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As filed with the Securities and Exchange Commission on December 23, 1999
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CERUS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 68-0262011
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2525 STANWELL DRIVE, SUITE 300
CONCORD, CA 94520
(925) 603-9071
(Address, including zip code, and
telephone number, including area
code, of registrant's principal
executive offices)
--------------------
STEPHEN T. ISAACS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CERUS CORPORATION
2525 STANWELL DRIVE, SUITE 300
CONCORD, CA 94520
(925) 603-9071
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copies to:
ALAN C. MENDELSON, ESQ. JAMES R. TANENBAUM, ESQ.
ANDREA VACHSS, ESQ. ANNA T. PINEDO, ESQ.
COOLEY GODWARD LLP STROOCK & STROOCK & LAVAN LLP
FIVE PALO ALTO SQUARE 180 MAIDEN LANE
3000 EL CAMINO REAL NEW YORK, NY 10038-4982
PALO ALTO, CA 94306-2155 (212) 806-5400
(650) 843-5000
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE
TO THE PUBLIC: As soon as practicable after this
registration statement becomes effective.
---------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value(2) 1,000,000 shares $25.75 $25,750,000 $6,798
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act. The price per share and
aggregate offering price are based on the average of the high and low
prices of the Registrant's common stock on December 21, 1999 as reported on
the Nasdaq National Market.
(2) Each share of the registrant's common stock being registered hereunder, if
issued prior to the termination by the registrant of its preferred share
rights agreement, includes Series C junior participating preferred stock
purchase rights. Prior to the occurrence of certain events, the Series C
junior participating preferred stock purchase rights will not be
exercisable or evidenced separately from the registrant's common stock and
have no value except as reflected in the market price of the share to which
they are attached.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON A DATE THAT THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 1999
1,000,000 SHARES
CERUS CORPORATION
COMMON STOCK
The selling stockholders listed on page 16 are offering up to 1,000,000
shares of Cerus Corporation common stock. We sold the shares to the selling
stockholders on December __, 1999 in a private transaction.
Our common stock trades on the Nasdaq National Market under the symbol
CERS. On December 22, 1999, the last reported sale price of our common stock was
$25.50 per share.
We will not be paying any underwriting discounts or commissions in this
offering.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
December __,1999.
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TABLE OF CONTENTS
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Page
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CERUS..............................................................................3
RISK FACTORS.......................................................................5
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................14
WHERE YOU CAN FIND MORE INFORMATION ABOUT CERUS AND THIS OFFERING.................15
USE OF PROCEEDS...................................................................15
SELLING STOCKHOLDERS..............................................................16
PLAN OF DISTRIBUTION..............................................................18
CERTAIN TRANSACTIONS..............................................................20
LEGAL MATTERS.....................................................................21
EXPERTS...........................................................................21
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We have not authorized any dealer, salesperson or other person to give
any information or represent anything not contained in this prospectus. You
should not rely on any unauthorized information. This prospectus does not offer
to sell or buy any shares in any jurisdiction in which it is unlawful. The
information in this prospectus is current as of the date on the cover.
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CERUS
Cerus develops products to prevent the transmission of diseases through
blood transfusions. Our systems inactivate infectious pathogens in blood
components and inhibit the white blood cell activity that is responsible for
certain adverse immune and other transfusion-related reactions. Blood components
include platelets, fresh frozen plasma and red blood cells. Our pathogen
inactivation systems, which are at various stages of pre-commercial development,
treat each of these components. We believe that our proprietary technology has
the potential to inactivate many new pathogens before they are identified and
before screening tests have been developed to detect them in the blood supply.
Because our systems are designed to inactivate rather than merely test for
pathogens, they may reduce the risk of transmission of pathogens that would
remain undetected by current testing methods. We also are leveraging our core
technology into programs for decontaminating plasma derivatives and improving
the outcome of bone marrow or stem cell transplants in cancer patients.
We have completed five clinical trials of our platelet system, three
clinical trials of our fresh frozen plasma system and two clinical trials of our
red blood cell system. Our platelet system is in Phase 3 clinical trials in
Europe and the United States. Our fresh frozen plasma system is in a Phase 3
clinical trial in the United States. Our red blood cell system is in Phase 1
clinical trials in the United States. Our system for improving the outcomes of
stem cell transplants is in a Phase 1 clinical trial in the United States.
We are a Delaware corporation. Our principal executive offices are
located at 2525 Stanwell Drive, Suite 300, Concord, California 94520, and our
telephone number is (925) 603-9071. In this prospectus, "Cerus," "we," "us," and
"our" refer to Cerus Corporation, unless the context otherwise requires.
RECENT DEVELOPMENTS
U.S. PHASE 3 CLINICAL TRIAL OF OUR PLATELET PATHOGEN INACTIVATION SYSTEM
In the third quarter of 1999, we initiated platelet transfusions in a
United States Phase 3 clinical trial. The multi-center study is designed to
evaluate the ability of platelets treated with our pathogen inactivation system
to control clinical bleeding. This trial is designed to include approximately
600 patients, who will receive either treated or untreated platelets for a
specified period of time. The primary endpoint to be evaluated is the incidence
of clinical bleeding events while the patients are receiving platelet support.
PHASE 3 CLINICAL TRIALS OF OUR FRESH FROZEN PLASMA PATHOGEN INACTIVATION SYSTEM
In the third quarter of 1999, we initiated transfusions in a Phase 3
clinical trial in the first of three patient groups. This single-arm, open-label
study is designed to evaluate coagulation factor function following transfusion
of fresh frozen plasma treated with our pathogen inactivation system. We plan to
enroll 30 patients in this patient group, who will receive fresh frozen plasma
for treatment of certain types of congenital clotting factor deficiencies. We
have also received FDA clearance to conduct Phase 3 clinical trials in two
additional patient groups: patients receiving fresh frozen plasma to treat
acquired clotting factor deficiencies and patients requiring large volume fresh
frozen plasma exchange to treat diseases such as thrombotic thrombocytopenic
purpura.
In the third quarter of 1999, we completed a Phase 2b clinical trial.
This was a controlled, double-blind trial in 13 patients diagnosed with chronic
liver diseases. The study showed that correction of patients' blood clotting
time and coagulation factor levels after transfusion were not adversely affected
by our treatment.
CLINICAL TRIALS OF OUR RED BLOOD CELL PATHOGEN INACTIVATION SYSTEM
In the third quarter of 1999, we completed a Phase 1b clinical trial of
our red blood cell pathogen inactivation system. The study, which included 28
healthy subjects, each of whom received four transfusions of treated red blood
cells, demonstrated there was no detectable immune response directed against the
red blood cells treated with our pathogen inactivation system and stored for 35
days. The study also showed that circulation of
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treated red blood cells 24 hours after transfusion exceeded the American
Association of Blood Banks standard for red blood cell recovery.
In the third quarter of 1999, we completed a Phase 1a clinical trial of
our red blood cell pathogen inactivation system. The randomized, controlled
study, which included 42 healthy subjects, was designed to evaluate the
post-transfusion viability of red blood cells treated with our pathogen
inactivation system and stored for 35 days. The study showed that the
circulation of both the treated and untreated red blood cells 24 hours after
transfusion exceeded the American Association of Blood Banks standard for red
blood cell recovery.
CLINICAL TRIAL OF OUR ALLOGENEIC CELLULAR IMMUNOTHERAPY SYSTEM (ACIT)
In the third quarter of 1999, we initiated patient treatment in a Phase
1 clinical trial in patients undergoing stem cell transplantation. The study is
designed to enroll approximately 30 patients, who will receive treated donor
T-cells as an adjunct to haploidentical (half-matched) stem cell transplants.
Patients receive a transfusion of donor T-cells treated with S-59 in conjunction
with stem cells provided by a close relative.
RECEIPT OF AN $800,000 NIH GRANT
In September 1999, we were awarded an $800,000 federal grant to be
administered by the National Institutes of Health (NIH) to support research
relating to our ACIT program. The grant will provide funding over three years
for pre-clinical research relating to the use of our proprietary technologies in
conjunction with stem cell transplantation as a treatment for blood disorders
such as sickle cell anemia and thalassemia.
THIRD QUARTER FINANCIAL RESULTS
For the three months ended September 30, 1999, we reported a net loss
of $5.5 million, or $0.47 per share, compared to a net loss of $6.1 million, or
$0.65 per share, in the comparable period of 1998. For the nine months ended
September 30, 1999, we reported a net loss of $15.5 million, or $1.43 per share,
compared to a net loss of $23.3 million, or $2.51 per share, in the comparable
period in 1998. At September 30, 1999, we had cash, cash equivalents and
short-term investments totaling $48.4 million.
ADOPTION OF STOCKHOLDER RIGHTS PLAN
Our Board of Directors approved the adoption of a stockholder rights
plan under which all stockholders of record as of November 23, 1999 will receive
rights to purchase shares of a new series of preferred stock. The rights plan is
designed to enable all of our stockholders to realize the full value of their
investment and to provide for fair and equal treatment for all stockholders in
the event that an unsolicited attempt is made to acquire Cerus.
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RISK FACTORS
You should carefully consider the following risk factors and warnings
before making an investment decision. The risks described below may not be the
only risks we face. Additional risks that we do not yet know of or that we
currently think are immaterial may also impair our business operations. If any
of the events or circumstances described in the following risks actually occurs,
our business, financial condition, or results of operations could be materially
adversely affected. In such case, the trading price of our common stock could
decline, and you may lose all or part of your investment.
OUR PRODUCTS ARE IN AN EARLY STAGE OF DEVELOPMENT AND THERE IS A HIGH RISK OF
FAILURE.
We have no products that have received regulatory approval for
commercial sale. All of our product candidates are in early stages of
development, and we face the risks of failure inherent in developing medical
devices and biotechnology products based on new technologies. Our products must
satisfy rigorous standards of safety and efficacy before they can be approved by
the United States Food and Drug Administration and international regulatory
authorities for commercial use. Our platelet, fresh frozen plasma, red blood
cell and stem cell transplantation programs are undergoing clinical testing to
evaluate safety and efficacy and concurrent preclinical studies to evaluate
their potential for carcinogenicity, mutagenicity, toxicity and other safety
factors. Our other programs are still in the early stages of research and
development. We will have to conduct significant additional product design and
development and research, preclinical (animal) and clinical (human) testing
before we can file applications with the FDA for product approval. Clinical
trials and preclinical safety studies are expensive and have a high risk of
failure. In addition, to compete effectively, our products must be easy to use,
cost-effective and economical to manufacture on a commercial scale. We cannot
assure you that we can achieve any of these objectives. Certain system
components remain in the design stage. Any of our products may fail or
experience delays in the design, development or testing processes or may not
attain market acceptance. Also, third parties may develop superior products or
have proprietary rights that preclude us from marketing our products. If
research and testing is not successful, our products are not commercially viable
or we cannot compete effectively, our business, financial condition and results
of operations will be materially adversely affected.
THE PROGRESS AND RESULTS OF OUR PRECLINICAL AND CLINICAL TESTING ARE UNCERTAIN.
We must provide the FDA and foreign regulatory authorities with
preclinical and clinical data that demonstrate the safety and efficacy of our
products before they can be approved for commercial sale. Clinical development,
including preclinical testing, is a long, expensive and uncertain process. It
may take us several years to complete our testing, and failure can occur at any
stage of testing. We cannot rely on interim results of preclinical or clinical
studies to necessarily predict their final results, and acceptable results in
early studies might not be repeated in later studies. Any preclinical or
clinical test may fail to produce results satisfactory to the FDA. Preclinical
and clinical data can be interpreted in different ways, which could delay, limit
or prevent regulatory approval. Negative or inconclusive results from a
preclinical study or clinical trial or adverse medical events during a clinical
trial could cause a preclinical study or clinical trial to be repeated or a
program to be terminated, even if other studies or trials relating to the
program are successful.
