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EXHIBIT 4.2
Form of Warrant
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE ACT.
December 10, 1998
___________ shares Warrant No. [A] [B]-_____
GERON CORPORATION
STOCK PURCHASE WARRANT
Registered Owner:
This certifies that, for value received, Geron Corporation, a Delaware
corporation, the ("Company") grants the following rights to the Registered
Owner, or assigns, of this Warrant:
1. ISSUE. Upon tender (as defined in section 5 hereof) to the Company,
the Company shall issue to the Registered Owner, ______________, or assigns, up
to the number of shares specified in paragraph 2 hereof of fully paid and
non-assessable shares of Common Stock, par value $.001 per share ("Common
Stock"), that the Registered Owner, or assigns, is otherwise entitled to
purchase.
2. NUMBER OF SHARES. The total number of shares of Common Stock that the
Registered Owner, or assigns, of this Warrant is entitled to receive upon
exercise of this Warrant is ________ shares of Common Stock, subject to
adjustment from time to time as set forth in paragraph 6 below. The Company
shall at all times reserve and hold available sufficient shares of Common Stock
to satisfy all conversion and purchase rights represented by outstanding
convertible securities, options and warrants, including this Warrant. The
Company covenants and agrees that all shares of Common Stock that may be issued
upon the exercise of this Warrant shall, upon issuance, be duly and validly
issued, fully paid and non-assessable, and free from all taxes, liens and
charges with respect to the purchase and the issuance of the shares.
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3. EXERCISE PRICE. The initial exercise price of this Warrant, the
price at which the shares of stock issuable upon exercise of this Warrant may be
purchased, is $12.00 and subject to adjustment from time to time pursuant to the
provisions of paragraph 6 below (the "Exercise Price").
3A. PAYMENT OF EXERCISE PRICE. The Registered Owner may pay the
Exercise Price in one of the following manners:
(i) Cash Exercise. The Registered Owner shall deliver
immediately available funds or a check payable to the Company; or
(ii) Cashless Exercise. At such time as, but only at such time
as, after the 180th day after the date of issuance of this Warrant, all
of the Underlying Shares are not registered pursuant to an effective
registration statement, the Registered Owner shall have the right to
surrender this Warrant to the Company together with a notice of cashless
exercise, in which event the Company shall issue to the Registered Owner
the number of Warrant Shares determined as follows:
where: X = Y (A-B)/A
X = the number of Warrant Shares (as defined in
the Purchase Agreement) to be issued to the
Registered Owner
Y = the number of Warrant Shares with respect to
which this Warrant is being exercised
A = the average of the Per Share Market Value of
the Common Stock for the five (5) Trading Days
immediately prior to (but not including) the date
of exercise
B = the Exercise Price
For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Registered
Owner, and the holding period for the Warrant Shares shall be deemed to have
been commenced, on the issue date to the extent permitted by Rule 144.
4. EXERCISE PERIOD. This Warrant may only be exercised beginning on
December 10, 1998 and up to and including June 10, 2000 (the "Exercise Period").
If not exercised during this period, this Warrant and all rights granted under
this Warrant shall expire and lapse.
5. TENDER. This Warrant may be exercised, in whole or in part, by actual
delivery of (i) the Exercise Price in cash, (ii) a duly executed Warrant
Exercise Form, a copy of which is
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attached to this Warrant as Exhibit A, properly executed by the Registered
Owner, or assigns, of this Warrant, and (iii) by surrender of this Warrant. The
payment and Warrant Exercise Form must be delivered, personally or by mail, to
the registered office of the Company. Documents sent by mail shall be deemed to
be delivered when they are received by the Company.
