Draft of January 5, 1997

2,000,000 Shares

CERUS CORPORATION

Common Stock
$.001 par value

UNDERWRITING AGREEMENT

__________ __, 1997

__________ __, 1997

Morgan Stanley & Co. Incorporated
Alex. Brown & Sons Incorporated
as Representatives of the several Underwriters named in Schedule I hereto
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Ladies and Gentlemen:

Cerus Corporation, a Delaware corporation (the "Company"), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of 2,000,000 shares of its common stock ($.001 per share par value) (the "Firm Shares").

The Company also proposes to issue and sell to the several Underwriters not more than an additional 300,000 shares of its common stock ($.001 per share par value) (the "Additional Shares"), if and to the extent that you, as managers of the offering, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such shares of common stock granted to the Underwriters in Article II hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the "Shares." The shares of common stock, ($.001 per share par value), of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the "Common Stock."

The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus, relating to the Shares. The registration statement as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter referred to as the "Registration Statement;" the prospectus in the form first used to confirm sales of Shares is hereinafter referred to as the "Prospectus." If the Company files a registration statement to register a portion of the Shares and relies on Rule 462(b) under the Securities Act for such registration statement to become effective upon filing with the Commission (the "Rule 462 Registration Statement"), then any reference to the "Registration Statement" shall be deemed to refer to both the registration statement referred to above (Commission File No. 333-11341) and the Rule 462 Registration Statement, in each case as amended from time to time.

I.

The Company represents and warrants to each of the Underwriters that:

(a) The Registration Statement has become effective, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission.

(b) (i) The Registration Statement, when it became effective, did not contain, and as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph (b) do not apply to statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein.

(c) 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 Prospectus 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.

(d) The Company does not own or control, directly or indirectly, any interest in any other corporation, association, or other business entity.

(e) 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 Prospectus 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 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 Prospectus.

(f) The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus.

(g) 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 Prospectus, 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.

(h) 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.

(i) This Agreement has been duly authorized, executed and delivered by the Company.

(j) 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.

(k) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company from that set forth in the Prospectus.

(l) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (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, 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 Prospectus.

(m) There are no legal or governmental proceedings pending or, to the Company's knowledge, threatened to which the Company is a party or to which any of the properties of the Company is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.

(n) 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 Prospectus, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company.

(o) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 or Rule 462 under the Securities Act, complied as to form when so filed in all material respects with the Securities Act and the rules and regulations of the Commission thereunder.

(p) 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 Prospectus, will not be an "investment company" as such term is defined in the Investment Company Act of 1940, as amended.

(q) 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.

(r) 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 Prospectus.

(s) 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 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.

(t) 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.

(u) 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 Prospectus, 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 other than pursuant to agreements with Baxter Healthcare Corporation ("Baxter"), the Auckland Division Cancer Society of New Zealand, Inc., Miles Inc. and Diamond Scientific Corporation, and as disclosed in the Prospectus, and, except as disclosed in the Prospectus, 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 Prospectus, the discoveries, inventions, products or processes of the Company referred to in the Prospectus 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 and the U.S. Government as summarized in the Prospectus under the caption "Research Grants," 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 Prospectus.

(v) 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 Prospectus, 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 Prospectus.

(w) 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.

(x) No material labor dispute with the employees of the Company exists, except as described in or contemplated by the Prospectus, 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.

(y) All outstanding shares of Common Stock, and all securities convertible into or exercisable or exchangeable for Common Stock, with the exception of ______ shares of Common Stock or securities convertible into or exchangeable for Common Stock, are subject to valid, binding and enforceable agreements (collectively, the "Lock-up Agreements") that restrict the holders thereof from (1) offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right, or warrant for the purchase of, or otherwise transferring or disposing of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or (2) entering into any swap or similar agreement that transfers, in whole or in part, the economic risk of ownership of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, otherwise than (i) as a bona fide gift or gifts, (ii) by will or intestacy to the holder's immediate family or to a trust the beneficiaries of which are exclusively the holder and/or a member or members of the holder's immediate family, (iii) as a distribution to limited partners or shareholders of the holder, or (iv) with the prior written consent of Morgan Stanley & Co. Incorporated; proved that a gift, transfer or distribution pursuant to clause
(i), (ii) or (iii) above shall be conditioned upon such donee, transferee or distributee executing and delivering a copy of a Lock-up Agreement to Morgan Stanley & Co. Incorporated and further that such holders will not make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock prior to the expiration of 180 days after the date of the Prospectus.

