Document:

Employment Agreement_E. Scarbrough

    EXHIBIT
      10.38

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT is entered into as of July 25, 2006 (the “Effective Date”), by and
      between Cytori Therapeutics, Inc., a Delaware corporation located at 3020 Callan
      Road, San Diego, CA 92121 (“Company”), and Elizabeth A. Scarbrough, an
      individual (“Employee”). 

    

    Whereas,
      the Company has eliminated the position of Vice President, Marketing &
Development on July 25, 2006; and

    

    Whereas,
      the Company and Employee wish to continue the Employment relationship in a
      new
      capacity through February 7, 2007; 

    

    Now
      therefore, in consideration of the mutual promises made by the parties to this
      Agreement, the parties agree as follows: 

    

    1.
      Duties
      and Compensation 

    

    (a)
      Employee is engaged by the Company as its Strategic Marketing & Development
      Advisor with duties as directed by the CEO and/or the President and otherwise
      customarily associated with that position. 

    

    (b)
      The
      Company shall pay to Employee in exchange for the services to be rendered
      hereunder a salary of Fifteen Thousand Four Hundred and Seventeen Dollars
      [$15,417.00] per month, payable twice a month on the fifteenth and last days
      of
      each month during which this Agreement is in force. 

    

    (c)
      In
      exchange for Company agreeing to enter into this Agreement, Employee shall
      be
      required to sign a full release of claims with respect to her past employment
      with the Company. The release shall be in the form attached hereto as Exhibit
      A.
      Company shall have the option to suspend its performance under this Agreement
      and the Stock Option Extension Agreement until such time as Employee has
      executed the full release of claims and the seven day period for revocation
      of
      the release has elapsed. In the event the release is not signed by Employee
      within the 45 day period, or in the event Employee revokes the release prior
      to
      the expiration of the 7 day revocation period, the parties agree that this
      Agreement and the Stock Option Extension Agreement shall immediately terminate
      and Company shall have no obligations to Employee under this Agreement, and
      all
      outstanding Company stock options described in the Stock Option Extension
      Agreement shall immediately terminate in their entirety. 

    

    2.
      Guaranteed Duration 

    

    The
      term
      of this Agreement shall commence on July 25, 2006 and shall end on February
      7,
      2007 (the”Term”) unless extended by mutual agreement. The employment
      relationship created by this Agreement is “at will” and may be terminated by
      either the Company or Employee at any time, with or without cause. Should the
      Company terminate Employee without cause prior to February 7, 2007, Employee
      shall receive, as severance, the balance of her monthly salary payments that
      would have otherwise been payable from such date of early termination through
      February 7, 2007. 

    

    3.
      Other
      Compensation / Benefits / Acknowledgements

    

    Employee
      understands and agrees that by her employment hereunder that she shall not
      earn
      or accrue the right to any additional paid time off (or “PTO”), nor shall she be
      eligible from the Effective Date of this Agreement to the vesting of any stock
      options through the Company’s incentive stock option programs during the term of
      this Agreement. Employee expressly acknowledges and agrees that this Agreement
      shall serve as full and final compensation for any and all PTO that she may
      have
      accrued prior to the Effective Date. Employee also understands and agrees that
      she is eligible to participate in the Company’s flexible benefits plan for
      2006/2007, but she agrees to not to submit for reimbursement of amounts in
      excess of that which she has paid into the plan.

    

    Employee
      understands and agrees that she shall be entitled to participate in all other
      standard benefits offered by the Company through the term of this Agreement.
      

    

    4.
      Agreement Relating to Confidential Information 

    

    Employee
      agrees that she shall continue to be covered by the Company’s Employment,
      Confidentiality and Assignment Agreement which she executed on March 28, 2003.
      

    

    5.
      Noninterference 

    

    While
      employed by the Company and for two (2) years immediately following the
      termination of employment, Employee agrees not to interfere with the business
      of
      the Company by soliciting, attempting to solicit, inducing, or otherwise causing
      any employee of the Company to terminate his or her employment in order to
      become an employee, consultant or independent contractor to
      or for
      any competitor of the Company. 

    

    Employee
      agrees that the duties under Sections 4 and 5 of this Agreement shall survive
      termination of employment with the Company. 

    

    6.
      Governing Law

    

    This
      Agreement and the rights and obligations of the parties shall be governed and
      construed by the substantive laws of the State of California as applied to
      contracts that are executed and performed entirely in California. Exclusive
      jurisdiction and venue for any dispute arising out of or related to this
      Agreement shall lie with the federal and state courts located in and serving
      San
      Diego County, California.

    

    7.
      Complete Agreement; Amendments 

    

    This
      Agreement, together with the Stock Option Extension Agreement and the
      Employment, Confidentiality and Assignment Agreement between Employee and the
      Company (including all exhibits and attachments thereto), are the entire
      agreement of the parties with respect to the subject matter hereof and thereof
      and may not be amended, supplemented, canceled or discharged except by written
      instrument executed by both parties hereto. If either party should waive any
      breach of any provision
      of this Agreement, he, she or it shall not thereby be deemed to have waived
      any
      preceding or succeeding breach of the same or any other provision of this
      Agreement. 

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
      Date.

     

    
      	
              EMPLOYEE:

               

              Elizabeth
                A. Scarbrough

               

               

              /s/
                Elizabeth A. Scarbrough

               

            	
              COMPANY:

               

              Cytori
                Therapeutics, Inc.

               

               

              By:
                Mark
                E. Saad 

              Name:
                Mark E. Saad

              Title: Chief
                Financial OfficerAmended and Restated Exclusive License Agreement_UC

    

      Exhibit
        10.39

      

      AMENDED
        AND RESTATED 

      EXCLUSIVE
        LICENSE AGREEMENT

      

      for

      

      ADIPOSE-DERIVED
        STEM CELLS

      

      This
        amended and restated exclusive license agreement ("Agreement") is made effective
        this 6th
        day
        of
        September, 2006 ("Effective Date"), between The Regents of the University
        of
        California, a California corporation, having its statewide administrative
        offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200
        ("The Regents"), and Cytori Therapeutics, Inc., a Delaware corporation, having
        a
        principal place of business at 3020 Callan Road, San Diego, CA 92121
        ("Licensee").

      

      BACKGROUND
        IN CONNECTION WITH THE AMENDMENT AND RESTATEMENT

      

      A.
        The
        Regents and StemSource, Inc. entered into that certain Exclusive License
        Agreement for Adipose-Derived Stem Cells (U.C. Agreement Control Number
        2002-03-0194) effective October 16, 2001 (the “License Agreement”), as amended
        by the Amendment to Exclusive License Agreement between The Regents and
        StemSource, Inc. dated January 23, 2002, and by the Consent Of Substitution
        Of
        Party dated November 8, 2002 pursuant to which Cytori Therapeutics, Inc
        (formerly MacroPore Biosurgery, Inc.) was substituted in as the exclusive
        licensee to The Regents interest in certain Inventions (as described below),
        under terms and conditions set forth in the License Agreement.

      

      B.
        The
        Regents and Licensee have recently reached a mutual understanding that the
        License Agreement drafted in 2001 no longer accurately reflected the business
        model of the Licensee, and that it contained certain restrictions and milestones
        that were not optimal for the commercialization of the Invention
        portfolio.

      

      C.
        In
        light of these issues, the parties have agreed to amend and restate the License
        Agreement to maximize the commercial potential for the Inventions, the interests
        of the parties and the public good.

