate s”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any purchases or sales of the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading
Affiliate that is, individually or collectively, a multi-managed investment bank
or vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s or Trading Affiliate’s assets, the representation set forth above shall apply only with respect to
the portion of assets managed by the portfolio manager that have knowledge about
the financing transaction contemplated by this Agreement. Other than to other
Persons party to this Agreement, such Purchaser has maintained the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    confidentiality
of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

     

                                    (i)           Brokers and Finders.
No Person will have, as a result of the transactions contemplated by this
Agreement, any valid right, interest or claim against or upon the Company or any
Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Purchaser.

     

                                    (j)           Independent Investment
Decision. Such Purchaser has independently evaluated the merits of its
decision to purchase Shares and Warrants pursuant to the Transaction Documents,
and such Purchaser confirms that it has not relied on the advice of any other
Purchaser’s business and/or legal counsel in making such decision. Such
Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the
purchase of the Shares and Warrants constitutes legal, tax or investment advice.
Such Purchaser has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares and Warrants. Such Purchaser understands that the
Placement Agent has acted solely as the agent of the Company in this placement
of the Shares and Warrants and such Purchaser has not relied on the business or
legal advice of the Placement Agent or any of its agents, counsel or Affiliates
in making its investment decision hereunder, and confirms that none of such
Persons has made any representations or warranties to such Purchaser in
connection with the transactions contemplated by the Transaction
Documents.

     

                                   (k)           Reliance on
Exemptions. Such Purchaser understands that the Shares and Warrants being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Shares and Warrants.

     

                                    (l)           No Governmental
Review. Such Purchaser understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Shares and Warrants or the fairness or
suitability of the investment in the Shares and Warrants nor have such
authorities passed upon or endorsed the merits of the offering of the Shares and
Warrants.

     

                                    (m)           Regulation M.
Such Purchaser is aware that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of Common Stock and other activities
with respect to the Common Stock by the Purchasers.

     

                                    (n)           Residency. Such
Purchaser’s residence (if an individual) or office in which its investment
decision with respect to the Shares and Warrants was made (if an entity) are
located at the address immediately below such Purchaser’s name on its signature
page hereto.

     

    The
Company and each of the Purchasers acknowledge and agree that no party to this
Agreement has made or makes any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Article III and the Transaction Documents.

     

     

    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

                    4.1           Transfer
Restrictions.

     

                                    (a)           Compliance with Laws.
Notwithstanding any other provision of this Article IV, each Purchaser covenants
that the Securities may be disposed of only pursuant to an effective
registration statement under, and in compliance with the requirements of, the
Securities Act, or pursuant to an available exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act, and in
compliance with any applicable state, federal or foreign securities
laws.  In connection with any transfer of 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    the
Securities other than (i) pursuant to an effective registration statement, (ii)
to the Company, (iii) pursuant to Rule 144 (provided that the Purchaser provides
the Company with reasonable assurances (in the form of seller and broker
representation letters) that the securities may be sold pursuant to such rule)
or Rule 144A or (iv) in connection with a bona fide pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company and the Transfer Agent, at the transferor’s expense, an opinion of
counsel selected by the transferor and reasonably acceptable to the Company and
the Transfer Agent, the form and substance of which opinion shall be reasonably
satisfactory to the Company and the Transfer Agent, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act.  As a condition of transfer (other than pursuant to
clauses (i), (ii) or (iii) of the preceding sentence), any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights Agreement
with respect to such transferred Securities.

     

                                    (b)           Legends. Certificates
evidencing the Shares, the Warrants and the Warrant Shares shall bear any legend
as required by the California Corporations Code (including the legend set forth
in Schedule
4.1(b) hereto), the “blue sky” laws of any state and a restrictive legend
in substantially the following form, until such time as they are not required
under Section 4.1(c) or applicable law:

     

    

    [NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

     

    The
Company acknowledges and agrees that a Purchaser may from time to time pledge,
and/or grant a security interest in, some or all of the legended Securities in
connection with applicable securities laws, pursuant to a bona fide margin
agreement in compliance with a bona fide margin loan.  Such a pledge
would not be subject to approval or consent of the Company and no legal opinion
of legal counsel to the pledgee, secured party or pledgor shall be required in
connection with the pledge, but such legal opinion shall be required in
connection with a subsequent transfer or foreclosure following default by the
Purchaser transferee of the pledge.  No notice shall be required of
such pledge, but Purchaser’s transferee shall promptly notify the Company of any
such subsequent transfer or foreclosure.  Each Purchaser acknowledges
that the Company shall not be responsible for any pledges relating to, or the
grant of any security interest in, any of the Securities or for any agreement,
understanding or arrangement between any Purchaser and its pledgee or secured
party.  At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Shares may reasonably request in connection with a pledge or a permissible
transfer of the Shares, including the preparation and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    filing of
any required prospectus supplement under Rule 424(b)(ii) of the Securities Act
or other applicable provision of the Securities Act to appropriately amend the
list of “Selling Stockholders” thereunder. Each Purchaser acknowledges and
agrees that, except as otherwise provided in Section 4.1(c), any Securities
subject to a pledge or security interest as contemplated by this Section 4.1(b)
shall continue to bear the legend set forth in this Section 4.1(b) and be
subject to the restrictions on transfer set forth in Section
4.1(a).

     

     

                                    (c)           Removal of Legends.
The restrictive legend set forth in Section 4.1(b) above shall be removed and
the Company shall issue a certificate without such restrictive legend or any
other restrictive legend to the holder of the applicable Securities upon which
it is stamped or issue to such holder by electronic delivery at the applicable
balance account at the Depository Trust Company (“DTC”), if (i) such Securities
are registered for resale under the Securities Act (provided that, if the
Purchaser is selling pursuant to the effective registration statement
registering the Securities for resale, the Purchaser agrees to only sell such
Securities during such time that such registration statement is effective and
not withdrawn or suspended, and only as permitted by such registration
statement), (ii) such Securities are sold or transferred pursuant to Rule 144
(if the transferor is not an Affiliate of the Company), or (iii) such Securities
are eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as
to such securities and without volume or manner-of-sale
restrictions.  Following the earlier of (i) the Effective Date or (ii)
Rule 144 becoming available for the resale of Securities, without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such securities and without volume or
manner-of-sale restrictions, the Company shall cause Company Counsel to issue to
the Transfer Agent the legal opinion referred to in the Irrevocable Transfer
Agent Instructions.  Any fees (with respect to the Transfer Agent,
Company Counsel or otherwise) associated with the issuance of such opinion or
the removal of such legend shall be borne by the Company.  Following
the Effective Date, or at such earlier time as a restrictive legend is no longer
required for certain Securities, the Company will no later than three (3)
Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer) and an opinion of counsel to the extent required by Section 4.1(a),
(such third Trading Day, the “Legend Removal Date”) deliver
or cause to be delivered to such Purchaser a certificate representing such
Securities that is free from all restrictive legends.  The Company may
not make any notation on its records or give instructions to the Transfer Agent
that enlarge the restrictions on transfer set forth in this Section
4.1(c).  Certificates for Securities subject to legend removal
hereunder may be transmitted by the Transfer Agent to the Purchasers by
crediting the account of the Purchaser’s prime broker with DTC as directed by
such Purchaser.

     

                                    (d)           Irrevocable Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its
Transfer Agent, and any subsequent transfer agent in the form of Exhibit E attached
hereto (the “Irrevocable
Transfer Agent Instructions”). The Company represents and warrants that
no instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 4.1(d) or instructions that are not contradictory
therewith will be given by the Company to its transfer agent in connection with
this Agreement, and that the Securities shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents and applicable law. The Company
acknowledges that a breach by it of its obligations under this
Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 4.1(d) will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this
Section 4.1(d), that a Purchaser shall be entitled, in addition to all
other available remedies, to an order and/or injunction restraining any breach
and requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being
required.

     

                                    (e)           Acknowledgement. Each
Purchaser hereunder acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer the
Securities or any interest therein without complying with the requirements of
the Securities Act. Except as otherwise provided below, while the
above-referenced registration statement remains effective, each Purchaser

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    hereunder
may sell the Shares and Warrant Shares in accordance with the plan of
distribution contained in the registration statement and if it does so it will
comply therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available.  Each Purchaser, severally and not
jointly with the other Purchasers, agrees that if it is notified by the Company
in writing at any time that the registration statement registering the resale of
the Shares and Warrant Shares is not effective or that the prospectus included
in such registration statement no longer complies with the requirements of
Section 10 of the Securities Act, the Purchaser will refrain from selling
such Shares and Warrant Shares until such time as the Purchaser is notified by
the Company that such registration statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is
able to, and does, sell such Shares and Warrant Shares pursuant to an available
exemption from the registration requirements of Section 5 of the Securities
Act. Both the Company and its Transfer Agent, and their respective directors,
officers, employees and agents, may rely on this subsection (e) and each
Purchaser hereunder will indemnify and hold harmless each of such persons from
any breaches or violations of this paragraph.

     

                                    (f)           Buy-In. If the
Company shall fail for any reason or for no reason to issue to a Purchaser
unlegended certificates within three (3) Business Days of receipt of all
documents necessary for the removal of the legend set forth above (the “Deadline Date”), then, in
addition to all other remedies available to such Purchaser, if on or after the
Business Day immediately following such three (3) Business Day period, such
Purchaser purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the holder of shares of
Common Stock that such Purchaser anticipated receiving from the Company without
any restrictive legend (a “Buy-In”), then the Company
shall, within three (3) Business Days after such Purchaser’s request and in
such Purchaser’s sole discretion, either (i) pay cash to the Purchaser in
an amount equal to such Purchaser’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
shares of Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to such Purchaser a certificate or certificates
representing such shares of Common Stock and pay cash to the Purchaser in an
amount equal to the excess (if any) of the Buy-In Price over the product of
(a) such number of shares of Common Stock, times (b) the Closing Bid
Price on the Deadline Date.

     

                    4.2           Acknowledgment of
Dilution.  The Company acknowledges that the issuance of the
Securities may result in dilution of the outstanding shares of Common
Stock.  The Company further acknowledges that its obligations under the
Transaction Documents, including without limitation its obligation to issue the
Securities pursuant to the Transaction Documents, are unconditional and absolute
and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.