6. ADJUSTMENT OF EXERCISE PRICE.
(a) Common Stock Dividends; Common Stock Splits; Reverse Common
Stock Splits. If the Company, at any time while this Warrant is outstanding, (a)
shall pay a stock dividend on its Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine outstanding shares
of Common Stock into a smaller number of shares, or (d) issue by
reclassification of shares of Common Stock any shares of capital stock of the
Company, the Exercise Price shall be multiplied by a fraction the numerator of
which shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding before such event and the denominator of which shall be the
number of shares of Common Stock outstanding after such event. Any adjustment
made pursuant to this paragraph (6)(a) shall become effective immediately after
the record date for the determination of shareholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
(b) Rights; Options; Warrants. If the Company, during the period
commencing on the date of issuance of this Warrant through the date which is 12
months from the date of issuance of this Warrant, shall issue rights or warrants
to all of the holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Exercise
Price, the Exercise Price shall be multiplied by a fraction, the denominator of
which shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase, and the numerator of which shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered would purchase at the Exercise
Price. Such adjustment shall be made whenever such rights or warrants are
issued, and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights or warrants.
However, upon the expiration of any right or warrant to purchase Common Stock
the issuance of which resulted in an adjustment in the Exercise Price pursuant
to this paragraph (6)(b), if any such right or warrant shall expire and all or
any portion thereof shall not have been exercised, the Exercise Price shall
immediately upon such expiration be re-computed and effective immediately upon
such expiration be increased to the price which it would have been (but
reflecting any other adjustments in the Exercise Price made pursuant to the
provisions of section 6(g) after the issuance of such rights or warrants) had
the adjustment of the Exercise Price made upon the issuance of such rights or
warrants been made on the basis of offering for subscription or purchase only
that number of shares of Common Stock (if any) actually purchased upon the
exercise of such rights or warrants actually exercised. If (X) the Registration
Statement (as defined in the Registration Rights Agreement) has been declared
effective by the Securities and Exchange Commission and (Y) the Per Share Market
Value is
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greater than 150% of the Exercise Price as of the date of this Warrant for five
consecutive Trading Days, then this Section 6 (b) shall expire automatically on
the 180th day following the date of issuance of this Warrant.
(c) Subscription Rights. If the Company, during the period
commencing on the date of issuance of this Warrant through the date which is 12
months from the date of issuance of this Warrant, shall distribute to all of the
holders of Common Stock evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any security (excluding those referred to
in paragraphs 6(a) and (b) above), then in each such case the Exercise Price at
which the Warrant shall thereafter be exercisable shall be determined by
multiplying the Exercise Price in effect immediately prior to the record date
fixed for determination of shareholders entitled to receive such distribution by
a fraction the denominator of which shall be the Per Share Market Value of
Common Stock determined as of the record date mentioned above, and the numerator
of which shall be such Per Share Market Value of the Common Stock on such record
date less the then fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one outstanding
share of Common Stock as determined by the Board of Directors in good faith;
provided, however, that in the event of a distribution exceeding ten percent
(10%) of the net assets of the Company, such fair market value shall be
determined by a nationally recognized or major regional investment banking firm
or firm of independent certified public accountants of recognized standing (an
"Appraiser") selected in good faith by the Registered Owner of the Warrant; and
provided, further, that the Company, after receipt of the determination by such
Appraiser shall have the right to select an additional Appraiser meeting the
same qualifications, in good faith, in which case the fair market value shall be
equal to the average of the determinations by each such Appraiser. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above. If (X) the
Registration Statement (as defined in the Registration Rights Agreement) has
been declared effective by the Securities and Exchange Commission and (Y) the
Per Share Market Value is greater than 150% of the Exercise Price as of the date
of this Warrant for five consecutive Trading Days, then this Section 6 (c) shall
expire automatically on the 180th day following the date of issuance of this
Warrant.
(d) Rounding. All calculations under this section 6 shall be made
to the nearest cent or the nearest 1/100th of a share, as the case may be.