      

      BACKGROUND
        OF THE INVENTIONS

      

      A.
        Certain inventions, generally characterized as "Adipose-Derived Stem Cells
        and
        Lattices" ("Inventions"), were made in the course of research at the University
        of California, Los Angeles by Drs. Marc H. Hedrick, H. Peter Lorenz, Prosper
        Benhaim and Min Zhu ("Regents' Inventors") and as of the Effective Date named
        inventors at the University of Pittsburgh ("Pittsburgh") include Drs. Adam
        J.
        Katz, J. Ramón Llull and J. William Futrell ("Pittsburgh's Inventors")
        (collectively, the "Inventors"). The Inventions are disclosed in UC Case
        No.
        2000-310 and are covered by Patent Rights as defined below.

      

      B.
        Licensee acknowledges that The Regents and Pittsburgh have not entered into
        any
        agreement that sets out the rights of each in regards to patent prosecution
        matters, inventorship, or licensing of the Inventions. 

      

      C.
        Licensee acknowledges that Pittsburgh has filed and taken the lead in
        prosecuting PCT/US00/06232 (filed 03/10/2000 and designating the US) and
        The
        Regents has filed and taken the lead in prosecuting a Continuation-in-Part
        application (filed 09/10/2001). No decisions have been made by the parties
        concerning Patent Rights.

      

      D.
        Licensee acknowledges that certain of the Inventions may be jointly owned
        by The
        Regents and Pittsburgh and that each party is licensing its interest in Patent
        Rights independently of the other.

      

      E.
        Licensee acknowledges and agrees that the rights granted under this Agreement
        may be limited by Pittsburgh's joint ownership or sole ownership in certain
        claims under Patent Rights, and the licenses granted under this Agreement
        are
        granted solely under The Regents undivided interest in Patent Rights, whatever
        those rights might be. 

      

      F.
        Licensee wishes to obtain rights from The Regents for the exclusive commercial
        development, use and sale of products from The Regents' interest in the
        Inventions, and The Regents is willing to grant those rights so that the
        Inventions may be developed to their fullest and the benefits enjoyed by
        the
        general public.

      

      G.
        Licensee is "a small business firm" as defined in 15 U.S.C. § 632.

       

      H.
        Licensee and The Regents recognize and agree that (subject to Sections 2.2
        and
        2.3 below) royalties due under this Agreement on products and methods will
        be
        paid by Licensee on both pending patent applications and issued
        patents.

      

      In
        view
        of the foregoing, the parties agree:

      

      	1.  	
              DEFINITIONS

            

      

      "Affiliate"
        means any corporation or other business entity: (i) in which Licensee owns
        or
        controls, directly or indirectly, at least fifty percent (50%) of the
        outstanding stock or other voting rights entitled to elect directors; or
        (ii)
        which owns, directly or indirectly, at least fifty percent (50%) of the
        outstanding stock or other voting rights entitled to elect directors of the
        Licensee; or (iii) which is under common ownership or control with Licensee
        to
        the extent of at least fifty percent (50%) of the outstanding stock or other
        voting rights entitled to elect directors. Notwithstanding the foregoing,
        in any
        country where the local law does not permit foreign equity participation
        of at
        least fifty percent (50%), then an "Affiliate" includes any company in which
        Licensee owns or controls, or is owned or controlled by, or is under common
        ownership or control with, directly or indirectly, the maximum percentage
        of
        outstanding stock or voting rights permitted by local law.

      

      "Licensed
        Method"
        means any method that is covered by or claimed in Patent Rights, or the use
        of
        which would constitute, but for the license granted to Licensee under this
        Agreement, an infringement of any unexpired claim of a patent or pending
        claim
        of a patent application included in Patent Rights.

      

      "Licensed
        Product"
        means any product that is covered by or claimed in Patent Rights; that is
        used
        in a manner requiring the performance of the Licensed Method; that is produced
        by the Licensed Method or that the manufacture, use or sale of which would
        be an
        infringement, but for the license granted to Licensee pursuant to this
        Agreement, of an unexpired claim of a patent or pending claim of a patent
        application included in Patent Rights. This definition of Licensed Product
        also
        includes a service either used by Licensee or an Affiliate or sublicensee
        or
        provided by Licensee an Affiliate or sublicensee to its customers when such
        service requires the use of Licensed Product or performance of Licensed
        Method.

      

      “Research
        Product”
        means a Licensed Product that is not a Clinical Product and is sold for research
        purposes or drug discovery purposes, i.e. an assay for identifying or validating
        human therapeutic drugs.

      

      “Clinical
        Product”
        means a Licensed Product which, were it sold in the United States, would
        require
        regulatory approval from the United States Food and Drug
        Administration.

       

      “Product”
        means Research Product and Clinical Product.

      

      1.7 “Field”
        means
        any and all products and/or services for the research, diagnosis, and/or
        therapy
        of disease and/or dissorders in humans and for cosmetic applications in humans.
        

      

      1.8 "Net
        Sales"
        means
        the total of the gross invoice prices from the Final Sale of Product, or
        Licensed Method performed by Licensee or an Affiliate, less the sum of the
        following actual and customary deductions where applicable: cash, trade or
        quantity discounts; sales, use, tariff, import/export duties or other excise
        taxes imposed on particular sales (excepting value added taxes or income
        taxes);
        transportation charges, including insurance; and allowances or credits to
        customers because of rejections or returns. Final Sale means the last sale
        within the control of Licensee or an Affiliate to an independent third party
        (including without limitation to distributors and agents). If the Licensee
        or an
        Affiliate sells Licensed Products to a sublicense, an Affiliate or the Licensee
        for the recipient’s end use (and not for resale, clinical studies, clinical
        trials, or other research to promote commercialization), then such sales
        will be
        considered a Final sale at the price normally charged to independent,
        unaffiliated third parties at the time of such end use sale or, if there
        is no
        such price, at the fair market value thereof at the time of such end use
        sale.
        Any sale of a Product by Licensee or an Affiliate to an Affiliate, the Licensee,
        or a sublicensee will not be considered a Final Sale where such sale is not
        for
        end use by Licensee, an Affiliate or a sublicensee. If Licensee
        or
        an
        Affiliate
        sells at
        a single price or rate a packaged combination of products (or “Kit”), not all of
        which if sold individually would be Licensed Products, then “Net Sales” with
        respect to such sales of such Kit or packaged products shall equal the number
        of
        units of Licensed Products sold as part of such Kit (less rejections, defects
        and returns) multiplied by either (i) the respective average net selling
        price
        during such period of the same type of Licensed Product sold individually,
        or
        (ii) the average net selling price during such period for a comparable product
        (if the same type of Product is not sold individually), in either case excluding
        sales, use or excise tax, freight, duty or insurance included therein.
        ***.

      

      Additionally,
        for the avoidance of doubt, if such product is an indivisible component of
        a
        larger product, composition of matter or combination product (the components
        of
        which cannot be sold separately), then such composition of matter or combination
        product is deemed in its entirety to be a Licensed Product for purposes of
        this
        definition.