     

                    4.3           Furnishing of
Information. In order to enable the Purchasers to sell the Securities
under Rule 144 of the Securities Act, for a period of one year from the Closing,
the Company shall maintain the registration of the Securities under Section
12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  During such one year period, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Purchasers and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the Securities under Rule
144.

     

                    4.4           Form D and Blue
Sky. The Company agrees to timely file a Form D with respect to the
Shares and Warrants as required under Regulation D.  The Company,
on or before the Closing Date, shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Shares and Warrants for sale to the Purchasers at the Closing
pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
states of the United States (or to obtain an exemption from such qualification).
The Company shall make all filings and reports relating to the offer and sale of
the Shares and Warrants required under applicable securities or “Blue Sky” laws
of the states of the United States following the Closing Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                    4.5           No Integration. The
Company shall not, and shall use its commercially reasonable efforts to ensure
that no Affiliate of the Company shall, sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that will be integrated with the offer or
sale of the Shares and Warrants in a manner that would require the registration
under the Securities Act of the sale of the Shares and Warrants to the
Purchasers, or that will be integrated with the offer or sale of the Shares and
Warrants for purposes of the rules and regulations of any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

     

                    4.6           Securities Laws Disclosure;
Publicity. By 9:00 a.m., New York City time, on the Trading Day
immediately following the execution of this Agreement, the Company shall issue
one or more press releases (each, a “Press Release”) reasonably
acceptable to the Placement Agent disclosing all material terms of the
transactions contemplated hereby and the items identified on Schedule
3.1(h)-2.  On or before 9:00 a.m., New York City time, on the
Trading Day immediately following the execution of this Agreement, the Company
will file a Current Report on Form 8-K with the Commission describing the terms
of the Transaction Documents (and including as exhibits to such Current Report
on Form 8-K the material Transaction Documents (including, without limitation,
this Agreement and the Registration Rights Agreement)). Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser or
an Affiliate of any Purchaser, or include the name of any Purchaser or an
Affiliate of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the
filing of final Transaction Documents (including signature pages thereto) with
the Commission and (ii) to the extent such disclosure is required by law,
request of the Staff of the Commission or Trading Market regulations, in which
case the Company shall provide the Purchasers with prior written notice of such
disclosure permitted under this subclause (ii).  From and after the
issuance of the Press Release(s) (which shall include the items identified in
Schedule 3.1(h)-2
hereto), no Purchaser shall be in possession of any material, non-public
information received from the Company, any Subsidiary or any of their respective
officers, directors, employees or agents, that is not disclosed in the Press
Release(s) (which shall include the items identified in Schedule 3.1(h)-2
hereto). Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company as described in this
Section 4.6 (which shall include the items identified in Schedule 3.1(h)-2
hereto), such Purchaser will maintain the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction).

     

                    4.7           Non-Public
Information. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, and except with the
express written consent of such Purchaser and unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information, the Company shall not, and shall cause each
Subsidiary and each of their respective officers, directors, employees and
agents, not to, and each Purchaser shall not directly solicit the Company, any
of its Subsidiaries or any of their respective officers, directors, employees or
agents to provide any Purchaser with any material, non-public information
regarding the Company or any of its Subsidiaries from and after the filing of
the Press Release(s) (which shall include the items identified in Schedule 3.1(h)-2
hereto).

     

                    4.8           Indemnification.

     

                                    (a)           Indemnification of
Purchasers. In addition to the indemnity provided in the Registration
Rights Agreement, the Company will indemnify and hold each Purchaser and its
directors, officers, stockholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers,
stockholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    such
title or any other title) of such controlling person (each, a “Purchaser Party”) harmless
from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or in the other Transaction
Documents.  The Company will not be liable to any Purchaser Party under
this Agreement to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents; provided that
such a claim for indemnification relating to any breach of any of the
representations or warranties made by the Company in this Agreement is made
within one year from the Closing.

     

                                    (b)           Conduct of Indemnification
Proceedings.
Promptly after receipt by any Person (the "Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 4.8(a), such
Indemnified Person shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided,
however , that the failure of any Indemnified Person so to notify the
Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is actually and materially and adversely prejudiced by
such failure to notify. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless: (i) the
Company and the Indemnified Person shall have mutually agreed to the retention
of such counsel; (ii) the Company shall have failed promptly
to assume the defense of such proceeding and to employ counsel reasonably
satisfactory to such Indemnified Person in such proceeding; or (iii) in the
reasonable judgment of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Company shall not be liable for
any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld, delayed or conditioned. Without the
prior written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, delayed or conditioned, the Company shall not effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Person from all liability arising out
of such proceeding.

     

                    4.9           Listing of Common
Stock. In the time and manner required by the Principal Trading Market,
the Company shall prepare and file with such Trading Market an additional shares
listing application covering all of the Shares and Warrant Shares and shall use
its commercially reasonable efforts to take all steps necessary to cause the
Shares and Warrant Shares to be approved for listing on the Principal Trading
Market as soon as possible thereafter.

     

                    4.10           Use of Proceeds. The
Company intends to use the net proceeds from the sale of the Shares and Warrants
hereunder to expand commercialization activities for its Celution® 800/CRS
System in Europe and Asia Pacific and global marketing efforts for the Company’s
Celution System-based StemSource® Cell Bank business and for working capital and
general corporate purposes.

     

    4.11           Short Sales After The Date
Hereof.  Such Purchaser shall not, and shall cause its Trading
Affiliates not to, engage, directly or indirectly, in any transactions in the
Company’s securities (including, without limitation, any Short Sales involving
the Company’s securities) during the period from the date hereof until the
earlier of such time as (i) the transactions contemplated by this Agreement are
first required to be publicly announced as described in Section 4.6 (which
public announcement shall include the items identified in Schedule 3.1(h)-2
hereto) or (ii) this Agreement is terminated in full pursuant to Section 6.17
and the items identified in Schedule 3.1(h)-2
hereto have been publicly announced as described in Section 4.6.  Each
Purchaser severally and not jointly with the other Purchasers covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
4.6 (which public announcement shall include the items identified in Schedule 3.1(h)-2
hereto), such Purchaser will maintain the confidentiality of the existence and
terms of this Agreement and the transactions contemplated hereby and the
non-public information contained in the items identified in Schedule 3.1(h)-2
hereto.  Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in Section 4.6 (which public announcement shall include the items
identified in Schedule 3.1(h)-2
hereto).  Notwithstanding the foregoing, in the event that a Purchaser
is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser's assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser's assets, the representation set forth
above shall apply only with respect to the portion of assets managed by the
portfolio manager that have knowledge about the financing transaction
contemplated by this Agreement.  Each Purchaser understands and
acknowledges, severally and not jointly with any other Purchaser, that the
Commission currently takes the position that covering a short position
established prior to effectiveness of a resale registration statement with
shares included in such registration statement would be a violation of Section 5
of the Securities Act, as set forth in Item 65, Section 5 under Section A, of
the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation
Finance.

     

    4.12           Subsequent Equity
Sales.  From the date hereof until the date occurring 30 days
following the Effective Date, except for (i) issuances of securities pursuant to
existing equity incentive plans and the exercise of outstanding options, (ii)
issuances of securities pursuant to the exercise of warrants outstanding as of
the date hereof or warrants issued pursuant to the agreement identified in Schedule 3.1(g)
hereto or this Agreement, (iii) as contemplated by the items identified in
Schedule 3.1(g)
hereto, and (iv) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities, neither the Company nor any Subsidiary shall issue shares of Common
Stock or Common Stock Equivalents; provided, however, that the 30 day period set
forth in this Section 4.12 shall be extended for the number of Trading Days
during such period in which trading in the shares of Common Stock is suspended
by any Trading Market.

     

    4.13           Reservation of Shares of
Common Stock.  The Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance from and
after the Closing Date, the number of shares of Common Stock issuable upon
exercise of the Warrants issued at the Closing (without taking into account any
limitations on exercise of the Warrants set forth in the Warrants).

     

     

    ARTICLE
V.

    CONDITIONS
PRECEDENT TO CLOSING

     

    5.1           Conditions Precedent to the
Obligations of the Purchasers to Purchase Shares and Warrants. The
obligation of each Purchaser to acquire Shares and Warrants at the Closing is
subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the
Closing Date, of each of the following conditions, any of which may be waived by
such Purchaser (as to itself only):

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                                    (b)           Performance. The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the
Closing.

     

                                    (c)           No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents.

     

                                    (d)           Consents. The Company
shall have obtained in a timely fashion any and all consents, permits,
approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares and Warrants at the Closing (including all Required
Approvals), all of which shall be and remain so long as necessary in full force
and effect.

     

                                    (e)           No Suspensions of Trading in
Common Stock; Listing . The Common Stock (i) shall be designated for
quotation or listed on the Principal Trading Market and (ii) shall not have
been suspended, as of the Closing Date, by the Commission or the Principal
Trading Market from trading on the Principal Trading Market nor shall suspension
by the Commission or the Principal Trading Market have been threatened, as of
the Closing Date, either (A) in writing by the Commission or the Principal
Trading Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Trading Market.

     

                                    (f)           Company Deliverables
.. The Company shall have delivered the Company Deliverables in accordance with
Section 2.2(a).

     

                                    (g)           Compliance
Certificate . The Company shall have delivered to each Purchaser a
certificate, dated as of the Closing Date and signed by its Chief Executive
Officer or its Chief Financial Officer, dated as of the Closing Date, certifying
to the fulfillment of the conditions specified in Sections 5.1(a) and
(b) in the form attached hereto as Exhibit G.

     

                                    (h)           Adverse Changes.
Since the date of execution of this Agreement, no event or series of events
shall have occurred that has had or would reasonably be expected to have a
Material Adverse Effect.

     

                                    (i)           Termination . This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.17 herein.

     

                    5.2           Conditions Precedent to the
Obligations of the Company to sell Shares and Warrants. The Company’s
obligation to sell and issue the Shares and Warrants at the Closing is subject
to the fulfillment to the satisfaction of the Company on or prior to the Closing
Date of the following conditions, any of which may be waived by the Company:

     

                                    (a)           Representations and
Warranties. The representations and warranties made by the Purchaser in
Section 3.2 hereof shall be true and correct in all material respects as of
the date when made, and as of the Closing Date as though made on and as of such
date, except for representations and warranties that speak as of a specific
date.