We typically rely on third-party clinical investigators to conduct our
clinical trials and other third-party organizations to perform data collection
and analysis, and as a result, we face certain additional delaying factors
outside our control. These factors include:
- difficulty in enrolling qualified subjects,
- inadequately trained or insufficient personnel at the study site, and
- delays in approvals from a study site's review board.
We cannot assure you that planned trials will begin on time or that any
of our preclinical or clinical testing will be completed on schedule or at all.
Certain of our clinical trials involve patient groups that have rare medical
conditions, and we may have difficulty in identifying and enrolling a sufficient
number of patients to complete the
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trials on a timely basis. We cannot assure you that any trials will result in
marketable products or that any products will be commercially successful even if
approved for marketing. Our product development costs will increase if we have
delays in testing or approvals. If the delays are significant, our business,
financial condition and results of operations will be materially adversely
affected.
WE FACE MANUFACTURING UNCERTAINTIES BECAUSE OUR PRODUCTS HAVE NOT BEEN
MANUFACTURED ON A COMMERCIAL SCALE.
Our products, and many of their components, have never been
manufactured on a commercial scale. It may be difficult or impossible to
manufacture our products economically on a commercial scale. We intend to use
third-party manufacturers to produce commercial quantities of our products,
including the inactivation compounds.
We have contracted with two manufacturers to provide enough S-59, the
inactivation compound we use in our platelet and fresh frozen plasma systems, to
meet our anticipated clinical trial requirements. Only one of the manufacturers
is performing the complete synthesis of S-59. If this manufacturer cannot
produce S-59 in commercial quantities, we may face delays and shortfalls before
our alternate manufacturer can produce sufficient quantities. Also, any new
manufacturer will have to prove both to us and to the FDA that its manufacturing
process complies with government regulations. We may need to identify and
qualify additional manufacturers for commercial production. We cannot be certain
that our existing manufacturers or any new manufacturer will be able to provide
required quantities of S-59.
We have produced only limited quantities of S-303, the inactivation
compound we use in our red blood cell pathogen inactivation system, for research
and clinical development. A sole third-party manufacturer has produced enough
S-303 for anticipated preclinical and clinical studies. We cannot be certain
that this manufacturer will be able to produce S-303 on a commercial scale. We
also do not know whether we will be able to enter into arrangements for the
commercial-scale manufacture of S-303 on reasonable terms or at all.
We purchase certain key components of our compounds from a limited
number of suppliers. While we believe there are alternative suppliers for these
components, it would be expensive and time-consuming to establish additional or
replacement suppliers for our compounds.
Baxter Healthcare Corporation, a development and marketing partner,
is responsible for manufacturing and assembling components of our systems.
Baxter has not manufactured these components in commercial quantities and may
not be able to provide them to us on an economical basis. Baxter intends to rely
on third parties to manufacture some of these components, which are customized
and have not been manufactured on a commercial scale. If Baxter or its
third-party component suppliers fail to develop commercially acceptable
manufacturing processes for these components, our business, results of
operations and financial condition will be materially adversely affected. If we
were unable to find adequate suppliers for these components, we would be
required to redesign the systems, which could lead to additional testing and
clinical trials. If we were required to redesign the products, our development
costs would increase and our programs could be delayed significantly.
OUR PRODUCTS MAY NEVER BE ACCEPTED BY THE HEALTH CARE COMMUNITY.
We believe that our ability to commercialize our systems effectively
will depend on the safety, efficacy and cost-effectiveness of our products and
the availability of adequate insurance reimbursement for these products. We
believe that market acceptance of our pathogen inactivation systems will depend
on the extent to which physicians, patients and healthcare payors perceive that
the benefits of using our systems justify their additional cost, given that the
blood supply has become safer in recent years. Our ability to successfully
commercialize our products depends in part on obtaining adequate reimbursement
for product costs and related treatment of blood products from governmental
authorities and private healthcare insurers (including health maintenance
organizations). Government and private third-party payors are increasingly
attempting to contain healthcare costs by limiting both the extent of coverage
and the reimbursement rate for new tests and treatments. In addition, we do not
expect our products to inactivate all known pathogens, and the inability of our
systems to inactivate certain pathogens may adversely affect market acceptance
of our products. Even if our products receive the necessary regulatory and
healthcare reimbursement approvals, our products may not achieve any significant
degree of market acceptance among blood centers, physicians, patients and
healthcare payors. Other technologies have been developed in recent years that
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have the potential to improve the safety of the blood supply. These technologies
include donor retested fresh frozen plasma, solvent-detergent treated fresh
frozen plasma and new methods to test for various blood-borne pathogens. For
various reasons, such as implementation costs and logistical concerns, the
transfusion industry has not always integrated these technologies into their
processes. Although we believe our inactivation systems can improve the safety
of the blood supply significantly, we cannot assure you that our technologies
will be accepted rapidly or at all. If our products fail to achieve market
acceptance, our business, results of operations and financial condition would be
materially adversely affected.
We are currently developing our platelet pathogen inactivation system
in the United States to treat apheresis platelets. Apheresis platelets are
collected from a single donor using an automated collection machine. Currently,
we estimate that approximately 60% of platelets are collected by apheresis in
the United States, and the balance are pooled random donor platelets. We cannot
predict whether the market for apheresis platelets will be maintained or will
develop further. If this market declines, our business, results of operation and
financial condition will be materially adversely affected. If we conduct
additional clinical trials to obtain FDA approval of the system for use in
treating random donor platelets, our development expenses will increase
significantly. In addition, FDA regulations limit the time from pooling to
transfusion to four hours to minimize the proliferation of bacterial
contamination in the pooled product. As a result, most pooling occurs in
hospitals. Our platelet system is designed for use in blood centers and requires
approximately six hours of processing. Therefore, the FDA's time limit between
pooling and transfusion currently precludes the use of our system with pooled
random donor platelets. Although our system is designed to reduce the risk of
bacterial contamination, we cannot predict whether the FDA would remove this
process time constraint to allow our system to be used with pooled random donor
platelets.
Baxter is one of three primary manufacturers of equipment for the
collection of apheresis platelets. The equipment, design and materials used to
collect the platelets vary from manufacturer to manufacturer. We are conducting
our preclinical and clinical studies using only Baxter's equipment and
materials, and initially we intend to seek FDA approval for our systems for use
only with Baxter's collection systems. As a result, market acceptance of our
platelet system will depend on the market acceptance of Baxter's collection
equipment. Blood centers may be reluctant to replace their existing equipment,
and the FDA may require us to make our systems compatible with other equipment.
If we are required to develop our platelet system for use on other
manufacturers' equipment, or if we decide to address a broader market, we will
need to perform additional studies, which will increase our development costs
and which may not be successful.
A SMALL NUMBER OF CUSTOMERS WILL DETERMINE MARKET ACCEPTANCE OF OUR PATHOGEN
INACTIVATION SYSTEMS.
The market for our pathogen inactivation systems is dominated by a
small number of blood collection centers. In the United States, the American Red
Cross collects and distributes approximately 50% of the nation's supply of blood
and blood components. Other major United States blood centers include the New
York Blood Center and United Blood Services, each of which distributes
approximately 6% of the nation's supply of blood and blood components. In
Western Europe and Japan, various national blood transfusion services or Red
Cross organizations collect, store and distribute virtually all of their
respective nations' blood and blood components supply. If we fail to properly
market, price or sell our products to even a small number of these large
customers, our business, financial condition and results of operations could be
materially adversely affected.
WE RELY HEAVILY ON BAXTER FOR DEVELOPMENT FUNDING, MARKETING AND SALES.
We have development and marketing agreements with Baxter for our
platelet, fresh frozen plasma and red blood cell pathogen inactivation systems,
and we rely on Baxter for significant financial and technical contributions to
these programs. Our ability to develop, manufacture and market these products
successfully depends significantly on Baxter's performance under these
agreements.
- Baxter can terminate our agreements or fail to perform. Baxter can
terminate the agreements without cause under certain circumstances. If
Baxter terminates the agreements or fails to provide adequate funding
to support the product development efforts, we will need to obtain
additional funding from other sources and will be required to devote
additional resources to the development of our products. We cannot
assure you that we would be able to find a suitable substitute partner
in a timely manner, on reasonable
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terms or at all. If we fail to find a suitable partner, our research,
development or commercialization of certain planned products would be
delayed significantly which would cause us to incur additional
expenditures.
- We rely on Baxter for the marketing, sales and distribution of our
products. We do not have and currently do not plan to develop our own
marketing and sales organization. Instead, we plan to rely on Baxter to
market and sell the pathogen inactivation systems. If our joint
development agreements with Baxter are terminated or if Baxter is
unable to market the products successfully, we will be required to find
another marketing, sales and distribution partner or develop these
capabilities ourselves. We may not be able to find a suitable partner
on favorable terms or on a timely basis, if at all. Developing
marketing, sales and distribution capabilities ourselves would delay
commercialization of our products and increase our costs.
- We lack control over management decisions. Baxter and we share
responsibility for managing the development programs for the pathogen
inactivation systems. Management decisions are made by a management
board that has equal representation from both Baxter and us. Our
interests and Baxter's may not always be aligned. If we disagree with
Baxter on program direction, a neutral party will make the decision.
The neutral party may not decide in our best interest. Under the
agreements, Baxter may independently develop a pathogen inactivation
system for fresh frozen plasma using their pre-existing methylene blue
technology. Such an effort by Baxter could create conflicts in our
joint program for the development of a pathogen inactivation system for
fresh frozen plasma.
OUR PRODUCTS ARE SUBJECT TO EXTENSIVE REGULATION BY DOMESTIC AND FOREIGN
GOVERNMENTS.
Our products under development and anticipated future products are
subject to extensive and rigorous regulation by United States local, state and
federal regulatory authorities and by foreign regulatory bodies. These
regulations are wide-ranging and govern, among other things:
- product development,
- product testing,
- product manufacturing,
- product labeling,
- product storage,
- product pre-market clearance or approval,
- product sales and distribution, and
- product advertising and promotion.
The FDA and other agencies in the United States and in foreign
countries impose substantial requirements upon the manufacturing and marketing
of products such as those being developed by our company or any partner. The
process of obtaining FDA and other required regulatory approvals is long,
expensive and uncertain. The time required for regulatory approvals is uncertain
and the process typically takes a number of years, depending on the type,
complexity and novelty of the product. We may encounter significant delays or
excessive costs in our efforts to secure necessary approvals or licenses.
We cannot be sure that our products will receive FDA approval in a
timely manner, if at all. Even if approvals are obtained, the marketing and
manufacturing of drug products are subject to continuing FDA and other
regulatory requirements, such as requirements to comply with good manufacturing
practices. The failure to comply with such requirements could result in
enforcement action, which could adversely affect us and our business. Later
discovery of problems with a product, manufacturer or facility may result in
additional restrictions on the product or
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manufacturer, including withdrawal of the product from the market. The
government may impose new regulations which could further delay or preclude
regulatory approval of our potential products. We cannot predict the impact of
adverse governmental regulation which might arise from future legislative or
administrative action.