      

      1.9 "Patent
        Rights"
        means The Regents' undivided interest in the following United States patents
        and
        patent applications, corresponding foreign patents and patent applications,
        and
        any reissues, extensions, substitutions, continuations, divisions, and
        continuation-in-part applications but excluding continuation-in-part
        applications (to the extent that claims are not supported in the
        parent);

       

      1.9.1 United
        States Patent Application No. 60/123,711 entitled “Isolation of Stromal Cells
        from Adipose Tissue,” filed March 10, 1999, by Dr. Marc Hedrick et al (UC Case
        2000-310-1) - inactive; 

      

      1.9.2. United
        States Patent Application No. 60,162,462 entitled “Isolation of Mesenchymal Stem
        Cells from Adipose Tissue,” filed October 29, 1999, by Dr. Marc Hedrick et al.
        (UC Case No. 2000-301-2) - converted;

       

      1.9.3 United
        States Patent Application No. 09/947,985 entitled “Adipose-Derived Stem Cells
        and Lattices,” filed Sept. 6, 2001, by Adam Katz et al (UC Case No. 2000-310-3),
        abandoned;

      

      1.9.4 United
        States Patent Serial No. 6,777,231 entitled “Adipose-Derived Stem Cells and
        Lattices,” issued August 17, 2004 by Dr. Marc Hedrick et al (UC Case
        2000-310-4).;

       

      1.9.5 United
        States Patent Application No. 09/952,522 entitled “Adipose-Derived Stem Cells
        and Lattices,” filed September 10, 2001, by Dr. Marc Hedrick et al.; (UC Case
        No. 2000-310-5) now abandoned;

       

      1.9.6 United
        States Patent Application No.10/651,564 entitled ‘Adipose-Derived Stem Cells and
        Lattices,” filed August 29, 2003, by Dr. Adam J. Katz et al.; (UC Case No.
        2000-310-6);

       

      1.9.7 United
        States Patent Application No. 10/740,315 entitled “Adipose-Derived Stem Cells
        and Lattices,” filed December 17, 2003, by Dr. Dr. Marc Hedrick et al.; (UC Case
        No. 2000-310-7);

       

      1.9.8 United
        States Patent Application No. 10/797,371 entitled “Adipose-Derived Stem Cells
        and Lattices,” filed March 9, 2004, by Dr. Adam Katz et al.; (UC Case No.
        2000-310-8);

       

      1.9.9 United
        States Patent Application No. 10/845,315 entitled “Adipose-Derived Stem Cells
        and Lattices,” filed May 12, 2004, by Dr. Adam Katz et al.; (UC Case No.
        2000-310-9);

       

      1.9.10 United
        States Patent Application No. 11/211,114 entitled “Adipose-Derived Stem Cells
        and Lattices,” filed August 24, 2005, by Dr. Marc Hedrick et al.; (UC Case No.
        2000-310-A).

      

      __________

      ***Material
        has been omitted pursuant to a request for confidential treatment filed
        separately with the Securities and Exchange Commission.

      

      2. LIFE
        OF PATENT EXCLUSIVE GRANT

      

      2.1 Subject
        to the limitations set forth in this Agreement, The Regents grants to Licensee
        a
        world-wide license under The Regents' undivided interest in Patent Rights
        to
        make, have made, use, sell, offer to sell and import Product and to practice
        Licensed Method in the Field to the extent permitted by
        law.

      

      2.2 The
        Regents acknowledge Licensee is currently commercializing an automated device
        called “Celution”, which when operated in conjunction with various disposable
        component parts is capable of producing a heterogeneous isolate of the material
        naturally occurring in adipose tissue including unmodified amounts of stem
        cells
        and other regenerative cells ( hereafter “PLA”), intended for human therapeutic,
        diagnostic, cosmetic and other uses;

      

      2.3 
        Licensee
        and the Regents acknowledge and agree that (except as provided below in this
        Paragraph 2.3) Licensee’s Celution device and PLA shall be deemed not to be
        included in or covered by the Patent Rights for purposes of this License,
        and
        that such exclusion shall not constitute an admission by The Regents that
        the
        Celution device or the PLA are not encompassed, either in whole or in part,
        within the Regents Patent Rights. Nor shall the Regents be barred from later
        requiring that the Celution device and PLA be governed by the terms of this
        Agreement in the event (and to the extent) of any subsequent issuance of
        claims
        under prosecution in the Patent Rights that would cause either Licensees
        Celution device or PLA to fall within the category of “Licensed Products” or
“Licensed Methods”. In no event shall any subsequent royalty associated with
        Licensees Celution device or the PLA exceed ***.

      

      2.4 Licensee
        acknowledges that Pittsburgh has the right to grant licenses to its undivided
        interest in Patent Rights.

      

      2.5 Except
        as otherwise provided in this Agreement, the license granted in Paragraph
        2.1
        is exclusive for the life of the Agreement.

      

      2.6 The
        Regents reserves the right to practice, and for other educational and non-profit
        institutions to practice, the Inventions and associated technology for
        educational and research purposes, including publication and other communication
        of research results.

      

      3. SUBLICENSES

      

      3.1 The
        Regents also grants to Licensee the right to issue sublicenses to third parties
        to make, have made, use, sell, and offer to sell and import Products and
        to
        practice Licensed Method, as long as Licensee has current exclusive rights
        thereto under this Agreement, except that the sublicensee may not be granted
        the
        right to further sublicense the technology without the prior approval by
        The
        Regents, which approval shall be granted only upon Licensees provision of
        substantial assurances that the Regents interests in the technology will
        at all
        times be maintained. To the extent applicable, sublicenses must include all
        of
        the rights of and obligations due to The Regents contained in this Agreement.
        The Licensee will not issue additional paid-up sublicenses without prior
        written
        approval of The Regents. For the avoidance of doubt, Licensee’s Affiliates are
        not licensed under this Agreement, except by a written sublicense agreement
        under this Article 3. And furthermore, The Regents hereby acknowledges and
        approves the sublicense issued by Licensee to Olympus-Cytori, Inc, entitled
        License/Commercial Agreement dated November 4, 2005, and acknowledges
        additionally that such sublicense is fully paid-up with respect to the Regents
        for the life thereof. 

      

      3.2 The
        Licensee will pay to The Regents *** under each sublicense agreement issued
        for
        the purpose of development or commercialization of Products (the “Purpose”)
        after the Effective Date (“Sublicensing Revenue”). Sublicensing Revenue will be
        the sole form of compensation payable to the Regents by Licensee with respect
        to
        any and all sublicenses granted hereunder. Sublicensing Revenue will not
        include
        the following: *** The
        operations of all sublicensees will be deemed to be the operations of the
        Licensee, for which the Licensee will be responsible. The Licensee will notify
        The Regents of each sublicense granted hereunder and provide The Regents
        with a
        complete copy 

      

      

      __________

      ***Material
        has been omitted pursuant to a request for confidential treatment filed
        separately with the Securities and Exchange Commission.

      

      of
        each sublicense within thirty (30) days of issuance of the sublicense. The
        Licensee will pay to The Regents all Sublicensing Revenue due in accordance
        with
        Article 4 (Sublicenses) below on or before the due date of the royalty report
        applicable to the quarter in which the Sublicensing Revenue is due to The
        Regents, in accordance with Section 4.1. The Licensee will require the
        sublicensees to provide it with Progress Reports and royalty reports in
        accordance with the provisions herein, and the Licensee will collect and
        deliver
        to The Regents all such reports due from the sublicensees. For avoidance
        of
        doubt, ***.

      

      3.3 In
        the
        event that The Regents rights to United States Patent Serial No. 6,777,231
        are
        finally determined not to be solely owned and assigned to The Regents in
        connection with the pending Complaint for Correction of Inventorship by the
        University of Pittsburgh vs. Hedrick et al. (U.S. Disc. Ct., C.D. Cal, Case
        No.
        CV 04-9014 CBM (AJWX)) (the “Complaint”), or ***.

      

      3.4 Upon
        termination of this Agreement for any reason, The Regents, will enter into
        written agreements with all sublicensees then in compliance with their
        obligations under this Agreement and who are willing to enter into direct
        agreements with The Regents on terms no less favorable to such sublicensees
        than
        set forth in their respective sublicense agreements. In no case, however,
        will
        The Regents be bound by duties and obligations contained in any sublicense
        that
        extend beyond the duties and obligations of The Regents set forth in this
        Agreement. 