     

                                    (b)           Performance. Such
Purchaser shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or
prior to the Closing Date.

     

                                    (c)           No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents.

     

                                    (d)           Consents. The Company
shall have obtained in a timely fashion any and all consents, permits,
approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares and Warrants, all of which shall be and remain so long as
necessary in full force and effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                                    (e)           Purchasers
Deliverables. Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).

     

                                    (f)           Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.17 herein.

     

    ARTICLE
VI.

     

     

    MISCELLANEOUS

     

    6.1           Fees and
Expenses.  Except as otherwise expressly set forth in the
Company’s engagement letter with the Placement Agent, the Company and the
Purchasers shall each pay the fees and expenses of their respective advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the sale and issuance of the Shares and Warrants to the
Purchasers.

     

     

    6.2           Entire Agreement. The
Transaction Documents, together with the Exhibits and Schedules thereto, contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements, understandings, discussions and
representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the
Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.

     

                    6.3           Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 5:00 p.m., New York City time, on a
Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 5:00 p.m., New York City time, on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service with next day delivery specified, or (d) upon
actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as follows:

     

    

    If to the
Company:               Cytori
Therapeutics, Inc.

    3020
Callan Road

    San
Diego, California 92121

    Telephone
No.:  (858) 458-0900

    Facsimile
No.:  (858) 450-4331

    Attention:  Chief
Executive Officer

     

    
      	
               
      

            	
              With
      a copy to:

            	
              DLA
      Piper US LLP

            

    

    
      	
               
      

            	
              4365
      Executive Drive, Suite 1100

            

    

    
      	
               
      

            	
              San
      Diego, California 92121-2133

            

    

    
      	
               
      

            	
              Telephone
      No.:  (858) 677-1400

            

    

    
      	
               
      

            	
              Facsimile
      No.:  (858) 677-1401

            

    

    
      	
               
      

            	
              Attention:  Jeff
      Baglio, Esq.

            

    

     

    
      	
                    If to a
      Purchaser:

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

            

    

    

    or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                    6.4           Amendments; Waivers; No
Additional Consideration. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each of the Purchasers holding or having the right to acquire at
least two-thirds of the Securities on a fully-diluted basis at the time of such
amendment or, in the case of a waiver, by the party against whom enforcement of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid
to any Purchaser to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to all Purchasers who then hold Securities.

     

                    6.5           Construction. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction
Documents.

     

                    6.6           Successors and
Assigns. The provisions of this Agreement shall inure to the benefit of
and be binding upon the parties and their successors and permitted assigns. This
Agreement, or any rights or obligations hereunder, may not be assigned by the
Company without the prior written consent of the Purchasers. Any Purchaser may
assign its rights hereunder in whole or in part to any Person to whom such
Purchaser assigns or transfers any Securities in compliance with the Transaction
Documents and applicable law, provided such transferee shall
agree in writing to be bound, with respect to the transferred Securities, by the
terms and conditions of this Agreement that apply to the
“Purchasers”.

     

                    6.7           No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person,
except the Placement Agent is an intended third party beneficiary of
Article III hereof and the Placement Agent may enforce the provisions of
such Section directly against the parties with obligations
thereunder.

     

                    6.8           Governing Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective Affiliates, employees or
agents) shall be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     

                    6.9           Survival. Subject to
applicable statute of limitations, the representations, warranties, agreements
and covenants contained herein shall survive the Closing and the delivery of the
Shares and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Warrants,
except that the representations and warranties contained herein shall terminate
upon the one-year anniversary of the Closing Date.

     

                    6.10           Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.

     

                    6.11           Severability. If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

     

                    6.12           Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the
execution by the holder thereof of a customary lost certificate affidavit of
that fact and an agreement to indemnify and hold harmless the Company and the
Transfer Agent for any losses in connection therewith or, if required by the
Transfer Agent, a bond in such form and amount as is required by the Transfer
Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities. If a replacement certificate or
instrument evidencing any Securities is requested due to a mutilation thereof,
the Company may require delivery of such mutilated certificate or instrument as
a condition precedent to any issuance of a replacement.

     

                    6.13           Remedies. In addition
to being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agree to waive in any action for specific performance of any
such obligation (other than in connection with any action for a temporary
restraining order) the defense that a remedy at law would be
adequate.

     

                    6.14           Payment Set Aside. To
the extent that the Company makes a payment or payments to any Purchaser
pursuant to any Transaction Document or a Purchaser enforces or exercises its
rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

     

                    6.15           Adjustments in Common Stock
Numbers and Prices . In the event of any stock split, subdivision,
dividend or distribution payable in shares of Common Stock (or other securities
or rights convertible into, or entitling the holder thereof to receive directly
or indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof and prior to the
Closing, each reference in any Transaction Document to a number of shares or a
price per share shall be deemed to be amended to appropriately account for such
event.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                    6.16           Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each Purchaser
under any Transaction Document are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document.  The decision of each Purchaser to purchase Securities
pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statement or opinions.  Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents.  Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction
Documents.  For reasons of administrative convenience only, Purchasers
and their respective counsels have chosen to communicate with the Company
through Goodwin Procter LLP, counsel to the Placement Agent.  Each
Purchaser acknowledges that Goodwin Procter LLP has rendered legal advice to the
Placement Agent and not to such Purchaser in connection with the transactions
contemplated hereby, and that each such Purchaser has relied for such matters on
the advice of its own respective counsel.  The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so
by any Purchaser.

     

                    6.17           Termination. This
Agreement may be terminated and the sale and purchase of the Shares and Warrants
abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if the
Closing has not been consummated on or prior to 5:00 p.m., New York City time,
on the Outside Date; provided,
however , that the right to terminate this Agreement under this
Section 6.17 shall not be available to any Person whose failure to comply
with its obligations under this Agreement has been the cause of or resulted in
the failure of the Closing to occur on or before such time.  Nothing
in this Section 6.17 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents. In the event of a termination
pursuant to this Section, the Company shall promptly notify all non-terminating
Purchasers and the Escrow Agent. Upon a termination in accordance with this
Section, the Company and the terminating Purchaser(s) shall not have any further
obligation or liability (including arising from such termination) to the other,
and no Purchaser will have any liability to any other Purchaser under the
Transaction Documents as a result therefrom.

     

                    6.18           Waiver of Conflicts.
Each party to this Agreement acknowledges that Company Counsel, outside general
counsel to the Company, has in the past performed and is or may now or in the
future represent one or more Purchasers or their affiliates in matters unrelated
to the transactions contemplated by the Transaction Documents, including
representation of such Purchasers or their affiliates in matters of a similar
nature to the transactions contemplated by the Transaction Documents. The
applicable rules of professional conduct require that Company Counsel inform the
parties hereunder of this representation and obtain their consent. Company
Counsel has served as outside general counsel to the Company and has negotiated
the terms of the transactions contemplated by the Transaction Documents solely
on behalf of the Company. The Company and each Purchaser hereby
(a) acknowledge that they have had an opportunity to 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ask for
and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledge that with respect to the transactions
contemplated by the Transaction Documents, Company Counsel has represented
solely the Company, and not any Purchaser or any stockholder, director or
employee of the Company or any Purchaser; and (c) gives its informed consent to
Company Counsel’s representation of the Company in the transactions contemplated
by the Transaction Documents.

     

                    6.19           Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any
Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within
the periods therein provided, then such Purchaser may rescind or withdraw, in
its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

     

    CYTORI
THERAPEUTICS, INC.

     

    
      	
               
      

            	
              By: 
      /s/ Christopher J. Calhoun        

            

    

     

    
      	
               
      

            	
              Name: 
      Christopher J. Calhoun

            

    

     

    
      	
               
      

            	
              Title: 
      CEO

            

    

     

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    [SIGNATURE
PAGES FOR PURCHASERS FOLLOW]

     

    
 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
    

     

    
      	 	NAME OF
      PURCHASER:  TRUK International Fund,
LP

    

     

                                            /s/ Michael Fein        

    
      	 	 	 By:	Atoll Asset
      Management, LLC
	 	 	 Name:	 Michael
      Fein
	 	 	 Title:	 Principal

    

     

     

    
      	 	 Aggregate
      Purchase Price (Subscription Amount):  $145,002.00
	 	 
	 	 Number of
      Shares to be Acquired:  24,167
	 	 
	 	 Underlying
      Shares Subject to Warrant:  12,083
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	 1 East 52nd
      Street, 6th Floor
	 	 New York, New
      York  10022
	 	 
	 	 Telephone
      No.:  212-888-2224
	 	 
	 	 Facsimile
      No.:  212-888-0334
	 	 
	 	 E-mail
      Address:  mfein@ramcapital.com
	 	 
	 	 Attention: 
      Michael Fein
	 	 
	 	 

    

     

     

    
    

     

    
      	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
      

       

      
        	 	NAME OF
      PURCHASER:  TRUK Opportunity Fund,
LLC

      

       

                                              /s/ Michael Fein        

      
        	 	 	 By:	Atoll Asset
      Management, LLC
	 	 	 Name:	 Michael
      Fein
	 	 	 Title:	 Principal

      

       

       

      
        	 	 Aggregate
      Purchase Price (Subscription Amount):  $355,002.00
	 	 
	 	 Number of
      Shares to be Acquired:  59,167
	 	 
	 	 Underlying
      Shares Subject to Warrant:  29,584
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	 1 East 52nd
      Street, 6th Floor
	 	 New York, New
      York  10022
	 	 
	 	 Telephone
      No.:  212-888-2224
	 	 
	 	 Facsimile
      No.:  212-888-0334
	 	 
	 	 E-mail
      Address:  mfein@ramcapital.com
	 	 
	 	 Attention: 
      Michael Fein
	 	 
	 	 

      

       

       

      
      

       

      
        	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	 	NAME OF
      PURCHASER:  Hudson Bay Overseas Fund
Ltd.

