EXHIBIT B
February 14, 1997
Progenitor, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Reorganization, dated
as of February 14, 1997 (the "Reorganization Agreement"), by and among
Progenitor, Inc., a Delaware corporation ("Progenitor"), MG Merger Sub Corp., a
Delaware corporation and wholly-owned subsidiary of Progenitor ("Reorganization
Sub") and Mercator Genetics, Inc., a Delaware corporation ("Mercator"), which
provides for the acquisition of Mercator by Progenitor as a result of the merger
of Mercator with and into Reorganization Sub (the "Reorganization") in a
transaction in which shares of Mercator Common Stock will be changed and
converted into shares of Progenitor Common Stock.
I have been informed that (i) I may be deemed to be an "affiliate" of
Mercator within the meaning of the Securities Act of 1933, as amended (the
"Act"), and (ii) accordingly, the shares of Mercator Common Stock and Progenitor
Common Stock held or acquired in the Reorganization by me may only be disposed
of in conformity with the provisions hereof. This letter agreement is
hereinafter referred to as the "Agreement."
I represent and warrant to, and agree with, Progenitor and Mercator as
follows:
1. I have been advised that the issuance of Progenitor Common Stock
to me pursuant to the Reorganization will be registered with the Commission
under the Act on a registration statement on Form S-4. However, I have also
been advised that, since at the time the Reorganization will be submitted to the
stockholders of Mercator for approval I may be deemed an "affiliate" of
Mercator, any sale or other disposition by me of any of such shares of
Progenitor Common Stock may, under current
law, only be made in accordance with the provision of paragraph (d) of Rule 145
under the Act, pursuant to an effective registration statement under the Act or
pursuant to an exemption provided thereunder.
2. I understand that the provisions of Rule 145(d), as currently in
effect, restrict my sales of Progenitor Common Stock during the one-year period
after the Effective Time of the Reorganization, and permit sales, in general,
only while Progenitor is subject to the requirements to file, and is filing,
periodic reports under Section 13 or 15(d) of the Securities Exchange Act of
1934, and only in brokers' transactions (or transactions directly with a market
maker) where the aggregate number of shares sold at any time, together with all
sales of restricted shares of Progenitor Common Stock sold for my account during
the preceding three month period, does not exceed the greater of (i) one percent
of the number of shares of Progenitor Common Stock outstanding, or (ii) the
average weekly volume of trading in shares of Progenitor Common Stock on all
national securities exchanges and/or reported through the automated quotation
system of a registered securities association, during the four-week period
preceding any such sale.
3. After a period of one year has elapsed from the closing date of
the Reorganization, as determined in accordance with paragraph (d) of Rule 144,
as currently in effect, I understand that Rule 145(d)(2) further permits me to
sell my shares of Progenitor Common Stock without regard to the volume
limitations and manner of sale restrictions described in the preceding paragraph
only if (i) I am not then an "affiliate" of Progenitor, and (ii) Progenitor is
then subject to the requirements to file, and is filing, periodic reports under
Section 13 or 15(d) of the Exchange Act.
4. After a period of two years has elapsed from the closing date of
the Reorganization, as determined in accordance with paragraph (d) of Rule 144,
as currently in effect, I understand that Rule 145(d)(3) further permits me to
sell my shares of Progenitor Common Stock without regard to the volume
limitations and manner of sale restrictions described in the second preceding
paragraph only if I am not at that time, and have
not been for a period of three months prior to that time, an "affiliate" of
Progenitor.
5. I understand that stop transfer instructions may be given to
Xxxxxxxx's and Progenitor's transfer agents with respect to my shares of
Mercator Common Stock and Progenitor Common Stock and that there may be placed
on the certificates for such shares, or any substitution therefor, a legend to
the foregoing effect.
6. I have carefully read this Agreement and discussed its
requirements and other applicable limitations upon the sale, transfer or other
disposition of the shares of Progenitor Common Stock to be acquired by me in
connection with the Reorganization and the shares of Mercator Common Stock owned
by me (or Progenitor Common Stock or Mercator Common Stock subject to
outstanding options or warrants or issuable upon conversion of other securities
held by me), to the extent I felt necessary, with my counsel or counsel for
Mercator.
7. I have full power and capacity to execute this Agreement and to
make the representations, warranties and agreements herein. This Agreement
shall be binding upon and enforceable against all of my administrators,
executors, representatives, heirs and successors and any pledgee holding shares
of Mercator Common Stock or Progenitor Common Stock.
It is understood and agreed that this Agreement shall terminate and be
of no further force and effect if the Reorganization Agreement is terminated
pursuant to its terms. In addition, it is understood and agreed that the legend
contemplated by Paragraph 5 above shall be removed forthwith from the
certificate or certificates representing my shares of Progenitor Common Stock if
I shall have delivered to Progenitor a copy of the letter from the staff of the
Commission, an opinion of counsel in form and substance reasonably satisfactory
to Progenitor, or other evidence satisfactory to Progenitor that a transfer of
my shares of Progenitor Common Stock represented by such certificate or
certificates will be a sale made in conformity with the provisions of Rule
145(d), or made pursuant to an effective registration statement under the Act.
Very truly yours,
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Signature
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(Please Print Name)
Accepted and agreed to this
14th day of , February 1997
PROGENITOR, INC.
By: /s/ Mark X. X. Xxxxxxx
Title: Vice President, Finance and Chief Financial Officer