      

      	4.  	
              PAYMENT
                TERMS

            

      

      4.1 Paragraphs
        1.9, 1.2 and 1.3 define Patent Rights, Licensed Method, and Licensed Product
        so
        that royalties are payable on products and methods covered by both pending
        patent applications and issued patents (subject to Paragraphs 2.1 and 2.3).
        Royalties will accrue in each country for the duration of Patent Rights in
        that
        country and are payable to The Regents thirty (30) days after the Product
        is
        invoiced or if not invoiced, when delivered to a third party. Sublicensing
        Revenue will accrue in each country for the duration of Patent Rights in
        that
        country and are payable to The Regents thirty (30) days after payment is
        due to
        the Licensee under the sublicense agreement. 

      

      4.2  Licensee
        will pay to The Regents earned royalties and Sublicensing Revenue quarterly
        on
        or before February 28, May 31, August 31 and November 30 of each calendar
        year.
        Each payment will be for earned royalties and Sublicensing Revenue accrued
        within Licensee's most recently completed calendar
        quarter.

      

      4.3  All
        monies due The Regents are payable in U.S. dollars. Licensee is responsible
        for
        all bank transfer charges. When Product is sold for monies other than U.S.
        dollars, Licensee will first determine the earned royalty in the currency
        of the
        country in which Product was sold and then convert the amount into equivalent
        U.S. funds, using the exchange rate quoted in The Wall Street Journal on
        the
        last business day of the reporting period.

      

      4.4  Sublicensing
        Revenue and royalties earned on sales occurring in any country outside the
        U.S.
        may not be reduced by any taxes, fees or other charges imposed by the government
        of such country on the payment of royalty income. Notwithstanding the foregoing,
        all payments made by Licensee in fulfillment of The Regents' tax liability
        in
        any particular country will be credited against earned royalties or fees
        due The
        Regents for that country.

      

      4.5  If
        at any time legal restrictions prevent the prompt remittance of royalties
        by
        Licensee from any country where a Product is sold or Sublicensing Revenue
        accrued, then Licensee will deposit the amount owed to The Regents into an
        interest bearing account and will pay The Regents directly from this account
        or
        from its U.S. source of funds within a year of the due
        date.

      

      4.6  If
        any patent or patent claim within Patent Rights is abandoned or held invalid
        in
        a final decision by a court of competent jurisdiction and last resort and
        from
        which no appeal has or can be taken, then all obligation to pay royalties
        or
        Sublicensing Revenue based on that patent or claim or any claim patentably
        indistinct there from will cease as of the date of final decision. Licensee
        will
        not, however, be relieved from paying any royalties that accrued before the
        final decision or that are based on another patent or claim not involved
        in the
        final decision or that are based on The Regents' property
        rights.

      __________

      ***Material
        has been omitted pursuant to a request for confidential treatment filed
        separately with the Securities and Exchange Commission.

      

      4.7  In
        the event payments, rebillings or fees are not received by The Regents when
        due,
        Licensee will pay to The Regents interest charges at a rate of ten percent
        (10%)
        per annum. Interest is calculated from the date payment was due until actually
        received by The Regents.

      

      5. LICENSE
        AMENDMENT CONSIDERATION

      

      5.1 As
        consideration for this amendment and restating of the Agreement, the Licensee
        will issue to The Regents one hundred thousand (100,000) shares of common
        stock
        (“the Stock”) of Cytori Therapeutics, Inc, within seven (7) days of the
        Effective Date of this Agreement or of the date Licensee receives notice
        from
        The Regents that The Regents’ Office of the President has approved acceptance of
        Stock, whichever is later. Licensee will use reasonable efforts to, within
        sixty
        (60) business days after such issuance, prepare and file with the US Securities
        and Exchange Commission (the "Commission") a Registration Statement covering
        the
        resale of the Shares for an offering to be made on a continuous basis pursuant
        to Rule 415. The Registration Statement will be on Form S-3 (except if Licensee
        is not then eligible to register for resale the Shares on Form S-3, in which
        case such registration will be on another appropriate form in accordance
        with
        the US Securities Act and the rules promulgated there under). Licensee will
        use
        its reasonable efforts to cause the Registration Statement to be declared
        effective under the US Securities Act within ninety (90) business days after
        such filing. Licensee will keep such Registration Statement continuously
        effective under the Securities Act for a period of two (2) years (the
“Effectiveness Period”). The Regents represents that they would acquire the
        Shares for their own account for investment, and not with a view to any
        distribution, which would violate any applicable securities laws. The Regents
        acknowledges that they have not received and are not relying upon any advice,
        representations or assurances made by or on behalf of the Licensee or any
        Licensee affiliate or any employee of or counsel to Licensee regarding the
        Shares. The Regents may transfer, or direct Licensee to transfer, to Regents’
Inventors an inventor share portion of the Stock under Regent’s Patent
        Policy.

      

      6. LICENSE
        MAINTENANCE FEE AND MILESTONE PAYMENTS

      

      6.1 Licensee
        will also pay to The Regents a royalty in the form of a license maintenance
        fee
        as follows:

      

      6.1.1 Fifty
        Thousand Dollars ($50,000) on or before June 30, 2008;

      

      6.1.2 Fifty
        Thousand Dollars ($50,000), on or before June 30, 2009;

      

      6.1.3 Seventy-Five
        Thousand Dollars ($75,000) on or before June 30, 2010;

      

      	6.1.4  	
              One
                Hundred Thousand Dollars ($100,000) on or before June 30,
                2011;

            

      

      	6.1.5  	
              One
                Hundred Thousand Dollars ($100,000) on or before June 30, 2012;
                and,

            

      

      	6.1.6  	
              One
                Hundred Thousand Dollars ($100,000) on or before June 30,
                2013.

            

      

      	6.2  	
              The
                license maintenance fee is not due on any anniversary of the Effective
                Date if Licenseeis commercially selling Product on that date and
                paying an
                earned royalty to The Regents on the sales of that Licensed Product.
                License maintenance fees are non-refundable and not an advance against
                earned royalties. 

            

      

      7. EARNED
        ROYALTIES AND MINIMUM ANNUAL ROYALTIES

      

      7.1 Licensee
        will also pay to The Regents an earned royalty of *** based on the Net Sales
        of
        Product sold by the Licensee. 

      

      

      __________

      ***Material
        has been omitted pursuant to a request for confidential treatment filed
        separately with the Securities and Exchange Commission.

      7.2 In
        the event that it becomes necessary for Licensee to license patent rights
        owned
        by third parties to make, have made, use or sell Clinical Product, then the
        Licensee will have the right to obtain the patent rights from such third
        party
        ***. 

      

      7.3 Licensee
        will pay to The Regents a minimum annual royalty for the life of Regents'
        Patent
        Rights beginning in the year of the first commercial sale of Product or Licensed
        Method but no later than ***. Minimum annual royalties will be as
        follows:

      

      7.3.1. ***;

      

      7.3.2 ***;
        

      

      7.3.3 ***.

      

      7.4 The
        minimum annual royalty will be paid semi-annually to The Regents on February
        28
        and July 31 of each year and will be credited against the earned royalty
        due for
        the calendar year in which the minimum payment was
        made.

      

      8. DUE
        DILIGENCE

      

      8.1 Licensee,
        upon execution of this Agreement, will diligently proceed with the development,
        manufacture and sale of Product and will earnestly and diligently endeavor
        to
        market the same within a reasonable time after execution of this Agreement
        and
        in quantities sufficient to meet market demands.

      

      8.2 Licensee
        will endeavor to obtain all necessary governmental approvals for the
        manufacture, use and sale of Licensed Product.

