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EXHIBIT 4.2
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.
September 30, 1999 Right to
Purchase
1,000,000 Shares
of Common Stock,
par value $0.001
per share
GERON CORPORATION
STOCK PURCHASE WARRANT
Registered Owner:
This warrant is a duly authorized warrant (the "Warrant") of Geron
Corporation, a Delaware corporation (the "Company") referred to in the
Securities Purchase Agreement (the "Purchase Agreement") dated as of September
30, 1999 by and between the Company and the Purchaser (as defined in the
Purchase Agreement). This Warrant is subject to the terms and conditions of the
Purchase Agreement, a copy of which is on file at and may be obtained from the
Company at its principal office at the address set forth in Section 11 hereof.
This certifies that, for value received 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, RGC International Investors, LDC,
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 1,000,000 shares of common Stock, subject to
adjustment from time to time as set forth in paragraph 6 below. Until the
earlier of the Authorization Date and March 31, 2000, the Registered Owner of
the Warrant shall not, without the prior written consent of the Company, convert
the Warrant into a number of shares of Common Stock in excess of the number of
shares of Common Stock the Company has reserved for issuance pursuant to the
terms of the Warrant (but in no event shall such number of shares reserved be
less than 1,189,009). The Company shall at all times (i) from the Closing Date
(as defined in the Purchase Agreement) through and including the Authorization
Date (as defined in the Purchase Agreement), reserve a minimum of
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1,189,009 shares of its authorized but unissued Common Stock to satisfy the
exercise or purchase rights under this Warrant and the conversion or purchase
rights under the Debentures (as defined below) and (ii) after the Authorization
Date, reserve and hold available such number of shares of Common Stock
sufficient to satisfy all conversion and purchase rights represented by
outstanding convertible securities, options and warrants, including this
Warrant. For this Warrant, such number of shares shall be equal to 125% of the
shares for which it may then be exercised. 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.
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 $12.50 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 120th day after the date of issuance of this Warrant, all of the
Registerable Securities (as defined in the Registration Rights Agreement)
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.
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4. EXERCISE PERIOD. This Warrant may be exercised at any time and from time
to time during the period beginning on September 30, 1999 and up to and
including the date which is 540 days after the Authorization Date (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 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. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.
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 Closing Date (as defined in the Purchase Agreement) through
and including the date which is 12 months from the Authorization Date, 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
$10.00, 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 $10.00 per
share. 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
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(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; provided, however, that if (X) (1) the Registration
Statement (as defined in the Registration Rights Agreement) is then in effect
and has been in effect and sales of all of the Registrable Securities (as
defined in the Registration Rights Agreement) can be made thereunder for at
least twenty (20) Trading Days prior to a Trigger Date (as defined below); (2)
the Company has, at all times prior to the Trigger Date, a sufficient number of
authorized shares of Common Stock reserved for issuance upon full conversion of
all of the Securities (as defined in the Purchase Agreement) issued pursuant to
the Purchase Agreement; and (3) no Event of Default shall have occurred and be
continuing; and (Y) the Per Share Market Value is greater than 150% of the
Conversion Price (as defined in the debentures issued pursuant to the Purchase
Agreement (the "Debentures")) in effect on the Closing Date for any five (5)
consecutive Trading Days prior to the 180th day following the Authorization Date
(the last day of such five (5) consecutive Trading Day period being referred to
herein as the "Trigger Date"), then this provision shall expire automatically on
the 180th day following the Authorization Date.
(c) Subscription Rights. If the Company, during the period commencing
on the Closing Date (as defined in the Purchase Agreement) through and including
the date which is 12 months from the Authorization Date, 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; provided, however,
that if (X) (1) the Registration Statement (as defined in the Registration
Rights Agreement) is then in
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effect and has been in effect and sales of all of the Registrable Securities (as
defined in the Registration Rights Agreement) can be made thereunder for at
least twenty (20) Trading Days prior to a Trigger Date; (2) the Company has, at
all times prior to the Trigger Date, a sufficient number of authorized shares of
Common Stock reserved for issuance upon full conversion of all of the Securities
(as defined in the Purchase Agreement) issued pursuant to the Purchase
Agreement; and (3) no Event of Default shall have occurred and be continuing;
and (Y) the Per Share Market Value is greater than 150% of the Conversion Price
(as defined in the Debentures) in effect on the Closing Date for any five (5)
consecutive Trading Days prior to the 180th day following the Authorization
Date, then this provision shall expire automatically on the 180th day following
the Authorization Date.
(d) Rounding. All calculations under this section 6 shall be made to
the nearest cent or the nearest l/l00th of a share, as the case may be.
(e) Notice of Adjustment. Whenever the Exercise Price is adjusted
pursuant to paragraphs 6(a), (b), (c) or (h), 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. Upon each adjustment of the Exercise Price pursuant paragraphs 6(a),
(b), (c) or (h), the number of shares of Common Stock issuable upon exercise of
this Warrant shall be adjusted by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.