(z) The Company (i) has entered into enforceable agreements (collectively, the "Option Agreements") with each holder of a currently outstanding option issued under the Company's 1992 Stock Option Plan (restated as the 1996 Equity Incentive Plan) (the "Option Plan") and each person who has acquired shares of Common Stock pursuant to the exercise of any option granted under the Option Plan that pursuant to the terms of the Option Agreements and the Option Plan, none of such options or shares may be sold or otherwise transferred or disposed of for a period of 180 days after the date of the initial public offering of the Shares, (ii) has entered into that certain Amended and Restated Investors' Rights Agreement dated April 1, 1996 (the "Rights Agreement") pursuant to which each party thereto has agreed not to sell or otherwise transfer or dispose of any Common Stock of the Company for a period of 180 days after the effective date of the initial public offering

(other than to donees who agree to be similarly bound), and (iii) has imposed or will impose prior to the effective date of the Registration Statement a stop-transfer instruction with the Company's transfer agent in order to enforce the foregoing lock-up provisions imposed pursuant to the Rights Agreement, the Option Agreements and the Option Plan to the same extent as is required in the Lock-up Agreements.

(aa) As of the date the Registration Statement becomes effective, the Common Stock will be authorized for quotation on the Nasdaq National Market upon official notice of issuance.

(bb) 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.

II.

The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company the respective number of Firm Shares (subject to such adjustments to eliminate fractional shares as you may determine) set forth in Schedule I hereto opposite the name of such Underwriter at $_____ a share (the purchase price).

On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company hereby agrees to issue and sell to the Underwriters the Additional Shares, and the Underwriters shall have a one-time right to purchase, severally and not jointly, up to 300,000 Additional Shares at the purchase price. Additional Shares may be purchased as provided in Article IV hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. If any Additional Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the total number of Additional Shares to be purchased as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares.

The Company hereby agrees that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the Prospectus, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or (2) enter into any swap or similar arrangement that transfers, in whole or in part, the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, other than (i) the Shares to be sold hereunder, (ii) any shares of Common Stock sold by the Company upon the exercise of an option or warrant or other right to acquire shares of the Company or the conversion of a security outstanding on the date hereof described in the Prospectus or any shares of Common Stock sold by the Company to Baxter upon achievement of certain milestones pursuant to the Red Cell/Plasma Agreement as described in the Prospectus, (iii) any options or other rights to purchase or acquire any shares of Common Stock or any shares of Common Stock issuable upon exercise of such options or other rights granted in connection with any compensatory arrangement with a director, officer, employee, consultant or advisor, so long as such person is otherwise subject to a Lock-Up Agreement, or (iv) any shares of Common Stock or other right to acquire shares of the Company issued pursuant to equipment or lease financing activities entered into in the ordinary course of the Company's business, so long as each person or entity acquiring shares of Common Stock or any

securities convertible into or exercisable or exchangeable for Common Stock is otherwise subject to a Lock-Up Agreement.

III.

The Company is advised by you that the Underwriters propose to make a public offering of the Shares as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable. The Company is further advised by you that the Shares are to be offered to the public initially at $_____ a share (the public offering price) and to certain dealers selected by you at a price that represents a concession not in excess of $_____ a share under the public offering price, and that any Underwriter may allow, and such dealers may reallow, a concession, not in excess of $_____ a share, to any Underwriter or to certain other dealers.

IV.

Payment for the Firm Shares shall be made in Federal or other funds immediately available in New York City against delivery of such Firm Shares for the respective accounts of the several Underwriters, at 7:00 a.m., local time, on __________ __, 1997, or at such other time on the same or such other date, not later than __________ __, 1997, as shall be designated in writing by you. The time and date of each such payment are hereinafter referred to as the Closing Date.

Payment for any Additional Shares shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Additional Shares for the respective accounts of the several Underwriters, at 7:00 a.m., local time, on such date (which may be the same as the Closing Date but shall in no event be earlier than the Closing Date nor later than ten business days after the giving of the notice hereinafter referred to) as shall be designated in a written notice from you to the Company of your determination, on behalf of the Underwriters, to purchase a number, specified in said notice, of Additional Shares, or on such other date, in any event not later than __________ __, 1997 as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the "Option Closing Date". The notice of the determination to exercise the option to purchase Additional Shares and of the Option Closing Date may be given at any time within 30 days after the date of this Agreement.

Certificates for the Firm Shares and Additional Shares shall be in definitive form and registered in such names and in such denominations as you shall request in writing not later than two full business days prior to the Closing Date or the Option Closing Date, as the case may be. The certificates evidencing the Firm Shares and Additional Shares shall be delivered to you on the Closing Date or the Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriters duly paid, against payment of the purchase price therefor.

V.