      

      8.3 Licensee,
        or its sublicense(s), will develop and commercialize a Research Product and
        will
        develop and commercialize a Clinical Product in the diagnostic field and/or
        in
        the therapeutic or cosmetic field as follows:

      

      8.3.1 ***;
        and will fill the market demand for such Research Product following commencement
        of marketing at any time during the exclusive period of this
        Agreement;

      

      8.3.2 Licensee
        will complete the following for a Clinical Product in the diagnostic field
        (i.e.
        a Clinical Product intended to diagnosis, prognosis or monitoring of disease
        in
        humans):

      

      (i) ***,
        and
        market such Clinical Product in the United States within six (6) months of
        receiving marketing approval;

      

      (ii) Fill
        the
        market demand for such Clinical Product following commencement of marketing
        at
        any time during the exclusive period of this Agreement; and/or,

      

      8.3.3 Licensee
        will complete the following for a Clinical Product in the therapeutic field
        (i.e. intended to treat or ameliorate disease in humans or intended for cosmetic
        applications);

      

      (i) ***;

      

      (ii) ***;
        and

      

      (iii) ***;

      

      

      __________

      ***Material
        has been omitted pursuant to a request for confidential treatment filed
        separately with the Securities and Exchange Commission.

      (iv) ***;
        

      

      (v) ***;

      

      (vi) ***;
        and

      

      (vii)
         Fill
        the
        market demand for such Clinical Products following commencement of marketing
        at
        any time during the exclusive period of this Agreement.

      

      Licensee’s
        completion of Paragraph 8.3.2 or 8.3.3 above will be considered fulfillment
        of
        Licensee’s obligation to develop a Clinical Product
        hereunder.

      

      8.4 If
        Licensee (or a sublicense) is unable to perform any of the above diligence
        provisions, then The Regents may terminate this Agreement and its licenses
        or
        reduce the licenses hereunder to non-exclusive licenses. Notwithstanding
        the
        foregoing, if the Licensee is in compliance with diligence provisions for
        the
        Research Product and fails to meet a diligence provision for the Clinical
        Product, or vice-versa, under Paragraph 8.3 above, then The Regents’ may
        terminate or reduce the exclusivity for the Product for which the diligence
        provision is unmet but not for the Product for which diligence is met. Moreover,
        if the Licensee can demonstrate to The Regents’ reasonable satisfaction that a
        milestone at issue for Clinical Product has been determined to be impracticable
        for commercialization, then The Licensee and The Regents will negotiate revised
        due diligence for Clinical Products. If the Licensee fails to meet a diligence
        provision for Clinical Product and cannot demonstrate that the milestone
        at
        issue for has been determined impractical for commercialization, then the
        Regents has the right to terminate the licenses granted hereunder or reduce
        such
        licenses for Clinical Products to non-exclusive licenses. The right, if
        exercised by The Regents, supersedes the rights granted for such Products
        in
        Article 2 (Life of Patent Exclusive Grant).

      

      8.5 Licensee
        will endeavor to develop Products through research performed at the University
        of California, Los Angeles in the amount of fifty thousand dollars ($50,000)
        in
        research funding by Licensee per year for six (6) years, beginning in the
        year
        2007. Both parties will endeavor to combine the research funding provided
        by
        Licensee with UC Discovery grants and/or the BioStar research programs (or
        any
        similar research fund matching programs then in effect), and Licensee will
        have
        sole discretion with respect to the development and design of such research.
        In
        accordance with the disclosure and licensing terms of the research agreement(s)
        executed by The Regents and the License, The Regents will disclose, and offer
        to
        license The Regents’ interest in patent rights claiming, inventions made and
        reduced to practice under such research agreements. Licensee will be released
        from the requirement to provide research funding in the event that this
        Agreement is terminated for any reason.

      

      8.6 The
        due diligence provisions of this Article 8 (Earned Royalties and Minimum
        Annual
        Royalties) shall not apply to, or effect Licensee’s rights to Celution Product
        and/or PLA., if any such rights are later deemed to be covered by this License
        pursuant to Paragraph 2.3.

      

      9. PROGRESS
        AND ROYALTY REPORTS

      

      9.1 During
        the life of this Agreement Licensee will submit to The Regents a written
        progress report covering Licensee's (and any Affiliate's or sublicensee's)
        activities related to the development and testing of all Products and the
        obtaining of the governmental approvals necessary for marketing. Progress
        reports are due on August 15 and on February 15 of each year and will cover
        the
        Licensee’s activities for the preceding January 1 through June 30 and July 1
        through December 31, respectively. Progress reports are required for each
        Product until the first commercial sale of that Product occurs in the U.S.
        and
        will be again required if commercial sales of such Product are suspended
        or
        discontinued.

      

      

      __________

      ***Material
        has been omitted pursuant to a request for confidential treatment filed
        separately with the Securities and Exchange Commission.

      

      

      9.2 Progress
        reports submitted under Paragraph 9.1 will include, but are not limited to,
        the
        following topics:

      

      9.2.1 Summary
        of work completed;

      

      9.2.2 Key
        scientific discoveries;

      

      9.2.3 Summary
        of work in progress;

      

      9.2.4 Current
        schedule of anticipated events or milestones;

      

      9.2.5 Market
        plans for introduction of Licensed Product; and

      

      9.2.6 A
        summary of resources (dollar value) spent in the reporting
        period.

      

      9.3 Licensee
        has a continuing responsibility to keep The Regents informed of the large
        and
        small business entity status as defined by the U.S. Patent and Trademark
        Office
        of itself and its sublicensees and Affiliates.

      

      9.4 Licensee
        will report to The Regents in its immediately subsequent progress and royalty
        report the date of first commercial sale of a Product in each
        country.

      

      9.5 After
        the first commercial sale of a Product anywhere in the world, Licensee will
        make
        quarterly royalty reports to The Regents on or before each February 28 (for
        the
        quarter ending December 31), May 31 (for the quarter ending March 31), August
        31
        (for the quarter ending June 30) and November 30 (for the quarter ending
        September 30) of each year. Each royalty report will cover Licensee's most
        recently completed calendar quarter and will show:

      

      9.5.1 The
        gross sales and Net Sales of Product sold during the most recently completed
        calendar quarter;

      

      9.5.2 The
        number of Product and sold;

      

      9.5.3 The
        royalties, in U.S. dollars, payable with respect to sales of
        Product;

      

      9.5.4 The
        method used to calculate the royalty;

       

      9.5.5 The
        exchange rates used;

      

      9.5.6 Sublicensing
        Revenue accrued during the previous quarter;

      

      9.5.7If
        no sales of Product are made during any reporting period, then the Licensee
        will
        so state in the subsequent royalty report. 

      

      10. BOOKS
        AND RECORDS

      

      10.1 Licensee
        will keep accurate books and records showing all
        Product,
        developed,
        manufactured, used and/or sold under the terms of this Agreement, as well
        as all
        Sublicensing Revenue owed to The Regents under the terms of this Agreement.
        Books and records must be preserved for at least five (5) years from the
        date of
        the royalty payment to which they pertain.

      

      10.2 Books
        and records must be open to inspection by representatives or agents of The
        Regents at reasonable times. The Regents will bear the fees and expenses
        of
        examination but if an error in royalties of more than five percent (5%) of
        the
        total royalties or Sublicensing Revenue due for any year is discovered in
        any
        examination, then Licensee will bear the fees and expenses of that
        examination.

      

      

      

      

      11. LIFE
        OF THE AGREEMENT

      

      11.1 Unless
        otherwise terminated by operation of law, Paragraph 11.2, or by acts of the
        parties in accordance with the terms of this Agreement, this Agreement will
        remain in effect from the Effective Date until the expiration or abandonment
        of
        the last of the Patent Rights licensed hereunder.

      

      11.2 This
        Agreement will become immediately terminable by either party upon the insolvency
        of the Licensee.

