<PAGE>   1
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 1996
 
                                                     REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                             ---------------------
 
                               GERON CORPORATION
             (Exact name of registrant as specified in its charter)
 

<TABLE>
<S>                            <C>                            <C>
           DELAWARE                         2834                        75-2287752
 (State or other jurisdiction   (Primary Standard Industrial         (I.R.S. Employer
               of               Classification Code Number)       Identification Number)
incorporation or organization)
</TABLE>

 
                             ---------------------
                             200 CONSTITUTION DRIVE
                          MENLO PARK, CALIFORNIA 94025
                                 (415) 473-7700
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)
 
                               RONALD W. EASTMAN
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                               GERON CORPORATION
                             200 CONSTITUTION DRIVE
                          MENLO PARK, CALIFORNIA 94025
                                 (415) 473-7700
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                             ---------------------
                                   Copies to:
 

<TABLE>
<S>                                            <C>
               JOSHUA L. GREEN                                JEROME L. COBEN
             EDGAR B. CALE, III                            Skadden, Arps, Slate,
              Venture Law Group                               Meagher & Flom
         A Professional Corporation                       300 South Grand Avenue
             2800 Sand Hill Road                       Los Angeles, California 90071
        Menlo Park, California 94025                          (213) 687-5000
               (415) 854-4488
</TABLE>

 
                             ---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  As soon as
practicable after the Registration Statement becomes effective.
 
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
 
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                             ---------------------

                        CALCULATION OF REGISTRATION FEE
 

<TABLE>
<S>                            <C>              <C>              <C>              <C>
                                                                 PROPOSED MAXIMUM
     TITLE OF EACH CLASS                        PROPOSED MAXIMUM    AGGREGATE
        OF SECURITIES            AMOUNT TO BE    OFFERING PRICE      OFFERING        AMOUNT OF
       TO BE REGISTERED         REGISTERED(1)     PER SHARE(2)       PRICE(2)     REGISTRATION FEE
Common Stock, $0.001 par value
  per share...................    2,875,000          $13.00        $37,375,000        $12,888
</TABLE>

 
(1) Includes 375,000 shares which the Underwriters have the option to purchase
    to cover over-allotments, if any.
 
(2) Estimated solely for the purpose of computing the amount of the registration
    fee pursuant to Rule 457(a).
                             ---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>   2
 
                               GERON CORPORATION
 
                             CROSS REFERENCE SHEET
 
                   PURSUANT TO ITEM 501(B) OF REGULATION S-K
                 SHOWING LOCATION IN PROSPECTUS OF INFORMATION
                    REQUIRED BY ITEMS IN PART I OF FORM S-1
 

<TABLE>
<CAPTION>
        ITEM NUMBER AND HEADING IN FORM S-1
              REGISTRATION STATEMENT                           LOCATION IN PROSPECTUS
- ---------------------------------------------------  ------------------------------------------
<C>   <S>                                            <C>
 1.   Forepart of Registration Statement and
        Outside Front Cover Page of Prospectus.....  Outside Front Cover Page; Front of
                                                     Registration Statement
 2.   Inside Front and Outside Back Cover Pages of
        Prospectus.................................  Inside Front and Outside Back Cover Pages
 3.   Summary Information, Risk Factors and Ratio
        of Earnings to Fixed Charges...............  Prospectus Summary; Risk Factors; The
                                                       Company
 4.   Use of Proceeds..............................  Use of Proceeds
 5.   Determination of Offering Price..............  Underwriting
 6.   Dilution.....................................  Dilution
 7.   Selling Security Holders.....................  Not Applicable
 8.   Plan of Distribution.........................  Outside and Inside Front Cover Pages;
                                                       Underwriting; Outside Back Cover Page
 9.   Description of Securities to Be Registered...  Prospectus Summary; Dividend Policy;
                                                       Capitalization; Description of Capital
                                                       Stock; Shares Eligible for Future Sale
10.   Interests of Named Experts and Counsel.......  Legal Matters
11.   Information with Respect to the Registrant...  Outside and Inside Front Cover Pages;
                                                       Prospectus Summary; Risk Factors;
                                                       Special Note Regarding Forward-Looking
                                                       Statements; Kyowa Hakko Direct
                                                       Placement; The Company; Use of Proceeds;
                                                       Dividend Policy; Capitalization;
                                                       Dilution; Selected Financial Data;

                                                       Management's Discussion and Analysis of
                                                       Financial Condition and Results of
                                                       Operations; Business; Management;
                                                       Investment Company Act Considerations;
                                                       Certain Transactions; Principal
                                                       Stockholders; Description of Capital
                                                       Stock; Shares Eligible for Future Sale;
                                                       Underwriting; Legal Matters; Experts;
                                                       Additional Information; Financial
                                                       Statements
12.   Disclosure of Commission Position on
        Indemnification for Securities Act
        Liabilities................................  Not Applicable
</TABLE>


<PAGE>   3
 
     INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
     REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
     SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
     MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
     BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
     THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
     SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
     UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
     OF ANY SUCH STATE.
 
PROSPECTUS                   Subject to Completion
                                 Dated June 12,
1996
 
2,500,000 Shares
 
[LOGO]
 
Common Stock
(par value $0.001 per share)
 
All of the Common Stock ("Common Stock") offered hereby is being offered by
Geron Corporation, a Delaware corporation ("Geron" or the "Company").
 
Prior to the Offering, there has been no public market for the Common Stock. It
is currently anticipated that the initial public offering price of the Common
Stock will be between $11.00 and $13.00 per share. See "Underwriting" for
information relating to the factors to be considered in determining the initial
public offering price of the Common Stock. Application has been made to have the
Common Stock quoted on the Nasdaq National Market under the symbol "GERN."
 
Kyowa Hakko Kogyo Co., Ltd. ("Kyowa Hakko"), a collaborative partner of the
Company, has committed to purchase $2,500,000 of Common Stock at the initial
public offering price (208,333 shares of Common Stock at an assumed initial
public offering price of $12.00 per share) in a private placement that will
close simultaneously with the closing of the Offering. The Underwriters are not
involved in the sale of shares of Common Stock to Kyowa Hakko. See "Kyowa Hakko
Direct Placement."
 
SEE "RISK FACTORS" COMMENCING ON PAGE 7 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
 

<TABLE>
<S>                                             <C>             <C>             <C>
- ------------------------------------------------------------------------------------------------
                                                    PRICE TO      UNDERWRITING    PROCEEDS TO
                                                     PUBLIC       DISCOUNT (1)    COMPANY (2)
- ------------------------------------------------------------------------------------------------
Per Share                                              $               $               $
- ------------------------------------------------------------------------------------------------
Total (3)                                              $               $               $
- ------------------------------------------------------------------------------------------------
</TABLE>

 
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
See "Underwriting."
 
(2) Before deducting expenses of the Offering payable by the Company estimated
at $          .
 
(3) The Company has granted to the Underwriters an option, exercisable within 30
days after the date of this Prospectus, to purchase up to an additional 375,000
shares of Common Stock on the same terms as set forth above, solely to cover
over-allotments, if any. If such option is exercised in full, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $          ,
$          and $          , respectively. See "Underwriting."
 
The shares of Common Stock offered by this Prospectus are being offered by the
Underwriters, subject to prior sale, when, as and if delivered to and accepted
by the Underwriters, and subject to approval of certain legal matters by
Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriters. It is
expected that delivery of the shares of Common Stock offered hereby will be made
against payment therefor on or about                     , 1996 at the offices
of J.P. Morgan Securities Inc., 60 Wall Street, New York, New York.
 
J.P.  MORGAN & CO.
                        MONTGOMERY SECURITIES
                                                 SALOMON BROTHERS INC
            , 1996

<PAGE>   4
 
                                   [GRAPHICS]
 
                                        2

<PAGE>   5
 
No person has been authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any Underwriter. This Prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, the Common Stock in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Company subsequent to the date hereof.
 
No action has been or will be taken in any jurisdiction by the Company or by any
Underwriter that would permit a public offering of the Common Stock or
possession or distribution of this Prospectus in any jurisdiction where action
for the purpose is required, other than in the United States. Persons into whose
possession this Prospectus comes are required by the Company and the
Underwriters to inform themselves about and to observe any restrictions as to
the offering of the Common Stock and the distribution of this Prospectus.
 
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                             PAGE
<S>                                          <C>
Prospectus Summary.........................     4
Risk Factors...............................     7
Special Note Regarding Forward-Looking
  Statements...............................    14
Kyowa Hakko Direct Placement...............    14
The Company................................    14
Use of Proceeds............................    14
Dividend Policy............................    14
Capitalization.............................    15
Dilution...................................    16
Selected Financial Data....................    17

Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...............................    18
 
<CAPTION>
                                             PAGE
<S>                                          <C>
 
Business...................................    21
Management.................................    34
Investment Company Act Considerations......    42
Certain Transactions.......................    43
Principal Stockholders.....................    45
Description of Capital Stock...............    47
Shares Eligible for Future Sale............    48
Underwriting...............................    50
Legal Matters..............................    51
Experts....................................    51
Additional Information.....................    51
Index to Financial Statements..............   F-1
</TABLE>

 
UNTIL            , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
The Company intends to furnish its stockholders with annual reports containing
audited financial statements examined by its independent auditors and will make
available quarterly reports containing interim unaudited financial statements
for each of the first three quarters of each fiscal year.
 
Geron and the Geron logo are trademarks of the Company. All other brand names or
trademarks appearing in this Prospectus are the property of their respective
holders.
 
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SEE "UNDERWRITING."
 
                                        3

<PAGE>   6
 

                               PROSPECTUS SUMMARY
 
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements, and
notes thereto, appearing elsewhere in this Prospectus. Except as otherwise noted
herein, all information in this Prospectus (i) assumes no exercise of the
Underwriters' over-allotment option, (ii) assumes the issuance of shares of
Common Stock with an aggregate purchase price equal to $2.5 million (208,333
shares at an assumed initial public offering price of $12.00 per share) to Kyowa
Hakko Kogyo Co., Ltd. ("Kyowa Hakko") in a private placement that will close
simultaneously with the closing of the Offering ("the Kyowa Hakko Direct
Placement"), (iii) assumes the issuance of 7,805 shares of Common Stock to be
issued upon the net exercise of 12,055 outstanding warrants upon the closing of
the Offering at an assumed initial public offering price of $12.00 per share,
(iv) assumes the filing of the Company's Amended and Restated Certificate of
Incorporation, authorizing a class of 3,000,000 shares of undesignated Preferred
Stock and effecting the 1-for-3.4 reverse stock split with respect to the Common
Stock and (v) reflects the conversion of all outstanding shares of the Company's
Preferred Stock, in accordance with the terms thereof, into shares of Common
Stock upon the closing of the Offering.
 

                                  THE COMPANY
 
Geron is a biopharmaceutical company exclusively focused on discovering and
developing therapeutic and diagnostic products based upon common biological
mechanisms underlying cancer and other age-related diseases. As the pioneer in
researching these mechanisms, the Company focuses on telomeres, which are
structures at the ends of chromosomes that the Company has shown act as a
molecular "clock" of cellular aging, and telomerase, an enzyme which appears to
stop the "clock" and lead to cellular immortality. The Company and its
collaborators have established that these mechanisms play a role in cancer and
many other age-related diseases and conditions, and thus the Company believes it
has a broadly applicable, proprietary platform for discovering and developing
novel small molecule therapeutics and diagnostics for such diseases. The most
advanced of the Company's three therapeutic programs is in the area of
telomerase inhibition for the treatment of cancer. Geron will continue to build
upon its leadership position in the field of telomere biology and telomerase
regulation by selectively collaborating with companies and research institutions
and by aggressively pursuing an extensive patent portfolio. The Company owns or
has certain exclusive rights to three issued United States patents and 52 United
States patent applications.
 
Cancer and other age-related diseases and conditions, including skin aging,
atherosclerosis, osteoporosis and Alzheimer's disease, are difficult and costly
to diagnose and treat. In many cases, entirely effective means of treating and
diagnosing these diseases and conditions are not currently available. Further,
with the progressive "graying" of the population, the incidence of cancer and
other age-related diseases and conditions is expected to increase and to place a
steadily growing financial burden on the health care system. Significant
improvements in the treatment and diagnosis of these diseases and conditions are
expected to offer attractive commercial opportunities.
 
Geron's scientific approach focuses on telomere shortening and telomerase
regulation as common biological mechanisms underlying cancer and other
age-related diseases and conditions. Geron and its collaborators have
demonstrated both in vivo and in vitro that telomeres, the repeated sequences of
DNA located at the ends of chromosomes, shorten throughout a normal cell's
replicative lifespan. The Company and its collaborators have also shown that
when telomeres reach a certain short length, cells stop dividing and become
senescent. Senescent cells display an altered pattern of gene expression
relative to replicatively young cells that leads to an imbalance in the
production of proteins and other cell products. This imbalance, which occurs in
many tissues throughout the body, can have a direct and destructive effect on
surrounding tissues and appears to contribute to age-related diseases and
conditions.
 
Cancer cells escape senescence and maintain an extended ability to divide
through mutations. Geron and its collaborators have shown that for most
cancerous tumors to attain life threatening size, or for cancer to metastasize
throughout the body, cancer cells must become immortal through an alteration
which prevents their telomeres from shortening with each division. In almost all
cases examined to date, a germ line enzyme called telomerase is abnormally
reactivated in these cancer cells to repair their telomeres with each cell
division, thereby conferring cellular immortality. Geron has shown telomerase to
be present in all of the over 20 types of cancer that it has studied, including
breast, prostate, lung, colon, and bladder cancers. The Company believes that
telomerase inhibition has the potential to be a universal and highly specific
cancer therapy. Geron has identified several series of small molecule compounds
that selectively inhibit telomerase.
 
                                        4

<PAGE>   7
 
In order to develop novel therapeutic and diagnostic products, the Company is
focused on three programs:
 
- - Telomerase Inhibition and Detection Geron's goal is to develop both small
  molecule telomerase inhibitors as potentially universal and highly specific
  cancer therapies and telomerase assays for the detection of cancer. Geron has
  demonstrated in vitro with a small molecule compound that telomerase
  inhibition results in renewed telomere shortening in cancer cells and eventual
  cancer cell death. Geron is currently optimizing a number of small molecule
  compounds as potential telomerase inhibitors in order to select a lead
  compound for preclinical development. With one of its collaborators, the
  Company has initiated studies of these small molecule compounds in animal
  models of human tumor growth. The Company has established a research and
  development collaboration with Kyowa Hakko, a leading oncology company in
  Japan, for the development and commercialization in certain Asian countries of
  a telomerase inhibitor for the treatment of cancer. The Company has retained
  all rights to a telomerase inhibitor outside these countries.
 
  The Company believes that telomerase is a universal and highly specific marker
  of cancer and that its detection and quantification may have significant
  clinical utility for cancer diagnosis, prognosis, monitoring and screening. In
  the research use only market, the Company has licensed its telomerase
  detection technologies to Oncor, Inc., Boehringer Mannheim and Dako
  Corporation. In May 1996, Oncor began commercial sale of the Company's
  proprietary Telomeric Repeat Amplification Protocol ("TRAP") assay for use in
  cancer research. The Company has also established collaborations with Dianon
  Systems, Inc. and Ventana Medical Systems, Inc. primarily for additional
  technology development and clinical assessment.
 
- - Cell Senescence Modulation Geron seeks to develop therapeutics to treat
  age-related diseases and conditions through modulation of the biological
  processes leading to and regulating cell senescence. The Company is pursuing
  two distinct approaches to modulate cell senescence. The objective of the Cell
  Lifespan Extension program is to slow telomere loss, thereby extending the
  period of normal cell replication and delaying the destructive onset of cell
  senescence. Geron and its collaborators have demonstrated that telomere length
  and replicative senescence can be modulated with synthetic compounds. This
  research is initially directed at T cell therapy and bone marrow
  transplantation applications. The Genomics of Aging program applies
  proprietary genomics techniques to target and modulate the destructive genetic
  changes that occur in senescent cells. The Company has identified genes that
  are differentially expressed by replicatively young versus senescent cells and
  mortal versus immortal cells. This program is initially focused on skin aging
  and atherosclerosis.
 
- - Primordial Stem Cell Therapies Geron seeks to generate a broad array of cell
  types from primordial stem cells ("PS cells") for cellular transplantation. PS
  cells are germ line cells that are unique in that they are both immortal,
  consistent with their normal telomerase expression, and capable of
  differentiation into any and all types of cells and tissues in the body. The
  Company is in the early stages of research directed towards growing and
  differentiating PS cells. This program is initially focused on differentiating
  PS cells into cardiomyocytes for the treatment of congestive heart failure and
  neurons for the treatment of Parkinson's disease.
 
The Company's strategy combines the following key elements: focusing on
fundamental mechanisms of cellular aging and cellular immortality to treat
cancer and other age-related diseases and conditions; developing high value
programs based on its common scientific platform; selectively pursuing strategic
collaborations; retaining the ability to develop and market products
independently; and enhancing its proprietary leadership position in the field.
 

                                  RISK FACTORS
 
Prospective investors should carefully consider "Risk Factors" immediately
following this Prospectus Summary.
 
                                  THE OFFERING
 

<TABLE>
<S>                                                 <C>
COMMON STOCK OFFERED..............................  2,500,000 shares
COMMON STOCK TO BE OUTSTANDING AFTER
  THE OFFERING(1).................................  10,191,905 shares
USE OF PROCEEDS BY THE COMPANY....................  For research and development, acquisition of laboratory
                                                    and other equipment, working capital and other general
                                                    corporate purposes. See "Use of Proceeds."
PROPOSED NASDAQ NATIONAL MARKET SYMBOL............  "GERN"
</TABLE>

 
- ---------------
 
(1) Based on shares outstanding as of May 31, 1996. Includes (i) shares of
Common Stock with an aggregate purchase price equal to $2.5 million (208,333
shares of Common Stock at an assumed initial public offering price of $12.00 per
share) to be issued in the Kyowa Hakko Direct Placement and (ii) 7,805 shares of
Common Stock to be issued upon the assumed net exercise of 12,055 outstanding
warrants upon the closing of the Offering, based on an assumed initial public
offering price of $12.00 per share. Does not include (i) 1,437,977 shares of
Common Stock issuable upon exercise of options outstanding as of May 31, 1996,
(ii) 56,248 shares of Common Stock issuable upon exercise of outstanding
warrants expected to remain outstanding after the Offering and (iii) an
aggregate of 1,080,781 shares of Common Stock reserved for future grant under
the Company's 1992 Stock Option Plan, 1996 Directors' Stock Option Plan and 1996
Employee Stock Purchase Plan. See "Capitalization," "Management -- Stock Plans,"
"Description of Capital Stock" and Notes 6 and 10 of Notes to Financial
Statements.
 
                                        5

<PAGE>   8
 
                             SUMMARY FINANCIAL DATA
 

<TABLE>
<CAPTION>
                                                ------------------------------------------------------------
<S>                                             <C>       <C>       <C>        <C>         <C>       <C>
                                                INCEPTION
                                                (NOVEMBER
                                                28,
                                                  1990)
                                                     TO                                                THREE
                                                DECEMBER                  YEARS ENDED DECEMBER 31,    MONTHS
Dollars in thousands, except share and per      31,       ----------------------------------------     ENDED
share data                                         1991      1992       1993      1994        1995   -------
                                                -------   -------   --------   -------     -------
                                                                                                        1995
                                                                                                     -------
STATEMENT OF OPERATIONS DATA:
Revenues -- contract..........................  $    --   $    --   $     --   $    --     $ 5,490   $    --
Operating expenses:
  Research and development....................       47       726      3,975     8,099      11,321     2,455
  General and administrative..................       52       661      2,220     2,397       2,888       573
                                                 ------    ------     ------    ------      ------    ------
     Total operating expenses.................       99     1,387      6,195    10,496      14,209     3,028
                                                 ------    ------     ------    ------      ------    ------
Loss from operations..........................      (99)   (1,387)    (6,195)  (10,496)     (8,719)   (3,028)
Interest and other income.....................        2        27        351       638         919       167
Interest and other expense....................       --        --       (103)     (320)       (399)      (93)
                                                 ------    ------     ------    ------      ------    ------
  Net loss....................................  $   (97)  $(1,360)  $ (5,947)  $(10,178)   $(8,199)  $(2,954)
                                                 ======    ======     ======    ======      ======    ======
Pro forma net loss per share (1)..............                                             $ (1.03)
Shares used in computing pro forma net loss
  per share (1)...............................                                             7,954,863
</TABLE>

 

<TABLE>
<CAPTION>
                                                                                ----------------------------
<S>                                                                             <C>          <C>
                                                                                       MARCH 31, 1996
                                                                                ----------------------------
                                                                                  ACTUAL
                                                                                --------
Dollars in thousands                                                                         AS ADJUSTED (2)
                                                                                             ---------------
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments.............................  $ 13,939        $  43,539
Working capital...............................................................    12,490           42,090
Total assets..................................................................    18,101           47,701
Noncurrent portion of capital lease obligations and equipment loans...........     1,471            1,471
Accumulated deficit...........................................................   (28,221)         (28,221)
Total stockholders' equity....................................................    14,662           44,262
</TABLE>

 
- ---------------
(1) See Note 1 of Notes to Financial Statements for information concerning
calculation of pro forma net loss per share.
(2) Adjusted to reflect (i) the sale of 2,500,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $12.00 per share, after
deducting estimated underwriting discounts and offering expenses, (ii) the
issuance of shares of Common Stock with an aggregate purchase price equal to
$2.5 million (208,333 shares at an assumed initial public offering price of
$12.00 per share) in the Kyowa Hakko Direct Placement and (iii) the issuance of
7,805 shares of Common Stock upon the assumed net exercise of 12,055 outstanding
warrants upon the closing of the Offering at an assumed initial public offering
price of $12.00 per share, and the application of the estimated net proceeds
therefrom. See "Use of Proceeds."
 