We intend to generate product revenue from sales outside of the United
States. Distribution of our products outside the United States also may be
subject to extensive government regulation. These regulations, including the
requirements for approvals or clearance to market, the time required for
regulatory review and the sanctions imposed for violations, vary by country. It
is uncertain whether we will obtain regulatory approvals in such countries or
that we will be required to incur significant costs in obtaining or maintaining
our foreign regulatory approvals. Failure to obtain necessary regulatory
approvals or any other failure to comply with regulatory requirements could
result in reduced revenue and earnings.
To support our requests for FDA approval to market our products, we
intend to conduct various types of studies including:
- toxicology studies to evaluate product safety,
- in vitro and animal studies to evaluate product effectiveness, and
- human clinical trials to evaluate the safety, tolerability and
effectiveness of treated blood components.
We have conducted many toxicology studies to demonstrate our products'
safety, and we plan to conduct additional toxicology studies throughout the
product development process. At any time, the FDA may require further toxicology
or other studies to further demonstrate our products' safety, which could delay
commercialization. We believe the FDA is likely to weigh the potential risks of
using our pathogen inactivation products against the incremental benefits, which
may be less compelling in light of improved safety in the blood supply. In
addition, our clinical development plan assumes that we will not be required to
perform human clinical studies to demonstrate our systems' ability to inactivate
pathogens. Although we have discussed this plan with the FDA, they may find it
unacceptable at any time and may require human clinical trials to demonstrate
efficacy in inactivating pathogens. Such trials may be too large and expensive
to be practical.
Regulatory agencies may limit the uses, or indications, for which any
of our products is approved. For example, we believe that we will be able to
claim the inactivation of particular pathogens only to the extent we have in
vitro or animal data to support such claims.
In addition to the regulatory requirements applicable to us and our
products, there are regulatory requirements applicable to our prospective
customers, the blood centers that process and distribute blood and blood
products. Blood centers and others will likely be required to obtain approved
license supplements from the FDA before shipping products processed with our
pathogen inactivation systems interstate. This requirement or FDA delays in
approving these supplements may deter some blood centers from using our
products. Blood centers that do submit supplements may face disapproval or
delays in approval that could provide further delay or deter them from using our
products. The regulatory impact on potential customers could slow or limit the
potential sales of our products.
WE ARE USING PROTOTYPE COMPONENTS IN OUR CLINICAL TRIALS AND HAVE NOT COMPLETED
THEIR COMMERCIAL DESIGN.
The system disposables and ultraviolet light sources we use in our
clinical trials are only prototypes. We are developing the commercial design for
these products at the same time. As a result, we will be required to perform
studies to demonstrate the equivalence of the prototype and the commercial
design. We plan to demonstrate this equivalence by conducting these studies in
healthy subjects using the commercial versions of the systems. However,
regulatory agencies may require us to perform additional studies, both
preclinical and clinical, using the commercial versions of the systems. If we
are required to perform our planned studies with patients or to conduct
additional preclinical studies, the commercialization of our products will be
delayed. If we fail to develop commercial versions of the systems on schedule,
our business, results of operations and financial condition will be materially
adversely affected.
9.
<PAGE> 11
WE HAVE ONLY A LIMITED OPERATING HISTORY AND WE EXPECT TO CONTINUE TO GENERATE
LOSSES.
We may never achieve a profitable level of operations. To date, we have
engaged primarily in research and development. Our development and general and
administrative expenses have resulted in substantial losses. As of September 30,
1999, we had an accumulated deficit of approximately $80.0 million. All of our
products are in the research and development stage, and we have not received any
revenue from product sales. We have received all of our revenue under our
agreements with Baxter and federal research grants. We will be required to
conduct significant research, development, clinical testing and regulatory
compliance activities for each of these products. We expect our losses to
continue at least through 2001. We also expect our losses to fluctuate
significantly from quarter to quarter due to differences in the timing of our
expenses and potential revenue from Baxter. Our ability to become profitable
will depend on our ability to, among other things:
- establish adequate protection of our intellectual property rights,
- complete our product development,
- obtain product regulatory approvals, and
- achieve market acceptance for our products.
WE WILL NEED ADDITIONAL FUNDS.
Our product development programs are capital-intensive. We expect to
continue to spend substantial funds for our operations for the foreseeable
future. We believe that our existing capital resources, together with the net
proceeds from this offering, anticipated payments from Baxter under our
agreements with Baxter and projected interest income, will support our current
and planned operations for at least the next 18 months. Our cash, liquidity and
capital requirements will depend on numerous factors, including additional
research and development needs, product testing results, regulatory
requirements, competitive pressures and technological advances and setbacks.
In addition, we may require substantial funds for our long-term product
development, marketing programs and operating expenses. We cannot assure you
that we will be able to raise additional funds on acceptable terms or at all. If
we raise additional funds by issuing equity securities, our existing
stockholders may experience substantial dilution.
WE OPERATE IN A COMPETITIVE INDUSTRY WITH RAPIDLY CHANGING TECHNOLOGY.
We expect our products to encounter significant competition. Our
products may compete with other approaches to blood safety and improving the
outcome of stem cell transplantation currently in use, as well as with future
products developed by biotechnology and pharmaceutical companies, hospital
supply companies, national and regional blood centers, and governmental
organizations and agencies. Our success will depend, in part, on our ability to
respond quickly to medical and technological changes through the development and
introduction of new products. Product development is risky and uncertain, and we
cannot assure you that we will develop our products successfully. Competitors'
products or technologies may make our products obsolete or non-competitive
before we are able to generate any significant revenue. Many of our competitors
or potential competitors have substantially greater financial and other
resources than we have. They may also have greater experience in preclinical
testing, human clinical trials and other regulatory approval procedures. Our
ability to compete successfully will depend, in part, on our ability to:
- attract and retain skilled scientific personnel,
- develop technologically superior products,
- develop lower cost products,
- obtain patent or other proprietary protection for our products and
technologies,
10.
<PAGE> 12
- obtain required regulatory approvals for our products,
- be early entrants to the market, and
- manufacture, market and sell our products, independently or through
collaborations.
Several companies are developing technologies which are, or in the
future may be, the basis for products that will directly compete with or reduce
the market for our pathogen inactivation systems. A number of companies are
specifically focusing on alternative strategies for pathogen inactivation in
various blood components. In May 1998, the FDA approved solvent-detergent for
use in treating fresh frozen plasma in the United States. If the treatment of
fresh frozen plasma by solvent-detergent becomes a widespread practice, which
has not happened to date, it could adversely affect our ability to market our
fresh frozen plasma pathogen inactivation system in the United States. Several
other companies are currently marketing solvent-detergent or methylene
blue-based pathogen inactivation systems for fresh frozen plasma in Europe.
Other groups are developing synthetic blood product substitutes and
products to stimulate the growth of platelets. If any of these technologies is
successfully developed, it could have a material adverse effect on our business,
financial condition and results of operations. Baxter has agreed to certain
restrictions on its ability to independently develop and market products that
compete with our products, however, these provisions may not prevent Baxter from
developing or marketing competing products using methylene blue.
FAILURE TO ATTRACT AND RETAIN KEY EMPLOYEES WILL ADVERSELY AFFECT OUR BUSINESS.
Because of the scientific nature of our business, we depend on the
principal members of our management and scientific staff. Our success will
depend largely on our ability to attract and retain highly skilled scientific
and managerial personnel. Competition for such personnel is intense. We cannot
assure you that we will be successful in attracting and retaining such
personnel. The failure to maintain our management and scientific staff and to
attract additional key personnel could materially adversely affect our business,
financial condition and results of operations. Although we intend to provide
incentive compensation to attract and retain our key personnel, we cannot
guarantee these efforts will be successful.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY OR OPERATE OUR BUSINESS
WITHOUT INFRINGING INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Our technology will be protected from unauthorized use by others only
to the extent that it is covered by valid and enforceable patents or effectively
maintained as trade secrets. As a result, our success depends in part on our
ability to:
- obtain patents,
- protect trade secrets,
- operate without infringing upon the proprietary rights of others, and
- prevent others from infringing on our proprietary rights.
We cannot be certain that our patents or patents that we license from
others will be enforceable and afford protection against competitors. Our
patents or patent applications, if issued, may be challenged, invalidated or
circumvented. Our patent rights may not provide us with proprietary protection
or competitive advantages against competitors with similar technologies. Others
may independently develop technologies similar to ours or independently
duplicate our technologies. Due to the extensive time required for development,
testing and regulatory review of our potential products, our patents may expire
or remain in existence for only a short period following commercialization. This
would reduce or eliminate any advantage of the patents.
11.
<PAGE> 13
We cannot be certain that we were the first to make the inventions
covered by each of our issued or pending patent applications or that we were the
first to file patent applications for such inventions. We may need to license
the right to use third-party patents and intellectual property to continue
development and marketing of our products. We may not be able to acquire such
required licenses on acceptable terms, if at all. If we do not obtain such
licenses, we may need to design around other parties' patents or we may not be
able to proceed with the development, manufacture or sale of our products.
We may face litigation to defend against claims of infringement, assert
claims of infringement, enforce our patents, protect our trade secrets or
know-how, or determine the scope and validity of others' proprietary rights.
Patent litigation is costly. In addition, we may require interference
proceedings declared by the United States Patent and Trademark Office to
determine the priority of inventions relating to our patent applications.
Litigation or interference proceedings could have a material adverse effect on
our business, financial condition and results of operations and could be
unsuccessful in our efforts to enforce our intellectual property rights.
FAILURE TO OBTAIN ADEQUATE REIMBURSEMENT FROM GOVERNMENT HEALTH ADMINISTRATION
AUTHORITIES, PRIVATE HEALTH INSURERS AND OTHER ORGANIZATIONS COULD MATERIALLY
ADVERSELY AFFECT OUR FUTURE BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL
CONDITION.
Our ability and the ability of our existing and future corporate
partners to market and sell our products will depend, in part, on the extent to
which reimbursement for the cost of our products and related treatments will be
available from government health administration authorities, private health
insurers and other organizations. Third party payors are increasingly
challenging the price of medical products and services.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products. In addition, for sales of our products in Europe,
we will be required to seek reimbursement on a country-by-country basis. We
cannot be certain that any products approved for marketing will be considered
cost effective or that reimbursement will be available or that allowed
reimbursement in foreign countries will be adequate. In addition, payors'
reimbursement policies could adversely affect our or any corporate partner's
ability to sell our products on a profitable basis.
WE MAY BE LIABLE IF OUR PRODUCTS HARM PEOPLE.
We are exposed to potential liability risks inherent in the testing and
marketing of medical devices and products. We may be liable if any of our
products causes injury, illness or death. We intend to obtain product liability
insurance before the commercial introduction of any product, but do not know
whether we will be able to obtain and maintain such insurance on acceptable
terms. Any insurance we obtain may not provide adequate coverage against
potential liabilities. A liability claim, regardless of merit or eventual
outcome, could materially adversely affect our business, results of operations
and financial condition.
WE USE HAZARDOUS SUBSTANCES THAT ARE SUBJECT TO ENVIRONMENTAL REGULATION.
Our research and development involves the controlled use of hazardous
materials, including certain hazardous chemicals, radioactive materials and
pathogens. Accordingly, we are subject to federal, state and local laws
governing the use, handling and disposal of these materials. We may incur
significant costs to comply with additional environmental and health and safety
regulations in the future. Although we believe that our safety procedures for
handling and disposing of hazardous materials comply with regulatory
requirements, we cannot eliminate the risk of accidental contamination or
injury. If an accident occurs, we could be held liable for any damages that
result.
12.
<PAGE> 14
THE MARKET PRICE OF OUR STOCK MAY BE HIGHLY VOLATILE.