(e) Notice of Adjustment. Whenever the Exercise Price is adjusted
pursuant to paragraphs 6(a), (b) or (c), the Company shall promptly mail to the
holder of the Warrant, a notice setting forth the Exercise Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
(f) Redemption Events. In case of (A) any reclassification of the
Common Stock, (B) any consolidation or merger of the Company with or into
another person pursuant to which (i) a majority of the Company's Board of
Directors will not constitute a majority of the board of directors of the
surviving entity or (ii) less than 51% of the outstanding shares of the capital
stock of the surviving entity will be held by the same shareholders of the
Company prior to such reclassification, consolidation or merger, (C) the sale or
transfer of all or substantially all
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of the assets of the Company, (D) any compulsory share exchange pursuant to
which the Common Stock is converted into other securities, cash or property, (E)
suspension from listing or delisting of the Common Stock from the National
Market System of the Nasdaq Stock Market ("Nasdaq") or any other exchange on
which the Common Stock is listed for a period of five (5) consecutive Trading
Days, (F) the Company's notice to any registered owner of the Tranche A Warrants
or the Tranche B Warrants, including by way of public announcement, at any time,
of its intention, for any reason, not to comply with proper requests for the
exercise of any such warrants, or (G) a breach by the Company of any
representation, warranty, covenant or other term or condition of the Purchase
Agreement, the Registration Rights Agreement or any other agreement, document,
certificate or other instrument delivered in connection with the transactions
contemplated thereby or hereby, except to the extent that such breach would not
have a Material Adverse Effect (as defined in Section 2.1(a) of the Purchase
Agreement) and except, in the case of a breach of a covenant which is curable,
only if such breach continues for a period of at least ten days after the
Company knows or reasonably should have known of the existence of such breach
(clauses (A) through (G) above referred to as a "Redemption Event"), the holder
of the Warrant shall have the right thereafter to exercise the Warrant within
ten (10) Business Days of the Redemption Event for the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such Redemption Event, and the holder of the Warrant
shall be entitled upon such event to receive such amount of securities, cash or
property as the shares of the Common Stock of the Company into which the Warrant
could have been converted immediately prior to such Redemption Event would have
been entitled.
(g) Reclassification, Etc. If:
A. the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
B. the Company shall declare a special nonrecurring cash
dividend on or a redemption of its Common Stock; or
C. the Company shall authorize the granting to all of the
holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of
any class or of any rights; or
D. the approval of any shareholders of the Company shall be
required in connection with any reclassification of the
Common Stock of the Company, any consolidation or merger
to which the Company is a party, any sale or transfer of
all or substantially all of the assets of the Company, of
any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property; or
E. the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of
the Company;
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then the Company shall cause to be filed at each office or agency maintained for
the purpose of exercise of this Warrant, and shall cause to be mailed to the
holder of this Warrant at its address as it shall appear below, at least 30
calendar days prior to the applicable record or effective date hereinafter
specified, a notice (provided such notice shall not include any material
non-public information) stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange;
provided, however, that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice.
(h) Adjustment to Exercise Price. If the Company, during the
period commencing on the date of issuance of this Warrant through the date which
is 12 months following the date of issuance of this Warrant takes any of the
actions described in this Section 6 (h), then, in order to prevent dilution of
the rights granted under this Warrant, the Exercise Price will be subject to
adjustment from time to time as provided in this Section 6(h); provided,
however, that if (X) the Registration Statement (as defined in the Registration
Rights Agreement) has been declared effective by the Securities and Exchange
Commission and (Y) the Per Share Market Value is greater than 150% of the
Exercise Price as of the date of issuance of this Warrant for five consecutive
Trading Days, then this provision shall expire automatically on the 180th day
following the date of issuance of this Warrant.
(i) Adjustment of Exercise Price upon Issuance of Common Stock.