                                        6

<PAGE>   9
 

                                  RISK FACTORS
 
An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Accordingly, prospective investors should consider carefully the
following factors, together with the information contained in this Prospectus,
in evaluating the Company and its business before purchasing the shares of
Common Stock offered hereby. This Prospectus contains forward-looking statements
that involve risk and uncertainty. Actual results and the timing of certain
events could differ materially from those projected in the forward-looking
statements as a result of the risk factors set forth below and other factors
discussed elsewhere in this Prospectus. See "Special Note Regarding
Forward-Looking Statements."
 
TECHNOLOGICAL UNCERTAINTY
 
The study of the mechanisms of cellular aging and cellular immortality,
including telomere biology and telomerase, is a relatively new area of research,
and there can be no assurance that this research will lead to the discovery or
development of any therapeutic or diagnostic product. If and when potential lead
drug compounds or product candidates are identified through the Company's
research programs, they will require significant preclinical and clinical
testing prior to regulatory clearance in the United States and elsewhere, and
there can be no assurance that any of these efforts will result in a product
that can be marketed. Because of the significant additional scientific,
regulatory and commercial milestones necessary for the Company's research
programs to be successful, there can be no assurance that any program will not
be abandoned after significant resources have been expended. The abandonment of
any research program could have a material adverse effect on the Company.
 
As a result of its drug discovery efforts to date, the Company has identified
compounds in in vitro studies that demonstrate potential for inhibiting
telomerase in vivo. However, additional development efforts will be required
prior to the selection of a lead compound for preclinical development and
clinical trials as a telomerase inhibitor for cancer. Once selected, the
Company's lead compound may prove to have undesirable and unintended side
effects or other characteristics affecting its efficacy or safety that may
prevent or limit its commercial use. For example, telomerase is active in
reproductive cells and transiently expressed in certain hematopoietic (blood),
skin and gastrointestinal cells. There can be no assurance that any product
based on the inhibition of telomerase will not adversely affect such cells and
result in unacceptable side effects. In addition, it is expected that telomerase
inhibition will have delayed efficacy as telomeres resume normal shortening and,
as a result, will in most cases be used in conjunction with traditional cancer
therapies. The abandonment of the Telomerase Inhibition and Detection program
would have a material adverse effect on the Company.
 
With respect to the development and commercial application of the Company's
proprietary telomerase detection technology, there is, as yet, insufficient
clinical data to confirm its full utility to diagnose, prognose, monitor or
screen for cancer. Although the Company's licensee, Oncor, Inc. has commenced
the sale of a diagnostic kit for research use, additional development work and
regulatory consents will be necessary prior to the introduction of tests for
clinical use. The Company's Cell Lifespan Extension program, designed to
modulate telomere length, is at an early stage of development. While telomere
length and replicative capacity have been extended in vitro, there can be no
assurance that the Company will discover a compound that will modulate telomere
length or increase replicative capacity effectively for clinical use. With
respect to the Company's Genomics of Aging program, the Company has identified
certain genes that are expressed differentially in senescent cells versus
replicatively young cells. However, the Company has not identified any compounds
that have been demonstrated to modulate such gene expression, and there can be
no assurance that any such compound will be discovered or developed. The
Company's Primordial Stem Cell program is also at a very early stage. While
primate PS cells have recently been isolated and allowed to differentiate into
numerous cell types, there can be no assurance that the Company's efforts in
this program will result in any commercial applications.
 
The Company may become aware of technology controlled by third parties that is
advantageous to the Company's business. There can be no assurance that the
Company will be able to acquire or license such technology on reasonable terms,
if at all. In the event that the Company is unable to acquire such technology,
the Company may be required to expend significant time and resources to develop
similar technology, and there can be no assurance that it will be successful in
this regard. If the Company cannot acquire or develop necessary technology, it
may be prevented from pursuing its business objectives. Moreover, a competitor
of the Company could acquire or license such technology. Any such event would
have a material adverse effect on the Company. See "Business -- Research
Programs" and "-- Patents, Proprietary Technology and Trade Secrets."
 
EARLY STAGE OF DEVELOPMENT
 
Geron is at an early stage in the development of therapeutic and diagnostic
products. The Company has not yet selected a lead compound for any of its drug
development programs. In order to identify and select such a compound, it must
have access to sufficient numbers of chemical compounds and resources, of which
there can be no assurance. Products that may result from the Company's research
and development programs are not expected to be commercially available for a
significant number of years, if at all. The Company's program to identify a
telomerase inhibitor is currently at the drug discovery stage, while the
Company's other programs are currently focused on research efforts prior to drug
discovery or preclinical development. It is difficult to predict when, if ever,
the Company will select a lead compound for drug development as a telomerase
inhibitor. In addition, there can be no assurance that the Company's other
programs will move beyond their current stage. Assuming the Company's research
advances and the Company is able
 
                                        7

<PAGE>   10
 
to identify and select a lead compound for telomerase inhibition, certain
preclinical development efforts will be necessary to determine whether the
potential product has sufficient safety to enter clinical trials. If such a
potential product receives authorization from the United States Food and Drug
Administration ("FDA") to enter clinical trials, then it may be subjected to a
multiphase, multicenter clinical study to determine its safety and efficacy. It
is not possible to predict the length or extent of clinical trials or the period
of any required patient follow-up, but it is presently expected to extend a
number of years. Assuming clinical trials of any potential product are
successful and other data are satisfactory, the Company will submit an
application to the FDA and appropriate regulatory bodies in other countries to
permit marketing of the product. Typically, the review process at the FDA takes
several years, and there can be no assurance that the FDA will clear the
Company's application or will not require additional clinical trials or other
data prior to clearance. Furthermore, even if such clearance is ultimately
obtained, delays in the clearance process could have a material adverse effect
on the Company. In addition, there can be no assurance that any potential
product will be capable of being produced in commercial quantities at a
reasonable cost or that such product will be successfully marketed. Based on the
foregoing, the Company does not anticipate being able to commence marketing of
any therapeutic products for many years, if at all. There can be no assurance
that any of the Company's product development efforts will be successfully
completed, that regulatory approvals will be obtained, or that the Company's
products, if any, will achieve market acceptance. See "Business -- Research
Programs" and "-- Government Regulation."
 
DEPENDENCE ON STRATEGIC AND RESEARCH COLLABORATIONS
 
The Company's strategy for the development, clinical testing and
commercialization of its products includes entering into collaborations with
corporate partners, licensors, licensees and others, and is dependent upon the
subsequent success of these other parties in performing their respective
responsibilities. The success of any collaboration depends on the continued
cooperation of its partners, as to which there can be no assurance. The amount
and timing of resources to be devoted to activities by its collaborators are not
within the direct control of the Company. There can be no assurance that such
partners will perform their obligations as expected or that the Company will
derive any revenue from such arrangements. There can also be no assurance that
the Company's current collaborators or any future collaborators will not pursue
existing or alternative technologies in preference to those being developed in
collaboration with the Company.
 
The Company currently has no manufacturing infrastructure and no marketing or
sales organization, and intends to rely in substantial part on its current and
future strategic partners for the manufacture of any product and the principal
marketing and sales responsibilities for any such product. To the extent that
the Company chooses not to or is unable to establish such arrangements, the
Company will require substantially greater capital to undertake its own
manufacturing, marketing and sales of any product.
 
In April 1995, the Company entered into a corporate collaboration with Kyowa
Hakko for the development and commercialization in certain Asian countries of a
telomerase inhibitor for the treatment of cancer (the "Kyowa Hakko Agreement").
Under the collaboration, Kyowa Hakko provides certain funding for the Company's
research and development activities and is responsible for all clinical,
regulatory, manufacturing, marketing and sales efforts and expenses in the
covered territory. The Kyowa Hakko Agreement provides that Kyowa Hakko will not
pursue research and development independent of its collaboration with Geron with
respect to telomerase inhibition for the treatment of cancer in humans until
April 24, 1999, at the earliest. The Kyowa Hakko Agreement provides in general
that, while Geron exercises significant control during the research phase, Kyowa
Hakko exercises significant control during the development and commercialization
phases of the collaboration. There can be no assurance that the collaboration
will be successful. The Company has also entered into licensing arrangements
with several diagnostic companies for the Company's telomerase detection
technology. However, because of their limitation to the research use only
market, such arrangements are not expected to generate significant commercial
revenues.
 
There can be no assurance that the Company will be able to negotiate additional
strategic arrangements in the future on acceptable terms, if at all, or that
such strategic arrangements will be successful. In the absence of such
arrangements, the Company may encounter significant delays in introducing any
product into certain markets or find that the research, development,
manufacture, marketing or sale of any product in such markets is adversely
affected. In the event that the Company does not enter into such arrangements,
it may be materially adversely affected.
 
The Company has relationships with collaborators and scientific advisors at
academic and other institutions, some of whom conduct research at the Company's
request. These collaborators and scientific advisors are not employees of the
Company and may have commitments to, or consulting or advisory contracts with,
other entities that may limit their availability to the Company. The Company has
limited control over the activities of these collaborators and advisors and,
except as otherwise required by its collaboration and consulting agreements, can
expect only limited amounts of their time to be dedicated to the Company's
activities. See "Business -- Research Programs," "-- Strategic Collaborations"
and "-- Research Collaborations."
 
                                        8

<PAGE>   11
 
DEPENDENCE ON PROPRIETARY TECHNOLOGY AND UNCERTAINTY OF PATENT PROTECTION
 
Geron's success will depend in part on its ability to obtain and enforce its
patents and maintain trade secrets, both in the United States and in other
countries. As of May 31, 1996, Geron owned, had licensed exclusively or held an
option to license exclusively three issued United States patents and 52 United
States patent applications, plus certain counterpart foreign patent
applications. The patent positions of pharmaceutical, biopharmaceutical and
biotechnology companies, including the Company, are highly uncertain and involve
complex legal and technical questions for which legal principles are not firmly
established. There can be no assurance that the Company has developed or will
continue to develop products or processes that are patentable or that patents
will issue from any of the pending applications, including patent applications
that have been allowed. There can also be no assurance that the Company's
current patents, or patents that issue on pending applications, will not be
challenged, invalidated or circumvented, or that the rights granted thereunder
will provide proprietary protection or competitive advantages to the Company.
Because (i) patent applications in the United States are maintained in secrecy
until patents issue, (ii) patent applications are not generally published until
many months or years after they are filed and (iii) publication of technological
developments in the scientific and patent literature often occurs long after the
date of such developments, the Company cannot be certain that it was the first
to invent the subject matter covered by the patent applications or that it was
the first to file patent applications for such inventions. Litigation to
establish the validity of patents, to defend against patent infringement claims
of others and to assert infringement claims against others can be expensive and
time consuming even if the outcome is favorable to the Company. If the outcome
of patent prosecution or litigation is unfavorable to the Company, the Company
could be materially adversely affected.
 
Patent law relating to the scope and enforceability of claims in the fields in
which the Company operates is still evolving. The degree of future protection
for the Company's proprietary rights, therefore, is highly uncertain. In this
regard, there can be no assurance that independent patents will issue from each
of the 52 United States patent applications referenced above, which include many
interrelated applications directed to common or related subject matter. The
Company is aware of certain patent applications that have been filed by others
with respect to telomerase and telomere length. In this regard, Iowa State
University has filed United States and corresponding foreign patent applications
claiming methods and reagents relating to the RNA component of human telomerase,
and Isis Pharmaceuticals, Inc. has filed United States and corresponding foreign
patent applications relating to oligonucleotide-like reagents asserted to have
telomere length modulating activity. In addition, there are a number of issued
patents and pending applications owned by others directed to differential
display, stem cell and other technologies relevant to the Company's research,
development and commercialization efforts. There can be no assurance that the
Company's technology can be developed and commercialized without a license to
such patents or that such patent applications will not be granted priority over
patent applications filed by the Company. Furthermore, there can be no assurance
that others will not independently develop similar or alternative technologies
to those of the Company, duplicate any of the Company's technologies, or design
around the patented technologies developed by the Company or its licensors, any
of which may have a material adverse effect on the Company.
 
The commercial success of the Company depends significantly on its ability to
operate without infringing patents and proprietary rights of others. There can
be no assurance that the Company's technologies do not and will not infringe the
patents or proprietary rights of others. In the event of such infringement, the
Company may be enjoined from pursuing research, development or commercialization
of its potential products or may be required to obtain licenses to these patents
or other proprietary rights or to develop or obtain alternative technologies.
There can be no assurance that the Company will be able to obtain alternative
technologies or any required license on commercially favorable terms, if at all,
and if any such license is or alternative technologies are not obtained, the
Company may be delayed or prevented from pursuing the development of certain of
its potential products. The Company's breach of an existing license or failure
to obtain or delay in obtaining alternative technologies or a license to any
technology that it may require to develop or commercialize its products may have
a material adverse effect on the Company.
 
Litigation, which could result in substantial costs to the Company, may also be
necessary to enforce any patents issued or licensed to the Company or to
determine the scope and validity of another's proprietary rights. There can be
no assurance that the Company's issued or licensed patents would be held valid
or infringed in a court of competent jurisdiction or that a patent held by
another will be held invalid or not infringed in such court. An adverse outcome
in litigation or an interference to determine priority or other proceeding in a
court or patent office could subject the Company to significant liabilities to
other parties, require disputed rights to be licensed from other parties or
require the Company to cease using such technology, any of which could have a
material adverse effect on the Company. In addition, the Company could incur
substantial costs if litigation is required to defend itself in patent suits
brought by third parties or if Geron initiates such suits.
 
Geron also relies on trade secrets to protect its proprietary technology,
especially in circumstances in which patent protection is not believed to be
appropriate or obtainable. Geron attempts to protect its proprietary technology
in part by confidentiality agreements with its employees, consultants and
certain contractors. There can be no assurance that these agreements will not be
breached, that the Company would have adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known or be independently
discovered by competitors.
 
                                        9

<PAGE>   12
 
The Company is party to various license agreements which give it rights to use
certain technologies in its research, development and commercialization
activities. Disputes have arisen and may continue to arise as to the
inventorship and corresponding rights in know-how and inventions resulting from
the joint creation or use of intellectual property by the Company and its
licensors, research collaborators and consultants. There can be no assurance
that the Company will be able to continue to license such technologies on
commercially reasonable terms, if at all, or to maintain the exclusivity of its
exclusive licenses. In this regard, the Company's license with the licensing arm
of the University of Wisconsin for the PS cells derived from primates is
currently exclusive for two years and non-exclusive thereafter. The failure of
the Company to maintain exclusive or other rights to such technologies could
have a material adverse effect on the Company. See "Business -- Patents,
Proprietary Technology and Trade Secrets."
 
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
 
The Company will require substantial capital resources in order to conduct its
operations. The Company's future capital requirements will depend on many
factors, including, among others, continued scientific progress in its research
and development programs; the magnitude and scope of these activities; the
ability of the Company to maintain and establish strategic arrangements for
research, development, clinical testing, manufacturing and marketing; progress
with preclinical and clinical trials; the time and costs involved in obtaining
regulatory consents; the costs involved in preparing, filing, prosecuting,
maintaining, defending and enforcing patent claims; or the potential for new
technologies and products. The Company intends to seek such additional funding
through collaborative arrangements, public or private equity or debt financings
and capital lease transactions; however, there can be no assurance that
additional financing will be available on acceptable terms, if at all.
Additional equity financings could result in significant dilution to
stockholders after this Offering. Further, in the event that additional funds
are obtained through arrangements with collaborative partners, such arrangements
may require the Company to relinquish rights to certain of its technologies,
product candidates or products that the Company would otherwise seek to develop
or commercialize itself. If sufficient capital is not available, the Company may
be required to delay, reduce the scope of or eliminate one or more of its
research or development programs, each of which would have a material adverse
effect on the Company. Based on current projections, the Company estimates that
its existing capital resources, including the net proceeds from the Offering and
the Kyowa Hakko Direct Placement and the interest income thereon, together with
facility and equipment financing and expected revenues from its collaboration
with Kyowa Hakko, will be sufficient to fund its current and planned operations
through 1998. There can be no assurance that the assumptions underlying such
estimates are correct or that such funds will be sufficient to meet the capital
needs of the Company during such period. In addition, a substantial amount of
the payments to be made by Kyowa Hakko are dependent upon the achievement by the
Company of development and regulatory milestones and there can be no assurance
that such milestones will be achieved. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
 
HISTORY OF OPERATING LOSSES; ACCUMULATED DEFICIT
 
Geron has incurred net operating losses in every year of operation since its
inception in 1990. As of March 31, 1996, the Company had an accumulated deficit
of approximately $28.2 million. Losses have resulted principally from costs
incurred in connection with the Company's research and development activities
and from general and administrative costs associated with the Company's
operations. The Company expects to incur additional operating losses over the
next several years as the Company's research and development efforts and
preclinical testing are expanded and clinical testing is commenced.
Substantially all of the Company's revenues to date have been research support
payments under the Kyowa Hakko Agreement. The Company's right to receive
research support payments under the Kyowa Hakko Agreement is scheduled to expire
in April 1998. In addition, the Company is unable to determine at this time the
level of the revenue to be received from the sale of diagnostic products and
does not expect to receive material revenues from the sale of the research kits.
The Company's ability to achieve profitability is dependent on its ability,
alone or with others, to successfully select therapeutic compounds for
development, obtain the required regulatory consents and manufacture and market
any resulting products. There can be no assurance when or if the Company will
receive revenues from product sales or achieve profitability. Failure to
generate significant additional revenues and achieve profitability could impair
the Company's ability to sustain operations.
 
SUBSTANTIAL COMPETITION; RISK OF TECHNOLOGICAL OBSOLESCENCE
 
The pharmaceutical and biopharmaceutical industries are intensely competitive.
The Company believes that certain pharmaceutical and biopharmaceutical companies
as well as certain research organizations currently engage in or have in the
past engaged in efforts related to the biological mechanisms of cell aging and
cell immortality, including the study of telomeres and telomerase. In addition,
other products and therapies that could compete directly with the products that
the Company is seeking to develop and market currently exist or are being
developed by pharmaceutical and biopharmaceutical companies, and by academic and
other research organizations. Many companies are also developing alternative
therapies to treat cancer and, in this regard, are competitive with the Company.
The pharmaceutical companies developing and marketing such competing products
have significantly greater financial resources and expertise in research and
development, manufacturing, preclinical and clinical testing, obtaining
regulatory consents and marketing than the Company. Smaller companies may also
prove to be significant competitors, particularly through collaborative
arrangements with large pharmaceutical and established biotechnology companies.
Academic institutions, government agencies and other public and
 
                                       10

<PAGE>   13
 
private research organizations may also conduct research, seek patent protection
and establish collaborative arrangements for clinical development and marketing
of products similar to those of the Company. These companies and institutions
compete with the Company in recruiting and retaining qualified scientific and
management personnel as well as in acquiring technologies complementary to the
Company's programs. There is also competition for access to libraries of
compounds to use for screening. Any inability of the Company to secure and
maintain access to sufficiently broad libraries of compounds for screening
potential targets would have a material adverse effect on the Company. In
addition to the above factors, Geron will face competition with respect to
product efficacy and safety, the timing and scope of regulatory consents,
availability of resources, reimbursement coverage, price and patent position,
including potentially dominant patent positions of others. There can be no
assurance that competitors will not develop more effective or more affordable
products, or achieve earlier patent protection or product commercialization than
the Company or that such products will render the Company's products obsolete.
See "Business -- Competition."
 