      

       

                                             

      
        	 	 	 By:	/s/
      Yoav Roth        
	 	 	 Name:	 Yoav
      Roth
	 	 	 Title:	 Principal and
      Portfolio Manager

      

       

       

      
        	 	 Aggregate
      Purchase Price (Subscription Amount):  $100,500.00
	 	 
	 	 Number of
      Shares to be Acquired:  16,750
	 	 
	 	 Underlying
      Shares Subject to Warrant:  8,375
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	120 Broadway, 40th
      Fl
	 	 New York, New
      York  10271
	 	 
	 	 Telephone
      No.:  212-571-1244
	 	 
	 	 Facsimile
      No.:  212-571-1279
	 	 
	 	 E-mail
      Address:  investments@hudsonbaycapital.com
	 	 
	 	 Attention: 
      Yoav Roth
	 	 
	 	 

      

       

       

      
      

       

      
        	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        	 	NAME OF
      PURCHASER:  Hudson Bay Fund LP

      

       

                                             

      
        	 	 	 By:	/s/
      Yoav Roth        
	 	 	 Name:	 Yoav
      Roth
	 	 	 Title:	 Principal and
      Portfolio Manager

      

       

       

      
        	 	 Aggregate
      Purchase Price (Subscription Amount):  $49,500.00
	 	 
	 	 Number of
      Shares to be Acquired:  8,250
	 	 
	 	 Underlying
      Shares Subject to Warrant:  4,125
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	120 Broadway, 40th
      Floor
	 	 New York, New
      York  10271
	 	 
	 	 Telephone
      No.:  212-571-1244
	 	 
	 	 Facsimile
      No.:  212-571-1279
	 	 
	 	 E-mail
      Address:  investments@hudsonbaycapital.com
	 	 
	 	 Attention: 
      Yoav Roth
	 	 
	 	 

      

       

       

      
      

       

      
        	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	 	NAME OF
      PURCHASER:  HK Partners L.P.

        

         

                                               

        
          	 	 	 By:	/s/
      Ronald B. Haave        
	 	 	 Name:	 Ronald B.
      Haave
	 	 	 Title:	 Managing
      Partner

        

         

         

        
          	 	 Aggregate
      Purchase Price (Subscription Amount):  $600,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  100,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  50,000
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	148 Hardesty
      Rd.
	 	 Stamford,
      CT  06903
	 	 
	 	 Telephone
      No.:  203-322-4504
	 	 
	 	 Facsimile
      No.:  203-468-8388
	 	 
	 	 E-mail
      Address:  ron@haave.com
	 	 
	 	 Attention: 
      
	 	 
	 	 

        

         

         

        
        

         

        
          	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	 	NAME OF
      PURCHASER:  Brian W. Matthews

        

         

                                               

        
          	 	 	 By:	/s/
      Brian W. Matthews        
	 	 	 Name:	 
	 	 	 Title:	 

        

         

         

        
          	 	 Aggregate
      Purchase Price (Subscription Amount):  $600,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  100,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  50,000
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	1052 Country Valley
      Road
	 	Thousand Oaks,
      CA  91362
	 	 
	 	 Telephone
      No.:  805-777-7970
	 	 
	 	 Facsimile
      No.:  
	 	 
	 	 E-mail
      Address:  brianmatthews1@mac.com
	 	 
	 	 Attention: 
      
	 	 
	 	 

        

         

         

        
        

         

        
          	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	 	NAME OF
      PURCHASER:  Iroquois Master Fund
Ltd.

        

         

                                               

        
          	 	 	 By:	/s/
      Joshua Silverman        
	 	 	 Name:	 Joshua
      Silverman
	 	 	 Title:	 Authorized
      Signatory

        

         

         

        
          	 	 Aggregate
      Purchase Price (Subscription Amount):  $699,996.00
	 	 
	 	 Number of
      Shares to be Acquired:  116,666
	 	 
	 	 Underlying
      Shares Subject to Warrant:  58,333
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	641 Lexington Ave,
      26th Fl
	 	New York, New
      York  10022
	 	 
	 	 Telephone
      No.:  212-974-3070
	 	 
	 	 Facsimile
      No.:  212-207-3452
	 	 
	 	 E-mail
      Address:  jsilverman@icfund.com
	 	 
	 	 Attention: 
      Joshua Silverman
	 	 
	 	 

        

         

         

        
        

         

        
          	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	 	NAME OF
      PURCHASER:  Gagnon 1999 Grandchildren's Trust STS 2/1/99 Maureen Drew
      TTEE

        

         

                                               

        
          	 	 	 By:	/s/
      Maureen Drew        
	 	 	 Name:	 Maureen
      Drew
	 	 	 Title:	Trustee

        

         

         

        
          	 	 Aggregate
      Purchase Price (Subscription Amount):  $150,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  25,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  12,500
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	P.O. Box
    691
	 	Bernardsville,
      NJ  07924
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

        

         

         

        
        

         

        
          	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
           

          
            
              	 	NAME OF
      PURCHASER:  Lois Gagnon

            

             

                                                   

            
              	 	 	 By:	/s/
      Lois Gagnon        
	 	 	 Name:	 Lois
      Gagnon
	 	 	 Title:	Self

            

             

             

            
              	 	 Aggregate
      Purchase Price (Subscription Amount):  $253,500.00
	 	 
	 	 Number of
      Shares to be Acquired:  42,250
	 	 
	 	 Underlying
      Shares Subject to Warrant:  21,125
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	P.O. Box
    691
	 	Bernardsville,
      NJ  07924
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

            

             

             

            
            

             

            
              	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

            

             

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
           

          
            
              	 	NAME OF
      PURCHASER:  Gagnon Investment Associates Master
  Fund

            

             

                                                   

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

            

             

             

            
              	 	 Aggregate
      Purchase Price (Subscription Amount):  $630,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  105,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  52,500
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	P.O. Box
    1034
	 	Grand Cayman
      KY1-1102
	 	Cayman
    Islands
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

            

             

             

            
            

             

            
              	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

            

             

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
             

            
              
                	 	NAME OF
      PURCHASER:  Neil Gagnon

              

               

                                                     

              
                	 	 	 By:	/s/
      Neil Gagnon        
	 	 	 Name:	 Neil
      Gagnon
	 	 	 Title:	Self

              

               

               

              
                	 	 Aggregate
      Purchase Price (Subscription Amount):  $501,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  83,500
	 	 
	 	 Underlying
      Shares Subject to Warrant:  41,750
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	P.O. Box
    691
	 	Bernardsville,
      NJ  07924
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

              

               

               

              
              

               

              
                	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

              

               

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          
            	 	NAME OF
      PURCHASER:  The Lois & Neil Gagnon
Foundation

          

           

                                                 

          
            	 	 	 By:	/s/
      Neil Gagnon        
	 	 	 Name:	 Neil
      Gagnon
	 	 	 Title:	President

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $162,600.00
	 	 
	 	 Number of
      Shares to be Acquired:  27,100
	 	 
	 	 Underlying
      Shares Subject to Warrant:  13,550
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	P.O. Box
    691
	 	Bernardsville,
      NJ  07924
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

          

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          
            	 	NAME OF
      PURCHASER:  Gagnon Family
Partnership

          

           

                                                 

          
            	 	 	 By:	/s/
      Neil Gagnon        
	 	 	 Name:	 Neil
      Gagnon
	 	 	 Title:	Partner

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $182,400.00
	 	 
	 	 Number of
      Shares to be Acquired:  30,400
	 	 
	 	 Underlying
      Shares Subject to Warrant:  15,200
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	P.O. Box
    691
	 	Bernardsville,
      NJ  07924
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

        

      

    

    
      
         

        
          
            	 	NAME OF
      PURCHASER:  Fallen Angel Partnership

          

           

                                                 

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

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $78,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  13,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  6,500
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	1370 6th Avenue,
      24th Floor
	 	New York, NY 
      10019
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            
               

              
                
                  	 	NAME OF
      PURCHASER:  Darwin Partnership

                

                 

                                                       

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

                

                 

                 

                
                  	 	 Aggregate
      Purchase Price (Subscription Amount):  $45,600.00
	 	 
	 	 Number of
      Shares to be Acquired:  7,600
	 	 
	 	 Underlying
      Shares Subject to Warrant:  3,800
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	1370 6th Avenue,
      24th Floor
	 	New York, NY 
      10019
	 	 
	 	 Telephone
      No.:  212-554-5000
	 	 
	 	 Facsimile
      No.:  212-265-6417
	 	 
	 	 E-mail
      Address:  susan@gagnonsec.com
	 	 
	 	 Attention: 
      Susan Grant
	 	 
	 	 

                

                 

                 

                
                

                 

                
                  	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  Gagnon
      Securities	 
	 	 
	 Street:   1370
      6th Avenue 24th	 
	 	 
	 City/State/Zip:
      New York, NY  10019	 
	 	 
	 Attention:
      Susan Grant	 
	 	 
	 Telephone
      No.: 212-554-5000	 
	 	 
	 	 

                

                 

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          
            	 	NAME OF
      PURCHASER:  Superius Securities MPP

          

           

                                                 

          
            	 	 	 By:	/s/
      A.C. Hudgins        
	 	 	 Name:	 A.C.
      Hudgins
	 	 	 Title:	 

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $2,000,004.00
	 	 
	 	 Number of
      Shares to be Acquired:  333,334
	 	 
	 	 Underlying
      Shares Subject to Warrant:  166,667
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	94 Grand
    Ave
	 	Englewood, NJ 
      07631
	 	 
	 	 Telephone
      No.:  201-568-8800
	 	 
	 	 Facsimile
      No.:  201-568-9392
	 	 
	 	 E-mail
      Address:  achudgins@gmail.com
	 	 
	 	 Attention: 
      
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

        

      

    

    
      
         

        
          
            	 	NAME OF
      PURCHASER:  Diamond Opportunity Fund,
LLC

          

           

                                                 

          
            	 	 	 By:	/s/
      Richard Marks        
	 	 	 Name:	 Richard
      Marks
	 	 	 Title:	 Managing
      Director

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $499,998
	 	 
	 	 Number of
      Shares to be Acquired:  83,333
	 	 
	 	 Underlying
      Shares Subject to Warrant:  41,666
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	500 Skokie Blvd.
      Suite 300
	 	Northbrook, IL 
      60062
	 	 
	 	 Telephone
      No.:  847-559-1002
	 	 
	 	 Facsimile
      No.:  847-919-4410
	 	 
	 	 E-mail
      Address:  rmarks@diamondgroup.us.com
	 	 
	 	 Attention:  Richard
      Marks
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

          

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          
            	 	NAME OF
      PURCHASER: Jennison Health Sciences
Fund

          

           

                                                 