If at any time during the Exercise Period, the Company issues or sells, or is
deemed to have issued or sold, any shares of Common Stock (other than the
Underlying Shares (as defined in the Purchase Agreement) or shares of Common
Stock deemed to have been issued by the Company in connection with an Approved
Stock Plan (as defined below), shares of Common Stock issuable upon the exercise
of any options or warrants outstanding on the date hereof and listed in Schedule
2.1(c) of the Purchase Agreement (as defined below), shares of Common Stock
issued or deemed to have been issued in a Strategic Venture (as defined below),
or shares of Common Stock issued or deemed to have been issued as consideration
for an acquisition by the Company of a division, assets or business (or stock
constituting any portion thereof) from another person) for a consideration per
share (the "New Issuance Price") less than the Conversion Price (as defined in
the Debenture issued on the Tranche A Closing Date in connection with the
transactions contemplated by the Purchase Agreement) in effect immediately prior
to such issuance or sale, then immediately after such issue or sale, the
Exercise Price then in effect shall be reduced to an amount equal to 120% of the
New Issuance Price. A "Strategic Venture" shall mean a venture between the
Company and a pharmaceutical or biotechnology company or an Affiliate thereof,
the primary purpose of which is not to raise capital in the form of equity
(including without limitation through the issuance of warrants, convertible
securities, phantom stock rights, stock appreciation rights or other rights with
equity features) and pursuant to which the Company contributes or
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issues securities of the Company valued at less than 50% of the entire
contribution of the Company. If the Registered Holder and the Company cannot
agree on the value of the components of such contribution, the last two
sentences of subsection (F)(I) entitled "Calculation of Consideration" shall
apply.
If at any time during the Exercise Period, the Company issues or
sells, or is deemed to have issued or sold, any shares of Common Stock (other
than Underlying Shares, shares of Common Stock deemed to have been issued by the
Company in connection with an Approved Stock Plan or shares of Common Stock
issuable upon the exercise of any options or warrants outstanding on the date
hereof and listed in Schedule 2.1(c) of the Purchase Agreement then, for
purposes of determining the adjusted Exercise Price under this Section 6(h)(i),
the following shall be applicable:
(A) Issuance of Options. If at any time during the
Exercise Period, the Company in any manner grants any rights or options
to subscribe for or to purchase Common Stock or any stock or other
securities convertible into or exchangeable for Common Stock (other than
the Underlying Shares or shares of Common Stock deemed to have been
issued by the Company in connection with an Approved Stock Plan, shares
of Common Stock issuable upon the exercise of any options or warrants
outstanding on the date hereof and listed in Schedule 2.1(c) of the
Purchase Agreement, shares of Common Stock issued or deemed to have been
issued as consideration for an acquisition by the Company of a division,
assets or business (or stock constituting any portion thereof) from
another person or shares of Common Stock issued or deemed to have been
issued in a Strategic Venture) (such rights or options being herein
called "Options" and such convertible or exchangeable stock or
securities being herein called "Convertible Securities") and the price
per share (the "New Option Price") for which Common Stock is issuable
upon the exercise of such Options or upon conversion or exchange of such
Convertible Securities is less than the Conversion Price in effect
immediately prior to such grant, then the Exercise Price shall be
reduced to an amount to equal 120% of the New Option Price. No
adjustment of the Exercise Price shall be made upon the actual issuance
of such Common Stock or of such Convertible Securities upon the exercise
of such Options or upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.
(B) Issuance of Convertible Securities. If at any time
during the Exercise Period, the Company in any manner issues or sells
any Convertible Securities and the price per share (the "New Convertible
Price") for which Common Stock is issuable upon such conversion or
exchange (other than the Underlying Shares or shares of Common Stock
deemed to have been issued by the Company in connection with an Approved
Stock Plan, shares of Common Stock issuable upon the exercise of any
options or warrants outstanding on the date hereof and listed in
Schedule 2.1(c) of the Purchase Agreement, shares of Common Stock issued
or deemed to have been issued as consideration for an acquisition by the
Company of a division, assets or business (or stock constituting any
portion thereof) from another person or shares of Common Stock issued or
deemed to have been issued in a Strategic Venture) is less than the
Conversion Price in effect immediately prior to issuance or sale, then
the Exercise Price shall be reduced to equal 120% the New Convertible
Price.