(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 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, 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 3(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 (10) 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
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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;
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 thirty
(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 betaken, 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 Closing Date (as defined in the Purchase Agreement) through
and including the date which is 12 months from the Authorization Date, 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
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Exercise Price will be subject to adjustment from time to time as provided in
this Section 6(h); provided, however, that if (X) (1) the Registration Statement
(as defined in the Registration Rights Agreement) is then in effect and has been
in effect and sales of all of the Registrable Securities (as defined in the
Registration Rights Agreement) can be made thereunder for at least twenty (20)
Trading Days prior to a Trigger Date; (2) the Company has, at all times prior to
the Trigger Date, a sufficient number of authorized shares of Common Stock
reserved for issuance upon full conversion of all of the Securities (as defined
in the Purchase Agreement) issued pursuant to the Purchase Agreement; and (3) no
Event of Default shall have occurred and be continuing; and (Y) the Per Share
Market Value is greater than 150% of the Conversion Price (as defined in the
Debentures) in effect on the Closing Date for any five (5) consecutive Trading
Days prior to the 180th day following the Authorization Date, then this
provision shall expire automatically on the 180th day following the
Authorization Date:
(i) Adjustment of Exercise Price upon Issuance of Common Stock. If,
during the period commencing on the Closing Date (as defined in the
Purchase Agreement) through and including the date which is 12 months from
the Authorization Date, the Company issues or sells, or is deemed to have
issued or sold, any shares of Common Stock (other than the Debenture Shares
or Warrant Shares (each as defined in the Purchase Agreement) or shares of
Common Stock deemed to have been issued by the Company in connection with a
Stock Plan (as defined below), shares of Common Stock issuable upon the
exercise of any options or warrants outstanding on the date hereof or upon
conversion of convertible securities outstanding on the date hereof, in
each case as 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 $10.00, 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 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, during the period commencing on the Closing Date (as defined in
the Purchase Agreement) through and including the date which is 12 months from
the Authorization Date, the Company issues or sells, or is deemed to have issued
or sold, any shares of Common Stock (other than Debenture Shares or Warrant
Shares, shares of Common Stock deemed to have been issued by the Company in
connection with a 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
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under this Section 6(h)(i), the following shall be applicable:
(A) Issuance of Options. If, during the period commencing on the
Closing Date (as defined in the Purchase Agreement) through and including
the date which is 12 months from the Authorization Date, 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 Debenture Shares or Warrant Shares or shares
of Common Stock deemed to have been issued by the Company in connection
with a Stock Plan, shares of Common Stock issuable upon the exercise of any
options or warrants outstanding on the date hereof or upon conversion of
convertible securities outstanding on the date hereof, in each case as
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 $10.00, 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, during the period
commencing on the Closing Date (as defined in the Purchase Agreement)
through and including the date which is 12 months from the Authorization
Date, 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
Debenture Shares or Warrant Shares or shares of Common Stock deemed to have
been issued by the Company in connection with a Stock Plan, shares of
Common Stock issuable upon the exercise of any options or warrants
outstanding on the date hereof or upon conversion of convertible securities
outstanding on the date hereof, in each case as 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 $10.00, then the Exercise Price
shall be reduced to equal 120% of the New Convertible Price.
(C) Change in Option Price or Rate of Conversion. If there is a change
during the period commencing on the Closing Date (as defined in the
Purchase Agreement) through and including the date which is 12 months from
the Authorization Date 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
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(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) "Stock Plan" means any stock or compensation plan pursuant to
which Common Stock may be issued to any employee, officer, director or
consultant of the Company which is either (a) approved by the stockholders
of the Company or (b) approved by the compensation committee of the
Company's Board of Directors for legitimate compensation purposes which
provides for the purchase of the Common Stock at a purchase price of no
less than 85% of the market price of the Common Stock on the date of
issuance of such option, warrant or security.
(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.
(E) [INTENTIONALLY OMITTED]
(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
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of 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 Warrant
Shares 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).
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. RESTRICTION ON EXERCISE BY THE REGISTERED OWNER. Notwithstanding
anything in this Warrant to the contrary, in no event shall the Holder of this
Warrant be entitled to exercise a number of Warrants (or portions thereof) in
excess of the number of Warrants (or portions thereof) upon exercise of which
the sum of (i) the number of shares of Common Stock beneficially
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owned by the Holder and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unexercised
Warrants and the unexercised or unconverted portion of any other securities of
the Company (including the Debentures) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being made,
would result in beneficial ownership by the Holder and its affiliates of more
than 9.9% of the outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
(i) hereof.
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
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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 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 September 30, 1999, by and between the Company and the Purchaser (as
defined in the Purchase Agreement).
"Redemption Event" has the meaning assigned to it in Section 6(f) hereof.
"Registered Owner" means RGC International Investors, LDC, 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 September 30, 1999, by and between the Company and the
Initial Investor (as defined in the Registration Rights Agreement).
"Trading Day(s)" means any day on which the primary market on which shares
of Common Stock are listed is open for trading.
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. [INTENTIONALLY OMITTED]
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 with copies to Xxxxxx Godward LLP, 0 Xxxx Xxxx
Xxxxxx, 0000 Xx Xxxxxx Xxxx, Xxxx Xxxx, XX 00000 attn: Xxxx X. Xxxxxxxxx, Esq.,
fax no. (000) 000-0000 and (ii) if to any Registered Owner to the address set
forth immediately below such Registered Owner's name on the signature pages to
the Purchase Agreement or such other address as may be designated in writing
hereafter, in the same manner, by such Person.
12. REMEDIES. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Registered Owner, or
assigns, by vitiating the intent
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and purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for breach of its obligations hereunder will
be inadequate and agrees, in the event of a breach or threatened breach by the
Company of any of the provisions hereunder, that the Registered Owner, or
assigns, shall be entitled, in addition to all other available remedies in law
or in equity, to an injunction or injunctions to prevent or cure breaches of the
provisions of this Security and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or
other security being required.
13. ALLOCATION OF RESERVED SHARES. Prior to the Authorization Date, the
holder of this Warrant shall not transfer this Warrant, or any portion thereof,
without obtaining a prior written agreement with such transferee as to the
allocation of shares of Common Stock reserved for issuance upon exercise of this
Warrant and upon conversion of the Debentures and providing notice to the
Company thereof.
[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: /s/ Xxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President, Finance
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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 September 30, 1999;
(2) encloses a payment of $__________ for these shares at a price of $12.50 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. The undersigned
represents that it is an accredited investor within the meaning of Regulation D
under the Securities Act.
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.
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