      

      11.3 Any
        termination or expiration of this Agreement will not affect the rights and
        obligations set forth in the following Articles:

      

      Article
        1    Definitions
        

      Article
        5    Payment
        Terms

      Article
        10   Books
        and
        Records

      Article
        14   Disposition
        of Product on Hand upon Termination

        Article
        15   Use
        of
        Names

      Article
        16   Limitation
        of Liability

      Paragraphs
        17.5 and 17.6  Patent
        Prosecution and Maintenance

      Article
        20   Indemnification

      Article
        21   Notices

      Article
        25   Governing
        Laws; Venue; Attorneys’ Fees 

      Article
        29   Secrecy

      

      11.4 The
        termination or expiration of this Agreement will not relieve the Licensee
        of its
        obligation to pay any fees, royalties, reimbursements for Patent Prosecution
        Costs, or other payments owed to the Regents at the time of such termination
        or
        expiration and will not impair any accrued right of The Regents, including
        the
        right to receive earned royalties and other consideration in accordance with
        Articles 3, 4, 8, and 15.

      

      12. TERMINATION
        BY THE REGENTS

      

      12.1 Subject
        to Paragraph 8.4, if Licensee fails to perform or violates any term of this
        Agreement, then The Regents may give written notice of default ("Notice of
        Default") to Licensee. If a Notice of Default is issued for non-payment of
        a fee
        or patent prosecution cost reimbursement owed hereunder, the Licensee must
        cure
        the default within sixty (60) days of the effective date of Notice of Default.
        If a Notice of Default is issued for something other than a payment of monies
        owed hereunder then the Licensee must cure the default within ninety (90)
        days
        of effective date of Notice of Default. If the Licensee fails to cure the
        material default within the time required above, The Regents may terminate
        this
        Agreement and its licenses by a second written notice ("Notice of Termination").
        If a Notice of Termination is sent to Licensee, then this Agreement will
        automatically terminate on the effective date of that notice. Such termination
        will not relieve Licensee of its obligation to pay any fees owing at the
        time of
        termination and will not impair any accrued right of The Regents. These notices
        are subject to Article 21 (Notices). These notices will be subject to Article
        21
        (Notices).

      

      13. TERMINATION
        BY LICENSEE

      

      13.1 Licensee
        has the right at any time to terminate this Agreement in whole or as to any
        portion of Patent Rights by giving notice in writing to The Regents. Such
        notice
        of termination will be subject to Article 20 (Notices) and termination of
        this
        Agreement will be effective sixty (60) days from the effective date of such
        notice.

      

      13.2 Any
        termination under the above Paragraph 13.1 does not relieve Licensee of any
        obligation or liability accrued under this Agreement prior to termination
        or
        rescind any payment made to The Regents or anything done by Licensee prior
        to
        the time termination becomes effective. Termination does not affect in any
        manner any rights of The Regents arising under this Agreement prior to
        termination.

      

      

      

      14. DISPOSITION
        OF PRODUCT ON HAND UPON TERMINATION

      

      14.1 Upon
        termination of this Agreement, Licensee is entitled to dispose of all previously
        made or partially made Product, but no more, within a period of one hundred
        and
        twenty (120) days provided that the sale of Product is subject to the terms
        of
        this Agreement, including, but not limited to, the rendering of reports and
        payment of royalties required under this Agreement.

      

      15. USE
        OF NAMES AND TRADEMARKS

      

      15.1 Nothing
        contained in this Agreement confers any right to use in advertising, publicity
        or other promotional activities any name, trade name, trademark or other
        designation of either party hereto (including contraction, abbreviation or
        simulation of any of the foregoing). Unless required by law, the use by Licensee
        of the name "The Regents of the University of California" or the name of
        any
        campus of the University of California is prohibited.

      

      15.2 The
        Regents is free to release to the inventors and senior administrators employed
        by The Regents the terms and conditions of this Agreement. If such release
        is
        made, then The Regents will give notice of the confidential nature and will
        request that the recipient does not disclose such terms and conditions to
        others. If a third party inquires whether a license to Patent Rights is
        available, then The Regents may disclose the existence of this Agreement
        and the
        extent of the grant in Article 2 (Life of Patent Exclusive Grant) to such
        third
        party, but will not disclose the name of Licensee or any other terms or
        conditions of this Agreement, except where The Regents is required to release
        information under either the California Public Records Act, a governmental
        audit
        requirement or other applicable law.

      

      16. LIMITED
        WARRANTY

      

      16.1 The
        Regents warrants to Licensee that it has the lawful right to grant this
        license.

      

      16.2 This
        license and the associated Inventions are provided WITHOUT WARRANTY OF
        MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY,
        EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT
        PRODUCT
        OR LICENSED METHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY
        RIGHT.

      

      16.3 IN
        NO EVENT MAY THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL
        DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTIONS
        OR
        PRODUCT.

      

      16.4 This
        Agreement does not:

      

      16.4.1 Express
        or imply a warranty or representation as to the validity or scope of any
        of
        Patent Rights;

      

      16.4.2 Express
        or imply a warranty or representation that anything made, used, sold, offered
        for sale or imported or otherwise disposed of under any license granted in
        this
        Agreement is or will be free from infringement of patents of third
        parties;

      

      16.4.3 Obligate
        The Regents to bring or prosecute actions or suits against third parties
        for
        patent infringement except as provided in Article 19 (Patent
        Infringement);

      

      16.4.4 Confer
        by implication, estoppel or otherwise any license or rights under any patents
        of
        The Regents other than Patent Rights as defined in this Agreement, regardless
        of
        whether those patents are dominant or subordinate to Patent Rights;
        or,

      

      16.4.5 Obligate
        The Regents to furnish any know-how not provided in Patent
        Rights.

      

      

      17. PATENT
        PROSECUTION AND MAINTENANCE

      

      17.1 In
        regard to PCT/US00/06232, filed by Pittsburgh, The Regents does not control
        patent prosecution and there is no agreement in place between The Regents
        and
        Pittsburgh regarding patent prosecution matters. This Agreement may need
        to be
        amended to take into account the provisions of any agreement reached between
        Pittsburgh and The Regents in regard to patent prosecution matters and the
        payment of patent costs by The Regents.

      

      17.2 In
        regard to Patent Rights filed by and assigned solely to The Regents, as long
        as
        Licensee has paid patent costs as provided for in this Article 17 (Patent
        Prosecution and Maintenance), The Regents will diligently endeavor to prosecute
        and maintain the U.S. and foreign patents using counsel of its choice. The
        Regents will provide Licensee with copies of all relevant documentation so
        that
        Licensee may be informed of the continuing prosecution. Licensee agrees to
        keep
        this documentation confidential. The Regents' counsel will take instructions
        only from The Regents, but The Regents will consider input from the Licensee
        in
        its choice of patent counsel and, if the Licensee so requests, The Regents
        will
        suggest three patent attorneys from which the Licensee may choose one to
        prosecute and maintain Patent Rights, provided The Regents concur that a
        change
        of prosecution counsel is warranted.

      

      17.3 The
        Regents will use reasonable effort to amend any patent application to include
        claims reasonably requested by Licensee to protect the products contemplated
        to
        be sold under this Agreement.

      

      17.4 Licensee
        may request that The Regents obtain patent protection on the Inventions in
        foreign countries if available and if it so desires. Licensee will notify
        The
        Regents of its decision to obtain or maintain foreign patents not less than
        sixty (60) days prior to the deadline for any payment, filing or action to
        be
        taken in connection therewith. This notice concerning foreign filing must
        be in
        writing, must identify the countries desired and must reaffirm Licensee's
        obligation to underwrite the costs thereof. The absence of such a notice
        from
        Licensee to The Regents will be considered an election not to obtain or maintain
        foreign rights.