The obligations of the Company and the several obligations of the Underwriters hereunder are subject to the condition that the Registration Statement shall have become effective not later than the date hereof.

The several obligations of the Underwriters hereunder are subject to the following further conditions:

(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:

(i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act, and

(ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Registration Statement that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Prospectus.

(b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company, to the effect set forth in clause (a)(i) above, and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

The officers signing and delivering such certificate may rely upon the best of their knowledge as to proceedings threatened.

(c) You shall have received on the Closing Date an opinion of Cooley Godward LLP, counsel for the Company, dated the Closing Date, to the effect that

(i) 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 Prospectus and is duly qualified to transact business and is in good standing in California and, to the knowledge of such counsel, 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;

(ii) to such counsel's knowledge the Company does not own or control, directly or indirectly, any interest in any other corporation, association, or other business entity;

(iii) the authorized capital stock of the Company conforms in all material respects as to legal matters to the description thereof contained in the Prospectus under the caption "Description of Capital Stock;"

(iv) 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, non-assessable and fully paid;

(v) the Shares to be sold by the Company have been duly authorized, and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued and non-assessable, and to such counsel's knowledge, fully paid, and the issuance of such Shares will not be subject to any preemptive rights, or, to such counsel's knowledge, rights of first refusal or similar rights;

(vi) the Company has corporate power and authority to enter into this Agreement and to issue, sell and deliver to the Underwriters the Shares to be issued and sold by the Company. This Agreement has been duly authorized, executed and delivered by the Company;

(vii) 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, other than the securities or Blue Sky laws of the various states and jurisdictions, or the certificate of incorporation or bylaws of the Company or, to such counsel's knowledge, any agreement or other instrument binding upon the Company that is material to the Company, taken as a whole, or, to such counsel's knowledge, 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 governmental agency is required for the performance by the Company of its obligations under this Agreement, except such as have been obtained under the Securities Act or may be required by the securities or Blue Sky laws of the various states and jurisdictions in connection with the offer and sale of the Shares;

(viii) the statements (1) in the Prospectus under the captions "Business -- Alliance with Baxter" describing the Platelet Agreement, the Red Cell/Plasma Agreement, the interim research funding agreements with Baxter and the Series E Stock Purchase Agreement, "Business -- Equity Incentive Plans" describing the Incentive Plan and the Purchase Plan, the fourth paragraph of "Certain Transactions" describing the Transfer Agreement with HRI, "Description of Capital Stock" and "Shares Eligible for Future Sale" and (2) in the Registration Statement in Items 14 and 15, in each case insofar as such statements constitute summaries of the legal conclusions or documents or proceedings referred to therein, fairly present the information called for under the Securities Act and the rules and regulations promulgated thereunder (the "Rules") with respect to such legal conclusions, documents and proceedings and fairly summarize the matters referred to therein required under the Securities Act and Rules;

(ix) to such counsel's knowledge there is no legal, regulatory or governmental proceeding pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company is subject that are required by the Securities Act and Rules to be described in the Registration Statement or the Prospectus and are not so described or of any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required;

(x) the Company is not an "investment company" as such term is defined in the Investment Company Act of 1940, as amended;

(xi) to the knowledge of such counsel, there is no legal or beneficial 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;

(xii) to the knowledge of such counsel: (1) the Registration Statement has become effective under the Securities Act, no stop order proceedings with respect thereto have been instituted or are pending or threatened under the Securities Act and nothing has come to such counsel's attention to lead it to believe that such proceedings are threatened; and (2) any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule 424(b);

(xiii) the Shares to be sold under this Agreement to the Underwriters are duly authorized for quotation on the Nasdaq National Market; and

(xiv) such counsel shall also state that (i) they believe that the Registration Statement and the Prospectus (except for financial statements and schedules, other financial data and statistical data derived therefrom, as to which they need express no belief) complied as to form in all material respects with the requirements of the Securities Act and the Rules and (ii) they confirm that they have no reason to believe that (except for financial statements and schedules, other financial data and statistical data derived therefrom, as to which they need express no belief) the Registration Statement as of its effective date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that (except for financial statements and schedules, other financial data and statistical data derived therefrom, as to which they need express no belief) the Prospectus, as of the date of the Prospectus and such date or dates as such opinion is delivered, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(d) You shall have received on the Closing Date an opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Underwriters, dated the Closing Date, covering the matters referred to in subparagraphs (v), the last sentence of subparagraph (vi), (viii) (but only as to the statements in the Prospectus under "Description of Capital Stock"), stating that such counsel has read the first four paragraphs and the sixth paragraph of the portion of the Registration Statement and the Prospectus entitled "Underwriters" (the "Underwriter Portion") and (xiv) of paragraph (c) above and to the effect that the statements in the Underwriter Portion, insofar as such statements constitute a summary of this Agreement, fairly present the information called for with respect to such Agreement.