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(C) Change in Option Price or Rate of Conversion. If there
is a change at any time in (i) the purchase price provided for in any
Options, (ii) the additional consideration, if any, payable upon the
issue, conversion or exchange of any Convertible Securities or (iii) the
rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock, then the Exercise Price in effect at the
time of such change shall be readjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold; provided that no
adjustment shall be made if such adjustment would result in an increase
of the Exercise Price then in effect.
(D) Certain Definitions. For purposes of determining the
adjusted Exercise Price under this Section 6(h)(i), the following terms
have meanings set forth below:
(I) "Approved Stock Plan" shall mean any contract,
plan or agreement which has been approved by the Board of Directors of
the Company, pursuant to which the Company's securities may be issued to
any employee, officer, director or consultant.
(II) "Common Stock Deemed Outstanding" means, at any
given time, the number of shares of Common Stock issued and outstanding
at such time, plus the number of shares of Common Stock deemed to be
outstanding pursuant to Sections 6(h)(i)(A) and 6(h)(i)(B) hereof
regardless of whether the Options or Convertible Securities are actually
exercisable at such time, but excluding any shares of Common Stock
issuable upon exercise of the Warrants.
(F) Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under this Section
6(h)(i), the following shall be applicable:
(I) Calculation of Consideration Received. If any
Common Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount received by the Company
therefor. In case any Common Stock, Options or Convertible Securities
are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company will be the
fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company will be the arithmetic average of the Per Share
Market Values of such security for the five (5) consecutive Trading Days
immediately preceding the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company
is the surviving entity the amount of consideration therefor will be
deemed to be the fair value of such portion of the net assets and
business of
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the non-surviving entity as is attributable to such Common Stock,
Options or Convertible Securities, as the case may be. The fair value of
any consideration other than cash or securities will be determined
jointly by the Company and the registered owners of a majority of the
Underlying Shares of Tranche A Warrants and the Tranche B Warrants then
outstanding. If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the
"Valuation Event"), the fair value of such consideration will be
determined within forty-eight (48) hours of the tenth (10th) day
following the Valuation Event by an Appraiser selected by the Company.
The determination of such Appraiser shall be binding upon all parties
absent manifest error.
(II) Integrated Transactions. In case any Option is
issued in connection with the issue or sale of other securities of the
Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Options by the parties
thereto, the Options will be deemed to have been issued for an aggregate
consideration of $.001.
(III) Treasury Shares. The number of shares of Common
Stock outstanding at any given time does not include shares owned or
held by or for the account of the Company, and the disposition of any
shares so owned or held will be considered an issue or sale of Common
Stock.
(IV) Record Date. If the Company takes a record of the
holders of Common Stock for the purpose of entitling them (1) to receive
a dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (2) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date will be deemed
to be the date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such dividend or the
making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.
(V) Certain Events. If any event occurs of the type
contemplated by the provisions of Section 6(h)(i) (subject to the
exceptions stated therein) but not expressly provided for by such
provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price so as to protect the rights
of the Registered Owner, or assigns, of this Warrant; provided, however,
that no such adjustment will increase the Exercise Price as otherwise
determined pursuant to this Section 6(h).
Notwithstanding anything to the contrary contained in this
Section 6, those shares of Common Stock issued pursuant to the transactions
contemplated by the Company and Xxxx Xxxx Capital Management, L.P. and certain
other investors pursuant to which the Company intends to complete a private
placement of Common Stock (as described in Schedule 2.1(c) to the Purchase
Agreement) shall be excluded from any adjustments provided for herein.
Additionally,
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in no event shall any provision in this Section 6 cause the Exercise Price to be
greater than the Exercise Price on the date of issuance of this Warrant.