DEPENDENCE ON KEY PERSONNEL
 
The Company is highly dependent on the principal members of its scientific and
management staff, the loss of whose services might significantly delay or
prevent the achievement of research, development or business objectives. Except
for Mr. Eastman, Dr. Harley and Dr. West, the Company does not maintain "key
person" life insurance on any officer, employee or consultant of the Company. In
addition, the Company relies on consultants and advisors, including the members
of its Scientific Advisory Board and Clinical Advisory Board to assist the
Company in formulating its research and development strategy. Retaining and
attracting qualified scientific and management personnel, consultants and
advisors is critical to the Company's success. The Company faces competition for
qualified individuals from numerous pharmaceutical, biopharmaceutical and
biotechnology companies, as well as academic and other research institutions.
There can be no assurance that the Company will be able to attract and retain
such individuals on acceptable terms, if at all, and the failure to do so would
have a material adverse effect on the Company. See "Business -- Scientific and
Clinical Advisors" and "Management."
 
ETHICAL, LEGAL AND SOCIAL IMPLICATIONS OF PRIMORDIAL STEM CELL THERAPIES
 
The Company's PS Cell Therapies program may involve the use of human primordial
stem cells that would be derived from human embryonic tissue, and therefore may
raise certain ethical, legal and social issues regarding the appropriate
utilization of this tissue. The use of embryonic tissue in scientific research
is an issue of national interest. Many research institutions, including certain
of the Company's scientific collaborators, have adopted policies regarding the
ethical use of these types of human tissue. These policies may have the effect
of limiting the scope of research conducted in this area, resulting in reduced
scientific progress. In addition, the United States government and its agencies
currently do not fund research which involves the use of such tissue and may in
the future regulate or otherwise restrict its use. The inability of the Company
to conduct research on these cells due to such factors as government regulation
or otherwise could have a material adverse effect on the program. In the event
the Company's research related to PS cell therapies becomes the subject of
adverse commentary or publicity, the Company's name and goodwill could be
adversely affected. See "Business -- Research Programs."
 
GOVERNMENT REGULATION
 
The preclinical testing and clinical trials of any compounds developed by the
Company or its collaborative partners and the manufacturing and marketing of any
new drugs resulting therefrom are subject to regulation by federal, state and
local governmental authorities in the United States, the principal one of which
is the FDA, and by similar agencies in other countries in which drugs developed
by the Company or its collaborative partners may be tested and marketed (each of
such federal, state, local and other authorities and agencies, a "Regulatory
Agency"). Any compound developed by the Company or its collaborative partners
must receive all relevant Regulatory Agency consents, if any, before it may be
marketed in a particular country. The regulatory process, which includes
preclinical testing and clinical trials of each compound in order to establish
its safety and efficacy, can take many years and requires the expenditure of
substantial resources. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations which could delay, limit or prevent
Regulatory Agency consent. In addition, delays or rejections may be encountered
based upon changes in Regulatory Agency policy during the period of drug
development and/or the period of review of any application for Regulatory Agency
consent for a product. Delays in obtaining Regulatory Agency approvals could
adversely affect the marketing of any drugs developed by the Company or its
collaborative partners, impose costly procedures upon the Company's and its
collaborative partners' activities, diminish any competitive advantages that the
Company or its collaborative partners may attain and adversely affect the
Company's ability to receive royalties and generate revenues and profits. There
can be no assurance that, even after such time and expenditures, any required
Regulatory Agency approvals will be obtained for any compounds developed by or
in collaboration with the Company. Moreover, if Regulatory Agency clearance for
a new drug is obtained, such approval may entail limitations on the indicated
uses for which it may be marketed that could limit the potential market for any
such drug. Furthermore, approved drugs and their manufacturers are subject to
continual review, and discovery of previously unknown problems with a drug or
its manufacturer may result in restrictions on such drug or manufacturer,
including withdrawal of the drug from the market. See "Business -- Government
Regulation."
 
                                       11

<PAGE>   14
 
NO ASSURANCE OF MARKET ACCEPTANCE; UNCERTAINTY OF PHARMACEUTICAL PRICING; IMPACT
OF HEALTH CARE REFORM MEASURES
 
There can be no assurance that any products successfully developed by the
Company or its collaborative partners, if approved for marketing, will achieve
market acceptance. The products which the Company is attempting to develop will
compete with a number of traditional drugs and therapies manufactured and
marketed by major pharmaceutical companies, as well as new products currently
under development by such companies and others. The degree of market acceptance
of any products developed by the Company will depend on a number of factors,
including the establishment and demonstration in the medical community of the
clinical efficacy and safety of the Company's product candidates, their
potential advantage over alternative treatment methods, and reimbursement
policies of government and third-party payors. There is no assurance that
physicians, patients or the medical community in general will accept and utilize
any products that may be developed by the Company or its collaborative partners.
 
In both domestic and foreign markets, sales of the Company's products, if any,
will depend in part on the availability of reimbursement from third party payors
such as government health administration authorities, private health insurers,
health maintenance organizations, pharmacy benefit management companies and
other organizations. Both federal and state governments in the United States and
foreign governments continue to propose and pass legislation designed to contain
or reduce the cost of health care through various means. Legislation and
regulations affecting the pricing of pharmaceuticals may change or be adopted
before any of the Company's potential products is approved for marketing. Cost
control initiatives could decrease the price that the Company receives for any
product it may develop in the future and have a material adverse effect on the
Company. In addition, third-party payors are increasingly challenging the price
and cost-effectiveness of medical products and services. Significant uncertainty
exists as to the reimbursement status of newly approved health care products,
including pharmaceuticals. There can be no assurance that the Company's
potential products will be considered cost effective or that adequate
third-party reimbursement will be available to enable Geron to maintain price
levels sufficient to realize an appropriate return on its investment in product
development. In any such event, the Company may be materially adversely
affected.
 
REGULATIONS RELATING TO HAZARDOUS MATERIALS
 
The Company's research and development activities involve the controlled use of
hazardous materials, chemicals and various radioactive compounds. As a
consequence, the Company is subject to numerous environmental and safety laws
and regulations. Any violation of, and the cost of compliance with, these
regulations could materially adversely affect the Company's operations. Although
the Company believes that its safety procedures for handling and disposing of
such materials comply with the standards prescribed by state and federal
regulations, the risk of accidental contamination or injury from these materials
cannot be eliminated. In the event of such an accident, the Company could be
held liable for any damages that result, and any such liability could have a
material adverse effect on the Company.
 
POTENTIAL PRODUCT LIABILITY CLAIMS; ABSENCE OF INSURANCE
 
Although the Company believes it does not currently have any exposure to product
liability claims, the Company's future business will expose it to potential
product liability risks that are inherent in the testing, manufacturing and
marketing of human therapeutic and diagnostic products. The Company currently
has no clinical trial liability insurance and there can be no assurance that it
will be able to obtain and maintain such insurance for any of its clinical
trials. In addition, there can be no assurance that the Company will be able to
obtain or maintain product liability insurance in the future on acceptable terms
or with adequate coverage against potential liabilities.
 
CONTROL BY MANAGEMENT AND CURRENT STOCKHOLDERS
 
Upon completion of the Offering, executive officers and directors of the
Company, together with entities affiliated with them, will own or control
approximately 42.9% of the outstanding shares of Common Stock (approximately
41.5% if the Underwriters' over-allotment option is exercised in full) and will
be able to continue its significant influence with regard to the election of the
Company's Board of Directors and other corporate actions requiring stockholder
approval, as well as significantly influence the direction and policies of the
Company. See "Principal Stockholders" and "Underwriting."
 
POTENTIAL ADVERSE MARKET IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE
 
Sales of substantial amounts of the Common Stock in the public market after the
Offering could adversely affect the market price of the Common Stock. Upon
completion of the Offering, the Company will have outstanding 10,191,905 shares
of Common Stock. All of the 2,500,000 shares sold in the Offering will be freely
transferable as of the date of this Prospectus by persons other than
"affiliates" of the Company without restriction or further registration under
the Securities Act of 1933, as amended (the "Securities Act"). The remaining
7,691,905 shares of Common Stock that will be outstanding upon completion of the
Offering (the "Restricted Shares") will be held by officers, directors,
employees, consultants and other stockholders of the Company. The Restricted
Shares were sold by the Company in reliance upon exemptions from the
registration requirements of the Securities Act and are "restricted securities"
under the Securities Act. The officers, directors, employees and stockholders of
the Company, who together hold the Restricted Shares, have
 
                                       12

<PAGE>   15
 
agreed not to sell their shares without the prior written consent of J.P. Morgan
Securities Inc. for a period of 180 days from the date of this Prospectus. Kyowa
Hakko has agreed not to sell the shares of Common Stock to be issued in the
Kyowa Hakko Direct Placement for a period of two years from the closing of the
Offering. Beginning 180 days after commencement of the Offering, approximately
6,290,045 Restricted Shares that are subject to lock-up agreements (as described
below under "Underwriting") will become eligible for sale in the public market
subject to Rule 144 and Rule 701 under the Securities Act. The remaining
approximately 1,401,860 Restricted Shares, which are also subject to such
lock-up agreements, will have been held for less than two years upon the
expiration of such lock-up agreements and will become eligible for sale under
Rule 144 at various dates thereafter as the holding period provisions of Rule
144 are satisfied. As of May 31, 1996, 1,437,977 shares were issuable upon
exercise of currently outstanding options and, taking into account the effect of
the lock-up agreements with the holders of options, 501,929 of such shares will
be fully vested and eligible for sale in the public markets beginning 180 days
after commencement of the Offering, subject, in the case of sales by affiliates,
to the volume, manner of sale, notice and public information requirements of
Rule 144. Certain holders of shares of Common Stock and securities convertible
into or exercisable for shares of Common Stock have certain registration rights
under a registration rights agreement among such holders and the Company. The
shares of Common Stock covered by these registration rights include: 6,887,228
outstanding shares of Common Stock and 56,248 shares of Common Stock issuable
upon exercise of outstanding warrants. These registration rights have been
waived in connection with the Offering but will, subject to the lock-up
agreements referred to above, continue to apply to the aforementioned shares of
Common Stock upon completion of the Offering. In addition, following completion
of the Offering, the Company intends to register under the Securities Act
approximately 2,518,758 shares of Common Stock subject to outstanding stock
options or reserved for issuance under the Company's 1992 Stock Option Plan,
1996 Directors' Stock Option Plan and 1996 Employee Stock Purchase Plan. See
"Management -- Stock Plans" and "Shares Eligible for Future Sale."
 
ABSENCE OF PRIOR TRADING MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
 
Prior to the Offering, there has been no public market for the Common Stock, and
there can be no assurance that an active trading market for the Common Stock
will develop or that shares of Common Stock can be resold at or above the
initial public offering price after the Offering. The initial public offering
price of the Common Stock will be established by negotiation between the Company
and the Representatives of the Underwriters. See "Underwriting." There has been
a history of significant volatility in the market prices for shares of
biopharmaceutical companies, and it is likely that the market price of the
Common Stock will be similarly volatile. Prices for the Common Stock following
the Offering may be influenced by many factors, including the depth of the
market for the Common Stock, investor perception of the Company, fluctuations in
the Company's operating results and market conditions relating to the
biotechnology, biopharmaceutical and pharmaceutical industries. In addition, the
market price of the Common Stock may be influenced by announcements of
technological innovations, new commercial products or clinical progress or the
lack thereof by the Company, its collaborative partners or its competitors. In
addition, announcements concerning regulatory developments, developments with
respect to proprietary rights and the Company's collaborations as well as other
factors could also have a significant impact on the Company's business and the
market price of the Common Stock. Finally, future sales of substantial amounts
of Common Stock by existing stockholders could also adversely affect the
prevailing price of the Common Stock. See "Description of Capital Stock,"
"Shares Eligible for Future Sale" and "Underwriting."
 
EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS; CERTAIN ANTI-TAKEOVER PROVISIONS
 
Upon completion of the Offering, the Company's Board of Directors will have the
authority to issue up to 3,000,000 shares of undesignated Preferred Stock and to
determine the rights, preferences, privileges and restrictions of such shares
without further vote or action by the Company's stockholders. The rights of the
holders of Common Stock will be subject to, and may be adversely affected by,
the rights of the holders of any Preferred Stock that may be issued in the
future. The issuance of Preferred Stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. The Company has no present plans to issue shares of
Preferred Stock. In addition, upon completion of the Offering, certain
provisions of the Company's charter documents, including the elimination of the
ability of stockholders to take actions by written consent and the staggered
election of the Company's Board of Directors, and certain provisions of Delaware
law could delay or make difficult a merger, tender offer or proxy contest
involving the Company. These provisions could also limit the price that
investors are willing to pay in the future for shares of Common Stock. See
"Description of Capital Stock."
 
DILUTION
 
The initial public offering price is expected to be substantially higher than
the net tangible book value per share of Common Stock. Investors purchasing
shares of Common Stock in the Offering will, therefore, incur immediate and
substantial dilution. Assuming an initial public offering price of $12.00 per
share, the immediate dilution to purchasers of shares of Common Stock in the
Offering will be $7.58 per share of Common Stock or 63.2%. Additional dilution
is likely to occur upon the exercise of options and warrants granted by the
Company. See "Dilution."
 
                                       13

<PAGE>   16
 
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Certain statements contained or incorporated by reference in this Prospectus,
including without limitation, statements containing the words "believes,"
"anticipates," "expects" and words of similar import, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Geron, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: technological
uncertainty; the early stage of the Company's research programs; dependence on
strategic collaborations; dependence on proprietary technology and uncertainty
of patent protection; the availability and terms of capital to fund the
expansion of Geron's business; history of operating losses; substantial
competition; dependence on key personnel; existing government regulations and
changes in, or the failure to comply with, government regulations; legislative
proposals for healthcare reform; the ability to attract and retain qualified
personnel; and other factors referenced in this Prospectus. Certain of these
factors are discussed in more detail elsewhere in this Prospectus, including,
without limitation, under the captions "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Business." Given these uncertainties, prospective investors
are cautioned not to place undue reliance on such forward-looking statements.
Geron disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
 
                          KYOWA HAKKO DIRECT PLACEMENT
 
Pursuant to the Kyowa Hakko Agreement, Kyowa Hakko has agreed to purchase that
number of shares of Common Stock that is equal to $2.5 million divided by the
initial public offering price of the Common Stock simultaneously with the
closing of the Offering. Assuming an initial public offering price of $12.00 per
share, Kyowa Hakko is obligated to purchase 208,333 shares of Common Stock upon
the closing of the Offering. Such shares of Common Stock will be sold by the
Company in reliance on exemptions from the registration requirements of the
Securities Act and will be "restricted securities" within the meaning of Rule
144 under the Securities Act. Kyowa Hakko has agreed not to sell the shares of
Common Stock to be issued in the Kyowa Hakko Direct Placement for a period of
two years from the closing of the Offering. The Underwriters are not involved in
the sale of shares of Common Stock to Kyowa Hakko.
 

                                  THE COMPANY
 
The Company was incorporated in Delaware in November 1990. The Company's
principal executive offices are located at 200 Constitution Drive, Menlo Park,
California 94025, and its telephone number is (415) 473-7700. In this
Prospectus, unless the context otherwise indicates, the terms "Company" and
"Geron" refer to Geron Corporation.
 

                                USE OF PROCEEDS
 
The net proceeds to the Company from the sale of the 2,500,000 shares of Common
Stock offered hereby are estimated to be $27.1 million ($31.3 million if the
Underwriters over-allotment option is exercised in full), assuming an initial
public offering price of $12.00 per share, after deducting estimated
underwriting discounts and other offering expenses payable by the Company. In
addition, the net proceeds from the Kyowa Hakko Direct Placement will be $2.5
million.
 
The Company presently expects to use a portion of the net proceeds from the
Offering and the Kyowa Hakko Direct Placement, (i) to fund approximately $21.7
million of research and development expense, (ii) to fund approximately $1.0
million of laboratory and other equipment purchases and (iii) for other working
capital and general corporate purposes. The Company may also use a portion of
such net proceeds to acquire or invest in businesses that are complementary to
those of the Company, although no such acquisitions are planned or being
negotiated as of the date of this Prospectus, and no portion of the net proceeds
has been allocated for any specific acquisition. The actual amount and timing of
these expenditures will depend on numerous factors, including the progress of
the Company's research and development programs. Pending such uses, the Company
intends to invest such funds in short-term, investment grade interest-bearing
debt obligations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."
 
Based on current projections, the Company estimates that its existing capital
resources, the net proceeds from the Offering, the proceeds from the Kyowa Hakko
Direct Placement, payments under the Kyowa Hakko Agreement, interest income and
equipment financing will be sufficient to fund its current and planned
operations through 1998.
 

                                DIVIDEND POLICY
 
The Company has never paid cash dividends on its capital stock and does not
anticipate paying cash dividends in the foreseeable future, but intends instead
to retain its capital resources for reinvestment in its business. Any future
determination to pay cash dividends will be at the discretion of the Board of
Directors and will be dependent upon the Company's financial condition, results
of operations, capital requirements and such other factors as the Board of
Directors deems relevant.
 
                                       14

<PAGE>   17
 

                                 CAPITALIZATION
 
The following table sets forth as of March 31, 1996 (i) the actual
capitalization of the Company, (ii) the pro forma capitalization of the Company,
giving effect to the conversion of all series of Preferred Stock into Common
Stock upon the closing of this Offering and (iii) the pro forma capitalization
as adjusted to reflect (a) the sale of 2,500,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $12.00 per share, after
deducting estimated underwriting discounts and offering expenses, (b) the
issuance of shares of Common Stock with an aggregate purchase price equal to
$2.5 million (208,333 shares at an assumed initial public offering price of
$12.00 per share) in the Kyowa Hakko Direct Placement and (c) the issuance of
7,805 shares of Common Stock upon the assumed net exercise of 12,055 outstanding
warrants upon the closing of the Offering at an assumed initial public offering
price of $12.00 per share, and the application of the estimated net proceeds
therefrom. See "Use of Proceeds."
 

<TABLE>
<CAPTION>
                                                        ---------------------------------------------------
<S>                                                     <C>                <C>                   <C>
                                                                          MARCH 31, 1996
                                                        ---------------------------------------------------
                                                            ACTUAL
                                                        ----------                                       AS
Dollars in thousands, except share data                                          PRO FORMA         ADJUSTED
                                                                           ---------------       ----------
Noncurrent portion of capital lease obligations
  and equipment loans...........................        $    1,471         $         1,471       $    1,471
Stockholders' equity:
  Preferred stock, $0.001 par value: 6,410,759
     shares authorized, 6,364,274 shares issued
     and outstanding, actual; 3,000,000 shares
     authorized, none issued or outstanding, pro
     forma and as adjusted......................                 6                      --               --
  Common stock, $0.001 par value: 10,294,117
     shares authorized, 929,390 shares issued
     and outstanding, actual; 25,000,000 shares
     authorized, pro forma and adjusted;
     7,293,664 shares issued and outstanding,
     pro forma, 10,009,802 shares issued and
     outstanding, as adjusted(1)................                 1                       7               10
  Additional paid-in capital....................            43,191                  43,191           72,788
  Notes receivable from stockholders............              (303)                   (303)            (303)
  Deferred compensation.........................               (12)                    (12)             (12)
  Accumulated deficit...........................           (28,221)                (28,221)         (28,221)
                                                        ----------         ---------------       ----------
  Total stockholders' equity....................            14,662                  14,662           44,262
                                                        ----------         ---------------       ----------
     Total capitalization.......................        $   16,133         $        16,133       $   45,733
                                                        ==========         ===============       ==========
</TABLE>

 
- ---------------
(1) Does not include (i) 375,000 shares of Common Stock subject to the
Underwriters' over-allotment option, (ii) 1,055,421 shares of Common Stock
issuable upon the exercise of outstanding options as of March 31, 1996 at a
weighted average exercise price of $0.77 per share under the Company's 1992
Stock Option Plan and (iii) 56,248 shares of Common Stock issuable upon exercise
of warrants expected to remain outstanding after the Offering, which are
exercisable at a weighted average exercise price of $7.93. As of May 31, 1996,
1,437,977 shares of Common Stock were issuable upon exercise of outstanding
options at a weighted average exercise price of $1.32. See "Management -- Stock
Plans," "Description of Capital Stock" and Notes 6 and 10 of Notes to Financial
Statements.
 