      

      17.5 Licensee
        will bear The Regents' costs of preparing, filing, prosecuting and maintaining
        all U.S. and foreign patent applications contemplated by this Agreement.
        Costs
        billed by The Regents' counsel will be rebilled to Licensee and are due within
        thirty (30) days of rebilling by The Regents. These costs include patent
        prosecution costs for the Inventions incurred by The Regents prior to the
        execution of this Agreement and any patent prosecution costs that may be
        incurred for patentability opinions, re-examination, re-issue, interferences,
        oppositions and inventorship determinations, as well as the existing Complaint
        for Correction of Inventorship by the University of Pittsburgh vs. Hedrick
        et
        al. (U.S. Disc. Ct., C.D. Cal, Case No. CV 04-9014 CBM
        (AJWX)
        and any
        other filings in this case, including counterclaims and appeals.
        Prior prosecution costs will be due upon execution of this Agreement and
        billing
        by The Regents.

      

      17.6 Licensee's
        obligation to underwrite and to pay patent prosecution costs will continue
        for
        so long as this Agreement remains in effect, but Licensee may terminate its
        obligations with respect to any given patent application or patent upon three
        (3) months' written notice to The Regents. The Regents will use its best
        efforts
        to curtail patent costs when a notice of termination is received from Licensee.
        The Regents may prosecute and maintain such application(s) or patent(s) at
        its
        sole discretion and expense, but Licensee will have no further right or licenses
        hereunder. Non-payment of patent costs may be deemed by The Regents as an
        election by Licensee not to maintain application(s) or
        patent(s).

      

      17.7 The
        Regents may file, prosecute or maintain patent applications at its own expense
        in any country in which Licensee has not elected to file, prosecute or maintain
        patent applications in accordance with this Article 17 (Patent Prosecution
        and
        Maintenance) and those applications and resultant patents will not be subject
        to
        this Agreement.

      

      17.8 Licensee
        will apply for an extension of the term of any patent included within Patent
        Rights under the Drug Price Competition and Patent Term Restoration Act of
        1984
        and/or European, Japanese and other foreign counterparts of this Law. Licensee
        will prepare all documents and The Regents agrees to execute the documents
        and
        to take additional action as Licensee reasonably requests in connection
        therewith.

      

      17.9 If
        either party (in the case of The Regents: the Licensing Officer responsible
        for
        administration of this Agreement) receives notice pertaining to infringement
        or
        potential infringement of any issued patent included within Patent Rights
        under
        the Drug Price Competition and Patent Term Restoration Act of 1984 and/or
        foreign counterparts of this Law, then that party will notify the other party
        within ten (10) days after receipt of notice of
        infringement.

      

      18. PATENT
        MARKING

      

      18.1 Licensee
        will mark all Products made, used or sold under the terms of this Agreement,
        or
        their containers, in accordance with the applicable patent marking
        laws.

      

      19. PATENT
        INFRINGEMENT

      

      19.1 If
        Licensee learns of the substantial infringement of any patent licensed under
        this Agreement, then Licensee will call The Regents' attention thereto in
        writing and provide The Regents with reasonable evidence of infringement.
        Neither party will notify a third party of the infringement of any of Patent
        Rights without first obtaining consent of the other party, which consent
        will
        not be unreasonably denied. Both parties will use their best efforts in
        cooperation with each other to terminate infringement without
        litigation.

      

      19.2 Licensee
        may request that The Regents take legal action against the infringement of
        Patent Rights. Such request must be in writing and must include reasonable
        evidence of infringement and damages to Licensee. If the infringing activity
        has
        not abated within ninety (90) days following the effective date of request,
        then
        The Regents has the right to:

      

      19.2.1 Commence
        suit on its own account; or,

      19.2.2 Refuse
        to participate in the suit, and,

      

      The
        Regents will give notice of its election in writing to Licensee by the end
        of
        the one-hundredth (100th) day after receiving notice of written request from
        Licensee. Licensee may thereafter bring suit for patent infringement, at
        its own
        expense, if and only if The Regents elects not to commence suit and if the
        infringement occurred during the period and in a jurisdiction where Licensee
        had
        exclusive rights under this Agreement. If, however, Licensee elects to bring
        suit in accordance with this Paragraph 19.2, then The Regents may thereafter
        join that suit at its own expense. Licensee agrees not to bring suit for
        patent
        infringement without following the procedures of this Paragraph 19.2, and
        both
        parties agree to be bound by an order of a court for patent infringement,
        patent
        infringement issues and patent infringement defenses raised through the pendency
        of such a suit under this Paragraph 19.2.

      

      19.3 Legal
        action, as is decided on, will be at the expense of the party bringing suit
        and
        all damages recovered thereby will belong to the party bringing suit, but
        legal
        action brought jointly by The Regents and Licensee and fully participated
        in by
        both will be at the joint expense of the parties and all recoveries will
        be
        shared jointly by them in proportion to the share of expense paid by each
        party.

      

      19.4 Each
        party will cooperate with the other in litigation proceedings instituted
        hereunder but at the expense of the party bringing suit. Litigation will
        be
        controlled by the party bringing the suit, except that The Regents may be
        represented by counsel of its choice in any suit brought by
        Licensee.

      

      20. INDEMNIFICATION

      

      20.1 Licensee
        will indemnify, hold harmless and defend The Regents, its officers, employees
        and agents, the sponsors of the research that led to the Inventions and the
        inventors of the patents and patent applications in Patent Rights and their
        employers against any and all claims, suits, losses, liabilities, damages,
        costs, fees and expenses resulting from or arising out of exercise of this
        license or any sublicense. This indemnification includes, but is not limited
        to,
        any product liability.

      

      20.2 Licensee,
        at its sole cost and expense, will insure its activities in connection with
        the
        work under this Agreement and obtain, keep in force and maintain
        insurance.

      

      20.3 Licensee
        will maintain the following or an equivalent program of self-insurance while
        Products are not being tested or used in-vivo in
        humans:

       

      Comprehensive
        or commercial form general liability insurance (contractual liability included)
        with limits as follows:

      

      -
        Each
        Occurrence $ 2,000,000 ($7MI Umbrella
        policy)

      -
        Products/Completed Operations Aggregate $5,000,000

      -
        Personal and Advertising Injury $1,000,000 ($7MI Umbrella
        policy)

      -
        General
        Aggregate (commercial form only) $2,000,000 ($7MI Umbrella
        policy)

      

      The
        Licensee increasing the required insurance levels as follows, prior to using
        or
        testing Products in-vivo in humans:

      

      -
        Each
        Occurrence $5,000,000

      -
        Products/Completed Operations Aggregate $10,000,000

      -
        Personal and Advertising Injury $5,000,000

      -
        General
        Aggregate (commercial form only) $10,000,000

      

      The
        coverage and limits referred to in this Paragraph 20.3 do not in any way
        limit
        the liability of Licensee. Licensee will furnish The Regents with certificates
        of insurance showing compliance with all requirements. Certificates
        must:

      

      
        	 	 	
                -

              	
                Provide
                  for thirty (30) days' advance written notice to The Regents of
                  any
                  modification.

              

      

      
        	 	 	
                -

              	
                Indicate
                  that The Regents has been endorsed as an additional Insured under
                  the
                  coverage referred to under the
                  above.

              

      

      
        	 	 	
                -

              	
                Include
                  a provision that the coverage will be primary and will not participate
                  with nor will be excess over any valid and collectable insurance
                  or
                  program of self-insurance carried or maintained by The
                  Regents.

              

      

      

      20.4 The
        Regents will notify Licensee in writing of any claim or suit brought against
        The
        Regents in respect of which The Regents intends to invoke the provisions
        of this
        Article 20 (Indemnification). Licensee will keep The Regents informed on
        a
        current basis of its defense of any claims under this Article 20
        (Indemnification).