(e) You shall have received on the Closing Date an opinion of Medlen and Carroll, intellectual property counsel for the Company, dated the Closing Date, to the effect that:

(i) such counsel represents the Company in certain matters relating to intellectual property, including patents, trade secrets and certain trademark matters;

(ii) such counsel is familiar with the technology used by the Company in its business and the manner of its use and has read the portions of the Registration Statement and the Prospectus entitled "Risk Factors -- Patent and License Uncertainties," "Risk Factors -- Risk of Product Liability" and "Business -- Patents, Licenses, and Proprietary Rights" (collectively, the "Intellectual Property Portion");

(iii) the Intellectual Property Portion contains accurate descriptions of the Company's patent applications, issued and allowed patents, and patents licensed to the Company and fairly summarizes the legal matters, documents and proceedings relating thereto;

(iv) based upon a review of the third party rights made known to counsel and discussions with Company scientific personnel, such counsel is not aware of any valid United States or foreign patent, including but not limited to those patents numbered __________, ___________ and ________ (which includes certain patents assigned to Johnson & Johnson which were the subject of a letter to Baxter, dated ____________), that is or would be infringed by the activities of the Company in the manufacture, use or sale of any presently proposed product, the technologies employed by the Company or the method of their use in any presently proposed product, each as described in the Prospectus;

(v) such counsel has reviewed United States Patent Number 5,399,719 and the claims made therein (the "719 Patent"), which 719 Patent is owned by the Company, and we are familiar with the S-59 compound developed by the Company and described in the Prospectus. To such counsel's knowledge, the S-59 compound falls within the composition of matter claims of the 719 Patent;

(vi) such counsel has reviewed the Company's patent applications filed in the United States and outside the United States (the "Applications") and which Applications are described in the Intellectual Property Portion and in the opinion of such counsel the Applications have been properly prepared and filed on behalf of the Company, and are being diligently pursued by the Company; the inventions described in the Applications are assigned or licensed to the Company; to such counsel's knowledge, no other entity or individual has any right or claim in any of the inventions, Applications, or any patent to be issued therefrom, and in such counsel's opinion each of the Applications discloses patentable subject matter;

(vii) such counsel is aware of no pending or threatened judicial or governmental proceedings relating to patents or proprietary information to which the Company is a party or of which any property of the Company is subject and such counsel is not aware of any pending or threatened action, suit or claim by others that the Company is infringing or otherwise violating any patent rights of others, based upon review of the Applications such counsel is not aware of any rights of third parties to any of the Company's inventions described in the Applications, issued, approved or licensed patents which could reasonably be expected to materially affect the ability of the Company to conduct its business as described in the Prospectus, including the commercialization of its products currently under development; and

(viii) such counsel has no reason to believe that the information contained in the Intellectual Property Portion of the Registration Statement or the Prospectus at the time it became effective contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that, at the Closing Date, the information contained in the Intellectual Property Portion of the Prospectus or any amendment or supplement to the Intellectual Property Portion of the Prospectus contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(f) You shall have received on the Closing Date an opinion of Buc & Beardsley, special regulatory counsel to the Company, dated the Closing Date, to the effect that:

(i) in connection with this offering, such counsel represents the Company in certain matters relating to the United States Federal Food, Drug, and Cosmetic Act (the "FFDC Act"), the Public Health Service Act (the "PHSA") and related government regulatory matters;

(ii) such counsel has read the portions of the Registration Statement and the Prospectus entitled "Risk Factors -- Government Regulation," "Business -- Government Regulation" and "Business -- Health Care Reimbursement and Reform" (the "Regulatory Portion"), and in such counsel's opinion, the Regulatory Portion, insofar as such statements constitute descriptions of the FFDC Act and the PHSA, regulations are fair and accurate summaries of such federal statutes, laws or regulations, are accurate and complete in all material respects; and

(iii) such counsel has no reason to believe that the information contained in the Regulatory Portion of the Registration Statement or the Prospectus at the time it became effective contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make

the statements therein not misleading or that, at the Closing Date, the information contained in the Regulatory Portion of the Prospectus or any amendment or supplement to the Regulatory Portion of the Prospectus contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

With respect to subparagraph (xiv) of paragraph (c) above, Cooley Godward LLP and Wilson Sonsini Goodrich & Rosati, Professional Corporation, may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification except as specified.