                                       15

<PAGE>   18
 
                                    DILUTION
 
The pro forma net tangible book value of the Company as of March 31, 1996 was
$14.7 million or $2.01 per share. Pro forma net tangible book value per share
represents the total tangible assets of the Company reduced by the Company's
total liabilities and divided by the number of shares of Common Stock
outstanding (on a pro forma basis to give effect to the conversion of all shares
of the Preferred Stock). Without taking into account any changes in net tangible
book value after March 31, 1996, other than to give effect to (i) the sale of
2,500,000 shares of Common Stock offered hereby at an assumed initial public
offering price of $12.00 per share, after deducting estimated underwriting
discounts and offering expenses, (ii) the issuance of shares of Common Stock
with an aggregate purchase price equal to $2.5 million (208,333 shares at an
assumed initial public offering price of $12.00 per share) in the Kyowa Hakko
Direct Placement and (iii) the issuance of 7,805 shares of Common Stock upon the
assumed net exercise of 12,055 outstanding warrants upon the closing of the
Offering at an assumed initial public offering price of $12.00 per share and the
application of the estimated net proceeds therefrom, the pro forma net tangible
book value of the Company at March 31, 1996 would have been $44.3 million, or
$4.42 per share. This represents an immediate increase in net tangible book
value of $2.41 per share to existing stockholders and an immediate dilution in
net tangible book value of $7.58 per share to purchasers of the Common Stock
offered hereby. The following table illustrates this per share dilution:
 

<TABLE>
<S>                                                                                  <C>           <C>
Assumed initial public offering price per share                                                    $12.00
Net tangible book value per share as of March 31, 1996                               $2.01
Increase in net tangible book value per share attributable to purchasers of
  the Common Stock offered hereby                                                     2.41
                                                                                     -----
Pro forma net tangible book value per share, as adjusted after the
  Offering                                                                                           4.42
                                                                                                   ------
Dilution per share to purchasers of the Common Stock offered hereby                                $ 7.58
                                                                                                   ======
</TABLE>

 
The following table sets forth on a pro forma basis as of March 31, 1996 the
differences between the number and percentage of shares of Common Stock
purchased from the Company, assuming conversion of all outstanding shares of
Preferred Stock into Common Stock, the total consideration (assuming an initial
public offering price of $12.00 per share) and percentage of total consideration
paid to the Company and the average price per share paid by existing
stockholders and by purchasers of the Common Stock offered hereby:
 

<TABLE>
<CAPTION>
                                                  ------------------------------------------------------------
<S>                                               <C>          <C>         <C>       <C>         <C>
                                                                                       TOTAL
                                                      SHARES PURCHASED
                                                  --------------------         CONSIDERATION
                                                                           -----------------     AVERAGE PRICE
                                                      NUMBER   PERCENT               PERCENT         PER SHARE
                                                  ----------   -------               -------     -------------
                                                                            AMOUNT
                                                                           -------
Existing stockholders                              7,293,664       73%     $43,331      57%        $    5.94
Purchasers of the Common Stock offered hereby      2,716,138       27       32,500      43             12.00
                                                   ---------    -----       ------   -----
  Total                                           10,009,802      100%     $75,831     100%
                                                   =========    =====       ======   =====
</TABLE>

 
The foregoing tables and discussion do not include (i) 375,000 shares of Common
Stock subject to the Underwriters' over-allotment option, (ii) 1,055,421 shares
of Common Stock issuable upon the exercise of outstanding options as of March
31, 1996 at a weighted average exercise price of $0.77 per share under the
Company's 1992 Stock Option Plan and (iii) 56,248 shares of Common Stock
issuable upon exercise of warrants expected to remain outstanding after the
Offering, which are exercisable at a weighted average exercise price of $7.93.
As of May 31, 1996, 1,437,977 shares of Common Stock were issuable upon exercise
of outstanding options at a weighted average exercise price of $1.32. See
"Management -- Stock Plans," "Description of Capital Stock" and Notes 6 and 10
of Notes to Financial Statements.
 
                                       16

<PAGE>   19
 
                            SELECTED FINANCIAL DATA
 
The following selected financial data for the period from inception (November
28, 1990) to December 31, 1991, and for the four years ended December 31, 1995,
are derived from the financial statements of Geron Corporation audited by Ernst
& Young LLP. The financial data for the three month periods ended March 31, 1995
and 1996 are derived from unaudited financial statements. The unaudited
financial statements include all adjustments, consisting of normal recurring
accruals, which the Company considers necessary for a fair presentation of the
financial position and the results of operations for these periods. Operating
results for the three months ended March 31, 1996, are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1996. The financial data is qualified in its entirety by, and the
data should be read in conjunction with, Management's Discussion and Analysis of
Financial Condition and Results of Operations and the financial statements,
including the related notes thereto, included elsewhere herein.
 

<TABLE>
<CAPTION>
                               ---------------------------------------------------------------------------------
<S>                            <C>              <C>       <C>       <C>        <C>           <C>       <C>
                                    INCEPTION
                                (NOVEMBER 28,
                                     1990) TO
                                 DECEMBER 31,
                               --------------
                                         1991                                                 THREE MONTHS ENDED
                               --------------                   YEARS ENDED DECEMBER 31,               MARCH 31,
Dollars in thousands, except                    ----------------------------------------     -------------------
share and per share data                                     1993       1994        1995                    1996
                                                   1992   -------   --------   ---------        1995   ---------
                                                -------                                      -------
STATEMENTS OF OPERATIONS
  DATA:
Revenues -- contract.........    $       --     $    --   $    --   $     --   $   5,490     $    --   $   1,335
Operating expenses:
  Research and development...            47         726     3,975      8,099      11,321       2,455       3,294
  General and
     administrative..........            52         661     2,220      2,397       2,888         573         681
                                       ----     -------   -------   --------   ---------     -------   ---------
          Total operating
            expenses.........            99       1,387     6,195     10,496      14,209       3,028       3,975
                                       ----     -------   -------   --------   ---------     -------   ---------
Loss from operations.........           (99)     (1,387)   (6,195)   (10,496)     (8,719)     (3,028)     (2,640)
Interest and other income....             2          27       351        638         919         167         306
Interest and other expense...            --          --      (103)      (320)       (399)        (93)       (101)
                                       ----     -------   -------   --------   ---------     -------   ---------
Net loss.....................    $      (97)    $(1,360)  $(5,947)  $(10,178)  $  (8,199)    $(2,954)  $  (2,435)
                                       ====     =======   =======   ========   =========     =======   =========
Pro forma net loss per
  share(1)...................                                                  $   (1.03)              $   (0.30)
Shares used in computing pro
  forma
  net loss per share(1)......                                                  7,954,863               8,009,240
</TABLE>

 

<TABLE>
<CAPTION>
                                                                -------------------------------------------
<S>                                                             <C>       <C>        <C>          <C>
                                                                                 DECEMBER 31,
                                                                -----------------------------
                                                                   1993
                                                                -------                           MARCH 31,
Dollars in thousands                                                          1994       1995          1996
                                                                          --------   --------     ---------
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments.............  $11,931   $ 13,915   $ 15,553     $  13,939
Working capital...............................................   10,247     12,410     12,115        12,490
Total assets..................................................   14,406     17,072     19,749        18,101
Noncurrent portion of capital lease obligations and equipment
  loans.......................................................    1,360      1,647      1,654         1,471
Accumulated deficit...........................................   (7,405)   (17,604)   (25,773)      (28,221)
Total stockholders' equity....................................   11,293     13,689     14,308        14,662
</TABLE>

 
- ---------------
(1) See Note 1 of Notes to Financial Statements for information concerning the
    calculation of pro forma net loss per share.
 
                                       17

<PAGE>   20
 

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
This Prospectus contains forward-looking statements which involve risks and
uncertainties. Actual results may differ materially from those projected in the
forward-looking statements. See "Special Note Regarding Forward-Looking
Statements." Factors that might cause such a difference include, but are not
limited to, those discussed in "Risk Factors."
 
OVERVIEW
 
Geron is a biopharmaceutical company exclusively focused on discovering and
developing therapeutic and diagnostic products based upon the common biological
mechanisms underlying cancer and other age-related diseases.
 
The Company has entered into a strategic collaboration with Kyowa Hakko to
develop and commercialize a telomerase inhibitor in certain Asian countries for
the treatment of cancer. Pursuant to the Kyowa Hakko Agreement, the Company
received research support payments of $7.0 million in 1995 and $4.0 million in
1996. The research payments are recorded as deferred revenue and recognized as
revenue as the related costs are incurred. Geron is entitled to receive
additional annual research support payments of $4.0 million and $1.0 million in
1997 and 1998, respectively. Further, the Agreement provides that Kyowa Hakko
will pay for all clinical expenses associated with product approvals in the
territory covered by the Agreement. Geron is also entitled to receive milestone
payments upon the achievement of certain milestones related to drug development
and regulatory progress totaling $11.5 million and royalty payments on product
sales. The Company has also entered into collaborative agreements with Ventana
and Dianon to develop telomerase diagnostic technology and royalty-bearing
licensing agreements with Oncor, Boehringer Mannheim and Dako for the sale of
diagnostic kits solely for the research use only market. Oncor commenced
commercial sale of the Company's proprietary telomerase assay for use in cancer
research in May 1996. The Company does not expect revenue from the sale of any
diagnostics kits for the research use only market to be material. See
"Business -- Strategic Collaborations."
 
The Company also has entered into a number of collaborations with academic
institutions and others to sponsor research in exchange for commercial rights to
any technology developed as a result of such research. In general, these
agreements provide for research payments by the Company over one to three years
and are renewable at the option of the Company. The Company has made research
payments of $315,000, $954,000, $930,000 and $833,000 in the three months ended
March 31, 1996 and in 1995, 1994 and 1993, respectively. The Company currently
is committed to make research payments of $1.1 million, $275,000 and $75,000
pursuant to existing research collaborations in 1996, 1997 and 1998,
respectively. See "Business -- Research Collaborations."
 
The Company has incurred significant losses since inception, with an accumulated
deficit of approximately $28.2 million as of March 31, 1996, due primarily to
ongoing expenditures related to its research and development programs. The
Company's results of operations have fluctuated from period to period and may
continue to fluctuate in the future based upon the timing and composition of
funding under various collaborative agreements, as well as the progress of its
research and development efforts. Results of operations for any period may be
unrelated to results of operations for any other period. In addition, historical
results should not be viewed as indicative of future operating results. Geron is
subject to risks common to companies in its industry, including risks inherent
in its research and development efforts, reliance upon collaborative partners,
enforcement of patent and proprietary rights, need for future capital, potential
competition, and uncertainty of regulatory approval. In order for a product to
be commercialized based on the Company's research, it will be necessary for
Geron and its collaborators to conduct preclinical tests and clinical trials,
demonstrate efficacy and safety of the Company's product candidates, obtain
regulatory clearances and enter into manufacturing, distribution and marketing
arrangements, as well as obtain market acceptance. The Company does not expect
to receive revenues or royalties based on therapeutic products for many years.
 
RESULTS OF OPERATIONS
 
Three Months Ended March 31, 1996 and 1995
 
Revenues  The Company recognized revenues of $1.3 million for the three months
ended March 31, 1996, compared to no revenues for the three months ended March
31, 1995. The revenues were research support payments under the Kyowa Hakko
Agreement. The Company expects to recognize $4.0 million of additional research
funding revenue from the Kyowa Hakko Agreement during 1996. There were no
revenues from the diagnostic agreements in either three month period.
 
Research and Development Expenses  The Company's research and development
expenses were $3.3 million for the three months ended March 31, 1996, compared
to $2.5 million for the three months ended March 31, 1995. The growth was
largely due to expenses related to additional personnel, expanded patent related
activities and greater purchases of research materials and laboratory supplies
related to the expansion of the Company's research programs. The Company expects
research and development expenses to increase in the future as a result of
continued efforts under its research programs and the amortization of deferred
compensation. The Company intends to record and amortize, over the related
vesting periods, deferred compensation representing the difference between
 
                                       18

<PAGE>   21
 
the price of certain options granted and the deemed fair market value of the
underlying Common Stock at the time of grant. These options generally vest over
a five year period. The amortization of deferred compensation in future periods
will aggregate approximately $1.3 million as the related options vest,
substantially all of which will be classified as research and development
expenses.
 
General and Administrative Expenses  General and administrative expenses were
$681,000 for the three months ended March 31, 1996, compared to $573,000 for the
three months ended March 31, 1995. The increase was primarily due to greater
compensation expense related to additional personnel and increased legal, travel
and other expenses related to business development. The Company expects general
and administrative expenses to increase in the future to support the expansion
of its business development activities, the amortization of deferred
compensation and increased expenses associated with being a public company.
 
Interest and Other Income  Interest income was $200,000 for the three months
ended March 31, 1996, compared to $151,000 for the three months ended March 31,
1995. This increase was due to an increase in average cash balances in 1996
related to proceeds received from the sale of equity securities and research
funding received under the Kyowa Hakko Agreement. The Company expects interest
income to increase in 1996 due to an increase in average cash balances as a
result of the consummation of the Offering and the Kyowa Hakko Direct Placement.
In addition to revenues from the Kyowa Hakko Agreement, Geron received payments
from government grants totaling $106,000 for the three months ended March 31,
1996, compared to $16,000 for the three months ended March 31, 1995. The Company
does not expect revenues from government grants to be significant in the
foreseeable future.
 
Interest and Other Expense  Interest and other expense was $101,000 for the
three months ended March 31, 1996 compared to $93,000 for the three months ended
March 31, 1995. This increase was due to an increase in capital lease balances
outstanding in 1995.
 
Net Loss  Net loss was $2.4 million for the three months ended March 31, 1996,
compared to $3.0 million for the three months ended March 31, 1995. This
decrease was primarily attributable to the recognition of research funding
revenue from the Kyowa Hakko Agreement.
 
Years Ended December 31, 1995, 1994 and 1993
 
Revenues  The Company recognized $5.5 million in research funding revenue from
the Kyowa Hakko Agreement for the year ended December 31, 1995. No revenues were
recognized prior to 1995.
 
Research and Development Expenses  The Company's research and development
expenses were $11.3 million, $8.1 million and $4.0 million in the years ended
December 31, 1995, 1994 and 1993, respectively. The increases were primarily due
to greater expenses associated with additional personnel hired to support the
Company's growing research efforts and related research materials and laboratory
supplies.
 
General and Administrative Expenses  The Company's general and administrative
expenses were $2.9 million, $2.4 million and $2.2 million in the years ended
1995, 1994 and 1993, respectively. Expenses increased as a result of the
increase in compensation, and benefits paid to and the costs related to the
hiring of additional personnel.
 
Interest and Other Income  Interest income was $643,000, $440,000 and $312,000
for the years ended December 31, 1995, 1994 and 1993, respectively. The
increases were primarily due to increases in average cash balances as a result
of the sale of equity securities. Income received from government grants was
$276,000, $198,000 and $39,000 for the years ended December 31, 1995, 1994 and
1993, respectively.
 
Interest and Other Expense  Interest and other expense was $399,000, $320,000
and $103,000 for the years ended December 31, 1995, 1994, and 1993,
respectively. This increase was due to higher outstanding capital lease balances
in 1994 and 1995.
 
Net Loss  Net loss was $8.2 million, $10.2 million and $5.9 million in the years
ended December 31, 1995, 1994 and 1993, respectively. The decrease in net loss
from 1994 to 1995 was the result of the recognition of revenue from research
support payments from the Kyowa Hakko Agreement. The increase in net loss from
1993 to 1994 was due to the expansion of the Company's research and development
programs.
 
The Company has not generated taxable income to date. At December 31, 1995, the
Company had federal and state net operating loss carryforwards of approximately
$24.3 million and $4.4 million, respectively. The carryforwards expire at
various dates beginning in 2006 through 2010 if not utilized. Future utilization
of the carryforwards may be limited in any one fiscal year pursuant to the
Internal Revenue Code and similar state provisions. As a result of the annual
limitation, a portion of these carryforwards may expire before becoming
available to reduce the Company's federal income tax liabilities.
 
                                       19

<PAGE>   22
 
LIQUIDITY AND CAPITAL RESOURCES
 
The Company has financed its operations since inception primarily through
private placements of preferred equity securities, funds provided under the
Kyowa Hakko Agreement and equipment financing. As of March 31, 1996, the Company
had received approximately $42.9 million in net proceeds from the sale of equity
securities and $7.0 million pursuant to the Kyowa Hakko Agreement.
 
Cash and investments at March 31, 1996 were $13.9 million compared to $15.6
million at December 31, 1995. The Company's funds are currently invested in
short-term, investment grade interest-bearing debt obligations. In April 1996,
the Company received $4.0 million in research funding under the Kyowa Hakko
Agreement.
 
Net cash used in operations in 1995 was $6.3 million, compared to $10.1 million
in 1994. Net cash used in operations declined due to the receipt of research
funding under the Kyowa Hakko Agreement which more than offset an increase in
research and development expenditures. Net cash used in operations increased to
$4.2 million for the three months ended March 31, 1996 from $3.1 million for the
three months ended March 31, 1995 as a result of expanded research and
development programs. The Company expects net cash used in operations to
increase for the year 1996 over 1995.
 
Through March 31, 1996, the Company had invested approximately $4.3 million in
property and equipment, of which approximately $4.0 million was financed through
equipment financing. The present value of obligations under equipment financing
at March 31, 1996 was $2.5 million. Minimum annual principal payments due under
the equipment financing facility are expected to total approximately $996,000,
$895,000 and $582,000 in 1996, 1997 and 1998, respectively. The Company made
principal payments under the equipment financing facility of $233,000 in the
three months ended March 31, 1996 and $769,000 in 1995. The Company expects its
capital expenditures in 1996 to be approximately $2.7 million, consisting of
approximately $1.7 million for leasehold improvements and approximately $1.0
million for laboratory and other equipment purchases. On May 1, 1996, the
Company renewed its existing committed equipment financing facility to provide
for an incremental $2.0 million availability. The commitment period for
additional drawdowns ends on April 30, 1997.
 
The Company presently expects to use a portion of the net proceeds from the
Offering and the proceeds from the Kyowa Hakko Direct Placement, (i) to fund
approximately $21.7 million of research and development expense, (ii) to fund
approximately $1.0 million for laboratory and other equipment purchases and
leasehold improvements and (iii) for other working capital and general corporate
purposes. Based on current projections, the Company estimates that its existing
capital resources, the net proceeds from the Offering, the Kyowa Hakko Direct
Placement, payments under the Kyowa Hakko Agreement, interest income and
equipment financing will be sufficient to fund its current and planned
operations through 1998. There can be no assurance, however, that changes in the
Company's research and development plans or other changes affecting the
Company's operating expenses will not result in the expenditure of available
resources before such time, and in any event, the Company will need to raise
substantial additional capital to fund its operations in future periods. The
Company intends to seek additional funding through collaborative arrangements,
public or private equity or debt financings, capital lease transactions or other
financing sources that may be available. If additional funds are raised by
issuing equity securities, substantial dilution to existing stockholders may
result. However, there can be no assurance that additional financing will be
available on acceptable terms, if at all. If adequate funds are not available,
the Company may be required to delay, reduce the scope of, or eliminate one or
more of its research or development programs or to obtain funds through
collaborative arrangements that are on unfavorable terms or that may require the
Company to relinquish rights to certain of its technologies, product candidates
or products that the Company would otherwise seek to retain.
 
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<PAGE>   23
 

 
                                   BUSINESS
 
Geron is a biopharmaceutical company exclusively focused on discovering and
developing therapeutic and diagnostic products based upon common biological
mechanisms underlying cancer and other age-related diseases. As the pioneer in
researching these mechanisms, the Company focuses on telomeres, which are
structures at the ends of chromosomes that the Company has shown act as a
molecular "clock" of cellular aging, and telomerase, an enzyme which appears to
stop the "clock" and lead to cellular immortality. The Company and its
collaborators have established that these mechanisms play a role in cancer and
many other age-related diseases and conditions, and thus the Company believes it
has a broadly applicable, proprietary platform for discovering and developing
novel small molecule therapeutics and diagnostics for such diseases. The most
advanced of the Company's three therapeutic programs is in the area of
telomerase inhibition for the treatment of cancer. Geron will continue to build
upon its leadership position in the field of telomere biology and telomerase
regulation by selectively collaborating with companies and research institutions
and by aggressively pursuing an extensive patent portfolio. The Company owns or
has certain exclusive rights to three issued United States patents and 52 patent
United States applications.
 
Cancer and other age-related diseases and conditions, including skin aging,
atherosclerosis, osteoporosis and Alzheimer's disease, are difficult and costly
to diagnose and treat. In many cases, entirely effective means of treating and
diagnosing these diseases and conditions are not currently available. Further,
with the progressive "graying" of the population, the incidence of cancer and
other age-related diseases and conditions is expected to increase and to place a
steadily growing financial burden on the health care system. Significant
improvements in the treatment and diagnosis of these conditions and diseases are
expected to offer attractive commercial opportunities.
 