The market prices for securities of emerging medical device and
biotechnology companies like us have been highly volatile. Announcements may
have a significant impact on the market price of our common stock. Such
announcements may include:
- biological or medical discoveries,
- technological innovations or new commercial services by us or our
competitors,
- developments concerning proprietary rights, including patents and
litigation matters,
- regulatory developments in both the United States and foreign
countries,
- public concern as to the safety of new technologies,
- general market conditions,
- comments made by analysts, including changes in analysts' estimates of
our financial performance, and
- quarterly fluctuations in our revenue and financial results.
The stock market has from time to time experienced extreme price and
volume fluctuations, which have particularly affected the market prices for
emerging biotechnology and medical device companies, and which have often been
unrelated to the operating performance of such companies. These broad market
fluctuations may adversely affect the market price of our common stock. In
addition, sales of substantial amounts of our common stock in the public market
following this offering could lower the market price of our common stock. In the
past, following periods of volatility in the market price of a company's stock,
securities class action litigation has occurred against the issuing company.
Such litigation could result in substantial costs and a diversion of
management's attention and resources, which could have a material adverse effect
on our revenue and earnings. Any adverse determination in such litigation could
also subject us to significant liabilities.
DELAWARE LAW, PROVISIONS IN OUR CHARTER AND OUR RIGHTS PLAN COULD MAKE THE
ACQUISITION OF OUR COMPANY BY ANOTHER COMPANY MORE DIFFICULT.
Provisions of our certificate of incorporation may have the effect of
delaying or preventing changes in control or management or limit the price that
investors may be willing to pay for shares of our common stock. We also are
subject to the provisions of Section 203 of the Delaware General Corporation
Law, an anti-takeover law, which could delay a merger, tender offer to proxy
contest or make a similar transaction more difficult. In addition, our board of
directors has the authority to issue up to 5,000,000 shares of preferred stock
without stockholders' approval, of which 8,327 shares currently are outstanding.
The rights of the holders of common stock will be subject to, and may be
affected by, the rights of the holders of outstanding preferred stock and any
preferred stock that may be issued in the future. The issuance of preferred
stock could have the effect of making it more difficult for a third party to
acquire a majority of our outstanding voting stock.
Also, in November 1999, our board of directors adopted a stockholder
rights plan, or "poison pill," which has anti-takeover effects.
13.
<PAGE> 15
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and the documents
incorporated by reference are forward-looking statements. These statements are
based on our current expectations, assumptions, estimates and projections about
our business and our industry, and involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's results,
levels of activity, performance or achievement to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied in or contemplated by the forward-looking statements. Words such as
"believe," "anticipate," "expect," "intend," "plan," "will," "may," "should,"
"estimate," "predict," "potential," "continue," or the negative of such terms or
other similar expressions, identify forward-looking statements. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Our actual
results could differ materially from those anticipated in such forward-looking
statements as a result of several factors more fully described under the caption
"Risk Factors" and in the documents incorporated by reference. The
forward-looking statements made in this prospectus relate only to events as of
the date on which the statements are made. We do not intend to update publicly
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
14.
<PAGE> 16
WHERE YOU CAN FIND MORE INFORMATION ABOUT CERUS AND THIS OFFERING
You should rely only on the information provided or incorporated by
reference in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of the document.
We have filed with the SEC a registration statement on Form S-3 to
register the common stock offered by this prospectus. However, this prospectus
does not contain all of the information contained in the registration statement
and the exhibits and schedules to the registration statement. We strongly
encourage you to carefully read the registration statement and the exhibits and
schedules to the registration statement.
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, DC, New York, New York and
Chicago, Illinois. You can request copies of these documents by contacting the
SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's website at www.sec.gov.
The SEC allows us to "incorporate by reference" the information
contained in documents that we file with them, which means that we can disclose
important information to you by referring to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information in this prospectus supersedes information incorporated by reference
which we filed with the SEC prior to the date of this prospectus, while
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934.
The following documents filed with the SEC are incorporated by
reference in this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31,
1998;
2. Our Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30 and September 30, 1999;
3. Our Current Report on Form 8-K, dated November 3, 1999; and
4. The description of our common stock set forth in our
Registration Statement on Form 8-A, filed with the SEC on
January 8, 1997.
We will furnish without charge to you, on written or oral request, a
copy of any or all of the documents incorporated by reference, including
exhibits to these documents. You should direct any requests for documents to
Cerus Corporation, Attention: Investor Relations Officer, 2525 Stanwell Drive,
Suite 300, Concord, California 94520, telephone: (925) 603-9071.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the account of the selling stockholders. We will not
receive any proceeds from the sale of these shares of common stock.
15.
<PAGE> 17
SELLING STOCKHOLDERS
We are registering the shares covered by this prospectus on behalf of
the selling stockholders named in the table below. We issued all of the shares
to the selling stockholders in a private placement transaction. We have
registered the shares to permit the selling stockholders and their pledgees,
donees, transferees or other successors-in-interest that receive their shares
from a selling stockholder as a gift, partnership distribution or other non-sale
related transfer after the date of this prospectus to resell the shares.
The following table sets forth the name of each selling stockholder,
the number of shares owned by each selling stockholder, the number of shares
that may be offered under this prospectus and the number of shares of our common
stock owned by each selling stockholder as of December ___, 1999, the number of
shares that may be offered under this prospectus and the number of shares of our
common stock owned by each selling stockholder after this offering is completed.
Except as set forth in the table below, none of the selling stockholders except
Baxter Healthcare Corporation has had a material relationship with us within the
past three years. See "Certain Transactions" for a description of our
relationship with Baxter. The number of shares in the column "Number of Shares
Being Offered" represent all of the shares that each selling stockholder may
offer under this prospectus. The selling stockholders may sell some, all or none
of their shares. We do not know how long the selling stockholders will hold the
shares before selling them and we currently have no agreements, arrangements or
understandings with any of the selling stockholders regarding the sale of any of
the shares. The shares offered by this prospectus may be offered from time to
time by the selling stockholders.
The percentages of shares owned prior to the offering are based on
12,742,843 shares of our common stock outstanding, giving effect to the sale of
1,000,000 shares to the selling stockholders in the private placement.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING SHARES BEING AFTER OFFERING
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------------ ------- ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Aries Domestic Fund, LP 14,033 * 14,033 0 0
Aries Master Fund 34,873 * 34,873 0 0
Aries Domestic Fund II, LP 1,094 * 1,094 0 0
Ashton Partners 10,000 * 10,000 0 0
Baxter Healthcare Corporation 2,070,337 16.2% 390,000 1,680,337 13.2%
BayStar Capital L.P. 20,000 * 20,000 0 0
BayStar International LTD 20,000 * 20,000 0 0
Doyle, Lawrence S. 10,000 * 10,000 0 0
Galleon Healthcare Partners, L.P. 17,191 * 17,191 0 0
Galleon Healthcare Overseas, Ltd. 57,809 * 57,809 0 0
Lincoln Partners 75,000 * 75,000 0 0
Meriken Nominees Ltd. 20,000 * 20,000 0 0
Narragansett Offshore Ltd. 12,600 * 12,600 0 0
Narragansett I, LP 47,400 * 47,400 0 0
Oracle Partners 58,000 * 58,000 0 0
Oracle Institutional Partners 19,500 * 19,500 0 0
</TABLE>
16.
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C> <C>
GSAM Oracle 18,500 * 18,500 0 0
Oracle Offshore 4,000 * 4,000 0 0
R.E.K. Profit Sharing Trust FBO Robert E. King 146,195 1.1% 20,000 126,195 1.0%
United Capital Management, Inc. 100,000 * 100,000 0 0
Weber, Alan 50,000 * 50,000 0 0
</TABLE>
- --------------
* less than one percent of our common stock
17.
<PAGE> 19
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares from time to time. The
selling stockholders will act independently of us in making decisions regarding
the timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at terms
then prevailing or at prices related to the then current market price, or in
privately negotiated transactions. The selling stockholders may effect these
transactions by selling the shares to or through broker-dealers. The selling
stockholders may sell their shares in one or more of, or a combination of:
- a block trade in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction,
- purchases by a broker-dealer as principal and resale by a
broker-dealer for its account under this prospectus,
- an exchange distribution in accordance with the rules of an
exchange,
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers, and
- privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. If the plan of
distribution involves an arrangement with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, the amendment or supplement
will disclose:
- the name of each selling stockholder and of the participating
broker-dealer(s),
- the number of shares involved,
- the price at which the shares were sold,
- the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable,
- that a broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus, and
- other facts material to the transaction.
From time to time, a selling stockholder may transfer, pledge, donate
or assign its shares of common stock to lenders or others and each of such
persons will be deemed to be a "selling stockholder" for purposes of this
prospectus. The number of shares of common stock beneficially owned by the
selling stockholder will decrease as and when it takes such actions. The plan of
distribution for the selling stockholders' shares of common stock sold under
this prospectus will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be selling stockholders hereunder.
Upon being notified by a selling stockholder that a donee or pledgee intends to
sell more than 500 shares, we will file a supplement to this prospectus.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out short positions. The selling stockholders may enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer the shares under this prospectus. The selling stockholders also may
loan
18.
<PAGE> 20
or pledge the shares to a broker-dealer. The broker-dealer may sell the loaned
shares, or upon a default the broker-dealer may sell the pledged shares under
this prospectus.
In effecting sales, broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate in the resales.
Broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling stockholders. Broker-dealers or agents may
also receive compensation from the purchasers of the shares for whom they act as
agents or to whom they sell as principals, or both. Compensation as to a
particular broker-dealer might be in excess of customary commissions and will be
in amounts to be negotiated in connection with the sale. Broker-dealers or
agents and any other participating broker-dealers or the selling stockholders
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended, in connection with sales of the shares.
Accordingly, any commission, discount or concession received by them and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act. In addition, any
securities covered by this prospectus that qualify for sale under Rule 144
promulgated under the Securities Act may be sold under Rule 144 rather than
under this prospectus. The selling stockholders have advised that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. There is
no underwriter or coordinating broker acting in connection with the proposed
sale of shares by the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in some
states the shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, as amended, any person engaged in the distribution of the shares
may not simultaneously engage in market making activities with respect to our
common stock for a period of two business days prior to the commencement of the
distribution. In addition, each selling stockholder will be subject to
applicable provisions of the Exchange Act and the associated rules and
regulations under the Exchange Act, including Regulation M, which provisions may
limit the timing of purchases and sales of shares of our common stock by the
selling stockholders. We will make copies of this prospectus available to the
selling stockholders and have informed them of the need to deliver copies of
this prospectus to purchasers at or prior to the time of any sale of the shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against specific liabilities,
including liabilities arising under the Securities Act. The selling stockholders
have agreed to indemnify specific persons, including broker-dealers and agents,
against specific liabilities in connection with the offering of the shares,
including liabilities arising under the Securities Act.
We have agreed to maintain the effectiveness of this registration
statement until each selling stockholder can sell all of the shares it holds
under Rule 144(k) promulgated under the Securities Act. The selling stockholders
may sell all, some or none of the shares offered by this prospectus.
19.
<PAGE> 21
CERTAIN TRANSACTIONS
BAXTER HEALTHCARE CORPORATION
Cerus is a party to agreements with Baxter for the development and
commercialization of platelet, fresh frozen plasma and red cell pathogen
inactivation systems. One agreement covers the platelet program, another covers
the fresh frozen plasma and red blood cell programs. Baxter also has made
several equity investments in Cerus, including investments in connection with
these collaborations.