The opinion of Cooley Godward LLP described in paragraph (c) above, the opinion of Medlen and Carroll described in paragraph (e) above and the opinion of Buc & Beardsley described in paragraph (f) above shall each be rendered to you at the request of the Company, and shall so state therein.

(g) You shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you, from Ernst & Young LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus.

(h) The Lock-up Agreements, as well as all other "lock-up" agreements imposed by the Option Agreements and the Rights Agreement between you and certain stockholders, officers and directors of the Company relating to sales of shares of Common Stock of the Company or any securities convertible into or exercisable or exchangeable for such Common Stock, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.

(i) The shares of Common Stock of the Company shall have received approval for listing, upon official notice of issuance, on the Nasdaq National Market.

(j) The Company shall have complied with the provisions of paragraph
(a) of Section VI hereof with respect to the furnishing of Prospectuses on the business day next succeeding the date of this Agreement in such quantities as you may reasonably request.

(k) Simultaneously with the Closing of the sale of the Firm Shares Baxter shall have purchased the shares of Common Stock of the Company pursuant to the Baxter Private Placement as defined and described in the Prospectus.

All the agreements, opinions, certificates and letters mentioned above or elsewhere in this Agreement shall be deemed in compliance with the provisions hereof only if Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Underwriters, shall be reasonably satisfied that they comply in form and scope.

The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to you on the Option Closing Date of such documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Shares, other matters related to the issuance of the Additional Shares and an opinion or opinions of Cooley Godward LLP, Medlen and Carroll and Buc & Beardsley in form and substance reasonably satisfactory to Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Underwriters.

VI.

In further consideration of the agreements of the Underwriters herein contained, the Company covenants as follows:

(a) To furnish to you, without charge, three (3) signed copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and, during the period mentioned in paragraph (c) below, as many copies of the Prospectus and any supplements and amendments thereto or to the Registration Statement as you may reasonably request. In the case of the Prospectus, to furnish copies of the Prospectus in New York City, prior to 5:00
p.m., on the business day following the date of this Agreement, in such quantities as you reasonably request.

(b) Before amending or supplementing the Registration Statement or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and to file no such proposed amendment or supplement to which you reasonably object.

(c) If, during such period after the first date of the public offering of the Shares as in the opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Underwriters, the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of your counsel, it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law.

(d) To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request and to pay all expenses (including reasonable fees and disbursements of counsel) in connection with such qualification and in connection with any review of the offering of the Shares by the National Association of Securities Dealers, Inc.

(e) To make generally available to the Company's security holders and to you as soon as practicable an earnings statement covering the twelve-month period ending December 31, 1997 that satisfies the provisions of Section 11(a) of the Securities Act and the Rules (including Rule 158).

(f) During a period of three years from the effective date of the Registration Statement, the Company will furnish to you copies of (i) all reports to its stockholders and (ii) all reports, financial statements and proxy or information statements filed by the Company with the Commission or any national securities exchange.

(g) The Company will apply the proceeds from the sale of the Shares substantially as set forth under in "Use of Proceeds" in the Prospectus.

(h) The Company will use its best efforts to obtain and its reasonable best efforts maintain in effect the quotation of the Shares on the Nasdaq National Market and will take all necessary steps to cause the Shares to be included on the Nasdaq National Market as promptly as practicable and to maintain such inclusion for a period of three years after the date hereof or until such earlier date as the Shares shall be listed for regular trading privileges on the Nasdaq National Market or another national securities exchange or trading system approved by you, which approval shall not be unreasonably withheld.

(i) The Company will file with the Commission such reports on Form SR as may be required pursuant to Rule 463 under the Securities Act.

(j) The Company will comply with all registration, filing and reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which may from time to time be applicable to the Company.

(k) The Company will comply with all provisions of all undertakings contained in the Registration Statement, Part II, Item 17.

(l) Prior to the Closing Date or the Option Closing Date, as the case may be, the Company will not, directly or indirectly, issue any press release or other public communication directly or indirectly and will not hold any press conference with respect to the Company, or its financial condition, results of operations, business, properties, assets or prospects, or this offering, without your prior written consent (which consent will not be unreasonably withheld).

(m) If at any time during the 25-day period after the Registration Statement becomes effective any rumor, publication or event relating to or affecting the Company shall occur as a result of which in your opinion the market price for the Stock has been or is likely to be materially affected (regardless of whether such rumor, publication or event necessitates a supplement to or amendment of the Prospectus), the Company will, after written notice from you advising the Company to the effect set forth above, forthwith prepare, consult with you concerning the substance of, and disseminate a press release or other public statement, reasonably satisfactory to you and the Company, responding to or commenting on such rumor, publication or event.