Geron's scientific approach focuses on telomere shortening and telomerase
regulation as common biological mechanisms underlying cancer and other
age-related diseases and conditions. Geron and its collaborators have
demonstrated both in vivo and in vitro that telomeres, the repeated sequences of
DNA located at the ends of chromosomes, shorten throughout a normal cell's
replicative lifespan. The Company and its collaborators have also shown that
when telomeres reach a certain short length, cells stop dividing and become
senescent. Senescent cells display an altered pattern of gene expression
relative to replicatively young cells that leads to an imbalance in the
production of proteins and other cell products. This imbalance, which occurs in
many tissues throughout the body, can have a direct and destructive effect on
surrounding tissues and appears to contribute to age-related diseases and
conditions.
 
Cancer cells escape senescence and maintain an extended ability to divide
through mutations. Geron and its collaborators have shown that for most
cancerous tumors to attain life threatening size, or for cancer to metastasize
throughout the body, cancer cells must become immortal through an alteration
which prevents their telomeres from shortening with each division. In almost all
cases examined to date, a germ line enzyme called telomerase is abnormally
reactivated in these cancer cells to repair their telomeres with each cell
division, thereby conferring cellular immortality. Geron has shown telomerase to
be present in all of the over 20 types of cancer that it has studied, including
breast, prostate, lung, colon, and bladder cancers. The Company believes that
telomerase inhibition has the potential to be a universal and highly specific
cancer therapy. Geron has identified several series of small molecule compounds
that selectively inhibit telomerase. With one of its collaborators, the Company
has initiated studies of these small molecule compounds in animal models of
human tumor growth.
 
In order to develop novel therapeutic and diagnostic products, the Company is
initially focused on three programs: (i) Telomerase Inhibition and
Detection -- developing both telomerase inhibitors as potentially universal and
highly specific cancer therapies and telomerase assays for the detection of
cancer; (ii) Cell Senescence Modulation -- delaying the onset of cell senescence
and regulating the pattern of destructive gene expression in senescent cells;
and (iii) Primordial Stem Cell Therapies -- generating a broad array of cell
types from primordial stem cells ("PS cells") for cellular transplantation. In
support of these programs, the Company employs advanced drug discovery
technologies, including proprietary assays, high throughput screening,
combinatorial chemistry, proprietary differential gene expression techniques,
protein purification, and gene sequencing to discover and design novel small
molecule therapeutics and diagnostic tools.
 
The Company's strategy combines the following key elements: focusing on
fundamental mechanisms of cellular aging and cellular immortality to treat
cancer and other age-related diseases and conditions; developing high value
programs based on its common scientific platform; selectively pursuing strategic
collaborations; retaining the ability to develop and market products
independently; and enhancing its proprietary leadership position in the field.
 
SCIENTIFIC BACKGROUND: CELLULAR AGING AND CELLULAR IMMORTALIZATION
 
Cells are the building blocks for all tissues in the human body. Cell division
plays an important role in the normal growth, maintenance and repair of human
tissue. However, cell division is a limited process in that cells generally
divide only 60 to 100 times in the course of their normal lifespan. Once cells
reach the end of their replicative capacity, they senesce. Cellular aging or
senescence, although influenced by environmental factors, is a genetically
determined process. Geron and its collaborators have demonstrated that
telomeres, the repeated sequences of DNA at the ends of each chromosome, are key
genetic elements involved in this process. Telomeres are necessary for
protecting chromosomes from degradation and fusion. Each time a normal cell
divides, however, telomeres shorten because cells are unable to replicate fully
these repeated DNA sequences. Thus, Geron believes that telomeres serve as a
molecular "clock" governing normal cell replication and lifespan.
 
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<PAGE>   24
 
                     [Figure 1: telomere shortening series]
 
Geron has demonstrated that once telomeres reach a certain short length, cell
division is halted, a condition known as cell senescence. Although senescent
cells have stopped dividing, these cells are still metabolically active and
demonstrate an altered pattern of gene expression. Specifically, in senescent
cells, some genes expressed by young and healthy cells are turned off and other
genes are turned on, creating an imbalance of proteins and other cell products
that has a direct and potentially destructive effect on the surrounding tissue.
Geron believes that this cellular dysfunction, which occurs in numerous tissues
throughout the body, causes or contributes to age-related diseases and
conditions.
 
The converse of cell senescence occurs in cancer cells. Normal cells have the
potential to become cancerous if random mutations activate various oncogenes and
deactivate tumor suppressor genes. With each mutation, pre-cancerous cells
become increasingly aberrant and uncontrolled, and may begin to generate a tumor
mass. The Company believes, however, that most cells which undergo such changes
are eliminated when telomere shortening leads to either cell senescence or
chromosomal instability and cell death. Geron and its collaborators' research
indicates that for most cancerous tumors to attain life threatening size, or for
cancer to metastasize throughout the body, cancer cells must become immortal,
through activation of telomerase.
 
Telomerase is a complex germ line enzyme, composed of RNA and protein
components, that maintains telomere length by replacing the DNA that is lost
each time a cell divides. The result is that telomeres do not shorten and cell
death is averted. Geron's research has shown that telomerase is abnormally
reactivated in all of the major cancer types and that, conversely, it is not
present in most normal cell types. Telomerase enables cancer cells to maintain
telomere length, providing them with indefinite replicative capacity or cellular
immortality.
 
                    [Figure 2: cancer cells with telomerase]
 
Telomerase is expressed in certain normal cells. Telomerase is present at high
levels and telomeres are very long in reproductive cells. It is widely believed
that telomerase is active in the germ line cells to ensure that the full genetic
code is passed from generation to generation. Telomerase is also present at very
low levels in certain hematopoietic (blood), skin and gastrointestinal cells and
may function to give these cells increased replicative capacity. However, these
cells still age and gradually lose telomeres, suggesting that telomerase may not
be essential for their normal functioning.
 
PS cells are germ line cells that appear for only a short period after
fertilization. These cells quickly differentiate into the many types of cells
found in the body. PS cells are the only known normal cells which are immortal
and have the potential to differentiate into any cell or tissue in the body.
Prior to differentiation, PS cells express telomerase activity. Studies
indicate, however, that once PS cells have differentiated into specialized
tissues or cells, telomerase activity is repressed and the differentiated cells
are destined to follow the senescence pathway.
 
                                       22

<PAGE>   25
 
MARKET OPPORTUNITY
 
Cancer and other age-related diseases and conditions, including skin aging,
atherosclerosis, osteoporosis and Alzheimer's disease, are difficult and costly
to diagnose and treat. In many cases, entirely effective means of treating and
diagnosing these diseases and conditions are not currently available. Further,
with the progressive "graying" of the population, the incidence of cancer and
other age-related diseases and conditions is expected to increase and to place a
steadily growing financial burden on the health care system. By the year 2010,
the over-65 population in the United States is expected to double to
approximately 64 million people and worldwide this population will increase to
over one billion. Significant improvements in the treatment and diagnosis of
these diseases and conditions are expected to offer attractive commercial
opportunities.
 
Cancer
The incidence of cancer increases dramatically with age. Eighty-five percent of
cancers diagnosed occur in people over the age of 50. People over the age of 65
have, on average, a ten times greater risk of dying from cancer than the
under-65 population.
 
Over ten million Americans alive today have a history of cancer and, in 1996, an
estimated 1.4 million Americans will be diagnosed with cancers of the lung,
colon, breast, prostate, pancreas, ovary, kidney, and bladder, along with
lymphomas and leukemia and other cancers. Despite significant medical advances,
cancer researchers and clinicians have had little impact on cancer mortality
rates. In 1996, cancer is expected to claim 555,000 lives, or 25% of the total
projected deaths in the United States. Within the next decade, largely because
of population aging, cancer may become the leading cause of death in most
industrialized nations.
 
Cancer therapy relies heavily on three treatment modalities: surgery, to remove
the tumor mass; radiation, to destroy tumor localized to a small region; and
chemotherapy, to eliminate tumor cells in diffuse parts of the body. Surgery is
an invasive procedure that may not remove the entire cancer, and the use of
radiation is limited to certain areas of the body. While drug therapies are less
invasive than surgery or radiation, many drugs used to treat cancer generally
attack rapidly dividing cells indiscriminately, damaging normal as well as
cancer cells. The current cancer drug therapy market in the United States is
over $3.8 billion having grown at an annual compounded rate in excess of 15%
between 1985 and 1995. Even when a drug is effective initially against a
particular cancer, it is usually not effective against other types of cancer
and, over time, the particular cancer can become resistant to that drug and
progress. The Company believes that a telomerase inhibitor could overcome these
limitations and potentially be a universal and highly specific drug therapy for
cancer.
 
Other Age-related Diseases and Conditions
Age-related diseases and conditions are those whose incidence increases
dramatically with age and include chronic diseases and conditions, such as skin
aging atherosclerosis, osteoporosis and Alzheimer's disease. There are
significant unmet medical needs associated with these diseases and conditions.
Many current therapies simply address the symptoms of these diseases and
conditions. Despite the limitation of current therapies, drugs and medical
devices targeting these diseases and conditions represent some of the largest
selling pharmaceuticals and devices. For example, the United States market for
cardiovascular drugs is about $10 billion, while the market for drugs addressing
osteoporosis and osteoarthritis is approximately $5 billion. The market for
retinoids used for skin therapy exceeds $3 billion. The Company's focus on
cellular aging and cellular immortality is designed to produce therapeutics and
diagnostics that address these diseases and conditions, focusing on their causes
rather than their symptoms.
 
STRATEGY
 
Geron's strategy is to become the leading biopharmaceutical company exclusively
focused on discovering and developing therapeutic and diagnostic products based
upon common biological mechanisms underlying cancer and other age-related
diseases and conditions. The key elements of this strategy include:
 
     Focus on Fundamental Mechanisms of Cellular Aging and Cellular
     Immortality.  Geron focuses its research and development on fundamental
     mechanisms of cellular aging and cellular immortality. These include
     telomere shortening and telomerase regulation. As the pioneer in
     researching and modulating these mechanisms, which affect many tissues of
     the body, the Company
 
                                       23

<PAGE>   26
 
     believes it has established a broadly applicable, proprietary platform for
     discovering and developing novel small molecule therapeutics and
     diagnostics for cancer and other age-related diseases and conditions.
 
     Develop High Value Programs With a Common Scientific Platform  Geron's
     strategy is to leverage its expertise in cellular aging and cellular
     immortality to develop those programs which offer the highest likelihood
     and shortest development path for therapeutic and diagnostic products.
     Geron is currently pursuing three research and development programs: (i)
     the inhibition and detection of telomerase for the treatment and diagnosis
     of cancer; (ii) cell senescence modulation for T cell therapy, bone marrow
     transplantation, skin aging and atherosclerosis; and (iii) primordial stem
     cell therapies for cell transplantation. The Company is employing advanced
     and proven drug discovery technologies in support of these programs.
 
     Pursue Strategic Collaborations  Geron has established and will continue to
     selectively establish collaborations with pharmaceutical and diagnostic
     companies and leading academic institutions to enhance its research,
     development and commercialization capabilities. Geron has entered into a
     strategic alliance with Kyowa Hakko, a leading oncology company in Japan,
     for the development and marketing in certain Asian countries of a
     telomerase inhibitor to treat cancer. In addition, the Company has
     established technology and clinical development collaborations with leading
     diagnostic companies. Finally, Geron has formed numerous research and
     clinical collaborations with the leading experts in the fields of cellular
     aging and cellular immortality. See "-- Strategic Collaborations" and
     "-- Research Collaborations."
 
     Retain the Ability to Develop and Market Products Independently  Geron
     believes that its broad scientific platform will continue to generate
     opportunities for a variety of collaborative arrangements. The Company
     intends to retain significant rights to develop and market key therapeutic
     and diagnostic applications of any discoveries it makes in its research
     programs.
 
     Enhance Proprietary Leadership Position  Geron intends to maintain its
     scientific leadership and accelerate its research programs by continuing to
     attract and retain leaders in the fields of cellular aging and cellular
     immortality, either as employees or research collaborators. In addition,
     the Company is aggressively pursuing a broad and extensive patent portfolio
     to protect its proprietary technology, including its drug discovery and
     diagnostic development technologies. To date, the Company owns or has
     certain exclusive rights to three issued United States patents and 52
     United States patent applications, as well as a number of corresponding
     foreign applications.
 
RESEARCH PROGRAMS
 
Geron is applying its proprietary scientific platform to discover and develop
novel therapeutics and diagnostics for cancer and other age-related diseases and
conditions. In support of its programs, the Company employs advanced drug
discovery technologies including proprietary assays, high-throughput screening,
combinatorial chemistry, proprietary differential gene expression techniques,
protein purification, and gene sequencing.
 
Telomerase Inhibition and Detection
Geron seeks to develop a small molecule telomerase inhibitor, which, by blocking
the activity of telomerase, will allow cancer cell telomeres to resume
shortening ultimately leading to cancer cell death. In addition, the Company
seeks to develop telomerase as a marker for cancer diagnosis, prognosis,
monitoring and screening.
 
Telomerase is not present in most normal cells and as a result these cells age
through telomere shortening. In contrast, telomerase is abnormally active in
cancer cells causing telomere length to be maintained, which in turn appears to
confer immortality to cancer cells in malignant tumors. Research has shown that
telomerase is present in all of the over 20 different cancer types that Geron
and its collaborators have studied, including the ten most prevalent cancers of
prostate, breast, lung, colon, bladder, uterus, and ovary, along with lymphomas,
melanomas and oral cancers. In all of these cancers, the majority of tumor
samples contain telomerase. Because telomerase is present in all cancer types
evaluated and is not biologically active in most normal cells, telomerase
appears to be a universal and highly specific marker of cancer. These
characteristics combine to make telomerase an attractive target for inhibition
to treat cancer, and for detection to diagnose cancer.
 
Therapeutic  Geron's research has demonstrated that a telomerase inhibitor
blocks cancer cells from using telomerase to maintain telomere length. As a
result, the telomeres in the cancer cells resume shortening as the cells
continue to divide, reaching a certain short length, at which point the cancer
cells die. Specifically, Geron scientists have blocked human telomerase in tumor
cell lines in vitro using both a small molecule compound and an antisense
compound to the human telomerase RNA component. In both experiments, blocking
telomerase led to telomere shortening and cancer cell death. Based on these
results, Geron is aggressively pursuing the identification of a number of
telomerase inhibitors as potential lead compounds for preclinical and clinical
development. While it has identified several strategies for inhibiting
telomerase activity, Geron's primary focus is on developing a small molecule
inhibitor. With one of its collaborators, the Company has initiated studies of
these small molecule compounds in animal models of human tumor
 
                                       24

<PAGE>   27
 
growth. The Company believes the small molecule approach will produce a
development candidate with a more favorable commercial profile -- oral
bioavailabilty, compound stability and low manufacturing cost.
 
To advance this program, Geron has established proprietary screening technology,
a structurally diverse library of small molecules and medicinal chemistry
capabilities. Specifically, the Company has developed a substantial automated
high throughput screening effort for the identification of telomerase inhibitors
using proprietary assays based on human telomerase. Geron has used this
proprietary screening capability to screen over 80,000 diverse small molecule
candidates that Geron has either acquired or created through its internal
combinatorial chemistry capabilities. As a result of its screening efforts,
Geron has identified several classes of compounds that demonstrate telomerase
inhibition and is actively pursuing structure/activity relationship studies to
develop lead compounds. Geron believes that these screens provide a strong
competitive advantage in view of the extreme difficulty and specialized skills
required for their development and use. The United States Patent and Trademark
Office has recently allowed a patent application on one of Geron's telomerase
inhibitor screens.
 
Geron believes that blocking telomerase activity will cause the affected cancer
cells to resume telomere shortening through cell division and thus lose their
immortality. When telomeres reach a certain short length, the cells will die.
Telomerase inhibition is therefore expected to have delayed efficacy as cancer
cell telomeres resume normal shortening. Although Geron envisions that a
telomerase inhibitor could be effective as a stand-alone treatment in certain
cases, it is expected that in most cases a telomerase inhibitor will be used in
conjunction with traditional anti-cancer therapies. There can be no assurance
that the delayed efficacy of a telomerase inhibitor will not have a materially
adverse effect on the preclinical and clinical development or marketability of a
telomerase inhibitor for the treatment of cancer.
 
Although the Company believes that a telomerase inhibitor will be an effective
cancer therapeutic for a broad range of cancers, there may be certain
limitations to its use. Because telomerase is present in reproductive cells, a
telomerase inhibitor, like most current cancer agents, may have a negative
impact on such cells. Telomerase is also transiently expressed in certain cells
in the hematopoietic (blood), skin and gastrointestinal tract. However, Geron
scientists and others have demonstrated that these tissues age and show gradual
telomere shortening during the course of cell division. As a result, the Company
believes that telomerase is not biologically critical for these tissues and that
telomerase inhibitors are unlikely to have a significant negative effect on
them. There can be no assurance that any product based on the inhibition of
telomerase will not adversely affect such cells and result in unacceptable side
effects.
 
Geron has established a strategic alliance with Kyowa Hakko, the leading
oncology company in Japan, for the development and commercialization in certain
Asian countries of a telomerase inhibitor for the treatment of cancer. The
Company has also established research collaborations for the study of telomerase
inhibition with the National Cancer Institute and the Memorial Sloan-Kettering
Institute for Cancer Research, and for the study of telomerase biology with Cold
Spring Harbor Laboratory.
 
Diagnostics  The Company believes that telomerase is a universal and highly
specific marker of cancer and, therefore, the detection and quantification of
telomerase may have significant clinical utility for cancer diagnosis. While
most current cancer diagnostics apply to a single or limited number of cancer
types, telomerase-based diagnostics could potentially address a broad range of
cancer types. The Company also believes that the availability of
telomerase-based diagnostics for cancer will enhance the commercial opportunity
for a telomerase inhibitor by enhancing the understanding by clinicians of the
biological mechanisms underlying telomerase activity.
 
The Company has developed several proprietary assays for the detection of
telomerase based on its activity or components. The first generation assay is
the Telomeric Repeat Amplification Protocol ("TRAP") which detects telomerase
activity in malignant tumor tissue. The second generation assay detects the RNA
component of human telomerase, which was first cloned by Geron. This RNA
technology enables the Company to use proprietary in situ hybridization and
other detection methods to detect the presence of telomerase. The Company is the
exclusive licensee of an issued United States patent which it believes covers
cancer diagnostic applications of its TRAP technology, and the United States
Patent and Trademark Office has allowed one of Geron's patent applications
relating to the RNA component of telomerase.
 
Geron is conducting clinical evaluations to assess the full potential of its
telomerase detection technology. Preliminary data from a number of studies
indicate telomerase levels correlate with clinical outcome in cancer patients.
In the event evaluations of a larger number of patients continue to present
favorable results, the Company intends to proceed to full scale development of
its telomerase detection technology as a novel and important diagnostic for
numerous cancers.
 
Oncor and Boehringer Mannheim have licensed the Company's TRAP assay and Dako
has licensed the Company's RNA detection technology on a non-exclusive basis for
sale to the research use only market. Oncor commenced commercial sale of the
TRAP-ezeTM kit in May 1996. Although the Company does not expect significant
royalties from the sale of these kits, their use is expected to stimulate
additional, more reliable studies of telomerase activity by academic
laboratories. The Company has also concluded collaborative agreements with
Dianon and Ventana for additional technology development and clinical
assessment. In each of its clinical diagnostic agreements, Geron has retained
significant development and commercialization rights. The Company has also
established
 
                                       25

<PAGE>   28
 
research collaborations for the study of telomerase detection with The Cleveland
Clinic, the University of Texas, San Antonio and the University of Texas
Southwestern Medical Center.
 
Cell Senescence Modulation -- Regulation of Cellular Aging
Geron seeks to develop therapeutics to modulate the biological processes leading
to and regulating cell aging or senescence. Telomere shortening occurs as cells
divide, which, Geron believes, eventually triggers the destructive genetic
changes found in senescent cells. The Company is pursuing two distinct
approaches to modulate cell senescence: (i) extending cell lifespan by slowing
telomere loss, thereby extending the period of normal cell replication and
delaying the destructive onset of cell senescence and (ii) applying proprietary
genomics and screening techniques to target and modulate the destructive genetic
changes that occur in senescent cells. Geron has entered into research
collaborations with several research institutions to support its cell senescence
modulation program, including Lawrence Berkeley Laboratories, Stanford
University, Baylor College of Medicine, Aarhus University (Denmark), the
University of Groningen (The Netherlands) and the University of Washington.
 