          
            	 	 	 By:	/s/ David
      Chan
	 	 	 Name:	 David
      Chan
	 	 	 Title:	 Managing
      Director of Jennison and Portfolio Manager to the
Fund

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $3,000,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  500,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  250,000
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	 
	 	 
	 	 
	 	 Telephone
      No.:  
	 	 
	 	 Facsimile
      No.:  
	 	 
	 	 E-mail
      Address:  
	 	 
	 	 Attention: 
      
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

          

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
         

        
          
            	 	NAME OF
      PURCHASER:  UBS O'Connor

          

           

                                                 

          
            	 	 	 By:	/s/ Jeffrey
      F. Putman
	 	 	 Name:	 Jeffrey F.
      Putnam
	 	 	 Title:	  Executive
  Director

          

           

           

          
            	 	 Aggregate
      Purchase Price (Subscription Amount):  $900,000.00
	 	 
	 	 Number of
      Shares to be Acquired:  150,000
	 	 
	 	 Underlying
      Shares Subject to Warrant:  75,000
	 	 (50% of the
      number of Shares to be acquired)
	 	 
	 	 Tax ID
      No.:  
	 	 
	 	 Address for
      Notice:
	 	 
	 	
                  
	 	
                  
	 	 
	 	 Telephone
      No.:  
	 	 
	 	 Facsimile
      No.:  
	 	 
	 	 E-mail
      Address:  
	 	 
	 	 Attention: 
      
	 	 
	 	 

          

           

           

          
          

           

          
            	 Delivery
      Instructions:	 
	 	 
	 (if different
      than above)	 
	 	 
	 c/o  _______________________________
      	 
	 	 
	 Street:   ____________________________	 
	 	 
	 City/State/Zip:
      ______________________	 
	 	 
	 Attention:
      __________________________	 
	 	 
	 Telephone
      No.: ____________________________	 
	 	 
	 	 

          

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBITS

     

    A:          Form
of Warrant

    B:           Form
of Registration Rights Agreement

    C-1:       Accredited
Investor Questionnaire

    C-2:       Stock
Certificate and Warrant Questionnaire

    D:          Form
of Opinion of Company Counsel

    E:           Irrevocable
Transfer Agent Instructions

    F:           Form
of Secretary’s Certificate

    G:           Form
of Officer’s Certificate

    H:          Wire
Instructions

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

     

    EXHIBIT
A

     

    Form of
Warrant

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
B

     

    Form of
Registration Rights Agreement

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Instruction
Sheet

    (to be
read in conjunction with the entire

    Securities
Purchase Agreement and Registration Rights Agreement)

    

    
      	
              A.

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

            

    

    
 

    
      
        	
                 
      

              	
                1.

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

                

              

      

       

    

    
      	
               
      

            	
              2.

            	
              Exhibit C-1 –
      Accredited Investor Questionnaire:

            

    

    

    
      	
               
      

            	
              Provide
      the information requested by the Accredited Investor
      Questionnaire

            

    

    

    
      	
               
      

            	
              3.

            	
              Exhibit C-2
      Stock Certificate and Warrant
Questionnaire:

            

    

    

    
      	
               
      

            	
              Provide
      the information requested by the Stock Certificate and Warrant
      Questionnaire

            

    

    

    
      	
               
      

            	
              4.

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

            

    

    

    
      	
               
      

            	
              Provide
      the information requested by the Selling Securityholder Notice and
      Questionnaire

            

    

    

    
      	
               
      

            	
              5.

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

            

    

    

    David W.
Stadinski 

    Piper
Jaffray & Co.

    150 East
42nd Street, 35th Fl.

    New York,
NY 10017

    Tel:  212-284-9572

    Fax:  212-658-9604

    Email:  david.w.stadinski@pjc.com

    

    
      	
              B.

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

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C-1

    

    ACCREDITED
INVESTOR QUESTIONNAIRE

    

    (ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)

    

    To:           Cytori
Therapeutics, Inc.

    

    This
Investor Questionnaire (“Questionnaire”) must
be completed by each potential investor in connection with the offer and sale of
shares of common stock, par value $0.001 per share, and warrants to purchase
shares of common stock (the “Securities”), of
Cytori Therapeutics, Inc., a Delaware corporation (the “Corporation”).  The
Securities are being offered and sold by the Corporation without registration
under the Securities Act of 1933, as amended (the “Act”), and the
securities laws of certain states, in reliance on the exemptions contained in
Section 4(2) of the Act and on Regulation D promulgated thereunder and in
reliance on similar exemptions under applicable state laws.  The
Corporation must determine that a potential investor meets certain suitability
requirements before offering or selling Securities to such
investor.  The purpose of this Questionnaire is to assure the
Corporation that each investor will meet the applicable suitability
requirements.  The information supplied by you will be used in
determining whether you meet such criteria, and reliance upon the private
offering exemptions from registration is based in part on the information herein
supplied.

     

    This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security.  Your answers will be kept strictly
confidential.  However, by signing this Questionnaire, you will be
authorizing the Corporation to provide a completed copy of this Questionnaire to
such parties as the Corporation deems appropriate in order to ensure that the
offer and sale of the Securities will not result in a violation of the Act or
the securities laws of any state and that you otherwise satisfy the suitability
standards applicable to purchasers of the Securities.  All potential
investors must answer all applicable questions and complete, date and sign this
Questionnaire.  Please print or type your responses and attach
additional sheets of paper if necessary to complete your answers to any
item.

     

    PART
A.                      BACKGROUND
INFORMATION

    

    Name of
Beneficial Owner of the
Securities:      _________________________________________________                                                                                        

    

    Business
Address:     __________________________________________________________________________________                                                                       

    (Number and Street)

     

    __________________________________________________________________________________________________

    (City)                                           (State)                                                                (Zip
Code)

    

    Telephone
Number:
(___)         _________________________________________________                                                                                                                                 

    

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

    

    Type of
entity:    _________________________________________________                                                                                                                                      

    

    State of
formation:______________________                                                                                     Approximate
Date of formation: ____________________

     

     

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

     

    Yes
____                      No
____

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    If an
individual:

    

    Residence
Address:        __________________________________________________________________________________                                                                       

      (Number and Street)

       

      __________________________________________________________________________________________________

      (City)                                           (State)                                                                (Zip
Code)

      

      Telephone
Number:
(___)         _________________________________________________                                                                                                                                 

    

    

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

    

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

     

    
      Are you a
director or executive officer of the Corporation?

       

    

    Yes
____                      No
____

    

    Social
Security or Taxpayer Identification
No.        ______________________________                                                                                                                             

    

    

    PART
B.                      ACCREDITED INVESTOR
QUESTIONNAIRE

    

     

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

     

    
      	
               
      

            	
              __
      (1)

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

            

    

    

    
      	
               
      

            	
              __
      (2)

            	
              A
      broker or dealer registered pursuant to Section 15 of the Securities
      Exchange Act of 1934

            

    

    

    
      	
               
      

            	
              __
      (3)

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

            

    

    

    
      	
               
      

            	
              __
      (4)

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

            

    

    

    
      	
               
      

            	
              __
      (5)

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

            

    

    

    
      	
               
      

            	
              __
      (6)

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

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              __
      (7)

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

            

    

    

    
      	
               
      

            	
              __
      (8)

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

            

    

    

    
      	
               
      

            	
              __
      (9)

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

            

    

     

    
      
        	
                 
      

              	
                __
      (10)

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

              

      

      
        

        
          	
                   
      

                	
                  __
      (11)

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

                

        

         

        
          
            	
                     
      

                  	
                    __
      (12)

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

                  

          

           

        

      

    

    
      	
               
      

            	
              ___(13)

            	
              An
      executive officer or director of the
Company;

            

    

     

    
      
        	
                 
      

              	
                ___(14)

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

              

      

      

    

     

    A.           FOR
EXECUTION BY AN INDIVIDUAL:

     

    ____________________      By      ________________________________     

    Date

    Print
Name:   __________________________

    

    B.           FOR
EXECUTION BY AN ENTITY:

    

    Entity
Name:       ________________________________                                                         

    

    
      ____________________      By      ________________________________     

      Date

      Print
Name:   __________________________

    

                                                       

    Title:     ______________________________

     

                

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      C.           ADDITIONAL
SIGNATURES (if required by partnership, corporation or trust
document):

      

      Entity
Name:       ________________________________                                                         

      

      
        ____________________      By      ________________________________     

        Date

        Print
Name:   __________________________

      

                                                         

      Title:     ______________________________

    

     

     

     

    
      Entity
Name:       ________________________________                                                         

      

      
        ____________________      By      ________________________________     

        Date

        Print
Name:   __________________________

      

                                                         

      Title:     ______________________________

    

    
 

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    EXHIBIT
C-2

     

    Stock
Certificate and Warrant Questionnaire

     

    Pursuant
to Section 2.2(b) of the Agreement, please provide us with the following
information:

     

    
      	
              1.

            	
              The
      exact name that the Securities are to be registered in (this is the name
      that will appear on the stock certificate(s) and
      warrant(s)).  You may use a nominee name if
      appropriate:

            	________________________________________ 
      
	
              2.

            	
              The
      relationship between the Purchaser of the Securities and the Registered
      Holder listed in response to Item 1 above:

            	________________________________________   
      
	
              3.

            	
              The
      mailing address, telephone and telecopy number of the Registered Holder
      listed in response to Item 1 above:

            	________________________________________   
      
	 
      	 
      	________________________________________   
      
	 
      	 
      	________________________________________   
      
	 
      	 
      	________________________________________   
      
	 
      	 
      	________________________________________   
      
	
              4.

            	
              The
      Tax Identification Number (or, if an individual, the Social Security
      Number) of the Registered Holder listed in response to Item 1
      above:

            	________________________________________   
      

    

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    EXHIBIT
D

     

    Form of
Opinion of Company Counsel

     

    
      	
              1.  

            	
              The
      Company has been duly incorporated and is a validly existing corporation
      in good standing under the laws of the State of
  Delaware.

            

    

     

    
      	
              2.  

            	
              The
      Company has the requisite corporate power to own its property and assets
      and to conduct its business as it is currently being
      conducted.

            

    

     

    
      	
              3.  

            	
              The
      Company is duly qualified to do business as a foreign corporation and is
      in good standing under the laws of the State of
  California.

            

    

     

    
      	
              4.  