      

      21. NOTICES

      

      21.1 Any
        notice or payment required to be given to either party will be deemed to
        have
        been properly given and to be effective as of the date specified below if
        delivered to the respective address given below or to another address as
        designated by written notice given to the other
        party:

      on
        the
        date of delivery if delivered in person;

      on
        the
        date of mailing if mailed by first-class certified mail, postage paid;
        or

      on
        the
        date of mailing if mailed by any global express carrier service that requires
        recipient to sign the documents demonstrating the delivery of such notice
        or
        payment.

      

      In
        the
        case of Licensee:  Cytori
        Therapeutics, Inc.

      3020
        Callan Rd.

      San
        Diego, CA 92121

      Attention: Mark
        Saad

      Chief
        Financial Officer

      

      In
        the
        case of The Regents: The
        Regents of the University of California

      Office
        of
        Intellectual Property Administration

      10920
        Wilshire Blvd., Ste. #1200

      Westwood,
        CA 90024

      Attention:
        Director

      

      22. ASSIGNABILITY

      

      22.1 This
        Agreement may be assigned by The Regents, but is personal to Licensee and
        assignable by Licensee only with the written consent of The Regents, which
        consent will not be unreasonably withheld.

      

      23. NO
        WAIVER

      

      23.1 No
        waiver by either party of any default of this Agreement may be deemed a waiver
        of any subsequent or similar default. A suspension of duty under this Agreement
        due to force majeure will not be for a period longer than one (1)
        year.

      

      

      

      

      24. FAILURE
        TO PERFORM

      

      24.1 If
        either party finds it necessary to undertake legal action against the other
        on
        account of failure of performance due under this Agreement, then the prevailing
        party is entitled to reasonable attorney's fees in addition to costs and
        necessary disbursements.

      

      25. GOVERNING
        LAWS

      

      25.1 THIS
        AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
        THE
        STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAWS OR TO WHICH PARTY
        DRAFTED
        PARTICULAR PROVISIONS OF THIS AGREEMENT, but the scope and validity of any
        patent or patent application will be governed by the applicable laws of the
        country of the patent or patent application. Disputes between the parties
        regarding this Agreement will utilize only trial courts within California
        for
        disputes that go to court.

      

      26. PREFERENCE
        FOR U.S. INDUSTRY

      

      26.1 Because
        this Agreement grants the exclusive right to use or sell the Inventions in
        the
        U.S., Licensee agrees that any products sold in the U.S. embodying this
        Invention or produced through the use thereof will be manufactured substantially
        in the U.S.

      

      27. GOVERNMENT
        APPROVAL OR REGISTRATION

      

      27.1 Licensee
        will notify The Regents if it becomes aware that this Agreement is subject
        to
        any U.S. or foreign government reporting or approval requirement. Licensee
        will
        make all necessary filings and pay all costs including fees, penalties and
        all
        other out-of-pocket costs associated with such reporting or approval
        process.

      

      28. EXPORT
        CONTROL LAWS

      

      28.1 Licensee
        will observe all applicable U.S. and foreign laws with respect to the transfer
        of Product and related technical data to foreign countries, including, without
        limitation, the International Traffic in Arms Regulations (ITAR) and the
        Export
        Administration Regulations.

      

      29
        SECRECY

      

      29.1 With
        regard to confidential information (“Data”), which can be oral or written or
        both, received from The Regents regarding this Inventions, Licensee
        agrees:

      

      29.1.1
        Not to use the Data except for the sole purpose of performing under the terms
        of
        this Agreement;

      

      29.1.2 To
        safeguard Data against disclosure to others with the same degree of care
        as it
        exercises with its own data of a similar nature;

      

      29.1.3 Not
        to disclose Data to others (except to its employees, agents or consultants
        who
        are bound to Licensee by a like obligation of confidentiality) without the
        express written permission of The Regents, except that Licensee is not prevented
        from using or disclosing any of the Data that:

      

      (i)
         Licensee
        can demonstrate by written records was previously known to it;

      
        	 	
                (ii)

              	
                is
                  now or becomes in the future, public knowledge other than through
                  acts or
                  omissions of Licensee; or

              

      

      (iii) is
        lawfully obtained by Licensee from sources independent of The Regents;

      
        	 	
                (iv)

              	
                is
                  required to be disclosed to a governmental entity or agency in
                  connection
                  with seeking any governmental or regulatory approval, or pursuant
                  to the
                  lawful requirement or request of a governmental entity or agency;
                  and

              

      

      

      29.1.4 that
        the secrecy obligations of Licensee with respect to Data will continue for
        a
        period ending five (5) years from the termination date of this
        Agreement.

      

      29.2 Upon
        the termination of this Agreement, Licensee must destroy or return to The
        Regents any Data in its possession within thirty (30) days following the
        effective date of termination. However, Licensee may retain one copy of Data
        solely for archival purposes, provided that such Data is subject to the
        confidentiality provisions set forth in this Paragraph 29.2 (Secrecy). Within
        sixty (60) days following termination, Licensee must provide The Regents
        with a
        written notice that Data has been returned or
        destroyed.

      

      29.3 With
        regard to biological material received by Licensee from The Regents, if any,
        including any cell lines, vectors, genetic material, derivatives, products
        progeny or material derived there from (“Biological Material”), Licensee
        agrees:

      

      29.3.1 Not
        to use Biological Material except for the sole purpose of performing under
        the
        terms of this Agreement;

      

      29.3.2 Not
        to transfer Biological Material to others (except to its employees, agents
        or
        consultants who are bound to Licensee by like obligations conditioning and
        restricting access, use and continued use of Biological Material) without
        the
        express written permission of The Regents, except that Licensee is not prevented
        from transferring Biological Material that:

      

      (i) becomes
        publicly available other than through acts or omissions of Licensee;
        or

      

      (ii) is
        lawfully obtained by Licensee from sources independent of The Regents;
        and

      

      29.3.3 To
        safeguard Biological Material against disclosure and transmission to others
        with
        the same degree of care as it exercises with its own biological materials
        of a
        similar nature; and,

      

      29.3.4 to
        destroy all copies of Biological Material at the termination of this
        Agreement.

      

      30. MISCELLANEOUS

      

      30.1 The
        headings of the several sections are inserted for convenience of reference
        only
        and are not intended to be a part of or to affect the meaning or interpretation
        of this Agreement.

      

      30.2 This
        Agreement is not binding on the parties until it has been signed below on
        behalf
        of each party. It is then effective as of the Effective
        Date.

      

      30.3 No
        amendment or modification of this Agreement is valid or binding on the parties
        unless made in writing and signed on behalf of each
        party.

      

      30.4 This
        Agreement embodies the entire understanding of the parties and will supersede
        all previous communications, representations, or understandings, either oral
        or
        written, between the parties relating to the subject matter
        hereof.

      

      30.5 In
        case any of the provisions contained in this Agreement is held to be invalid,
        illegal or unenforceable in any respect, that invalidity, illegality or
        unenforceability will not affect any other provisions of this Agreement and
        this
        Agreement will be construed as if the invalid, illegal or unenforceable
        provisions had never been contained in it.

      

      30.6 None
        of the provisions of this Agreement is intended to create any form of joint
        

      venture
        between the parties, rights in third parties or rights that are enforceable
        by
        any third party.

      

      IN
        WITNESS WHEREOF, both The Regents and Licensee have executed this Agreement,
        in
        duplicate originals, by their respective and duly authorized officers on
        the day
        and year written.

      

      CYTORI
        THERAPEUTICS, INC   THE
        REGENTS OF THE UNIVERSITY

      OF
        CALIFORNIA

      

      By: /s/
        Christopher J. Calhoun   By: /s/
        Emily
        Loughran

      

      Name: Christopher
        J. Calhoun   Name: 
        Emily
        Loughran 

      

      Title: CEO     Title: Director
        of Licensing

      

      Date: September
        18, 2006   Date: September
        26, 2006

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