Cell Lifespan Extension  Geron believes that maintaining telomere length will
extend cell lifespan by delaying the onset of cell senescence. The Company and
its collaborators have demonstrated in vitro that telomere length and
replicative senescence can be modulated with synthetic compounds. The Company's
initial focus is on the transient activation of telomerase to maintain telomere
length and postpone cell senescence without immortalizing an otherwise mortal
cell. As the first and fundamental step in this program, the Company is working
to complete the cloning of telomerase and its regulators. Geron has already
cloned, and has received an allowance for a United States patent application
relating to, the RNA component of human telomerase. Geron believes that the
cloning of the telomerase enzyme and its regulators may also provide the Company
with second generation telomerase inhibitor screens, new reagents for telomerase
detection and other markers useful in cancer diagnosis.
 
The initial therapeutic target of the cell lifespan extension effort is ex vivo
applications such as T cell therapy and bone marrow transplantation to treat
cancer or immune dysfunctions in the elderly. Ex vivo cell therapies typically
involve the extraction of certain cells from a patient, expansion of the number
of cells ex vivo and the reintroduction of the cells into the patient to
strengthen the patient's immune system. Current cell therapies have several
limitations, including, Geron believes, senescence of transplanted cells before
they can benefit the patient. Geron believes this is attributable in part to the
premature senescence of cells during the expansion process or during growth in
vivo. Geron's approach to extending cell lifespan could improve ex vivo therapy
by allowing enhanced expansion of extracted cells and the reintroduction to the
patient of cells with greater replicative capacity.
 
Genomics of Aging  The goal of Geron's Genomics of Aging program is to treat
age-related diseases and conditions by modulating the destructive pattern of
gene expression that occurs in cells as they reach the end of their replicative
capacity, or become senescent. Geron's approach to genomics is unique in that it
focuses on the differences in gene expression between replicatively young and
senescent cells. Geron believes there is a significant advantage in defining
differences in gene expression between young and senescent cells and then
utilizing senescent cells in drug discovery screens. Most genomics companies use
diseased tissue, which is complex in structure and varies from patient to
patient. By comparison, Geron believes that senescent cells are more
representative of the disease process and provide a homogeneous and reproducible
population of cells for both gene and drug discovery.
 
Geron has developed proprietary high throughput genetic analysis techniques
called "Enhanced Differential Display" and "Subtractive Differential Display."
These technologies have enabled the Company to identify genes, including those
which express products at low levels, that are differentially expressed by
replicatively young versus senescent cells and mortal versus immortal cells. The
Company is using these gene targets and their products to design automated
screens to discover small molecule drugs that counteract the destructive effects
caused by these genes and their gene products.
 
The Company's Genomics of Aging program is targeted at a wide range of
age-related diseases and conditions, including skin aging, atherosclerosis,
osteoporosis and Alzheimer's disease. Geron's initial focus is on skin aging and
atherosclerosis.
 
     Skin aging  Geron and its collaborators have established that when dermal
     fibroblasts age, or senesce, they undergo numerous changes in gene
     expression. Geron and its collaborators have discovered over 100 gene
     markers of genes that are differentially expressed in replicatively young
     versus senescent dermal fibroblasts. Some of these gene products appear to
     be destructive to the extracellular matrix. The Company believes that these
     and other changes contribute to the characteristic age-related atrophy of
     skin. Reversing or offsetting the effects of such altered gene expression
     in senescent fibroblasts by targeted and cell-based drug discovery could
     provide an effective treatment for dermal atrophy in aging adults. The
     Company is establishing automated screens to discover small molecule
     modulators of gene expression in senescent cells.
 
     Atherosclerosis  Atherosclerotic plaques frequently form in blood vessels
     at areas of turbulent blood flow. Geron and its collaborators have shown
     that endothelial cells lining arteries with turbulent blood flow, where
     cell turnover and thus cell division is high, have shorter telomeres than
     cells in regions with less blood turbulence and cell turnover. Further,
     some gene products differentially expressed in senescent endothelial cells
     have been shown to play a role in atherosclerosis. The Company believes
     that
 
                                       26

<PAGE>   29
 
     altering expression of the senescence-associated genes and their products
     in the vascular endothelium could provide a unique and effective therapy
     for atherosclerosis.
 
Primordial Stem Cell Therapies
Geron seeks to generate a broad array of cell types from PS cells for cellular
transplantation. PS cells are germ line cells that are unique in that they are
both immortal, consistent with their normal telomerase expression, and capable
of differentiation into any and all types of cells and tissues in the body. The
Company believes that PS cells offer significant advantages over other stem
cells, which can differentiate only into a limited array of cell types, an
example being the hematopoietic stem cell which is capable of becoming only
blood cells. In addition, PS cells, unlike other stem cells, are immortal and
can potentially be expanded and grown indefinitely. Finally, these cells may be
used repeatedly for transplantation and they can be thoroughly characterized and
shown to be free of viruses or other pathogens.
 
Initially, Geron plans to pursue transplantation applications using PS cells
derived from non-human primates. These cells were recently derived for the first
time at the University of Wisconsin at Madison and are currently licensed
exclusively to Geron. These cells have been shown to differentiate into numerous
cell types that could be useful clinically. There are many strong similarities
between these primate tissues and human tissues that may prevent the rejection
seen with transplantation from other species. The Company is in the early stages
of research directed towards differentiating PS cells for transplantation in
circumstances in which the risk of histoincompatibility will be minimized.
Specifically, the Company is focused on cardiomyocytes for the treatment of
congestive heart failure and neurons for the treatment of Parkinson's disease.
 
STRATEGIC COLLABORATIONS
 
Geron believes that its broad scientific platform will generate significant
opportunities for a variety of strategic collaborative arrangements. Geron has
established and will continue to selectively establish collaborations with
leading pharmaceutical and diagnostic companies to enhance research, development
and commercialization capabilities and fund operating expenses thereby reducing
equity capital requirements. In each of these strategic collaborations, the
Company will seek to retain significant rights to participate in the commercial
success of its products and to develop and market therapeutic and diagnostic
applications resulting from its discoveries.
 
Kyowa Hakko Collaboration
In April 1995, the Company entered into a License and Research Collaboration
Agreement (the "Kyowa Hakko Agreement") with Kyowa Hakko. Under the Kyowa Hakko
Agreement, Kyowa Hakko agreed to provide $16.0 million of research funding over
four years to support the Company's program to discover and develop in certain
Asian countries a telomerase inhibitor for the treatment of cancer. In addition,
the Company is entitled to receive future payments totaling $11.5 million upon
the achievement of certain contractual milestones relating to drug development
and regulatory progress, and royalty payments on product sales. Kyowa Hakko also
agreed to purchase $2.5 million of Common Stock in connection with the Company's
initial public offering. Under the Kyowa Hakko Agreement, Geron exercises
significant control during the research phase and Kyowa Hakko exercises
significant control during the development and commercialization phases. Kyowa
Hakko will pay for all clinical expenses associated with product approval in the
covered territory. The Company granted Kyowa Hakko an exclusive license in
certain Asian countries to develop, manufacture and sell products resulting from
the collaboration for the treatment of human cancer. These countries are China,
Hong Kong, India, Indonesia, Kampuchea, Korea, Japan, Laos, Malaysia, Myan Mar,
the Philippines, Singapore, Taiwan, Thailand and Vietnam. Geron has retained all
rights to a telomerase inhibitor outside these countries. Kyowa Hakko may
terminate the agreement only in the event of breach or bankruptcy by Geron or in
the event that both parties agree that it is no longer reasonably practical to
pursue further research and development of an inhibitor of telomerase.
 
Dianon Collaboration
Geron has entered into a development agreement with Dianon pursuant to which the
parties will jointly develop telomerase detection technology and perform
clinical studies in order to demonstrate the full utility of telomerase as a
cancer diagnostic and prognostic marker. The agreement expires in January 1997,
unless extended by the parties. Each company will generally be responsible for
its respective expenses during the term of the agreement. Geron has granted
Dianon a non-exclusive right to license the Geron telomerase technology to
provide clinical reference or anatomical pathology laboratory services, and a
first right of negotiation to license Geron's technology for exclusive use in
diagnostic test services through January 1997.
 
Other Collaborations
Geron has entered into a development and license agreement with Ventana for
development and commercialization of the Company's telomerase detection
technology to make and sell licensed products solely for use on Ventana systems.
Ventana and Geron will share any profits resulting from this arrangement. Geron
has entered into non-exclusive royalty-bearing license agreements with Oncor and
Boehringer Mannheim for use of the Company's TRAP assay for use as a research
kit only on a worldwide basis excluding Japan. Oncor
 
                                       27

<PAGE>   30
 
commenced commercial sale of the TRAP-ezeTM kit in May 1996. The Company has
also entered into a non-exclusive royalty-bearing license agreement with Dako
for use of Geron's RNA detection technology for research use only on a worldwide
basis.
 
RESEARCH COLLABORATIONS
 
The Company has entered into and intends to continue to selectively enter into
research agreements with leading academic and research institutions in order to
significantly enhance its research and development capabilities. Under these
agreements, the Company generally provides funding for scientific research in
exchange for exclusive commercial rights to such research. In each of these
agreements, the Company seeks to retain rights to develop and market
applications of any discoveries made under such collaborations by obtaining
options to license exclusively any technology developed under such programs,
including issued patents or patent applications filed in connection with such
programs.
 
The Company has established collaborations for the study of telomeres and
telomerase and the discovery and development of a telomerase inhibitor with the
National Cancer Institute, the Memorial Sloan-Kettering Institute for Cancer
Research, Cold Spring Harbor Laboratory, University of Texas Southwestern
Medical Center at Dallas, The Cleveland Clinic and the University of Texas, San
Antonio. In support of its Cell Senescence Modulation program, Geron has
established collaborations with Lawrence Berkeley Laboratories, Stanford
University, Baylor College of Medicine, Aarhus University (Denmark), University
of Groningen (The Netherlands) and the University of Washington. Geron has
established an exclusive license and collaboration agreement in support of its
PS Cell Therapies program with the licensing arm of the University of Wisconsin
at Madison.
 
PATENTS, PROPRIETARY TECHNOLOGY AND TRADE SECRETS
 
As of May 31, 1996, the Company owned, had exclusively licensed or held an
option to exclusively license three United States patents and 52 pending United
States patent applications, as well as six corresponding international filings
under the Patent Cooperation Treaty and nine pending foreign national patent
applications. Protection of the Company's proprietary compounds and technology
is important to the Company's business. The Company's policy is to seek, when
appropriate, patent protection for its lead compounds, gene discoveries,
screening technologies and certain other proprietary technologies through
licensing and by filing patent applications in the United States and certain
other countries. The Company believes its patent filings and patent licenses and
options may provide protection for its drug discovery and diagnostics
development programs and its patent applications disclose useful discoveries in
the field of telomere biology and telomerase regulation as well as cellular
senescence and cellular immortality. The Company's screening efforts have
resulted in the identification of several compounds that inhibit human
telomerase in vitro and the Company has filed United States patent applications
on certain of these chemical classes of telomerase inhibitors. The Company has
licensed an issued United States patent relating to telomerase activity-based
cancer diagnostic methods and has several United States patent applications
pending that are directed to the TRAP assay. The Company's in situ telomerase
RNA detection technology is the subject of several patent applications, one of
which relating to reagents used in the assay has received a notice of allowance
from the United States Patent and Trademark Office. The Company has also filed
patent applications on its technologies for identifying genes that are
differentially expressed in different cell types or at different stages of
cellular development, and the United States Patent and Trademark Office has
recently allowed claims relating to the Company's "Enhanced Differential
Display" technology. There can be no assurance that any allowed patent
applications will issue. See "Risk Factors -- Dependence on Proprietary
Technology and Uncertainty of Patent Protection."
 
While the Company believes its patents and patent applications provide
competitive advantage in its efforts to discover, develop and market useful
therapeutic and diagnostic products, the patent positions of pharmaceutical,
biopharmaceutical, and biotechnology companies, including the Company, are
highly uncertain and involve complex legal and technical questions for which
legal principles are not firmly established. There can be no assurance that the
Company has developed or will continue to develop products or processes that are
patentable or that patents will issue from any of the pending applications,
including patent applications that have been allowed. There can also be no
assurance that the Company's current patents, or patents that issue on pending
applications, will not be challenged, invalidated or circumvented, or that the
rights granted thereunder will provide proprietary protection or competitive
advantages to the Company. Because (i) patent applications in the United States
are maintained in secrecy until patents issue, (ii) patent applications are not
generally published until many months or years after they are filed and (iii)
publication of technological developments in the scientific and patent
literature often occur long after the date of such developments, the Company
cannot be certain that it was the first to invent the subject matter covered by
the patent applications or that it was the first to file patent applications for
such inventions. Litigation to establish the validity of patents, to defend
against patent infringement claims of others and to assert infringement claims
against others can be expensive and time consuming even if the outcome is
favorable to the Company. If the outcome of patent prosecution or litigation is
unfavorable to the Company, the Company could be materially adversely affected.
 
Patent law relating to the scope and enforceability of claims in the technology
fields in which the Company operates is still evolving. The degree of future
protection for the Company's proprietary rights, therefore, is highly uncertain.
In this regard, there can be no
 
                                       28

<PAGE>   31
 
assurance that independent patents will issue from each of the 52 United States
patent applications referenced above, which include many interrelated
applications directed to common or related subject matter. The Company is aware
of certain patent applications that have been filed by others with respect to
telomerase and telomere length. In this regard, Iowa State University has filed
United States and corresponding foreign patent applications claiming methods and
reagents relating to the RNA component of human telomerase, and Isis
Pharmaceuticals, Inc. has filed United States and corresponding foreign patent
applications relating to oligonucleotide-like reagents asserted to have telomere
length modulating activity. In addition, there are a number of issued patents
and pending applications owned by others directed to differential display, stem
cell and other technologies relating to the Company's research, development and
commercialization efforts. There can be no assurance that the Company's
technology can be developed and commercialized without a license to such patents
or that patent applications will not be granted priority over patent
applications filed by the Company. Furthermore, there can be no assurance that
others will not independently develop similar or alternative technologies to
those of the Company, duplicate any of the Company's technologies, or design
around the patented technologies developed by the Company or its licensors, any
of which may have a material adverse effect on the Company.
 
The commercial success of the Company depends significantly on its ability to
operate without infringing patents and proprietary rights of others. There can
be no assurance that the Company's technologies do not and will not infringe the
patents or proprietary rights of others. In the event of such infringement, the
Company may be enjoined from pursuing research, development or commercialization
of its potential products or may be required to obtain licenses to these patents
or other proprietary rights or to develop or obtain alternative technology.
There can be no assurance that the Company will be able to obtain alternative
technologies or any required license on commercially favorable terms, if at all,
and if any such license is or alternative technologies are not obtained, the
Company may be delayed or prevented from pursuing the development of certain of
its potential products. The Company's breach of an existing license or failure
to obtain or delay in obtaining alternative technologies or a license to any
technology that it may require to develop or commercialize its products may have
a material adverse effect on the Company.
 
Litigation, which could result in substantial costs to the Company, may also be
necessary to enforce any patents issued or licensed to the Company or to
determine the scope and validity of another's proprietary rights. There can be
no assurance that the Company's issued or licensed patents would be held valid
or infringed in a court of competent jurisdiction or that a patent held by
another will be held invalid or not infringed in such court. An adverse outcome
in litigation or an interference to determine priority or other proceeding in a
court or patent office could subject the Company to significant liabilities to
other parties, require disputed rights to be licensed from other parties or
require the Company to cease using such technology, any of which could have a
material adverse effect on the Company. In addition, the Company could incur
substantial costs if litigation is required to defend itself in patent suits
brought by third parties or if Geron initiates such suits.
 
Geron also relies on trade secrets to protect its proprietary technology,
especially in circumstances in which patent protection is not believed to be
appropriate or obtainable. Geron attempts to protect its proprietary technology
in part by confidentiality agreements with its employees, consultants and
certain contractors. There can be no assurance that these agreements will not be
breached, that the Company would have adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known or be independently
discovered by competitors.
 
The Company is party to various license agreements which give it rights to use
certain technologies in its research, development and commercialization
activities. Disputes have arisen and may continue to arise as to the
inventorship and corresponding rights in know-how and inventions resulting from
the joint creation or use of intellectual property by the Company and its
licensors, research collaborators and consultants. There can be no assurance
that the Company will be able to continue to license such technologies on
commercially reasonable terms, if at all, or to maintain its exclusive licenses.
In this regard, the Company's license with the licensing arm of the University
of Wisconsin for the PS cells derived from primates is currently exclusive for
two years and non-exclusive thereafter. The failure of the Company to maintain
exclusive or other rights to such technologies could have a material adverse
effect on the Company. See "Risk Factors -- Patents, Proprietary Technology and
Trade Secrets."
 
SCIENTIFIC AND CLINICAL ADVISORS
 
The Company has consulting agreements with a number of leading academic
scientists and clinicians who serve as members of its Scientific Advisory Board
("SAB"), Clinical Advisory Board ("CAB", and together with the SAB, the
"Advisory Boards") or as consultants. These individuals are distinguished
scientists and clinicians with expertise in the areas of genetics of aging, cell
senescence, telomerase, cell biology and molecular biology.
 
The SAB was established to consult with the Company with respect to scientific
programs and strategies. The individuals also provide important contacts
throughout the broader scientific community. The SAB meets as a whole
approximately once a year and in smaller groups to focus on certain scientific
issues on a more frequent basis. Individual members are called upon on an ad hoc
basis as appropriate. The CAB was established to help the Company define
clinical targets and diseases. The CAB meets on an as-needed basis.
 
                                       29

<PAGE>   32
 
Each member of the Advisory Boards has entered into an agreement with the
Company covering the terms of his or her position as a member of the Advisory
Board. Each member provides services on an as-needed basis. Most members of the
Advisory Boards have entered into separate agreements with the Company covering
additional consultation above and beyond their activities as Advisory Board
members. Certain Advisory Board members hold options to purchase or have
purchased Common Stock of the Company. In addition, members of the Advisory
Board generally receive a fee of $1,000 for attending each Advisory Board
meeting and are reimbursed for out-of-pocket expenses incurred in attending each
meeting. Most members of the Advisory Boards are employed by institutions other
than the Company and may have commitments to, or consulting or advisory
agreements with, other entities that may limit their availability to the
Company.
 
The Company's scientific and clinical advisors and consultants include the
following individuals:
 
ELIZABETH BLACKBURN, PH.D., is a Professor and Chair of the Department of
Microbiology and Immunology at the University of California at San Francisco and
a member of the National Academy of Sciences. Dr. Blackburn is known for her
pioneering characterization of telomeres and for her co-discovery of telomerase
with Dr. Carol Greider in 1985 and subsequent characterization of this important
enzyme.
 
GUNTER K. BLOBEL, M.D., PH.D., is an investigator at the Howard Hughes Medical
Institute, Rockefeller University and a member of the SAB. Dr. Blobel is a
member of the National Academy of Sciences, the recipient of the 1993 Lasker
Award, and past president of the American Society for Cell Biology. He is well
known for his work in protein translocation and is now turning much of his
research focus to nuclear trafficking.
 
DAVID BOTSTEIN, PH.D., is Professor and Chairman of the Department of Genetics,
Stanford University School of Medicine. He was elected to the National Academy
of Sciences in 1981 and to the Institute of Medicine in 1993. His current
research activities include studies of yeast genetics and cell biology and
linkage mapping of human genes predisposing to manic-depressive illness and the
development and maintenance of the Saccharomyces Genome Database on the World
Wide Web. He has received numerous awards, including the Eli Lilly Award in
Microbiology (1978), the Genetics Society of America Medal (1985), and the Allen
Award of the American Society of Human Genetics (1989). Dr. Botstein has served
on numerous committees including the NAS/NRC study on the Human Genome Project
(1987-88), the NIH Program Advisory Panel on the Human Genome (1989-90) and the
Advisory Council of the National Center for Human Genome Research (1990-1995).
 
ROBERT N. BUTLER, M.D., is a gerontologist and psychiatrist with broad
experience in aging research and advocacy. In 1982, he founded the first, and
still the only, department of geriatrics at a United States medical
school -- the Department of Geriatrics and Adult Development at the Mount Sinai
Medical Center -- where he continues to serve as Professor. Since 1990, he has
also been Director of the International Longevity Centers. In 1975, he became
the founding director of the National Institute on Aging of the National
Institutes of Health, a position he held until 1982. He currently serves on the
National Advisory Council of the National Institute on Aging and a member of the
Company's CAB. Dr. Butler also serves as editor-in-chief of the journal
Geriatrics and is the author of approximately 300 scientific and medical
articles. In 1976, he won the Pulitzer Prize for his book, Why Survive? Being
Old in America.
 
JUDITH CAMPISI, PH.D., is a Senior Scientist, Life Sciences Division, Department
of Cancer Biology, Lawrence Berkeley National Laboratory; Group Leader,
Carcinogenesis & Differentiation, Lawerence Berkeley National Laboratory; and
Acting Chair, Department of Cancer Biology, Lawerence Berkeley National
Laboratory. She has been an Established Investigator of the American Heart
Association and currently has a MERIT Award from the National Institute on
Aging, and serves on the NIA Board of Scientific Counselors. Her major interest
is the cell and molecular biology of senscense and tumorigenesis.
 