            	
              The
      Company has the requisite corporate power to execute, deliver and perform
      its obligations under the Transaction Documents, including, without
      limitation, to issue, sell and deliver the Securities under the Purchase
      Agreement.

            

    

     

    
      	
              5.  

            	
              Each
      of the Transaction Documents has been duly and validly authorized,
      executed and delivered by the Company and each such agreement constitutes
      a valid and binding agreement of the Company enforceable against the
      Company in accordance with its terms, subject to (i) applicable
      bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
      moratorium and other similar laws affecting the rights of creditors
      generally, (ii) general principles of equity, regardless of whether such
      enforcement is considered in a proceeding at law or in equity, and (iii)
      any rights to indemnity and contribution thereunder may be limited by
      federal and state securities laws and public policy
      considerations.

            

    

     

    
      	
              6.  

            	
              The
      Company’s authorized capital stock consists of 95,000,000 shares of Common
      Stock, par value $0.001 per share, and 5,000,000 shares of Preferred
      Stock, par value $0.001 per share. The Securities have been duly
      authorized, and upon issuance and delivery against payment therefor in
      accordance with the terms of the Purchase Agreement (and, with respect to
      the Warrant Shares, in accordance with the terms of the Warrants), the
      Securities will be validly issued, fully paid and nonassessable, and free
      of any preemptive right or similar rights contained in the Organizational
      Documents.  The Warrant Shares have been duly and validly
      reserved for issuance by all necessary corporate
  action.

            

    

     

    
      	
              7.  

            	
              The
      execution and delivery of the Transaction Documents by the Company and the
      issuance of the Securities pursuant thereto do not violate any provision
      of the Organizational Documents and do not violate (a) any federal or
      California governmental statute, rule or regulation which in our
      experience is typically applicable to transactions of the nature
      contemplated by the Transaction Documents or (b) any order, writ,
      judgment, injunction, decree, determination or award which has been
      entered against the Company and of which we are
  aware.

            

    

     

    
      	
              8.  

            	
              To
      our knowledge, there is no action, proceeding or investigation pending or
      overtly threatened against the Company before any court or administrative
      agency that questions the validity or enforceability of the Transaction
      Documents, or seeks to enjoin the performance of the Transaction
      Documents.

            

    

     

    
      	
              9.  

            	
              All
      consents, approvals, authorizations, or orders of, and filings,
      registrations, and qualifications with any U.S. Federal or California
      regulatory authority or governmental body or required under the Delaware
      General Corporation Law for the issuance of the Shares and Warrants, have
      been made or obtained, except for (a) the filing of a Form D
      pursuant to Securities and Exchange Commission Regulation D,
      (b) the filing of the notice to be filed under California
      Corporations Code Section 25102.1(d), and (c) the filings required in
      accordance with Section 4.6 of the Purchase
  Agreement.

            

    

     

    
      	
              10.  

            	
              The
      offer and sale of the Shares and Warrants pursuant to the Purchase
      Agreement are exempt from the registration requirements of the Securities
      Act of 1933, as amended, subject to the timely filing of a Form D
      pursuant to Securities and Exchange Commission
      Regulation D.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
E

     

    Form of
Irrevocable Transfer Agent Instructions

     

    As of
_________, 2008

     

    Computershare
Investor Services, LLC

    [Address]

    [Address]

    Attn:  _________________

     

     

    Ladies
and Gentlemen:

     

                    Reference
is made to that certain Securities Purchase Agreement, dated as of August 7,
2008 (the “Agreement”),
by and among Cytori Therapeutics, Inc., a Delaware corporation (the “Company”), and the purchasers
named on the signature pages thereto (collectively, and including permitted
transferees, the “Holders”), pursuant to which
the Company is issuing to the Holders shares of common stock (the “Shares”) of the Company, par
value $0.001 per share (the “Common Stock”) and warrants
(the “Warrants”) which
are exercisable into Common Stock.

     

                    This
letter shall serve as our irrevocable authorization and direction to you
(provided that you are the transfer agent of the Company at such time and the
conditions set forth in this letter are satisfied), subject to any stop transfer
instructions that we may issue to you from time to time, if any, to issue
certificates representing shares of Common Stock to a Holder from time to time
upon delivery to you of instructions by the Company as indicated in writing
executed by a duly authorized officer of the Company together with indication of
receipt of the exercise price therefor.

     

    You acknowledge and agree that so long
as you have received (a) written confirmation from the Company’s legal
counsel that either (1) a registration statement covering resales of the
Shares and Warrant Shares has been declared effective by the Securities and
Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), or
(2) the Shares and Warrant Shares have been sold in conformity with
Rule 144 under the Securities Act (“Rule 144”) or are
eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such securities and without volume or manner-of-sale restrictions and
(b) if applicable, a copy of such registration statement, then, unless
otherwise required by law, within three (3) business days of your receipt
of written authorization from a duly authorized officer of the Company that the
Common Stock may be issued pursuant to the Exercise Notice, you shall issue the
certificates representing the Common Stock registered in the names of such
Holders or transferees, as the case may be, and such certificates shall not bear
any legend restricting transfer of the Shares or Warrant Shares thereby and
should not be subject to any stop-transfer restriction; provided, however, that if
such Shares or Warrant Shares are not registered for resale under the Securities
Act or able to be sold under Rule 144 without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as
to such securities and without volume or manner-of-sale restrictions, then the
certificates for such Shares or Warrant Shares shall bear the following
restrictive legend:

    

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

     

     

                    The
Shares and the Warrant Shares shall continue to bear the following informative
legend:

     

    THIS
CERTIFICATE EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET
FORTH IN A RIGHTS AGREEMENT BETWEEN CYTORI THERAPEUTICS, INC. AND COMPUTERSHARE
TRUST COMPANY, INC., A COLORADO CORPORATION, AS RIGHTS AGENT, DATED AS OF MAY
29, 2003, AS AMENDED (THE “RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF CYTORI THERAPEUTICS, INC. UNDER CERTAIN CIRCUMSTANCES, AS
SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE
CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. CYTORI
THERAPEUTICS, INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE
RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF
OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND
VOID.

     

    A form of
written confirmation from the Company’s outside legal counsel that a
registration statement covering resales of the Shares and Warrant Shares has
been declared effective by the Commission under the Securities Act is attached
hereto as Annex I.

     

                   

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

     

    

    Very truly yours,

    

    CYTORI THERAPEUTICS, INC.

    

     

    By:  __________________________________

                                    Name:
________________________________

    Title:  ________________________________

    

    

    Acknowledged
and Agreed:

    

    COMPUTERSHARE
INVESTOR SERVICES, LLC

    

    By:
__________________________________

    Name:
________________________________

    Title:  ________________________________

    

    Date:  _________________,
2008

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    Annex I

     

    FORM
OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT

    
      	 
      	 
      	 
      
	
              Computershare
      Investor Services

              [Address]

              [Address]

              Attn:  _________________

            
	 
      	 
      	 
      
	 
      	 
      	
              Re:
      Cytori
      Therapeutics, Inc.

            

    

     

    Ladies
and Gentlemen:

     

                       We
are counsel to Cytori Therapeutics, Inc., a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of August 7, 2008, entered into by and among the Company and
the buyers named therein (collectively, the “Purchasers”) pursuant to
which the Company issued to the Purchasers shares of the Company’s common stock,
$0.001 par value per share (the “Common Stock”) and warrants
to purchase additional shares of Common Stock.  Pursuant to that
certain Registration Rights Agreement of even date, the Company agreed to
register the resale of such shares and the shares issuable upon exercise of such
warrants (collectively, the “Registrable Securities”),
under the Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Company’s obligations under the Registration Rights
Agreement, on                     ,
2008, the Company filed a Registration Statement on Form S-3 (File
No. 333-                    )
(the “Registration
Statement”) with the Securities and Exchange Commission (the “Commission”) relating to the
Registrable Securities which names each of the Purchasers as a selling
stockholder thereunder.

     

                      In
connection with the foregoing, we advise you that a member of the Commission’s
staff has advised us by telephone that the Commission has entered an order
declaring the Registration Statement effective under the Securities Act at ____
[a.m.][p.m.] on __________, ____, and we have no knowledge, after telephonic
inquiry of a member of the staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are
pending before, or threatened by, the Commission and the Registrable Securities
are available for resale under the Securities Act pursuant to the Registration
Statement.

     

                    Pursuant
to the Agreement, the Purchasers have agreed to satisfy the applicable
prospectus delivery requirements and to sell pursuant to the “Plan of
Distribution” section in the Registration Statement.  On the basis of
the foregoing, this letter shall serve as our standing notice to you that the
Common Stock may be freely transferred by the Purchasers pursuant to the
Registration Statement. You need not require further letters from us to effect
any future legend-free issuance or reissuance of Common Stock to the Purchasers
or the transferees of the Purchasers, as the case may be, as contemplated by the
Company’s Irrevocable Transfer Agent Instructions dated __________, 2008,
provided at the time of such reissuance, the Company has not otherwise notified
you that the Registration Statement is unavailable for the resale of the
Registrable Securities. This letter shall serve as our standing instructions
with regard to this matter.

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Very
      truly yours,

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              [DLA
      PIPER US LLP]

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	____________________________________________\\\\\\\ 
      
	 
      	 
      	 
      	 
      	 
      

    

     

    CC:           Purchasers

     

    Piper Jaffray & Co.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
F

     

    Form of
Secretary’s Certificate

    

    The
undersigned hereby certifies that he is the duly elected, qualified and acting
Secretary of Cytori Therapeutics, Inc., a Delaware corporation (the "Company"), and that as such
he is authorized to execute and deliver this certificate in the name and on
behalf of the Company and in connection with the Securities Purchase Agreement,
dated as of August 7, 2008, by and among the Company and the investors party
thereto (the "Securities
Purchase Agreement"), and further certifies in his official capacity, in
the name and on behalf of the Company, the items set forth
below.  Capitalized terms used but not otherwise defined herein shall
have the meaning set forth in the Securities Purchase Agreement.

     

    
      	
              1.  

            	
              Attached
      hereto as Exhibit A is a
      true, correct and complete copy of (a) the resolutions duly adopted by
      unanimous written consent of the Board of Directors of the Company,
      effective as of July 23, 2008, and (b) the resolutions duly adopted by the
      Special Pricing Committee of the Board of Directors of the Company at a
      meeting of the Special Pricing Committee held on _______,
      2008.  Such resolutions have not in any way been amended,
      modified, revoked or rescinded, have been in full force and effect since
      their adoption to and including the date hereof and are now in full force
      and effect.