(n) The Company agrees: (i) to enforce the terms of the lock-up agreements contained in the Option Agreements and the Rights Agreement to the same extent as required in the Lock-up Agreements, (ii) issue stop-transfer instructions to the transfer agent for the Common Stock with respect to any transaction or contemplated transaction that would constitute a breach of or default under the applicable Lock-up Agreement, the Rights Agreement, or any agreement executed pursuant to either Option Plan, and (iii) upon written request of Morgan Stanley & Co. Incorporated, to release from the Lock-up Agreements, or the lock-up agreements contained in the Rights Agreement or any agreement executed pursuant to either Option Plan those shares of Common Stock held by those holders set forth in such request. In addition, except with the prior written consent of Morgan Stanley & Co. Incorporated, the Company agrees
(i) not to amend or terminate, or waive any right under, any Lock-up Agreement, the Rights Agreement or any agreement executed pursuant to either Option Plan or take any other action that would directly or indirectly have the same effect as an amendment or termination, or waiver of any right under, any Lock-up Agreement, the Rights Agreement or any agreement executed pursuant to either Option Plan that would permit any holder of shares of Common Stock, or securities convertible into or exercisable or exchangeable for Common Stock, to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, make any short sale of, grant any option, right, or warrant for the purchase of, enter into any swap or similar agreement that transfers, in whole or in part, the economic risk of ownership of Common Stock, or otherwise transfer or dispose of,

directly or indirectly, any of such shares of Common Stock or other securities prior to the expiration of 180 days after the date of the Prospectus, (ii) not to release any such stop-transfer instruction as described in (ii) above prior to the expiration of 180 days after the date of the Prospectus, and (iii) not to consent to any sale, short sale, grant of an option for the purchase of, or other disposition or transfer of shares of Common Stock, or securities convertible into or exercisable or exchangeable for Common Stock, subject to a Lock-up Agreement, the Rights Agreement or any agreement executed pursuant to either Option Plan.

(o) The Company will place a restrictive legend on any shares of Common Stock acquired pursuant to the exercise, after the date hereof and prior to the expiration of the 180-day period after the date of the initial public offering of the Shares, of any option granted under either of the Option Plans or pursuant to the exercise of any warrant, which legend shall restrict the transfer of such shares prior to the expiration of such 180-day period. In addition, the Company agrees that, without the prior written consent of Morgan Stanley & Co. Incorporated, it will not release any stockholder, option holder or warrant holder from the market standoff provision imposed by the Company pursuant to the terms of either Option Plan, the Rights Agreement or earlier than 180 days after the date of the initial public offering of the Shares.

VII.

The Company agrees to pay all costs and expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to, all expenses incident to (i) the preparation and filing of the Registration Statement (including all exhibits thereto) and the Prospectus and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Shares, including any transfer taxes payable in connection with the transfer and sale of the Shares to the Underwriters, (iii) the fees and disbursements of the Company's counsel and accountants, (iv) the qualification of the Shares under state securities or Blue Sky laws in accordance with the provisions of paragraph (d) of Article VI hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any Blue Sky or Legal Investment Memoranda, (v) the printing and delivery to the Underwriters, in quantities as hereinabove stated, of copies of the Registration Statement (including all exhibits thereto) and all amendments thereto and of each preliminary prospectus and the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies of this Agreement or any Blue Sky or Legal Investment Memoranda, (vii) the filing fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc., made in connection with the offering of the Shares, (viii) any expenses incurred by the Company in connection with a "road show" presentation to potential investors and (ix) the listing of the Common Stock on the Nasdaq National Market.

VIII.

The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under common control with, or is controlled by, any Underwriter, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state

therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter or any person controlling such Underwriter, from whom the person asserting any such losses, claims, damages or liabilities purchased Shares, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Shares to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the directors of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto.

In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to any of the two preceding paragraphs, such person (the "Indemnified Party") shall promptly notify the person against whom such indemnity may be sought (the "Indemnifying Party") in writing and the Indemnifying Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Party shall not, in respect of the legal expenses of any Indemnified Party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (a) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and (b) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such
Section , and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriters and such control persons of Underwriters, such firm shall be designated in writing by Morgan Stanley & Co. Incorporated. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The Indemnifying Party shall not be liable for any

settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested by certified mail addressed to an Indemnifying Party to reimburse the Indemnified Party for the reasonable fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the Indemnifying Party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the Indemnified Party in accordance with such request prior to the date of such settlement. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such proceeding.