VINCENT CRISTOFALO, PH.D., is a Professor of Pathology and Laboratory Medicine,
and Director of the Center for Gerontological Research, Medical College of
Pennsylvania and Hahnemann University and a member of the Company's SAB. In
addition, he is professor emeritus at the University of Pennsylvania and adjunct
professor at The Wistar Institute. He sits on the Board of Scientific Counselors
of the National Institute on Aging and the Department of Veterans Affairs
Geriatrics and Gerontology Advisory Committee, as well as numerous editorial
boards.
 
CAROL GREIDER, PH.D., is a Senior Staff Scientist at the Cold Spring Harbor
Laboratory and a member of the Company's SAB. She is known for her co-discovery
of telomerase with Dr. Elizabeth Blackburn. Her pioneering work on the molecular
mechanisms of this enzyme and its role in cellular immortalization is widely
recognized.
 
DOUGLAS HANAHAN, PH.D., is a Professor of Biochemistry in the Department of
Biochemistry and Biophysics and Associate Director of the Hormone Research
Institute, University of California, San Francisco and a member of the Company's
SAB. His major research interests are the cellular and genetic mechanisms of
tumor development and autoimmunity. Prior to joining UCSF in 1988, Dr. Hanahan
was with the Cold Spring Harbor Laboratory for nine years, where he developed
technologies for recombinant DNA and molecular cloning, and established
transgenic mouse models to study cancer and autoimmune diseases.
 
                                       30

<PAGE>   33
 
LEONARD HAYFLICK, PH.D., is a Professor of Anatomy at the University of
California, School of Medicine, San Francisco, and is a member of the Company's
SAB. Dr. Hayflick is best known for his pioneering work in tissue culture where
he discovered the finite replicative capacity of normal human cells which he
interpreted as aging at the cell level. This phenomenon is known as the
"Hayflick Limit" and Dr. Hayflick is widely known as the "father" of cellular
gerontology. Dr. Hayflick is the recipient of numerous national and
international research awards and honors, was President of the Gerontological
Society of America, is editor-in-chief of Experimental Gerontology, was a
founding member of the Council of the National Institute on Aging, and recently
authored the popular book, "How and Why We Age."
 
ERIC LANDER, PH.D., is a Professor of Biology at the Massachusetts Institute of
Technology and serves as the Director of the Whitehead Institute/MIT Center for
Genome Research. Dr. Lander is active in several organizations involved in human
genetics research, including serving on the board of directors for the Genetic
Society of America, acting as former chair of the Genome Research Review
Committee for NIH's National Center for Human Genome Research and the Company's
SAB. He brings broad experience in human and mammalian genetic research.
 
GEORGE M. MARTIN, M.D., is Professor of Pathology, Adjunct Professor of
Genetics, Director of Alzheimer's Disease Research Center, University of
Washington School of Medicine and a member of the Company's CAB. He has held
various positions in the departments of pathology and genetics at the University
of Washington School of Medicine since 1957, and was appointed director of the
Alzheimer Disease Research Center in 1985. Dr. Martin's recent awards include a
Research Medal granted by the American Aging Association in 1992 and the Robert
W. Kleemeier Award given by the Gerontological Society of America in 1993.
 
MALCOLM MOORE, PH.D., is a Professor of Biology at the Sloan-Kettering Division,
Cornell Graduate School of Medical Sciences. Also he is currently incumbent of
the Enid A. Haupt Chair of Cell Biology, Memorial Sloan-Kettering Cancer Center.
Dr. Moore most recently received the William B. Coley Award For Distinguished
Research in Immunology by the Cancer Research Institute (June 1995).
 
JERRY W. SHAY, PH.D., is a Professor of Cell Biology and Neuroscience,
University of Texas Southwestern Medical Center at Dallas and a member of the
Company's SAB. Dr. Shay's research focuses on molecular mechanisms of
tumorigenesis and immortalization with a particular emphasis on cancer of the
breast.
 
JAMES D. WATSON, PH.D., is the President of Cold Spring Harbor Laboratory and a
member of the Company's SAB. Dr. Watson is the former head of the NIH Human
Genome Project, a member of the National Academy of Sciences and is famous for
his 1953 discovery with Francis Crick, of the double helical structure of DNA,
for which he received the Nobel Prize.
 
WOODRING E. WRIGHT, M.D., PH.D., is a Professor of Cell Biology and Neuroscience
at the University of Texas Southwestern Medical Center at Dallas and a member of
the Company's SAB. He is widely recognized as a leading molecular biologist
working in the field of cellular senescence and on the molecular basis of muscle
development.
 
BUSINESS ADVISORS
 
The Company has also established a Business Advisory Board to advise it on
strategic business matters. Each member has entered into an agreement with the
Company covering the terms of his position. Both members hold options to
purchase or have purchased Common Stock of the Company. The members of the
Company's Business Advisory Board are:
 
JACK L. BOWMAN has over 30 years of health care management experience, most
recently as company group chairman of Johnson & Johnson. Prior to Johnson &
Johnson, Mr. Bowman was with American Cyanamid, where his positions included
President of Lederle Laboratories, and Ciba-Geigy Pharmaceuticals.
 
ROBERT A. SWANSON founded Genentech, Inc. in 1976 and served as its Chief
Executive Officer and as a director. Prior to Genentech, Mr. Swanson was a
partner with the venture capital firm, Kleiner Perkins Caufield & Byers. He is a
member of the Overseers Visiting Committee of the Harvard Medical School and the
Board of Fellows of the Faculty of Medicine at Harvard University.
 
GOVERNMENT REGULATION
 
Regulation by governmental entities in the United States and other countries
will be a significant factor in the production and marketing of any
pharmaceutical products, including a telomerase inhibitor, which may be
developed by the Company or one of its strategic partners. Most of the Company's
or its strategic partners' pharmaceutical products will require regulatory
approval by governmental agencies prior to commercialization. The nature and the
extent to which such regulation may apply to the Company or its strategic
partners will vary depending on the nature of any such pharmaceutical products.
Generally, biological drugs are regulated more rigorously than non-biological
drugs. In particular, human pharmaceutical therapeutic products are subject to
rigorous preclinical and clinical testing and other requirements by the FDA in
the United States and similar health authorities in foreign countries. Various
federal and, in some cases, state statutes and regulations also govern or
influence the manufacturing, safety, labeling, storage, record
 
                                       31

<PAGE>   34
 
keeping and marketing of such pharmaceutical products. The process of obtaining
these clearances and the subsequent compliance with appropriate federal and
foreign statutes and regulations are time consuming and require the expenditure
of substantial resources.
 
Generally, in order to gain FDA pre-market approval, a company first must
conduct preclinical studies in the laboratory and in animal model systems to
gain preliminary information on a product's potential efficacy and to identify
any safety problems. The results of these studies are submitted as a part of an
investigational new drug application ("IND"), which must become effective before
human clinical trials of an investigational drug can start. In order to
commercialize any products, the Company or its strategic partners will be
required to sponsor and file an IND and will be responsible for initiating and
overseeing the clinical studies to demonstrate the safety, purity, efficacy and
potency in the case of biological drugs, or safety and efficacy in the case of
non-biological drugs that are necessary to obtain FDA approval of any such
products. Clinical trials are normally done in three phases and generally take
two to five years, but may take longer, to complete. After completion of
clinical trials of a new product, FDA marketing clearance must be obtained. If
the product is classified as a non-biologicial drug, the Company or its
strategic partner will be required to file a new drug application ("NDA") and
receive clearance before commercial marketing of the drug. In the case of a
biological drug, an Establishment License Application ("ELA") and Product
License Application ("PLA") will usually have to be filed and approved before
marketing can occur and the testing and approval processes require substantial
time and effort and there can be no assurance that any such clearance will be
granted on a timely basis, if at all. NDAs or PLAs/ELAs submitted to the FDA can
take, on average, two to five years to receive approval. If questions arise
during the FDA review process, clearance can take more than five years. Even if
FDA regulatory clearances are obtained, a marketed product is subject to
continual review, and later discovery of previously unknown problems or failure
to comply with the applicable regulatory requirements may result in restrictions
on the marketing of a product or withdrawal of the product from the market as
well as possible civil or criminal sanctions. For marketing outside the United
States, the Company will also be subject to foreign regulatory requirements
governing human clinical trials and marketing approval for pharmaceutical
products. The requirements governing the conduct of clinical trials, product
licensing, pricing and reimbursement vary widely from country to country.
 
Any diagnostic products to be developed by the Company or its strategic partners
are likely to be regulated by the FDA as devices rather than drugs. The nature
of the FDA requirements applicable to such medical diagnostic devices depends on
their classification by the FDA. A diagnostic device developed by the Company or
a strategic partner would most likely be classified as a Class III device,
requiring pre-market clearance. Obtaining pre-market clearance involves the
costly and time-consuming process, comparable to that for new drugs, of
conducting preclinical studies, obtaining an investigational device exemption to
conduct clinical tests, filing a pre-market clearance application, and obtaining
FDA clearance.
 
Both drugs and devices are subject to good manufacturing practice regulations
("GMPs"), often even at the clinical trial stages. Both drug and device GMPs
specify extensive record keeping requirements, including the maintenance of
product compliance files, as well as require compliance with various standards
governing personnel, equipment and raw materials, including product stability
requirements. There can be no assurance that the Company or its collaborators or
contract manufacturers, if any, will be able to maintain compliance with the GMP
regulations on a continuing basis. Failure to maintain such compliance could
have a material adverse effect on the Company's business.
 
The Company's research and development activities involve the controlled use of
hazardous materials, chemicals and various radioactive materials. The Company is
subject to federal, state and local laws and regulations governing the use,
storage, handling and disposal of such materials and certain waste products.
Although the Company believes that its safety procedures for handling and
disposing of such materials comply with the standard prescribed by state and
federal laws and regulations, the risk of accidental contamination or injury
from these materials cannot be completely eliminated. In the event of such an
accident, the Company could be held liable for any damages that result and any
liability could exceed the resources of the Company.
 
COMPETITION
 
The pharmaceutical and biopharmaceutical industries are intensely competitive.
The Company believes that certain pharmaceutical and biopharmaceutical companies
as well as certain research organizations currently engage in or have in the
past engaged in efforts related to the biological mechanisms of cell aging and
cell immortality, including the study of telomeres and telomerase. In addition,
other products and therapies that could compete directly with the products that
the Company is seeking to develop and market currently exist or are being
developed by pharmaceutical and biopharmaceutical companies, and by academic and
other research organizations. Many companies are also developing alternative
therapies to treat cancer and, in this regard, are competitive with the Company.
The pharmaceutical companies developing and marketing such competing products
have significantly greater financial resources and expertise in research and
development, manufacturing, preclinical and clinical testing, obtaining
regulatory consents and marketing than the Company. Smaller companies may also
prove to be significant competitors, particularly through collaborative
arrangements with large pharmaceutical and established biotechnology companies.
Academic institutions, government agencies and other public and private research
organizations may also conduct research, seek patent protection and establish
collaborative arrangements for clinical development and marketing of products
similar to those of the Company. These companies and institutions compete with
the Company
 
                                       32

<PAGE>   35
 
in recruiting and retaining qualified scientific and management personnel as
well as in acquiring technologies complementary to the Company's programs. There
is also competition for access to libraries of compounds to use for screening.
Any inability of the Company to secure and maintain access to sufficiently broad
libraries of compounds for screening potential targets would have a material
adverse effect on the Company. In addition to the above factors, Geron will face
competition with respect to product efficacy and safety, the timing and scope of
regulatory consents, availability of resources, reimbursement coverage, price
and patent position, including potentially dominant patent positions of others.
There can be no assurance that competitors will not develop more effective or
more affordable products, or achieve earlier patent protection or product
commercialization than the Company or that such products will render the
Company's products obsolete.
 
EMPLOYEES
 
The Company had 82 full-time employees at May 31, 1996, of whom 33 hold M.D. or
Ph.D. degrees and 18 hold other advanced degrees. Of the total workforce, 68 are
engaged in, or directly support, the Company's research and development
activities and 14 are engaged in business development, finance and
administration. The Company also retains outside consultants. None of the
Company's employees is covered by a collective bargaining agreement, nor has the
Company experienced work stoppages. The Company considers relations with its
employees to be good.
 
FACILITIES
 
Geron currently leases approximately 17,000 square feet of office space at 194
Constitution Drive and 200 Constitution Drive, Menlo Park, California. The
Company's lease for such office space expires in January 2002, with an option to
renew the lease for two additional periods of two and one-half years each. In
March 1996, the Company entered into a lease for an additional 24,000 square
feet of office space at 230 Constitution Drive, Menlo Park, California, of which
it expects to take possession on or about November 1996. The Company's lease for
such office space expires in January 2002, with an option to renew the lease for
two additional periods of two and one-half years each. The Company believes that
its existing facilities are adequate to meet its requirements for the near term
and that additional space will be available on commercially reasonable terms if
needed.
 
LEGAL PROCEEDINGS
 
The Company is not a party to any material legal proceedings.
 
                                       33

<PAGE>   36
 

                                   MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
The following table sets forth certain information with respect to the executive
officers and directors of the Company as of May 31, 1996:
 

<TABLE>
<CAPTION>
             NAME              AGE                                      POSITION
- -----------------------------------         ----------------------------------------------------------------
<S>                            <C>          <C>
Ronald W. Eastman                44         President, Chief Executive Officer and Director
David L. Greenwood               44         Chief Financial Officer, Treasurer and Secretary
Richard T. Haiduck               48         Vice President of Corporate Development
Calvin B. Harley, Ph.D.          43         Vice President of Research
Jeryl L. Hilleman                38         Vice President of Operations
Kevin R. Kaster, Esq.            36         Vice President of Intellectual Property and Chief Patent Counsel
Daniel J. Levitt, M.D., Ph.D.    48         Vice President of Drug Development and Chief Medical Officer
Michael D. West, Ph.D.           43         Vice President of New Technologies and Director
Alexander E. Barkas,             48         Chairman of the Board of Directors
  Ph.D.(1)(2)
Brian H. Dovey(1)                54         Director
Charles M. Hartman               54         Director
Thomas D. Kiley, Esq.(2)         53         Director
Patrick F. Latterell             38         Director
Robert B. Stein, M.D., Ph.D.     45         Director
</TABLE>

 
- ---------------
 
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
 
RONALD W. EASTMAN has served as President, Chief Executive Officer and Director
of the Company since May 1993. From 1978 until joining the Company, Mr. Eastman
was employed with American Cyanamid Co., most recently as a Vice President and
General Manager of Lederle Laboratories, American Cyanamid's pharmaceutical
business. Mr. Eastman holds a B.A. from Williams College and an M.B.A. from
Columbia University.
 
DAVID L. GREENWOOD has served as Chief Financial Officer, Treasurer and
Secretary of the Company since July 1995. From 1979 until joining the Company,
Mr. Greenwood held various management positions with J.P. Morgan & Co.
Incorporated, an international banking firm, and its subsidiaries, J.P. Morgan
Securities Inc. and Morgan Guaranty Trust Company of New York. Mr. Greenwood
holds a B.A. from Pacific Lutheran University and an M.B.A. from Harvard
Business School.
 
RICHARD T. HAIDUCK has served as Vice President of Corporate Development of the
Company since October 1993. From March 1991 until joining the Company, Mr.
Haiduck was employed by ASB Meditest, a mobile medical testing company, as
Senior Vice President of Field Operations. From December 1989 to February 1991,
he was Chief Executive Officer of Lifescreen, Inc., a health screening company,
and from 1975 to 1989, Mr. Haiduck held various positions with Abbott
Laboratories, Inc., a pharmaceutical company. Mr. Haiduck holds a B.S. from
Miami University and an M.B.A. from Xavier University.
 
CALVIN B. HARLEY, PH.D., has served as Vice President of Research of the Company
since May 1994. From April 1993 to May 1994, Dr. Harley was Director, Cell
Biology of the Company. Dr. Harley was an Associate Professor from 1989 until
joining the Company, and an Assistant Professor from 1982 to 1989, of
Biochemistry at McMaster University. Dr. Harley also was the Chair of the
Canadian Association on Gerontology, Division of Biological Sciences from
October 1989 to October 1991 and Chairman Elect from 1987 to 1989. Dr. Harley
holds a B.S. from University of Waterloo and a Ph.D. from McMaster University,
and conducted postdoctoral work at the University of Sussex and the University
of California, San Francisco.
 
JERYL L. HILLEMAN has served as Vice President of Operations of the Company
since July 1995. From June 1992 until July 1995, Ms. Hilleman served as Vice
President of Administration and Finance of the Company. From 1987 until joining
the Company, Ms. Hilleman served as Vice President, Finance and Operations of
Cytel Corporation, a biotechnology company. Ms. Hilleman holds an A.B. from
Brown University and an M.B.A. from the Wharton Graduate School of Business.
 
KEVIN R. KASTER, ESQ., has served as Vice President of Intellectual Property and
Chief Patent Counsel of the Company since June 1994. From September 1991 until
joining the Company, Mr. Kaster was employed with Affymax, N.V., a biotechnology
company, as Director, Intellectual Property. From May 1988 until September 1991,
Mr. Kaster was a patent attorney with Cetus Corporation, a biotechnology
company. Prior to his employment with Cetus Corporation, he served as an
Associate Biologist and then as a Patent
 
                                       34

<PAGE>   37
 
Technician with Eli Lilly and Company, a pharmaceutical company. Mr. Kaster
holds a B.S. in Chemistry and Molecular Biology from Vanderbilt University and a
J.D. from Indiana University.
 
DANIEL J. LEVITT, M.D., PH.D., has served as Vice President of Drug Development
and Chief Medical Officer of the Company since February 1995. From 1990 until
joining the Company, Dr. Levitt held various positions at Sandoz Pharma Ltd., a
pharmaceutical company, most recently as Worldwide Head of Oncology Clinical
Research and Development. From 1986 to 1990, Dr. Levitt held various positions
with Hoffman-LaRoche, a pharmaceutical company, including Director of Clinical
Oncology and Immunology. He received post graduate training in Pediatrics at
Yale-New Haven Hospital and in Immunology and Oncology at the University of
Alabama-Birmingham Hospitals. Dr. Levitt was an Assistant Professor of
Pediatrics and Immunology at the University of Chicago Pritzker School of
Medicine from 1980 through 1983, and was a founding Scientist of the Guthrie
Research Institute. Dr. Levitt holds a B.A. from Brandeis University and an M.D.
and Ph.D. in Biology from the University of Chicago Pritzker School of Medicine.
 
MICHAEL D. WEST, PH.D., the founder of the Company, has served as a Director of
the Company since November 1990 and as Vice President of New Technologies of the
Company since October 1993. From February 1993 until October 1993, Dr. West
served as Executive Vice President of Business Development of the Company, and
from March 1992 until February 1993, he was Executive Vice President and Chief
Scientific Officer of the Company. From November 1990 until March 1992, Dr. West
served as President of the Company. Prior to joining the Company, Dr. West was a
Senior Research Scientist at the University of Texas Southwestern Medical Center
at Dallas in the Department of Cell Biology and Neuroscience and, from 1989 to
1990, was a Postdoctoral Research Fellow in the same department. Dr. West holds
a B.S. from Rensselaer Polytechnic Institute, an M.S. from Andrews University
and a Ph.D. from Baylor College of Medicine.
 
ALEXANDER E. BARKAS, PH.D., has served as Chairman of the Board since July 1993
and as a Director of the Company since March 1992. From March 1992 until May
1993, he served as President and Chief Executive Officer of the Company. He has
been a partner of Kleiner Perkins Caufield & Byers, a venture capital investment
firm, since 1990, prior to which he was a retained consultant to such firm for
two years. Dr. Barkas is also a director of Connective Therapeutics, Inc. and
several privately held medical technology companies. He holds a B.A. from
Brandeis University and a Ph.D. from New York University.
 
BRIAN H. DOVEY has served as a Director of the Company since June 1993. Mr.
Dovey has been a general partner of Domain Associates, a venture capital
investment firm, since 1988. From 1986 to 1988, Mr. Dovey was President of Rorer
Group, Inc. (now Rhone Poulenc Rorer, Inc.), a pharmaceutical company. Mr. Dovey
is also a director of Athena Neurosciences, Inc., Resound Corporation, NABI,
Inc., Creative BioMolecules, Inc., Vivus, Inc., Connective Therapeutics, Inc.
and several privately held companies. He holds a B.A. from Colgate University
and an M.B.A. from Harvard Business School.
 