7. LIMITATIONS.
(a) Nasdaq Limitation. If on any date (the "Determination Date")
(a) the Common Stock is listed for trading on Nasdaq or the Nasdaq SmallCap
Market, (b) the Exercise Price then in effect is such that the aggregate number
of shares of Common Stock (x) that would then be issuable upon exercise in full
of this Warrant, would equal or exceed 20% of the number of shares of the Common
Stock outstanding immediately prior to the later of (A) the Tranche A Closing
Date (as defined in the Purchase Agreement) and (B) the Tranche B Closing Date
(as defined in the Purchase Agreement) (such number of shares as would not equal
or exceed such 20% limit, the "Issuable Maximum"), and (c) the Company shall not
have previously obtained the vote of the shareholders of the Company (the
"Shareholder Approval"), if any, as may be required by the applicable rules and
regulations of Nasdaq (or any successor entity) to approve the issuance of
shares of Common Stock in excess of the Issuable Maximum in a private placement
whereby shares of Common Stock are deemed to have been issued at a price that is
less than the greater of book value or fair market value of the Common Stock,
then with respect to the aggregate shares of Common Stock underlying this
Warrant then held by the Registered Owners for which an exercise in accordance
with the Exercise Price would result in an issuance of shares of Common Stock in
excess of the Issuable Maximum (the "Excess Share Amount") the Company may elect
to prepay cash to the Registered Owners in an amount equal to the Per Share
Market Value. Any such election by the Company must be made in writing to the
Registered Owners within two Trading Days after the Determination Date and the
payment of such Per Share Market Value must be made in full to the Registered
Owners with ten (10) Business Days after the date such notice is delivered. If
the Company does not deliver timely a notice of its election to pay under this
Section or shall, if it shall have delivered such a notice, fail to pay the
payment amount hereunder within ten (10) Business Days thereafter, then the
Registered Owners of a majority of shares underlying the Warrants then
outstanding shall have the option by written notice to the Company, to declare
any such notice given by the Company, if given, to be null and void and require
the Company to pay cash to each Registered Owner in an amount equal to the Per
Share Market Value for such Registered Owner's portion of the Excess Share
Amount. The payment of the Per Share Market Value to each Registered Owner
pursuant to this Section shall be determined on a pro rata basis upon the number
of shares underlying this Warrant held by such Registered Owner on the
Determination Date. If the Company fails to pay the Per Share Market Value in
full pursuant to this Section within five Business Days after the date payable,
the Company will pay interest thereon at a rate of 15% per annum to the
exercising Registered Owner, accruing interest daily from the date of exercise
until such amount, plus all such interest thereon, if any, is paid in full.
(b) Restriction on Exercise by the Registered Owner.
Notwithstanding anything herein to the contrary, in no event shall any
Registered Owner have the right or be required to exercise any portion or all of
this Warrant if the aggregate number of shares of Common Stock beneficially
owned by such Registered Owner and its Affiliates would exceed
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9.9% of the outstanding shares of the Common Stock following such exercise. For
purposes of this Section 7(b), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended.
8. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in the Purchase Agreement. As
used in this Warrant, the following terms have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," controlling" and "controlled" have meanings
correlative to the foregoing.
"Appraiser" has the meaning assigned to it in section 6(c) hereof.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.
"Common Stock" means the shares of the Company's common stock, par value
$.001 per share.
"Company" means Geron Corporation, a Delaware corporation.
"Convertible Securities" has the meaning assigned to it in section
6(h)(i)(A) hereof.
"Exercise Period" has the meaning assigned to it the section 4 hereof.
"Exercise Price" has the meaning assigned to it in section 3 hereof.
"Market Price" has the meaning assigned to it in section 6(h)(i) hereof.
"Options" has the meaning assigned to it in section 6(h)(i)(A) hereof.