The agreement for the platelet program provides for Baxter and Cerus
to generally share system development costs equally, subject to mutually agreed
budgets established from time to time, and for Cerus to receive 33.5% of
revenue from sales of inactivation system disposables after each party is
reimbursed for its cost of goods above a specified level. The agreement also
provides for Baxter to make a $5.0 million cash milestone payment to Cerus upon
approval by the FDA of an application to market products developed under the
platelet program, comparable approval in Europe or termination of the program.
The agreement for the fresh frozen plasma and red blood cell programs
provides for Baxter and Cerus generally to share red blood cell system
development costs equally, subject to mutually agreed budgets established
from time to time. The agreement also provides for an equal sharing of revenue
from sales of red blood cell inactivation disposables after each party is
reimbursed for its cost of goods and a specified percentage allocation, not to
exceed 14% of revenue, is retained by Baxter for marketing and administrative
expenses. Also under the agreement, Cerus and Baxter equally funded the fresh
frozen plasma program development through December 31, 1997, after which time
Baxter's funding commitment for the fresh frozen plasma development program is
limited to $1.2 million, of which $600,000 offset payments owed to Baxter in
January 1999 and $600,000 is payable to Cerus in January 2000. Baxter has an
exclusive, worldwide distribution license and will be responsible for
manufacturing and marketing the fresh frozen plasma product under the direction
of Cerus. The agreement also provides for Cerus to receive 75% and Baxter to
receive 25% of revenue from sales of fresh frozen plasma inactivation system
disposables after each party is reimbursed for its cost of goods and a specified
percentage allocation, not to exceed 14% of revenue, is retained by Baxter for
marketing and administrative expenses.
Baxter currently holds approximately 1,680,337 shares of Cerus' common
stock (2,070,337 shares, or 16.2%, after giving effect to the purchase of
390,000 shares in the private placement), and has purchased 5,000 shares of
Series A convertible preferred stock for $5 million and 3,327 shares of Series B
convertible preferred stock for $9.5 million. Baxter has made approximately
$21.8 million of development and milestone payments to Cerus and has made
$37.0 million of equity investments ($46.8 million after giving effect to the
purchase of shares in the private placement).
Baxter is the only holder of Cerus preferred stock. The Series A
preferred stock will convert to Cerus common stock upon the approval by the FDA
of an application to market products developed under the platelet program,
comparable approval in Europe or termination of the program. In the event of
marketing approval, each share of Series A preferred stock will automatically
convert into a number of shares of common stock equal to $1,000 divided by one
hundred twenty percent (120%) of the average closing price of the common stock
for the thirty (30) trading days prior to and including the trading day
immediately prior to the approval. In the event of a program termination, each
share of Series A preferred stock will automatically convert into a number of
shares of common stock equal to $1,000 divided by the average closing price of
the common stock for the thirty (30) trading days commencing with the fifteenth
(15th) trading day prior to the termination. Cerus has the right to redeem the
Series A preferred stock prior to conversion for a $5.0 million cash payment. In
the event of a program termination, Baxter may require Cerus to redeem the
Series A preferred stock for a $5.0 million cash payment.
Each share of Series B preferred stock becomes convertible at Baxter's
option into 100 shares of Cerus common stock on March 3, 2000. The Series B
preferred stock will earn a premium of 7% per annum until April 6, 2000. Cerus
has the right to redeem the Series B preferred stock prior to conversion for a
payment to Baxter equal to the aggregate purchase price of the shares redeemed.
20.
<PAGE> 22
CONSORTIUM FOR PLASMA SCIENCE
In December 1998, Cerus and the Consortium for Plasma Science entered
into an agreement for the development of a pathogen inactivation system for
source plasma. The Consortium is co-funded by four plasma fractionation
companies, one of which is Baxter. The Consortium, which is a separate entity
from its members, provides research and development funding worldwide for
technologies to improve the safety of source plasma. The agreement includes an
initial commitment of approximately $2.0 million to fund development of Cerus'
proprietary technology for use with source plasma. The initial term of the
agreement is approximately 18 months, ending June 30, 2000. The agreement
contemplates funding by the Consortium through the regulatory approval phase,
with future commitments to be determined by the Consortium annually. The
agreement provides for Cerus to pay the Consortium a royalty on potential
product sales.
INDEMNIFICATION AND LIMITATION OF DIRECTOR AND OFFICER LIABILITY
In July 1996, the Board authorized Cerus to enter into indemnity
agreements with each of the Company's directors, executive officers, Controller
and Director of Finance. The form of indemnity agreement provides that Cerus
will indemnify against any and all expenses of the indemnified person who
incurred such expenses because of his or her status as a director, executive
officer, Controller or Director of Finance, to the fullest extent permitted by
Cerus' Bylaws and Delaware law. In addition, Cerus' Bylaws provide that Cerus
shall indemnify its directors and executive officers to the fullest extent
permitted by Delaware law, subject to certain limitations, and may also secure
insurance, to the fullest extent permitted by Delaware law, on behalf of any
director, officer, employee or agent against any expense, liability or loss
arising out of his or her actions in such capacity.
Cerus' Restated Certificate of Incorporation contains certain
provisions relating to the limitation of liability of directors. Cerus' Restated
Certificate provides that a director shall not be personally liable to Cerus or
its stockholders for monetary damages for any breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for unlawful payment of dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of a director, then the liability of a Cerus director shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended. The provision in the Restated Certificate does
not eliminate the duty of care and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon by Cooley Godward LLP.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the financial
statements included in our Annual Report on Form 10-K for the three years ended
December 31, 1998, as set forth in their report which is incorporated in this
prospectus by reference. Our financial statements are incorporated by reference
in reliance upon Ernst & Young LLP's report given on their authority as experts
in accounting and auditing.
21.
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The registrant will bear no expenses in connection with any sale or
other distribution by the selling stockholders of the shares being registered
other than the expenses of preparation and distribution of this registration
statement and the prospectus included in this registration statement. The extent
of these expenses is set forth in the following table. All of the amounts shown
are estimates except the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee $6,798
Nasdaq listing fee 17,500
Legal fees and expenses 15,000
Accounting fees and expenses 7,500
Printing expenses 2,500
Miscellaneous expenses 702
-------
Total $50,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act of 1933, as amended ("Securities Act"). The Registrant's Bylaws
also provide that the Registrant will indemnify its directors and executive
officers and may indemnify its other officers, employees and other agents to the
fullest extent permitted by Delaware law.
The Registrant's Restated Certificate of Incorporations ("Restated
Certificate") provides that the liability of its directors for monetary damages
shall be eliminated to the fullest extent permissible under Delaware law.
Pursuant to Delaware law, this includes elimination of liability for monetary
damages for breach of the directors' fiduciary duty of care to the Registrant
and its stockholders. These provisions do not eliminate the directors' duty of
care and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant, for acts or omissions not in
good faith or involving intentional misconduct, for knowing violations of law,
for any transaction from which the director derived an improper personal
benefit, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
effect a director's responsibilities under any other laws, such as federal
securities laws or state or federal environmental laws.
The Registrant has entered into agreements with its directors and
officers that require Cerus to indemnify such persons to the fullest extent
authorized or permitted by the provisions of the Restated Certificate and
Delaware law against expenses, judgements, fines, settlements and other amounts
actually and responsibly incurred (including expenses of a derivative action) in
connection with any proceeding, whether actual or threatened, to which any such
person may be made a party by reason of the fact that such person is or was a
director, officer, employee or other agent of the Registrant or any of its
affiliated enterprise. Delaware law permits such indemnification, provided such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interest of the Registrant and, with respect to
any criminal proceeding, had no reasonable cause to believe his or her conduct
was unlawful. The indemnification agreements also set forth certain procedures
that will apply in the event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
II-1
<PAGE> 24
ITEM 16. EXHIBITS.
EXHIBITS.
5.1 Opinion of Cooley Godward LLP
10.1 Form Purchase Agreement by and between Cerus Corporation
and each of the selling stockholders.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to that information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities it offers, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of this offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC this form of indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against these
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by a director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of this issue.
II-2
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Cerus Corporation certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Concord, state of California, on December 22,
1999.
CERUS CORPORATION
By: /s/ STEPHEN T. ISAACS
--------------------------------------
Stephen T. Isaacs
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen T. Isaacs and Gregory W. Schafer
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments and registration statements filed pursuant
to Rule 462) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ STEPHEN T. ISAACS President, Chief Executive Officer December 22, 1999
- ------------------------------------------ and Director (Principal Executive
Stephen T. Isaacs Officer)
/s/ GREGORY W. SCHAFER Vice President, Finance and Chief December 22, 1999
- ------------------------------------------ Financial Officer (Principal
Gregory W. Schafer Financial and Accounting Officer)
/s/ B.J. CASSIN Director December 22, 1999
- ------------------------------------------
B.J. Cassin
/s/ JOHN E. HEARST Director December 22, 1999
- ------------------------------------------
John E. Hearst
/s/ PETER H. MCNERNEY Director December 22, 1999
- ------------------------------------------
Peter H. McNerney
/s/ DALE A. SMITH Director December 22, 1999
- ------------------------------------------
Dale A. Smith
/s/ HENRY E. STICKNEY Director December 22, 1999
- ------------------------------------------
Henry E. Stickney
</TABLE>
II-3
<PAGE> 26
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
5.1 Opinion of Cooley Godward LLP
10.1 Form Purchase Agreement by and between Cerus Corporation
and each of the selling stockholders.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
December 22, 1999
Cerus Corporation
2525 Stanwell Drive, Suite 300
Concord, CA 94520
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Cerus Corporation (the "Company") of a Registration Statement
on Form S-3 (the "Registration Statement") with the Securities and Exchange
Commission covering the offering for resale of 1,000,000 shares of the Company's
Common Stock (the "Shares"), with a par value of $0.001, issued in connection
with that certain Purchase Agreement by and between the Company and the
purchasers named therein.
In connection with this opinion, we have examined the Registration Statement,
the Company's Certificate of Incorporation and Bylaws, as amended, the
resolutions adopted by the Board of Directors of the Company on November 18 and
December 17, 1999, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when issued and sold in accordance with the Purchase Agreement,
will be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters" in
the Prospectus included in the Registration Statement.
Sincerely,
Andrea Vachss
<PAGE> 1
EXHIBIT 10.1
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the __ day of __________, 1999, by and
among Cerus Corporation ("Company"), a corporation organized under the laws of
the State of Delaware, with its principal offices at 2525 Stanwell Drive, Suite
300, Concord, California 94520, and the purchaser whose name and address is set
forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company, and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to
1,000,000 shares (the "Shares") of common stock, par value $0.001 per share (the
"Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing (as
defined in Section 3), the Company will sell to the Purchaser, and the Purchaser
will buy from the Company, upon the terms and conditions hereinafter set forth,
the number of Shares (at the purchase price) shown below:
<TABLE>
<CAPTION>
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
--------- ------- -----
<S> <C> <C>
</TABLE>
The Company proposes to enter into this same form of purchase agreement
with certain other investors (the "Other Purchasers") and expects to complete
sales of the Shares to them. The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Agreement and the agreements executed by the Other Purchasers are hereinafter
sometimes collectively referred to as the "Agreements." The term "Placement
Agent" shall mean Prudential Vector Healthcare Group, a unit of Prudential
Securities Incorporated.
SECTION 3. Delivery of the Shares at the Closing. The completion of the
purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable and as agreed by the parties hereto following notification by the
Securities and Exchange Commission (the "Commission") to the Company of the
Commission's willingness to declare effective the registration statement to be
filed by the Company pursuant to Section 7.1 hereof (the "Registration
Statement") at a place and time (the "Closing Date") to be agreed upon by the
Company, and the Placement Agent and of which the Purchasers will be notified by
facsimile
1
<PAGE> 2
transmission or otherwise.