If the indemnification provided for in the first or second paragraph of this Article VIII is unavailable to an Indemnified Party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Party under such paragraph, in lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Indemnifying Party or parties on the one hand and the Indemnified Party or parties on the other hand from the offering of the Shares 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 also the relative fault of the Indemnifying Party or parties on the one hand and of the Indemnified Party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Article VIII are several in proportion to the respective number of Shares they have purchased hereunder, and not joint.

The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Article VIII were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VIII, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such

Underwriter 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 remedies provided for in this Article VIII are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity.

The indemnity and contribution provisions contained in this Article VIII and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Shares.

IX.

This Agreement shall be subject to termination by notice given by you to the Company, if (a) after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in your sole judgment, is material and adverse and (b) in the case of any of the events specified in clauses (a)(i) through (iv), such event singly or together with any other such event makes it, in your sole judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Prospectus.

X.

This Agreement shall become effective upon execution and delivery hereof by the parties hereto.

If, on the Closing Date or the Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares that it or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided, however, that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to Article II be increased pursuant to this Article X by an amount in excess of one-ninth of such number of Shares without the written consent of such Underwriter. If, on the Closing Date or the Option Closing Date, as the case may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Shares are not made within 36 hours after such default, this Agreement shall

terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date or the Option Closing Date, as the case may be, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or because for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.

This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

Very truly yours,

Cerus Corporation

Accepted, __________ __, 1997

Morgan Stanley & Co. Incorporated
Alex. Brown & Sons Incorporated

Acting severally on behalf of themselves and the several Underwriters named herein.

By: Morgan Stanley & Co. Incorporated

                                                    NUMBER OF FIRM SHARES
                 UNDERWRITER                           TO BE PURCHASED
- ------------------------------------------------    ---------------------

Morgan Stanley & Co. Incorporated...............
Alex. Brown & Sons Incorporated.................

                                                     -------------------
                           Total................


                                                     -------------------

                                                                   EXHIBIT 4.2

                                                           THIS CERTIFICATE IS
                                                           TRANSFERABLE IN THE
                                                           CITY OF NEW YORK OR
                                                           IN MINNEAPOLIS, MN

COMMON STOCK
   NUMBER                                            COMMON STOCK
    CERS                     CERUS CORPORATION          SHARES

                             INCORPORATED            SEE REVERSE FOR
                             UNDER THE LAWS OF       CERTAIN
                             THE STATE OF            DEFINITIONS AND A
                             DELAWARE                STATEMENT AS TO
                                                     THE POWERS, DESIGNATIONS,
                                                     PREFERENCES,
                                                     RESTRICTIONS AND RIGHTS OF
                                                     SHARES
                                      CUSIP


         THIS CERTIFIES THAT

TEN COM -  as tenants in common
TEN ENT -  as tenants by the entireties
JT TEN -   as Joint tenants with right of
           survivorship and not as tenants
           in common

 UNIF GIFT MIN ACT -             _________Custodian____________________________
                                 (Cust)                                 (Minor)
                                 under Uniform Gifts to Minors
                                 Act___________________________________________
                                             (State)
 UNIF TRF MIN ACT -              _________Custodian (until age_________________)
                                 (Cust)
                                 ________________________under Uniform Transfer
                                 (Minor)
                                 to Minors Act_________________________________
                                                 (State)

                                           X____________________________________

                                           X____________________________________
                                  NOTICE.           THE SIGNATURE(S) TO THIS
                                                    ASSIGNMENT MUST CORRESPOND
                                                    WITH THE NAME(S) AS WRITTEN
                                                    UPON THE FACE OF THE
                                                    CERTIFICATE IN EVERY
                                                    PARTICULAR,    WITHOUT
                                                    ALTERATION OR ENLARGEMENT OR
                                                    ANY CHANGE WHATSOEVER.

SIGNATURE GUARANTEED:

______________________________

By: /s/ Howard G. Ervin
    ______________________________

        Howard G. Ervin

By: /s/ Stephen T. Isaacs
    -----------------------
      Stephen T. Isaacs

Title: President
       --------------------

Date:  December 9, 1996
       --------------------

By: /s/ Timothy B. Anderson
    -----------------------
     Timothy B. Anderson

Title: Group Vice President
       --------------------

Date:  December 9, 1996

       --------------------

TO:            KIM BUSH

FROM:          DAVID CLAYTON

DATE:          JANUARY 3, 1997

CC:            DAN BISCHOF, BRIAN SCHOEN, STEVE ISAACS

RE:            1997 PROJECT BUDGETS

/s/ David S. Clayton                        /s/ Kim Bush
________________________                    ____________________________________
David S. Clayton, CFO                       Kim Bush, President, Fenwal Division
Cerus Corporation                           Baxter Healthcare Corporation