            

    

     

    
      	
              2.  

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

            

    

     

    
      	
              3.  

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

            

    

     

    
      	
              4.  

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

            

    

     

    

    
      	
              Name

            	
              Position

            	
              Signature

               

            
	
              Christopher
      J. Calhoun

            	
              Chief
      Executive Officer

            	
              _________________________

            
	
              Mark
      E. Saad

            	
              Chief
      Financial Officer

            	
              _________________________

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day of
August, 2008.

     

     

    
      	 	___________________________________ 
	 	Jonathan
      E. Soneff
	
               
      

            	
              Secretary

            

    

    

    

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

    
       

      
        	 	___________________________________ 
	 	Christopher
      J. Calhoun
	
                 
      

              	
                Chief
      Executive Officer

              

      

      

    

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

     

    
 

    
      	
               
      

            	
              EXHIBIT
      A

            

    

    Resolutions

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

     

    Certificate
of Incorporation

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

     

    Bylaws

     

    

    

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
G

     

    Form of
Officer’s Certificate

     

    

    The
undersigned, the Chief Executive Officer of Cytori Therapeutics, Inc., a
Delaware corporation (the "Company"), pursuant to
Section 5.1(g) of the Securities Purchase Agreement, dated as of August 7, 2008,
by and among the Company and the investors signatory thereto (the "Securities Purchase
Agreement"), hereby represents, warrants and certifies as follows
(capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the Securities Purchase Agreement):

    

    
      	
               
      

            	
              1.

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

            

    

    

    
      	
               
      

            	
              2.

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

            

    

    

    

    IN WITNESS WHEREOF, the
undersigned has executed this certificate this ___ day of August,
2008.

    

    

    

    ___________________________

    Christopher
J. Calhoun

    Chief
Executive Officer

    

     

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
H

     

    Wire
Instructions

     

    

     

    

    JPMorgan
Chase Bank

    ABA #
XXXXXXXXX

    Account
No.:  XXXXXXXXX

    Account
Name:  Cytori Therapeutics Inc.exhibit1034_warrant.htm

    Exhibit
10.34

    
 

    
      NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

       

      CYTORI
THERAPEUTICS, INC.

       

      WARRANT
TO PURCHASE COMMON STOCK

       

      
        	 
      	 
      	 
      
	
                Warrant
      No. ___

              	
                  

              	
                Original
      Issue Date: _________, 2008

              

      

       

      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 [_____________
(__________)] shares 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 per share equal to $8.50 per share (as
adjusted from time to time as provided in Section 9 herein, the “Exercise Price”), at any time
and from time to time after the date that is six months from the date hereof
(the “Trigger Date”)
and through and including 5:30 P.M., New York City time, on ____________, 2013
(the “Expiration
Date”), and subject to the following terms and conditions:

      

      This
Warrant (this “Warrant”) is one of a series
of similar warrants issued pursuant to that certain Securities Purchase
Agreement, dated August 7, 2008, by and among the Company and the Purchasers
identified therein (the “Purchase
Agreement”).  All such warrants are referred to herein,
collectively, as the “Warrants.”

       

      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.           
Registration of
Warrants.  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.           Registration of
Transfers. Subject to the restrictions on transfer set forth in Section
4.1 of the Purchase Agreement and compliance with all applicable securities
laws, 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 Schedule 2 hereto
duly completed and signed, to the Company’s transfer agent or to the Company at
its address specified in the Purchase Agreement and (x) delivery, at the request
of the Company, of an opinion of counsel reasonably satisfactory to the Company
to the effect that the transfer of such portion of this Warrant may be made
pursuant to an available exemption from the registration requirements of the
Securities Act and all applicable state securities or blue sky laws and (y)
delivery by the transferee of a written statement to the Company certifying that
the transferee is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and making the representations and certifications set forth in
Section 3.2(b), (c), (d) and (f) of the Purchase Agreement, to the Company at
its address specified in the Purchase Agreement. 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 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. The Company shall prepare, issue
and deliver at its own expense any New Warrant under this Section
3.

       

      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 Trigger Date and through and including 5:30 P.M. New York City
time, on the Expiration Date. At 5:30 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 Schedule 1 hereto
(the “Exercise
Notice”), completed and duly signed,  and (ii) payment of the
Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised (which may take the form of a “cashless exercise” if so
indicated in the Exercise Notice and if a “cashless exercise” may occur at such
time pursuant to Section 10 below), and the date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an
“Exercise Date.” The
delivery by (or on behalf of) the Holder of the Exercise Notice and the
applicable Exercise Price as provided above shall constitute the Holder’s
certification to the Company that its representations contained in Section
3.2(b), (c), (d) and (f) of the Purchase Agreement are true and correct as of
the Exercise Date as if remade in their entirety (or, in the case of any
transferee Holder that is not a party to the Purchase Agreement, such transferee
Holder’s certification to the Company that such representations are true and
correct as to such assignee Holder as of the 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 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 (provided that, if the Registration
Statement is not effective and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an
opinion of counsel reasonably satisfactory to the Company to the effect that the
issuance of such Warrant Shares in such other name may be made pursuant to an
available exemption from the registration requirements of the Securities Act and
all applicable state securities or blue sky laws), (i) a certificate for the
Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii)
an electronic delivery of the Warrant Shares to the Holder’s account at the
Depository Trust Company (“DTC”) or a similar
organization, unless in the case of clause (i) and (ii) a registration statement
covering the resale of the Warrant Shares and naming the Holder as a selling
stockholder thereunder is not then effective or the Warrant Shares are not
freely transferable without restriction under Rule 144 by Holders who are not
affiliates of the Company, in which case such Holder shall receive a certificate
for the Warrant Shares issuable upon such exercise with appropriate restrictive
legends.  The Holder, or any Person 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.  If the Warrant
Shares are to be issued free of all restrictive legends, the Company shall, upon
the written request of the Holder, use its reasonable best efforts to deliver,
or cause to be delivered, Warrant Shares hereunder electronically through The
Depository Trust Company 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.

       

      (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 a
certificate representing 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 (3) Trading Days after the Holder’s request and in the
Holder’s sole discretion, either (1) 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 deliver such certificate (and to issue such
Warrant Shares) shall terminate or (2) promptly honor its obligation to deliver
to the Holder a certificate or certificates representing 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 bid price of a share of Common Stock 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 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 of any obligation to
the Company or any 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      violation
or alleged violation of law by the Holder or any other Person, 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 certificates representing shares of Common Stock 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 or an Affiliate thereof.
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 receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each 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. The Company will take all
such action as may be reasonably necessary to assure that such shares of Common
Stock may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed.

       

      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) or (iii) rights or warrants
to subscribe for or purchase any security, or (iv) any other asset (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 without regard to
any limitation on exercise contained therein.

      

      (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 Person, in which 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 Person,
(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, or (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)
above) (in any such case, 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 Person 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 analogous of a Fundamental Transaction
type.  Notwithstanding the foregoing, in the event of a Fundamental
Transaction in which the consideration consists of substantially all cash or
securities of a private company, 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 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  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.

      

                  (d)           Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) and (e) 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 increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.

       

      (e)              Subsequent Equity
Sales.

       

      (i)    Except as
provided in subsection (e)(iii) hereof, if and whenever the Company shall issue
or sell, or is, in accordance with any of subsections (e)(ii)(l) through
(e)(ii)(7) hereof, deemed to have issued or sold, any shares of Common Stock for
no consideration or for a consideration per share less than the Exercise Price
in effect immediately prior to the time of such issue or sale, then and in each
such case (a “Trigger
Issuance”) the then-existing Exercise Price shall be reduced as of the
close of business on the effective date of the Trigger Issuance, to a price
determined as follows:

      

      Adjusted
Exercise Price = (A x
B) + D

                  A+C

      

      where

      

      “A” equals the number of shares of
Common Stock outstanding, including Additional Shares of Common Stock (as
defined below) deemed to be issued hereunder, immediately preceding such Trigger
Issuance;

      

      “B” equals the Exercise Price in effect
immediately preceding such Trigger Issuance;

      

      “C” equals the number of Additional
Shares of Common Stock issued or deemed issued hereunder as a result of the
Trigger Issuance; and

      

      “D” equals the aggregate consideration,
if any, received or deemed to be received by the Company upon such Trigger
Issuance;

      

      provided, however, that in no
event shall the Exercise Price after giving effect to such Trigger Issuance be
greater than the Exercise Price immediately prior to such Trigger
Issuance.

       

      For
purposes of this subsection (e), “Additional Shares of Common Stock” shall mean
all shares of Common Stock issued by the Company or deemed to be issued pursuant
to this subsection (e), other than Excluded Issuances (as defined in subsection
(e)(iii) hereof).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                             
(ii)    For purposes of this subsection 9(e), the following
subsections (e)(ii)(l) to (e)(ii)(7) shall also be applicable:

       

                                                (1)   
Issuance of Rights or
Options. In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any warrants or other
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or security convertible into or exchangeable for
Common Stock (such warrants, rights or options being called “Options” and such convertible
or exchangeable stock or securities being called “Convertible Securities”),
whether or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per share for
which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of
(x) the total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus (y) the aggregate
amount of additional consideration payable to the Company upon the exercise of
all such Options, plus (z), in the case of such Options that relate to
Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such Options, then the total
number of shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been issued
for such price per share as of the date of granting of such Options or the
issuance of such Convertible Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Exercise Price. Except as otherwise
provided in subsection 9(e)(ii)(3), no adjustment of the Exercise Price
shall be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.

       

                                                (2)   
Issuance of
Convertible Securities. In case the Company shall in any manner issue
(directly and not by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or convert any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon such conversion or exchange (determined
by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof, by (ii) the total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the
Exercise Price, provided that (a) except as otherwise provided in
subsection 9(e)(ii)(3), no adjustment of the Exercise Price shall be made
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities and (b) no further adjustment of the Exercise Price
shall be made by reason of the issue or sale of Convertible Securities upon
exercise of any Options to purchase any such Convertible Securities for which
adjustments of the Exercise Price have been made pursuant to the other

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      provisions
of subsection 9(e). No adjustment pursuant to
this Section 9 shall be made if such adjustment would result in an increase of
the Exercise Price then in effect.