At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or in such nominee
name(s) as designated by the Purchaser in writing, representing the number of
Shares set forth in Section 2 above. The name(s) in which the stock certificates
are to be registered are set forth in the Stock Certificate Questionnaire
attached hereto as part of Appendix I. The Company's obligation to complete the
purchase and sale of the Shares and deliver such stock certificate(s) to the
Purchaser at the Closing shall be subject to the following conditions, any one
or more of which may be waived by the Company: (a) receipt by the Company of
same-day funds in the full amount of the purchase price for the Shares being
purchased hereunder; (b) completion of the purchases and sales under the
Agreements with all of the Other Purchasers; and (c) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment of
those undertakings of the Purchasers to be fulfilled prior to the Closing. The
Purchaser's obligation to accept delivery of such stock certificate(s) and to
pay for the Shares evidenced thereby shall be subject to the following
conditions: (a) the Commission has notified the Company of the Commission's
willingness to declare the Registration Statement effective on or prior to the
75th day after the date such Registration Statement was filed by the Company;
and (b) the accuracy in all material respects of the representations and
warranties made by the Company herein and the fulfillment in all material
respects of those undertakings of the Company to be fulfilled prior to Closing.
The Purchaser's obligations hereunder are expressly not conditioned on the
purchase by any or all of the Other Purchasers of the Shares that they have
agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Purchaser as
follows:
(a) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Confidential Private Placement Memorandum, including all
exhibits and supplements thereto and all documents incorporated by reference
therein (the "Memorandum") and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company.
(b) The Company does not own or control, directly or indirectly, any
interest in any other corporation, association, or other business entity.
(c) The Company has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it
which is material to the business of the Company, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Memorandum or 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 real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as are not material and
2
<PAGE> 3
do not interfere with the use made and currently proposed to be made of such
property and buildings by the Company except as described in or contemplated by
the Memorandum.
(d) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Memorandum.
(e) The shares of Common Stock outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable. Except as set forth in the Memorandum,
the Company does not have outstanding any options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations. All outstanding shares of capital stock and options and other
rights to acquire capital stock have been issued in compliance with the
registration and qualification provisions of all applicable securities laws and
were not issued in violation of any preemptive rights, rights of first refusal
or other similar rights.
(f) The Shares have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to
any preemptive rights, rights of first refusal or similar rights which have not
been waived or satisfied.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or bylaws of the
Company, or any agreement or other instrument binding upon the Company that is
material to the Company, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Company, and
no consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
(i) There has not occurred any material adverse change in the condition,
financial or otherwise, or in the earnings, business, prospects or operations of
the Company from that set forth in the Memorandum.
(j) Subsequent to the respective dates as of which information is given
in the Memorandum, except as contemplated in the Memorandum and except as such
as may have occurred in the ordinary course of the Company's business or
operations, (i) the Company has not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction in
each case not in the ordinary course of business; (ii) the Company has not
purchased any of its outstanding capital stock other than unvested shares from
former employees,
3
<PAGE> 4
directors or consultants nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary and customary
dividends; and (iii) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company, except in each case as
described in or contemplated by the Memorandum.
(k) There are no legal or governmental proceedings pending or threatened
to which the Company is a party or to which any of the properties of the Company
is subject that might prevent or might reasonably be expected to materially and
adversely affect the transactions contemplated by this Agreement and are not so
described in the Memorandum. Also, there are no regulations, contracts or other
documents that are required to be described in the Memorandum that are not
described.
(l) The Company has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business in the
manner described in the Memorandum, except to the extent that the failure to
obtain or file would not have a material adverse effect on the Company.
(m) The Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in the
Memorandum, will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(n) There is no owner of any securities of the Company who has any
rights, not effectively satisfied or waived, to require registration of any
shares of capital stock of the Company in connection with the filing of the
Registration Statement or the sale of any shares thereunder.
(o) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which it is engaged; the Company has not been
refused any insurance coverage sought or applied for; and the Company has no
reason to believe that it will not be able to renew its 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 at a cost that
would not materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company, except as described in
or contemplated by the Memorandum.
(p) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"), (ii) has received all permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct its business and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or
4
<PAGE> 5
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse effect
on the Company.
(q) To the best of the Company's knowledge, costs and liabilities
associated with its compliance with Environmental Laws as currently in effect
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) would not, singly or in the
aggregate, reasonably be expected to have a material adverse effect on the
Company.
(r) Except as otherwise disclosed or contemplated in the Memorandum, the
Company owns or possesses adequate licenses or other rights to use all patents,
copyrights, trademarks, service marks, trade names, technology and know-how
necessary (in any material respect) to conduct its business in the manner
described in the Memorandum, the Company is not obligated to pay a royalty,
grant a license, or provide other consideration to any third party in connection
with its patents, copyrights, trademarks, service marks, trade names, or
technology, except that the Company has entered into a Memorandum of
Understanding with Emory University relating to certain patent rights owned by
Emory University that may pertain to the Company's ACIT program and, except as
disclosed in the Memorandum, the Company has not received any notice of
infringement or conflict with (and the Company does not know of any infringement
or conflict with) asserted rights of others with respect to any patents,
copyrights, trademarks, service marks, trade names, technology or know-how which
could reasonably be expected to result in any material adverse effect upon the
Company and, except as disclosed in the Memorandum, the discoveries, inventions,
products or processes of the Company referred to in the Memorandum do not, to
the best knowledge of the Company, infringe or conflict with any right or patent
of any third party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the Company
which could reasonably be expected to have a material adverse effect on the
Company. Other than Baxter, the Consortium of Plasma Sciences, LLC and the U.S.
Government as summarized in the Memorandum, no third party, including any
academic or governmental organization, possesses rights to the Company's
patents, copyrights, trademarks, service marks, trade names, or technology
which, if exercised, could enable such third party to develop products
competitive to those of the Company or could have a material adverse effect on
the ability of the Company to conduct its business in the manner described in
the Memorandum.
(s) The Company possesses all consents, approvals, orders, certificates,
authorizations and permits issued by and has made all declarations and filings
with, all appropriate federal, state or foreign governmental or self-regulatory
authorities and all courts and other tribunals necessary to conduct its business
and to own, lease, license and use its properties in the manner described in the
Memorandum, and the Company has not received any notice of proceedings related
to the revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of any unfavorable
decision, ruling or finding, or failure to obtain or file would result in a
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company, except as described in or
contemplated by the Memorandum.
5
<PAGE> 6
(t) 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 generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) No material labor dispute with the employees of the Company exists,
except as described in or contemplated by the Memorandum, or, to the best
knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company.
(v) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida), relating to issuers doing
business with Cuba.
(w) Ernst & Young LLP, who have expressed their opinion with respect to
the consolidated financial statements to be incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 into
the Registration Statement and the Prospectus which forms a part thereof, are
independent accountants as required by the Securities Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations").
(x) The Company has not distributed and will not distribute prior to the
Closing Date any offering material in connection with the offering and sale of
the Shares other than the Memorandum or any amendment or supplement thereto. The
Company has not in the past nor will it hereafter take any action independent of
the Placement Agent to sell, offer for sale or solicit offers to buy any
securities of the Company which would bring the offer, issuance or sale of the
Shares, as contemplated by this Agreement, within the provisions of Section 5 of
the Securities Act, unless such offer, issuance or sale was or shall be within
the exemptions of Section 4 of the Securities Act.
(y) The Company represents and warrants that the information contained
in the following documents, which the Placement Agent has furnished to the
Purchaser, or will furnish prior to the Closing, is or will be true and correct
in all material respects as of their respective final dates:
(a) the Company's Current Report on Form 8-K filed with the
Commission on November 12, 1999;
(b) the Company's Annual Report on Form 10-K for the fiscal
year ended
6
<PAGE> 7
December 31, 1998 (without exhibits);
(c) the Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, 1999, June 30, 1999 and
September 30, 1999;
(d) the Company's Proxy Statement for the 1999 Annual
Meeting of Stockholders;
(e) the Registration Statement;
(f) the Memorandum, including all addenda and exhibits
thereto (other than the Appendices); and
(g) all other documents, if any, filed by the Company with
the Securities and Exchange Commission since September
30, 1999 pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(z) Prior to the Closing, Cooley Godward LLP, counsel to the Company,
will deliver its legal opinion in customary form to the Placement Agent. Such
opinion shall also state that each of the Purchasers may rely thereon as though
it were addressed directly to such Purchaser.
(aa) Prior to the Closing, {__________}, patent counsel for the Company,
will deliver its legal opinion in customary form to the Placement Agent. Such
opinion shall state that each of the Purchasers may rely thereon as though it
were addressed directly to such Purchaser.
(bb) At the Closing, the Company will deliver to Purchaser a certificate
executed by the Chairman of the Board or President and the chief financial or
accounting officer of the Company, dated the Closing Date, in customary form to
the effect that the representations and warranties of the Company set forth in
this Section 4 are true and correct in all material respects as of the date of
this Agreement and as of the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions herein on its part to be
performed or satisfied on or prior to such Closing Date.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and covenants with, the Company
that: (i) the Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares; (ii) the Purchaser is
acquiring the number of Shares set forth in Section 2 above in the ordinary
course of its business and for its own account for investment (as defined for
purposes of the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and the
regulations thereunder) only and with no present intention of
7
<PAGE> 8
distributing any of such Shares or any arrangement or understanding with any
other persons regarding the distribution of such Shares; (iii) the Purchaser
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Shares except in compliance with the Act and the Rules
and Regulations; (iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire and the Stock Certificate Questionnaire,
both attached hereto as Appendix I, for use in preparation of the Registration
Statement, and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the Registration
Statement; (v) the Purchaser has, in connection with its decision to purchase
the number of Shares set forth in Section 2 above, relied solely upon the
Memorandum and the documents included therein and the representations and
warranties of the Company contained herein; and (vi) the Purchaser is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act.
(b) The Purchaser hereby covenants with the Company not to make any sale
of the Shares without satisfying the prospectus delivery requirement under the
Securities Act, and the Purchaser acknowledges and agrees that such Shares are
not transferable on the books of the Company unless the certificate submitted to
the transfer agent evidencing the Shares is accompanied by a separate officer's
certificate: (i) in the form of Appendix II hereto, (ii) executed by an officer
of, or other authorized person designated by, the Purchaser, and (iii) to the
effect that (A) the Shares have been sold in accordance with the Registration
Statement, the Securities Act and the Rules and Regulations and any applicable
state securities or blue sky laws and (B) the requirement of delivering a
current prospectus has been satisfied. The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. The Purchaser hereby
covenants that it will not sell any Shares pursuant to said prospectus during
the period commencing at the time at which the Company gives the Purchaser
written notice of the suspension of the use of said prospectus and ending at the
time the Company gives the Purchaser written notice that the Purchaser may
thereafter effect sales pursuant to said prospectus. The Purchaser further
covenants to notify the Company promptly of the sale of all of its Shares.
(c) The Purchaser further represents and warrants to, and covenants
with, the Company that (i) the Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification agreements of the Purchaser in Section 7.3 hereof may be
legally unenforceable.