"Per Share Market Value" means on any particular date (i) the closing
bid price per share of the Common Stock on such date on Nasdaq or another
registered national stock exchange on which the Common Stock is then listed or
if there is no such price on such date, then the closing bid price on such
exchange or quotation system on the date nearest preceding such date, or (ii) if
the Common Stock is not listed then on the National Market System of the Nasdaq
Stock Market or any registered national stock exchange, the closing bid price
for a share of Common Stock in the over-the-counter market, as reported by the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (iii) if the Common Stock is not then publicly traded the fair
market value of a share of Common Stock as determined by an Appraiser selected
in good faith by the holder of this Warrant; provided, however, that the
Company, after receipt of the determination by such Appraiser, shall have the
right to select an additional Appraiser, in which case, the fair
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market value shall be equal to the average of the determinations by each such
Appraiser; and provided, further that all determinations of the Per Share Market
Value shall be appropriately adjusted for any stock dividends, stock splits or
other similar transactions during such period.
"Purchase Agreement" means that certain Securities Purchase Agreement,
dated December 10, 1998, among the Company, Brown Xxxxxxx Strategic Growth Fund,
Ltd., Brown Xxxxxxx Strategic Growth Fund, L.P., LB I Group Inc. and RGC
International Investors, LDC.
"Redemption Event" has the meaning assigned to it in section 6(f)
hereof.
"Registered Owner" means ________, or such other Person as shown on the
records of the Company as being the registered owner of this Warrant.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of December 10, 1998, among the Company, Brown Xxxxxxx
Strategic Growth Fund, Ltd., Brown Xxxxxxx Strategic Growth Fund, L.P., LB I
Group Inc. and RGC International Investors, LDC.
"Trading Day(s)" means any day on which the primary market on which
shares of Common Stock are listed is open for trading.
"Tranche A Warrants" means the warrants issuable at the Tranche A
Closing.
"Tranche B Warrants" means the warrants issuable at the Tranche B
Closing.
9. REGISTRATION RIGHTS. The Company will undertake the registration of
the Common Stock into which this Warrant is exercisable at such times and upon
such terms pursuant to the provisions of the Registration Rights Agreement.
10. RESERVATION OF UNDERLYING SHARES. The Underlying Shares are and will
at all times hereafter continue to be duly authorized and reserved for issuance
pursuant to this Warrant.
11. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been received
(a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission confirmation
report) at the address or number designated below (if received by 8:00 p.m. EST
where such notice is to be received), or the first business day following such
delivery (if delivered on a business day after during normal business hours
where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications are (i) if to the Company to Geron
Corporation, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 attn: Xxxxx
Xxxxxxxxx, fax no. (000) 000-0000 and (ii) if to any Registered Owner to the
address set forth on Schedule II to the Purchase Agreement with copies to Akin,
Xxxx, Xxxxxxx, Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attn: Xxxxx Xxxx, fax no.
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(000) 000-0000 or such other address as may be designated in writing hereafter,
in the same manner, by such Person.
[signature page follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer as of the date first set forth above.
GERON CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT A
Warrant Exercise Form
TO: GERON CORPORATION
The undersigned hereby: (1) irrevocably subscribes for and offers to
purchase _______ shares of Common Stock of Geron Corporation, pursuant to
Warrant No. ___ heretofore issued to ___________________ on December 10, 1998;
(2) encloses a payment of $__________ for these shares at a price of $12.00 per
share (as adjusted pursuant to the provisions of the Warrant); and (3) requests
that a certificate for the shares be issued in the name of the undersigned and
delivered to the undersigned at the address specified below.
Date:
--------------------------------
Investor Name:
--------------------------------
Taxpayer Identification
Number:
--------------------------------
By:
--------------------------------
Printed Name:
--------------------------------
Title:
--------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Note: The above signature should correspond exactly with the
name on the face of this Warrant Certificate or with the
name of assignee appearing in assignment form below.
AND, if said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant Certificate is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder less
any fraction of a share paid in cash and delivered to the address stated above.