 /s/ David S. Clayton                        /s/ Kim Bush
- -----------------------------               ------------------------------------
David S. Clayton, CFO                       Kim Bush, President, Fenwal Division
Cerus Corporation                           Baxter Healthcare Corporation

By:          /s/ Steve Isaacs                    By:       /s/  [*]
       -----------------------------                    ------------------------

Title: Steve Isaacs, President & CEO             Title:    [*]    , President
       -----------------------------                    ------------------------

Date:             10/1/96                        Date:       Sept. 25, 1996
       -----------------------------                    ------------------------

   Reduction to Practice and Preparation of non-GMP S-303-HC1 from S-301-HC1
            (Provided by Cerus) for Range Finding Toxicology Studies

Overall, [*] will attempt to do the following tasks using a synthetic
scheme provided by Cerus.

Scope of Tasks

1.  Transfer pertinent analytical methods and initiate at [*].
2.  Do one run following a synthetic scheme provided by Cerus (initial
    reduction to practice) noting and recording significant observations.
3.  Do one or two runs at an approximate [*] to [*] scale (working scale-up)
    to study and show feasibility at a larger scale. Some process improvement
    will be attempted, by mutual agreement, at this scale and may include:
    increased loading. Reference standards will be taken.
4.  Do one or two runs at a development scale designed to produce agreed upon
    quantities (non-GMP) of the designated compound.
5.  Develop and deliver progress reports every two weeks.
6.  Do agreed quality control analysis on material and generate a certificate
    of analysis.
7.  Ship material to Cerus or designate as directed.
8.  Provide process and analytical data for material supplied to Cerus or
    designate.
9.  Ship to Cerus all significant quantities of S-303 prepared that are not
    required by [*].

General Analytical Methods (subject to change)

- ------------------------------------------------------------------------------
Compound or Intermediate        Methods (parentheses indicate data taken for
                                information only)
- ------------------------------------------------------------------------------
 S-301                          HPLC, IR, (NMR)
- ------------------------------------------------------------------------------
 S-302                          HPLC, IR, (NMR)
- ------------------------------------------------------------------------------
                                HPLC, NMR, IR, (Elemental: C,H,N,Cl;
 S-303                          Solvents by GC)
- ------------------------------------------------------------------------------

By: /s/ [*]                             By: /s/ Stephen T. Isaacs
    ---------------------------             -------------------------

Title: President                        Title: President & CEO
       ------------------------                ----------------------

Date:  Sept. 26, 1996                   Date:  10/1/96
       ------------------------                -----------------------

                                               DECEMBER 31,                       SEPTEMBER 30,
                                  ---------------------------------------   -------------------------
                                     1993          1994          1995          1995          1996
                                  -----------   -----------   -----------   -----------   -----------
Net loss........................  $(3,515,466)  $(1,800,089)  $(2,360,321)  $(3,591,876)  $(7,117,293)
                                  ===========   ===========   ===========   ===========   ===========
Shares used in net loss per
  share computation:
  Weighted average shares of
     common stock outstanding...    1,490,580     1,443,942     1,416,355     1,415,841     1,418,712
  Shares related to Staff
     Accounting Bulletin Topic
     4D:
     Common stock(1)............      485,247       485,247       485,247       485,247       485,247
     Common stock options(2)....      265,426       265,426       265,426       265,426       265,426
     Preferred stock(3).........      560,001       560,001       560,001       560,001       560,001
                                  -----------   -----------   -----------   -----------   -----------
                                    1,310,674     1,310,674     1,310,674     1,310,674     1,310,674
                                  -----------   -----------   -----------   -----------   -----------
Shares used in net loss per
  share computation.............    2,801,254     2,754,616     2,727,029     2,726,515     2,729,386
                                  ===========   ===========   ===========   ===========   ===========
Net loss per share..............  $     (1.25)  $     (0.65)  $     (0.87)  $     (1.32)  $     (2.61)
                                  ===========   ===========   ===========   ===========   ===========
Calculation of shares
  outstanding for computing pro
  forma net loss per share:
  Shares used in computing
     historical net loss per
     share (from above):........                                2,727,029                   2,729,386
  Adjustment to reflect the
     effect of the assumed
     conversion of convertible
     preferred stock from the
     date of issuance(4):.......                                3,506,213                   3,852,242
                                                              -----------                 -----------
Shares used in computing pro
  forma net loss per share......                                6,233,242                   6,581,628
                                                              ===========                 ===========
Pro forma net loss per share....                              $     (0.38)                $     (1.08)
                                                              ===========                 ===========

                                                /s/ ERNST & YOUNG, LLP


Walnut Creek, California

January 7, 1997