8
<PAGE> 9
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities
Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) as soon as practicable, prepare and file with the Commission the
Registration Statement on Form S-3 relating to the sale of the
Shares by the Purchaser from time to time through the automated
quotation system of the Nasdaq National Market or the facilities
of any national securities exchange on which the Company's
common stock is then traded or in privately-negotiated
transactions;
(b) use its reasonable efforts, subject to receipt of necessary
information from the Purchasers, to cause the Commission to
notify the Company of the Commission's willingness to declare
the Registration Statement effective within 75 days after the
Registration Statement is filed by the Company;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep the
Registration Statement effective until the earlier of (i)
twenty-four months after the effective date of the Registration
Statement or (ii) the date on which the Shares may be resold by
the Purchasers without registration by reason of Rule 144(k)
under the Securities Act or any other rule of similar effect;
(d) furnish to the Purchaser with respect to the Shares registered
under the Registration Statement (and to each underwriter, if
any, of such Shares) such reasonable number of copies of
prospectuses and such other documents as the Purchaser may
reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Purchaser;
provided, however, that the obligation of the Company to deliver
copies of prospectuses to the Purchaser shall be subject to the
receipt by the Company of reasonable assurances from the
Purchaser that the Purchaser will comply with the applicable
provisions of the Securities Act and of such other securities or
blue sky laws as may be applicable in connection with any use of
such prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in
9
<PAGE> 10
states specified in writing by the Purchaser; provided, however,
that the Company shall not be required to qualify to do business
or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented; and
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.1 and the
registration of the Shares pursuant to the Registration
Statement, other than fees and expenses, if any, of counsel or
other advisers to the Purchaser or the Other Purchasers or
underwriting discounts, brokerage fees and commissions incurred
by the Purchaser or the Other Purchasers, if any.
7.2. Transfer of Shares After Registration. The Purchaser agrees that it
will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act,
except as contemplated in the Registration Statement referred to in Section 7.1,
and that it will promptly notify the Company of any changes in the information
set forth in the Registration Statement regarding the Purchaser or its Plan of
Distribution.
7.3. Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser/Affiliate" shall include the Purchaser and
any affiliate (within the meaning of Rule 144 under the
Securities Act of 1933, as amended) such Purchaser; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in Section
7.1.
(a) The Company agrees to indemnify and hold harmless each of the
Purchasers and each person, if any, who controls any Purchaser within the
meaning of the Securities Act, against any losses, claims, damages, liabilities
or expenses, joint or several, to which such Purchasers or such controlling
person may become subject, under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, including the prospectus, financial statements and schedules, and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A,
or pursuant to Rule 434, of the Rules and Regulations, or the prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the Registration Statement at the time of effectiveness if
no Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto, or arise out
10
<PAGE> 11
of or are based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the statements
in any of them, in light of the circumstances under which they were made, not
misleading, or arise out of or are based in whole or in part on any inaccuracy
in the representations and warranties of the Company contained in this
Agreement, or any failure of the Company to perform its obligations hereunder or
under law, and will reimburse each Purchaser and each such controlling person
for any legal and other expenses as such expenses are reasonably incurred by
such Purchaser or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser expressly for use therein, or (ii) the
failure of such Purchaser to comply with the covenants and agreements contained
in Sections 5(b) or 7.2 hereof respecting sale of the Shares, or (iii) the
inaccuracy of any representations made by such Purchaser herein or (iv) any
statement or omission in any Prospectus that is corrected in any subsequent
Prospectus or prospectus supplement that was delivered to the Purchaser prior to
the pertinent sale or sales by the Purchaser.
(b) Each Purchaser will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser) insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (i) any failure to comply with the covenants and agreements
contained in Sections 5(b) or 7.2 hereof respecting the sale of the Shares or
(ii) the inaccuracy of any representation made by such Purchaser herein or (iii)
any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Purchaser expressly
for use therein, and will reimburse the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person for any
legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.
11
<PAGE> 12
(c) Promptly after receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7.3 promptly notify the indemnifying party in writing
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 7.3 or to the extent it is not prejudiced as a result of such failure.
In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, which approval shall
not be unreasonably withheld, the indemnifying party will not be liable to such
indemnified party under this Section 7.3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party in the case of paragraph (a), representing
the indemnified parties who are parties to such action) or (ii) the indemnified
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of action, in each of which cases the reasonable fees and
expenses of counsel (in the case of clause (ii), counsel selected by the
indemnifying party in its assumption of the defense) shall be at the expense of
the indemnifying party.
(d) If the indemnification provided for in this Section 7.3 is required
by its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) of this Section 7.3 in respect to any losses, claims, damages, liabilities
or expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Purchaser from the placement of Common Stock or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but the relative fault of the Company and the
Purchaser in
12
<PAGE> 13
connection with the statements or omissions or inaccuracies in the
representations and warranties in this Agreement which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company on the one hand and each Purchaser on the other shall be deemed to be in
the same proportion as the amount paid by such Purchaser to the Company pursuant
to this Agreement for the Shares purchased by such Purchaser that were sold
pursuant to the Registration Statement bears to the difference (the
"Difference") between the amount such Purchaser paid for the Shares that were
sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of such Selling Stockholders and
each Purchaser shall be determined by reference to, among other things, whether
the untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Company or
by such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in paragraph (c) of this Section 7.3, any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 7.3 with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for contribution is
to be made under this paragraph (d); provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under paragraph (c) for purposes of indemnification. The Company
and each Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, no Purchaser shall be required to contribute any amount in excess of the
amount by which the Difference exceeds the amount of any damages that such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 7.3 are several and not joint.
7.4. Termination of Conditions and Obligations. The conditions precedent
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares upon the
passage of twenty-four months from the effective date of the Registration
Statement covering such Shares or at such time as an opinion of counsel
satisfactory in form and substance to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.
7.5. Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
make available to the Purchaser:
13
<PAGE> 14
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Stockholders, (i) within 120 days
after the end of each fiscal year of the Company), one copy of
its Annual Report to Stockholders (which Annual Report shall
contain financial statements audited in accordance with
generally accepted accounting principles by a national firm of
certified public accountants), (ii) its Annual Report on Form
10-K, (iii) its quarterly reports on Form 10-Q, and (iv) a full
copy of the particular Registration Statement covering the
Shares (the foregoing, in each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, a reasonable
number of copies of the Prospectus to supply to any other party
requiring such Prospectus;
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters, during
normal business hours and at such representative's reasonable convenience, to
discuss information relevant for disclosure in the Registration Statement
covering the Shares, subject to appropriate confidentiality limitations.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser. Each of the parties hereto hereby represents that, on the
basis of any actions and agreements by it, there are no other brokers or finders
entitled to compensation in connection with the sale of the Shares to the
Purchaser.
SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
Cerus Corporation
2525 Stanwell Dr., Suite 300
Concord, California 94520
Tel: (925) 603-9071, Ext. 110
Fax: (925) 603-9099
Attn: Stephen T. Isaacs
with a copy to:
Cooley Godward LLP
5 Palo Alto Square
Palo Alto, California 94306
Tel: (650) 843-5000
14
<PAGE> 15
Fax: (650) 857-0663
Attn: Alan C. Mendelson, Esq.
or to such other person at such other place as the Company shall
designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the end of
this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing.
SECTION 10. Changes. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchaser.
SECTION 11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.
SECTION 14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
CERUS CORPORATION
By:
---------------------------------
Name:
Title:
Print or Type:
15
<PAGE> 16
Name of Purchaser
(Individual or Institution):
---------------------------------
Name of Individual representing
Purchaser (if an Institution):
---------------------------------
Title of Individual representing
Purchaser (if an Institution):
---------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
---------------------------------
Address:
----------------------------
Telephone:
--------------------------
Telecopier:
-------------------------
16
<PAGE> 17
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A.. Complete the following items on BOTH Purchase Agreements:
1. Page 17 - Signature:
(i) Name of Purchaser (Individual or Institution)
(ii) Name of Individual representing Purchaser (if an
Institution)
(iii) Title of Individual representing Purchaser (if an
Institution)
(iv) Signature of Individual Purchaser or Individual
representing Purchaser
2. Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
Appendix I - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
Prudential Vector Healthcare Group
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015
Attention: Jeffrey Stevens
B. Instructions regarding the transfer of funds for the purchase of Shares
will be sent by facsimile to the Purchaser by the Placement Agent at a
later date.
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to the
buyer (prospectuses must be obtained from the Company at
the Purchaser's request); and
(ii) must send a letter in the form of Appendix II to the
Company so that the Shares may be properly transferred.
<PAGE> 18
Appendix I
(one of two)
CERUS CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the
name that will appear on your stock certificate(s)). You may use a
nominee name if appropriate:
-----------------------
2. The relationship between the Purchaser of the Shares and the Registered
Holder listed in response to item 1 above:
-----------------------
3. The mailing address of the Registered Holder listed in response to item
1 above:
-----------------------
-----------------------
-----------------------
-----------------------
4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to item 1 above:
----------------------
18.
<PAGE> 19
Appendix I
(two of two)
CERUS CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
The undersigned holder (the "Selling Stockholder") of Common Stock (the
"Registrable Shares") of Cerus Corporation (the "Company") purchased pursuant to
the Common Stock Purchase Agreement, dated as of __________, 1999, by and among
the Company and the Purchasers named therein (the "Purchase Agreement"), hereby
elects to include in the registration statement for the registration and resale
of the Registrable Shares (the "Registration Statement"), the Registrable Shares
beneficially owned by it and listed below in Item (3) (unless otherwise
specified under Item 3). The undersigned agrees to be bound with respect to such
Registrable Shares by the terms and conditions of this Questionnaire and the
Purchase Agreement.
Upon any sale of Registrable Shares pursuant to the Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
the Selling Stockholder will be required to deliver to the Company the Notice of
Transfer set forth in Appendix I attached hereto (completed and signed) and
hereby undertakes to do so.
The Selling Stockholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
(1) (a) Full Legal Name of Selling Stockholder:
----------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as
in (a) above) of Registrable Shares listed in (3) below
are held:
(2) Address and Telephone Numbers for Selling Stockholder:
----------------------------------------------------------
----------------------------------------------------------
Telephone:
-------------------------------------------------------
Fax:
-------------------------------------------------------------
Contact Person:
--------------------------------------------------
19.
<PAGE> 20
(3) Beneficial Ownership of Registrable Shares:
Fill in the number of shares of Common Stock owned of record and
beneficially (see definition) by the Selling Stockholder:
<TABLE>
<CAPTION>
Of Record Beneficially
<S> <C> <C>
Common Stock (other than the Registrable
Shares to be included in the Registration
Statement)
----------- ------------
Registrable Shares to be included in
the Registration Statement
----------- ------------
(a) Fill in the number of shares to which the Selling
Stockholder disclaims beneficial ownership (see definition)
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(b) Reason for disclaiming beneficial ownership (see definition)
in (a) above, if applicable:
-----------------------------------------------------------------
-----------------------------------------------------------------
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(4) Other securities of the Company owned by the Selling Stockholder:
Except as set forth below and under Item (3) above, the
undersigned Selling Stockholder is not the beneficial or
registered owner of any shares of Common Stock or any other
securities of the Company.
State any exceptions here:
---------------------------------------
-----------------------------------------------------------------
(5) Relationships with the Company:
Except as set forth below, neither the Selling Stockholder nor
any of its affiliates, officers (see definition), directors or
principal shareholders (5% or more) has held any position or
office or has had any other material (see definition)
relationship with the Company (or its predecessors or affiliate)
during the past three years.
State any exceptions here:
---------------------------------------
-----------------------------------------------------------------
</TABLE>
20.