       

       

                                                (3)   
Change in Option Price
or Conversion Rate. Upon the happening of any of the following events,
namely, if the purchase price provided for in any Option referred to in
subsection 9(e)(ii)(l) hereof, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in subsections 9(e)(ii)(l) or 9(e)(ii)(2), or the rate at which Convertible
Securities referred to in subsections 9(e)(ii)(l) or 9(e)(ii)(2) are convertible
into or exchangeable for Common Stock shall change at any time (including, but
not limited to, changes under or by reason of provisions designed to protect
against dilution), the Exercise Price in effect at the time of such event shall
forthwith be readjusted to the Exercise Price that would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold.

       

                                                (4)           Stock
Dividends.  Subject to the provisions of this Section 9(e), in
case the Company shall declare a dividend or make any other distribution upon
any stock of the Company (other than the Common Stock) payable in Common Stock,
Options or Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.

       

      (5)    Consideration for
Stock.  In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the gross amount received by the Company
therefor. In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be deemed to be the
fair value of such consideration as determined in good faith by the Board of
Directors of the Company. In case any Options shall be issued in connection with
the issue and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board of Directors of
the Company. If Common Stock, Options or Convertible Securities shall be issued
or sold by the Company and, in connection therewith, other Options or
Convertible Securities (the “Additional Rights”) are
issued, then the consideration received or deemed to be received by the Company
shall be reduced by the fair market value of the Additional Rights (as
determined using the Black-Scholes option pricing model or another method
mutually agreed to by the Company and the Holder). The Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holder as to
the fair market value of the Additional Rights. In the event that the Board of
Directors of the Company and the Holder are unable to agree upon the fair market
value of the Additional Rights, the Company and the Holder shall jointly select
an appraiser who is experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.

       

      (6)           Record
Date.  In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them (i) to receive a dividend
or other distribution payable in Common Stock, Options or Convertible Securities
or (ii) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

       

                             
(iii)    Notwithstanding the foregoing, no adjustment will be
made under this paragraph (e) in respect of: (i) the issuance of
securities upon the exercise or conversion of any Common Stock or Common Stock
Equivalents issued by the Company on or prior to the date hereof, (ii) the
grant of options, warrants, Common Stock or other Common Stock Equivalents (but
not including any amendments to such instruments) under any duly authorized
Company stock option, restricted stock plan or stock purchase plan whether now
existing or hereafter approved by the Company and its stockholders in the
future, and the issuance of Common Stock in respect thereof, (iii) the
issuance of securities in connection with a Strategic Transaction, or
(iv) the issuance of securities in a transaction described in
Section 9(a) or 9(b) (collectively, “Excluded Issuances”). For
purposes of this paragraph, a “Strategic Transaction” means
a transaction or relationship in which (1) the Company issues shares of
Common Stock to a Person that the Board of Directors of the Company determined
in good faith is, itself or through its Subsidiaries, an operating company in a
business synergistic with the business of the Company (or a shareholder thereof)
and (2) the Company expects to receive benefits in addition to the
investment of funds, but shall not include (x) a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to
a Person whose primary business is investing in securities or (y) issuances
to lenders.

       

                            (iv)           NASDAQ
Limitation.  Upon any adjustment to the Exercise Price pursuant
to Section 9(e)(i) above, the number of Warrant Shares purchasable hereunder
shall be adjusted by multiplying such number by a fraction, the numerator of
which shall be the Exercise Price in effect immediately prior to such adjustment
and the denominator of which shall be the Exercise Price in effect immediately
thereafter. This provision shall not restrict the number of shares of Common
Stock that a Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may receive in the
event of a transaction contemplated by Section 9 of this
Warrant.  Notwithstanding any other provisions in this Section 9 to
the contrary, if a reduction in the Exercise Price pursuant to Section 9(e)(i)
would require the Company to obtain stockholder approval of the transactions
contemplated by the Purchase Agreement pursuant to NASDAQ Marketplace Rule
4350(i) and such stockholder approval has not been obtained, the Exercise Price
shall be reduced to the maximum extent that would not require stockholder
approval under such Rule.

      

      (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 ten (10) business 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; 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 shall pay the Exercise Price in immediately available
funds; provided,
however, that if, on any Exercise Date there is not an effective
Registration Statement (as defined in that certain Registration Rights
Agreement, of even date herewith, by and among the Company and the several
purchasers signatory thereto) registering, or no current prospectus available
for, the resale of the Warrant Shares by the Holder, then the Holder may, in its
sole discretion, satisfy its obligation to pay the Exercise Price through a
“cashless exercise”, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

       

      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.

       

      A = the
average of the Closing Sale Prices of a share of Common Stock (as reported by
Bloomberg Financial Markets) for the five (5) Trading Days ending on the date
immediately preceding the Exercise Date.

       

      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 Financial Markets, 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 Financial Markets, 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 Financial Markets, 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
Board of Directors of the Company shall use its good faith judgment to determine
the fair market value.  The Board of Directors’ 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 Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the original
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced as to such original Holder, on the date this Warrant was originally
issued pursuant to the Purchase Agreement (provided that the Commission
continues to take the position that such treatment is proper at the time of such
exercise).

       

      11.           Limitations on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of Warrant Shares that may be acquired by the Holder upon any exercise of
this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by the Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice by the Holder will constitute a representation by the Holder
that it has evaluated the limitation set forth in this Section 11 and determined
that issuance of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this Section 11.  The Company’s obligation
to issue shares of Common Stock in excess of the limitation referred to in this
Section 11 shall be suspended (and, except as provided below, shall not
terminate or expire notwithstanding any contrary provisions hereof) until such
time, if any, as such shares of Common Stock may be issued in compliance with
such limitation; provided, that, if, as of 5:30 P.M., New York City time, on the
Expiration Date, the Company has not received written notice that the shares of
Common Stock may be issued in compliance with such limitation, the Company’s
obligation to issue such shares shall terminate.  This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant.  By written
notice to the Company, which will not be effective until the 61st day
after such notice is delivered to the Company, the Holder may waive the
provisions of this Section 11 to change the beneficial ownership limitation to
9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this
Warrant, and the provisions of this Section 11 shall continue to apply. Upon
such a change by a Holder of the beneficial ownership limitation from such 4.99%
limitation to such 9.99% limitation, the beneficial ownership limitation may not
be further waived by such Holder.   

      

      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 next whole number and the Company shall pay the Holder in cash the fair
market value (based on the Closing Sale Price) for any such fractional
shares.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      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
the Purchase Agreement 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
the Purchase Agreement 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 address
and facsimile number of a party for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such party by two (2)
Trading Days’ prior notice to the other party in accordance with this Section
13.

       

      14.           Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (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 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
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 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 such Person 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 in Section 4.1 of the Purchase Agreement, and compliance with
applicable securities laws, this Warrant may be assigned by the Holder. This
Warrant may not be assigned by the Company without the 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 other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing signed by the
Company and the Holder, or their successors and assigns.

       

      (c) Amendment and
Waiver.  Except as otherwise provided herein, the provisions of
the Warrants 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 Holders of Warrants representing a majority
of the Warrant Shares obtainable upon exercise of the Warrants then
outstanding.

       

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

       

      (e) 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 LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH
PARTY 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 (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH
PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR 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 THE
PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL
BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW. EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY
JURY. 

       

      (d)           Headings.   The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

       

      (e)           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 INTENTIONALLY LEFT BLANK,

      SIGNATURE
PAGE FOLLOWS]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      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:

              	 
      	 
      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
1

      

      CYTORI
THERAPEUTICS, INC.

      

      FORM OF
EXERCISE NOTICE

      

      (To be
executed by the Holder to purchase shares of Common Stock under the foregoing
Warrant)

       

      Ladies
and Gentlemen:

      

      (1)           The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”).  Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.

      

      (2)           The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.

        

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

      

        o          Cash
Exercise

      

        o         
“Cashless Exercise” under Section 10

      

      (4)           If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in immediately available funds to the Company in accordance with the terms of
the Warrant.

      

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

       

      (6)           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 (as
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 11 of the Warrant to which this notice
relates.

      

       

       

      Dated:_______________,
_____

       

      Name of
Holder:  ___________________________

       

      By:__________________________________

       

      Name:
_______________________________

       

      Title:  _______________________________

      (Signature
must conform in all respects to name of Holder as specified on the face of the
Warrant)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
2

      

      CYTORI
THERAPEUTICS, INC.

      

      FORM OF
ASSIGNMENT

       

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

       

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

      

      
        	
                (a)

              	
                the
      offer and sale of the Warrant contemplated hereby is being made in
      compliance with Section 4(1) of the United States Securities Act of 1933,
      as amended (the “Securities Act”) or another valid exemption from the
      registration requirements of Section 5 of the Securities Act and in
      compliance with all applicable securities laws of the states of the United
      States;

              

      

       

      
        	
                (b)

              	
                the
      undersigned has not offered to sell the Warrant by any form of general
      solicitation or general advertising, including, but not limited to, any
      advertisement, article, notice or other communication published in any
      newspaper, magazine or similar media or broadcast over television or
      radio, and any seminar or meeting whose attendees have been invited by any
      general solicitation or general
advertising;

              

      

       

      
        	
                (c)

              	
                the
      undersigned has read the Transferee’s investment letter included herewith,
      and to its actual knowledge, the statements made therein are true and
      correct; and

              

      

       

      
        	
                (d)

              	
                the
      undersigned understands that the Company may condition the transfer of the
      Warrant contemplated hereby upon the delivery to the Company by the
      undersigned or the Transferee, as the case may be, of a written opinion of
      counsel (which opinion shall be in form, substance and scope customary for
      opinions of counsel in comparable transactions) to the effect that such
      transfer may be made without registration under the Securities Act and
      under applicable securities laws of the states of the United
      States.

              

      

       

      
        	
                Dated:
        _________________________,
          __________________

              	 
      	 
      ___________________________________________
	 
      	 
      	
                (Signature
      must conform in all respects to name of holder as specified on the face of
      the Warrant)

              
	 
      	 
      	 
      ___________________________________________
	 
      	 
      	
                Address
      of Transferee

              
	
                In
      the presence of:

              	 
      	 
      
	 
      	 
      	 
      ___________________________________________
	 
      ___________________________________________	 
      	 
      ___________________________________________

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