<PAGE> 21
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Stockholder
intends to distribute the Registrable Shares above in Item (3)
(those shares issued pursuant to the Common Stock Purchase
Agreement dated __________, 1999) pursuant to the Registration
Statement only as follows: All or a portion of such Registrable
Shares may be sold from time to time directly by the undersigned
Selling Stockholder or, alternatively, through underwriters,
broker-dealers or agents. Such Registrable Shares may be sold in
one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the
time of sale, or at negotiated prices. Such sales may be effected
in transactions (which may involve crosses or block transactions)
(i) on any national securities exchange or quotation service on
which the Registrable Shares may be listed or quoted at the time
of sale, (ii) in the over-the-counter market or (iii) in
transactions otherwise than on such exchanges or services or in
the over-the-counter market. The Selling Stockholder may also
loan or pledge Registrable Shares to broker-dealers that in turn
may sell such securities.
State any exceptions here:
---------------------------------------
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(7) NASD Matters:
1. Do you know of any information pertaining to underwriting
compensation and arrangements (see definition) or any dealings between any
Underwriter or Related Person (see definition), NASD Member (see definition) or
Person Associated with a Member of the NASD (see definition) on the one hand,
and the Company or any parent, subsidiary or Controlling (see definition)
shareholder thereof on the other hand?
Answer: [ ] Yes [ ] No If "yes," please describe
21.
<PAGE> 22
2. (a)Are you (i) an NASD Member (see definition), (ii) a Controlling
(see definition) shareholder of an NASD Member, (iii) a Person Associated with a
Member of the NASD (see definition), or (iv) an Underwriter or a Related Person
(see definition) with respect to the proposed offering; or (b) do you own any
shares or other securities of any NASD Member not purchased in the open market;
or (c) have you made any outstanding subordinated loans to any NASD Member?
Answer: [ ] Yes [ ] No If "yes," please describe
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3. Have you been an underwriter, or a Controlling (see definition)
person or member of any investment banking or brokerage firm which has been or
might be an underwriter, for securities of the Company?
Answer: [ ] Yes [ ] No If "yes," please describe
-----------------------------------------------------------------
4. If the answer to either Question 2 or 3 above is "yes," set forth
below information as to all purchases and acquisitions (including contracts for
purchase or acquisition) of securities of the Company by you during the last 18
months, as well as to all proposed purchases and acquisitions which are to be
consummated in whole or in part within the next 12 months.
<TABLE>
<CAPTION>
SELLER OR AMOUNT AND DESCRIPTION
PROSPECTIVE NATURE OF PRICE OR OTHER OF
SELLER SECURITIES CONSIDERATION DATE RELATIONSHIP
<S> <C> <C> <C>
</TABLE>
22.
<PAGE> 23
5. Set forth below information as to all sales and dispositions
(including contracts to sell or to dispose) of securities of the Company during
the last 18 months by you to any NASD Member (see definition) or any Person
Associated with a Member of the NASD (see definition) or any Underwriter or
Related Person (see definition) as well as to all proposed sales and
dispositions by you to such persons which are to be consummated by you in whole
or in part within the next 12 months. Also set forth below a description of the
relationship, affiliation or association of you and, if known, the other party
or parties to the above transactions with an underwriter or other person or
entity "in the stream of distribution" with respect to the offering.
<TABLE>
<CAPTION>
BUYER OR AMOUNT AND DESCRIPTION
PROSPECTIVE NATURE OF PRICE OR OTHER OF
BUYER SECURITIES CONSIDERATION DATE RELATIONSHIP
<S> <C> <C> <C>
</TABLE>
6. If you have had during the last 18 months, or are to have within the
next 12 months, any transactions of the character referred to in Question 4 or 5
of this Section, describe briefly below the relationship, affiliation or
association of both you and, if known, the other party or parties to any such
transaction with an underwriter or other person or entity "in the stream of
distribution" with respect to the proposed transaction. In any case, where the
purchaser (whether you or any such party) is known by you to be a member of a
"private investment group," such as a hedge fund or other group of purchasers,
furnish, if known, the names of all persons comprising the Group (see
definition) and their association with or relationship to any broker-dealer.
Description:
23.
<PAGE> 24
The Selling Stockholder acknowledges that it understands it obligation
to comply with the provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules thereunder, relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules), in connection
with the offering of its Registrable Shares covered by the Registration
Statement. The Selling Stockholder agrees that neither it nor any person acting
on its behalf, will sell or purchase any securities of the Company in violation
of such provisions, so long as the Registrable Shares beneficially owned by it
are being offered pursuant to the Registration Statement.
In the event that the Selling Stockholder transfers all or any portion
of the Registrable Shares listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Stockholder agrees to notify
the transferee(s) at the time of the transfer of the transferee(s) rights and
obligations under this Information Statement and the Purchase Agreement.
By signing below, the Selling Stockholder consents to the disclosure of
the information contained herein in its answers to Items (1) through (7) above
and the inclusion of such information in the Registration Statement and related
Prospectus. The Selling Stockholder understands that such information will be
relied upon by the Company in connection with the preparation of the
Registration Statement and related Prospectus and any amendments or supplements
thereto.
The undersigned Selling Stockholder agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein which
may occur subsequent to the date hereof at any time while the Registration
Statement is in effect. All notices hereunder shall be made in writing and shall
be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation,
if made by facsimile or (iii) one business day after being deposited with a
reputable next-day courier, postage prepaid, as follows:
(i) To the Company
CERUS CORPORATION
2525 Stanwell Drive, Ste. 300
Concord, CA 94520
Attn: Howard G. Ervin III
Fax: (925) 603-9099
(ii) With a copy to:
COOLEY GODWARD LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Andrea Vachss, Esq.
Fax: (650) 857-0663
24.
<PAGE> 25
Once this Information Statement is executed by the Selling Stockholder
and received by the Company, this Information Statement, and the representations
and warranties contained herein, shall be binding on, shall inure to the benefit
of and shall be enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the Selling Stockholder (with
respect to the Registrable Shares beneficially owned by such Selling Stockholder
and listed in Item (3) above).
25.
<PAGE> 26
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Information Statement to be executed and delivered either in person or by
its duly authorized agent.
Dated:
---------------------------- ------------------------------------
Selling Stockholder
(Print/type full legal name of
registered owner of Registrable
Shares)
By:
---------------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED INFORMATION STATEMENT TO THE COMPANY'S
COUNSEL AT:
COOLEY GODWARD LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Andrea Vachss, Esq.
Fax: (650) 857-0663
26.
<PAGE> 27
EXHIBIT A
DEFINITIONS
For purposes of the representations made in this Information Statement,
the following definitions shall be applicable:
Arrangement. The term "arrangement" means any plan, contract, agreement,
authorization or arrangement, whether or not set forth in writing.
Beneficial Ownership. The term "beneficially owned" as applied to an
interest in securities means (a) any direct or indirect interest in the
securities which entitles you to any of the rights or benefits of ownership,
even though you are not the holder or owner of record or (b) securities owned by
you or to which you have a right to acquire, directly or indirectly, including
those held for your own benefit (regardless of how registered) or securities
held by others for your own benefit (regardless of how registered), such as
custodians, brokers, nominees, pledgees, etc. and including securities held by
an estate or trust in which you have an interest as legatee or beneficiary,
securities owned by a partnership of which you are a partner, securities held by
a personal holding company of which you are a shareholder, etc., and securities
held in the name of your spouse, minor children and any relative (sharing the
same home). "Beneficial ownership" includes having or sharing, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise:
(1) voting power which includes the power to vote, or to direct the
voting of, such security; and/or
(2) investment power which includes the power to dispose, or to direct
the disposition, of such security. Any person who, directly or indirectly,
creates or uses a trust, proxy, power of attorney, pooling arrangement or any
other contract, arrangement or device with the purpose or effect of divesting
such person of beneficial ownership of a security or preventing the vesting of
such beneficial ownership as part of a plan or scheme to evade the reporting
requirements of Section 13(d) of the Exchange Act, is deemed for purposes of
such section to be the beneficial owner of such security.
The Securities and Exchange Commission (the "SEC") has expressed the
view that a person may be regarded as the beneficial owner of securities which
are held in the name of such person's spouse, minor children or other relatives
(including relatives of the person's spouse) who share the person's home if the
relationship which exists results in such person obtaining benefits
substantially equivalent of ownership of the securities.
The SEC has expressed the view that a person may be deemed to be the
beneficial owner of a security if that person has the right to acquire
beneficial ownership of such security within 60 days, including, but not limited
to, any right to acquire: (1) through the exercise of any option, warrant or
right; (2) through the conversion of a security; (3) pursuant to the right to
revoke a trust, discretionary account or similar arrangements; or (4) pursuant
to the automatic termination of a trust, discretionary account or similar
arrangement.
27.
<PAGE> 28
If you have any reason to believe that any interest in securities of the
Company, however remote, which you or the above-described relatives may have is
a beneficial interest, please describe such interest.
Control. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, 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. (Rule 405 under the
Securities Act of 1933, as amended)
Group. The term "group" includes a partnership, syndicate or other
group, whether formally organized or not, which has as a purpose the acquiring,
holding or disposing of securities of the Company.
Material. The term "material," when used in this Information Statement
to qualify a requirement for the furnishing of information as to any subject,
limits the information required to those matters as to which there is a
substantial likelihood that a reasonable investor would attach importance in
determining whether to purchase securities of the Company. The materiality of
any relationship is to be determined on the basis of the significance of the
information to investors in light of all of the circumstances of the particular
case. The importance of the relationship, the relationship of the parties to the
transaction with each other and the amount involved in the transaction are among
the factors to be considered in determining the significance of the information
to investors. If you have any question as to whether or not a matter is
"material," please describe the matter, and, if such is the case, state your
belief that the matter is not "material."
NASD Member. The term "NASD member" means either any broker or dealer
admitted to membership in the National Association of Securities Dealers, Inc.
("NASD"). (NASD Manual, By-laws Article I, Definitions)
Officers. The term "officers" means that of the president, secretary,
treasurer, any vice president in charge of a principal business function (such
as sales, administration or finance) and any other person who performs similar
policy-making functions for the Company.
Person Associated with a member of the NASD. The term "person associated
with a member of the NASD" means every sole proprietor, partner, officer,
director, branch manager or executive representative of any NASD Member, or any
natural person occupying a similar status or performing similar functions, or
any natural person engaged in the investment banking or securities business who
is directly or indirectly controlling or controlled by a NASD Member, whether or
not such person is registered or exempt from registration with the NASD pursuant
to its bylaws. (NASD Manual, By-laws Article I, Definitions)
Underwriter or a Related Person. The term "underwriter or a related
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)
28.
<PAGE> 29
APPENDIX II
BROKER'S NOTICE OF TRANSFER OF SECURITIES PURSUANT TO
REGISTRATION STATEMENT
COOLEY GODWARD LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Andrea Vachss, Esq.
Fax: (650) 857-0663
Re: Cerus Corporation (the "Company")
Ladies and Gentlemen:
Please be advised that ________________________________ has transferred ________
shares (the "Shares") of Common Stock on _________________ (date), pursuant to
the Registration Statement on Form S-3 (SEC File No. __________________) filed
by the Company:
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Shares
is named as a selling stockholder in the Prospectus dated ____________________
or in amendments or supplements thereto, and that the aggregate number of shares
of Common Stock transferred are [a portion of] the Common Stock listed in such
owner's name.
Dated:
----------------------------
Very truly yours,
------------------------------------
Name:
Title:
29.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Cerus Corporation
for the registration of 1,000,000 shares of its Common Stock and to the
incorporation by reference therein of our report dated January 22, 1999, except
for Note 2 as to which the date is January 30, 1999, and Note 5, as to which the
date is March 3, 1999, with respect to the financial statements of Cerus
Corporation included in its Annual Report on Form 10-K for the year ended
December 31, 1998 filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Walnut Creek, California
December 21, 1999