CHARLES M. HARTMAN has served as a Director of the Company since August 1992. He
has been a general partner of CW Group, a venture capital partnership, since
1983. From 1965 to 1983, Mr. Hartman held a number of positions with Johnson &
Johnson. He is also a director of SUGEN, Inc., Ribozyme Pharmaceuticals, Inc.
and several privately held life sciences companies. He is also a director of the
Hastings Center, a nonprofit organization dedicated to the study of ethics in
medicine and the life sciences. Mr. Hartman holds a B.S. in Chemistry from Notre
Dame University and an M.B.A. from the University of Chicago.
 
THOMAS D. KILEY, ESQ., has served as a Director of the Company since September
1992. He has been self-employed since 1988 as an attorney, consultant and
investor. From 1980 to 1988, he was an officer of Genentech, Inc., a
biotechnology company, serving variously as Vice President and General Counsel,
Vice President for Legal Affairs and Vice President for Corporate Development.
From 1969 to 1980, he was with the Los Angeles law firm of Lyon & Lyon and was a
partner in such firm from 1975 to 1980. Mr. Kiley is also a director of Athena
Neurosciences, Inc., Pharmacyclics, Inc., Connective Therapeutics, Inc.,
Cardiogenesis Corporation and certain privately held biotechnology and other
companies. Mr. Kiley holds a B.S. in Chemical Engineering from Pennsylvania
State University and a J.D. from George Washington University.
 
PATRICK F. LATTERELL has served as a Director of the Company since March 1992.
Mr. Latterell is a General Partner of Venrock Associates, a venture capital
investment group, which he joined in 1989. From 1985 to 1989, he was a General
Partner at Rothschild Ventures Inc., a venture capital firm, where he was
responsible for its healthcare ventures. Prior to joining Rothschild, Mr.
Latterell was Manager of Corporate Development with Syntex Corporation, a
pharmaceutical company. Mr. Latterell is also a director of Biocircuits
Corporation, Pharmacyclics, Inc., Vical, Inc. and several privately held
biomedical companies. Mr. Latterell holds S.B. degrees in Biological Sciences
and Economics from the Massachusetts Institute of Technology and an M.B.A. from
Stanford Business School.
 
ROBERT B. STEIN, M.D., PH.D., has served as a Director of the Company since
April 1996. Since August 1993, Dr. Stein has been Senior Vice President and
Chief Scientific Officer of Ligand Pharmaceuticals Inc., a pharmaceutical
company, and from May 1990 to August 1993, he was Vice President of Research at
Ligand. From 1982 to 1990, Dr. Stein held various positions with Merck, Sharp,
and Dohme Research Laboratories, a pharmaceuticals company, including Senior
Director and Head of the Department of
 
                                       35

<PAGE>   38
 
Pharmacology from 1989 to 1990. Dr. Stein holds a B.S. in Biology and Chemistry
from Indiana University and an M.D. and Ph.D. in Physiology and Pharmacology
from Duke University.
 
BOARD OF DIRECTORS COMMITTEES, COMPENSATION OF DIRECTORS AND OTHER INFORMATION
 
The following directors were elected pursuant to a voting agreement, dated as of
March 20, 1992 and amended August 21, 1992 and June 3, 1993, between the Company
and certain stockholders of the Company: Drs. Barkas and West and Messrs. Dovey,
Hartman and Latterell. Upon the closing of the Offering, this voting agreement
will terminate pursuant to a separate agreement among the parties thereto.
 
The Company's Amended and Restated Bylaws provide for a classified Board of
Directors, which may have the effect of deterring hostile takeovers or delaying
changes in control or management of the Company. For purposes of determining
their terms of office, directors are divided into three classes: Class I, Class
II and Class III. Each director serves for a term ending on the date of the
third annual meeting of stockholders following the annual meeting at which the
director is elected, or until his or her earlier death, resignation or removal.
The initial Class I directors, Dr. West and Messrs. Hartman and Latterell, will
hold office until the 1997 annual meeting of stockholders; the initial Class II
directors, Messrs. Dovey, Eastman and Kiley, will hold office until the 1998
annual meeting of stockholders; and the initial Class III directors, Drs. Barkas
and Stein, will hold office until the 1999 annual meeting of stockholders. The
officers of the Company are appointed annually and serve at the discretion of
the Board of Directors.
 
Directors currently receive no cash fees for services provided in that capacity
but are reimbursed for out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The 1996 Director's Stock
Option Plan, under which current and future nonemployee directors will be
eligible to receive stock options in consideration for their services, was
adopted by the Board of Directors in June 1996 and will be submitted for
approval by the stockholders prior to the closing of the Offering. The 1996
Director's Stock Option Plan provides that each person who first becomes a
nonemployee director of the Company after the date of the Offering shall be
granted a nonstatutory stock option to purchase 25,000 shares of Common Stock
(the "First Option") on the date on which the optionee first becomes a
nonemployee director of the Company. The First Option will not be granted to
individuals currently serving as nonemployee directors as of the date of the
Offering. Thereafter, on the date of each annual meeting of the Company's
stockholders, each nonemployee director (including directors who were not
granted a First Option prior to the date of such annual meeting) shall be
granted an option to purchase 5,000 shares of Common Stock (a "Subsequent
Option") if, on such date, he or she has served on the Board of Directors for at
least six months. See "Management -- Stock Plans."
 
The Board of Directors currently has an Audit Committee and a Compensation
Committee. The Audit Committee, which was formed in May 1996, oversees the
actions taken by the Company's independent auditors and reviews the Company's
interim financial and accounting controls. The Audit Committee is currently
composed of Dr. Barkas and Mr. Kiley. The Compensation Committee was formed in
August 1993 to review and approve the compensation and benefits for the
Company's executive officers, administer the Company's stock plans and make
recommendations to the Board of Directors regarding such matters. The
Compensation Committee is currently composed of Dr. Barkas and Mr. Dovey. No
interlocking relationship exists between the Board of Directors or Compensation
Committee and the board of directors or compensation committee of any other
company, nor has any such interlocking relationship existed in the past. See
"Certain Transactions."
 
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
 
The Company's Amended and Restated Certificate of Incorporation limits the
liability of directors to the maximum extent permitted by Delaware law. Delaware
law provides that a director of a corporation will not be personally liable for
monetary damages for breach of such individual's fiduciary duties as a director
except for liability (i) for any breach of such director's duty of loyalty to
the corporation, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which a director derives an improper personal benefit.
 
The Company's Amended and Restated Bylaws provide that the Company will
indemnify its directors and may indemnify its officers, employees and other
agents to the full extent permitted by law. The Company believes that
indemnification under its Bylaws covers at least negligence and gross negligence
on the part of an indemnified party and permits the Company to advance expenses
incurred by an indemnified party in connection with the defense of any action or
proceeding arising out of such party's status or service as a director, officer,
employee or other agent of the Company upon an undertaking by such party to
repay such advances if it is ultimately determined that such party is not
entitled to indemnification.
 
The Company has entered into separate indemnification agreements with each of
its directors and officers. These agreements require the Company, among other
things, to indemnify such director or officer against expenses (including
attorneys' fees), judgments, fines and settlements (collectively, "Liabilities")
paid by such individual in connection with any action, suit or proceeding
arising out of such
 
                                       36

<PAGE>   39
 
individual's status or service as a director or officer of the Company (other
than Liabilities arising from willful misconduct or conduct that is knowingly
fraudulent or deliberately dishonest) and to advance expenses incurred by such
individual in connection with any proceeding against such individual with
respect to which such individual may be entitled to indemnification by the
Company. The Company believes that its Certificate of Incorporation and Bylaw
provisions and indemnification agreements are necessary to attract and retain
qualified persons as directors and officers.
 
At present the Company is not aware of any pending or threatened litigation or
proceeding involving any director, officer, employee or agent of the Company in
which indemnification will be required or permitted.
 

EXECUTIVE COMPENSATION
 
The following table sets forth certain compensation paid by the Company during
the year ended December 31, 1995 to the Company's Chief Executive Officer and
the Company's four other most highly compensated executive officers whose total
cash compensation exceeded $100,000 (collectively, the "Named Executive
Officers").
 
SUMMARY COMPENSATION TABLE
 

<TABLE>
<CAPTION>
                                            --------------------------------------------------------------------
                                                              ANNUAL COMPENSATION
                                                     --------------------------------------        LONG-TERM
                                                                                                 COMPENSATION
                                                                                                    AWARDS
                                                                                               -----------------
                                            -----------------------------------------------    -----------------
                                                                                  OTHER           SECURITIES
                                                                                 ANNUAL           UNDERLYING
NAME AND PRINCIPAL POSITION (1)             YEAR      SALARY       BONUS      COMPENSATION(2)     OPTIONS(#)
- ------------------------------------------  -----    ---------    --------    -------------    -----------------
<S>                                         <C>      <C>          <C>         <C>              <C>
Ronald W. Eastman                            1995    $ 214,750    $ 38,660          $30,000               68,235
  President and Chief Executive Officer
Richard T. Haiduck                           1995      169,000      30,420           18,000               26,921
  Vice President of Corporate Development
Calvin B. Harley, Ph.D.                      1995      154,897      27,890           18,000               28,928
  Vice President of Research
Jeryl L. Hilleman                            1995      139,285      26,650            9,000               25,709
  Vice President of Operations
Daniel J. Levitt, M.D., Ph.D.(3)             1995      136,581      28,490           10,000               79,417
  Vice President of Drug Development and
     Chief Medical Officer
</TABLE>

 
- ---------------
(1) Mr. Greenwood, the Company's Chief Financial Officer, Treasurer and
Secretary, joined the Company in July 1995 and currently receives an annual base
salary of $184,100. Had he been employed with the Company for the entire year
ended December 31, 1995, Mr. Greenwood would have been a Named Executive
Officer.
(2) Other annual compensation consists of monthly housing allowances.
(3) Dr. Levitt joined the Company in March 1995 and currently receives an annual
base salary of $197,200.
 
                                       37

<PAGE>   40
 
The following table provides certain information regarding options granted to
the Named Executive Officers during the year ended December 31, 1995. No stock
appreciation rights were granted to these individuals during the year.
 
OPTION GRANTS IN LAST FISCAL YEAR
 

<TABLE>
<CAPTION>
                          ------------------------------------------------------------------------------------------
                                                  INDIVIDUAL GRANTS                            POTENTIAL REALIZABLE
                          -----------------------------------------------------------------      VALUE AT ASSUMED
                                                     PERCENT OF                                ANNUAL RATES OF STOCK
                          NUMBER OF SHARES        TOTAL OPTIONS                                 PRICE APPRECIATION
                                UNDERLYING           GRANTED TO   EXERCISE OR                   FOR OPTION TERM(4)
                                   OPTIONS            EMPLOYEES    BASE PRICE    EXPIRATION    ---------------------
          NAME            GRANTED(#)(1)(2)    IN FISCAL YEAR(3)        ($/SH)          DATE      5%($)        10%($)
- ------------------------  ----------------   ------------------   -----------    ----------    -------     ---------
<S>                       <C>                <C>                  <C>            <C>           <C>         <C>
Ronald W. Eastman                   68,235                 14.2%        $0.82       7/27/05    $35,017     $  88,740
Richard T. Haiduck                  26,921                  5.6          0.82       7/27/05     13,816        35,012
Calvin B. Harley, Ph.D.             28,928                  6.0          0.82       7/27/05     14,845        37,621
Jeryl L. Hilleman                   25,709                  5.4          0.82       7/27/05     13,193        33,435
Daniel J. Levitt, M.D.,
  Ph.D.                             79,417                 16.5          0.82       7/27/05     40,755       103,282
</TABLE>

 
- ---------------
(1) These stock options, which were granted under the 1992 Stock Option Plan,
are immediately exercisable for all option shares, but any shares purchased
under the option are subject to repurchase by the Company at the original
exercise price per share upon the cessation of the optionee's employment with
the Company. The Company's repurchase right generally lapses at the rate of
1/10th of the total number of shares at the end of the first six month period
after the commencement of the optionee's employment with the Company and 1/60th
of the total number of shares at the end of each month thereafter. The maximum
term of each option grant is ten years from the date of grant. The exercise
price is equal to the fair market value of the underlying stock on the grant
date.
 
(2) On April 30, 1996, the Board of Directors granted stock options to the above
Named Executive Officers as follows: Mr. Eastman, 91,761 shares; Mr. Haiduck,
25,489 shares; Dr. Harley, 25,489 shares; Ms. Hilleman, 25,489 shares; and Dr.
Levitt, 31,861 shares. In addition, on such date, the Board of Directors granted
a stock option to Mr. Greenwood for 42,482 shares. All of the foregoing options
will vest over a five year period from the date of grant and are exercisable at
$2.04, the fair market value per share on the date of grant as determined by the
Board of Directors.
 
(3) Based on an aggregate of 479,883 options granted by the Company in the year
ended December 31, 1995 to employees of the Company, including the Named
Executive Officers.
 
(4) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the Securities and Exchange Commission. There is no assurance
provided to any executive officer or any other holder of the Company's
securities that the actual stock price appreciation over the ten year option
term will be at the assumed 5% and 10% levels or at any other defined level.
Unless the market price of the Common Stock appreciates over the option term, no
value will be realized from the option grants made to the executive officers.
 
                                       38

<PAGE>   41
 
The following table sets forth information with respect to options exercised
during the year ended December 31, 1995 by the Named Executive Officers.
 
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
 

<TABLE>
<CAPTION>
                             ---------------------------------------------------------------------------------------------
                                                          NUMBER OF SECURITIES UNDERLYING          VALUE OF UNEXERCISED
                                                               UNEXERCISED OPTIONS AT              IN-THE-MONEY OPTIONS
                               SHARES                        FISCAL YEAR-END (#)(1)(2)         AT FISCAL YEAR-END ($)(2)(3)
                             ACQUIRED ON      VALUE       --------------------------------   --------------------------------
           NAME              EXERCISE(#)   REALIZED($)    EXERCISABLE(4)    UNEXERCISABLE    EXERCISABLE(4)    UNEXERCISABLE
- ---------------------------  -----------   ------------   ---------------   --------------   ---------------   --------------
<S>                          <C>           <C>            <C>               <C>              <C>               <C>
Ronald W. Eastman                132,352        $63,000           164,622                0            $  840               $0
Richard T. Haiduck                33,823          1,150            52,361                0                 0                0
Calvin B. Harley, Ph.D.                0              0            75,508                0             1,850                0
Jeryl L. Hilleman                 29,411         14,000            66,343                0               554                0
Daniel J. Levitt, M.D.,
  Ph.D.                                0              0            79,417                0                 0                0
</TABLE>

 
- ---------------
(1) No stock appreciation rights were granted to the Named Executive Officers
during the fiscal year ended December 31, 1995.
(2) As of December 31, 1995, Mr. Greenwood held options to purchase 73,529
shares at an exercise price of $0.82 per share, all of which were then
exercisable. During the year ended December 31, 1995, Mr. Greenwood did not
exercise any options.
(3) Based on the fair market value of the Common Stock as of December 31, 1995,
as determined by the Board of Directors ($0.82 per share), minus the per share
exercise price, multiplied by the number of shares underlying the option.
(4) These stock options, which were granted under the 1992 Stock Option Plan,
are immediately exercisable for all option shares, but any shares purchased
under the option are subject to repurchase by the Company at the original
exercise price per share upon the cessation of the optionee's employment with
the Company. The Company's repurchase right generally lapses at the rate of
1/10th of the total number of shares at the end of the first six month period
after the commencement of the optionee's employment with the Company and 1/60th
of the total number of shares at the end of each month thereafter.
 
STOCK PLANS
 
1992 Stock Option Plan
The Company's 1992 Stock Option Plan (the "Stock Option Plan") was adopted by
the Board of Directors in May 1992 and approved by the stockholders in July
1992. In April 1996, the Stock Option Plan was amended by the Board of Directors
to increase the number of shares of Common Stock authorized for issuance
thereunder. In June 1996, the Stock Option Plan was amended by the Board of
Directors to comply with certain requirements of Rule 16b-3 of the Securities
Exchange Act of 1934, as amended, and the Internal Revenue Code of 1986, as
amended (the "Code"). In addition, the Stock Option Plan was amended to provide
that nonemployee directors will no longer be eligible to receive grants
thereunder. A total of 2,554,411 shares of Common Stock have been authorized for
issuance under the Stock Option Plan plus an automatic increase on the first
trading day of the 1997, 1998, 1999, 2000 and 2001 calendar years of an
additional number of shares equal to 2% of the number of shares of Common Stock
outstanding on December 31 of the immediately preceding calendar year, with no
such annual increase to exceed 300,000 shares. As of May 31, 1996, options to
purchase a total of 585,653 shares of Common Stock had been exercised, options
to purchase a total of 1,437,977 shares at a weighted average exercise price of
$1.32 per share were outstanding, and 530,781 shares remained available for
future option grants. Upon the effective date of the Offering, the Company
expects to grant options under the Stock Option Plan to purchase an aggregate of
194,491 shares to employees, officers, directors and consultants of the Company,
including the following executive officers: Mr. Eastman, 35,297 shares; Mr.
Greenwood, 16,341 shares; Mr. Kaster, 12,256 shares; Dr. Levitt, 12,256 shares;
Dr. West, 12,256 shares; Mr. Haiduck, 9,805 shares; Dr. Harley, 9,805 shares;
and Ms. Hilleman, 9,805 shares. These options will have an exercise price equal
to the initial public offering price and will vest over a five year period from
the date of grant.
 
The Stock Option Plan provides for the grant to employees of the Company
(including officers and employee directors) of "incentive stock options" within
the meaning of Section 422 of the Code and for the grant of nonstatutory stock
options to employees and consultants of the Company. To the extent an optionee
would have the right in any calendar year to exercise for the first time one or
more incentive stock options for shares having an aggregate fair market value
(under all plans of the Company and determined for each share as of the date the
option to purchase the share was granted) in excess of $100,000, any such excess
options will be treated as nonstatutory stock options.
 
The Stock Option Plan is administered by the Board of Directors or a committee
of the Board of Directors (the "Administrator"). A committee of nonemployee
directors grants options to Section 16 insiders. The Administrator determines
the terms of options granted
 
                                       39

<PAGE>   42
 
under the Stock Option Plan, including the number of shares subject to the
option, exercise price, term and exercisability. However, in no event may any
one person participating in the Stock Option Plan receive options in any
calendar year for more than 500,000 shares. The exercise price of all incentive
stock options granted under the Stock Option Plan must be at least equal to the
fair market value of the Common Stock of the Company on the date of grant. The
exercise price of all nonstatutory stock options must equal at least 85% of the
fair market value of the Common Stock on the date of grant. The exercise price
of any incentive stock option granted to an optionee who owns stock representing
more than 10% of the voting power of the Company's outstanding capital stock (a
"10% Stockholder") must equal at least 110% of the fair market value of the
Common Stock on the date of grant. Payment of the exercise price may be made in
cash, promissory notes or other consideration determined by the Administrator.
The Administrator determines the term of options. The term of a stock option
granted under the Stock Option Plan may not exceed ten years; provided, however,
that the term of an incentive stock option may not exceed five years for 10%
Stockholders. No option may be transferred by the optionee other than by will or
the laws of descent or distribution, except that a nonstatutory stock option may
be assigned in accordance with the terms of a qualified domestic relations
order.
 
Each option may be exercised during the lifetime of the optionee only by such
optionee or a transferee under a qualified domestic relations order. Options
granted under the Stock Option Plan generally are immediately exercisable, and
the shares purchasable under such options are subject to repurchase by the
Company at their original exercise price, which repurchase rights generally
lapse in a series of installments at the rate of 10% of the total number of
shares after the six month period from the date of grant, and approximately
1.67% each month thereafter. In addition, the Stock Option Plan provides that
the Administrator, in its sole discretion, may assist any optionee in the
exercise of an option by authorizing the extension of a loan from the
Corporation to such optionee or by permitting such optionee to pay the exercise
price in installments over a period of years.
 
In the event an optionee ceases to be employed by the Company for any reason
other than death or disability, each outstanding option held by such optionee
will remain exercisable for the three month period following the date of such
cessation of employment. Should the optionee's employment terminate by reason of
disability, each outstanding option will remain exercisable for the six month
period following the date of such cessation of employment. Should the disability
be deemed a permanent disability or should the optionee's employment terminate
by reason of death, options held by such optionee will remain exercisable for 12
months following such cessation of employment. The Board will have full power
and authority to extend the period of time for which the option is to remain
exercisable following the optionee's termination of service.
 
In the event of certain transactions involving changes in control of the
Company, the Stock Option Plan requires that each outstanding option will
accelerate so that each option will be fully exercisable for all of the shares
subject to such option immediately prior to the effective date of the
transaction, unless assumed by the successor corporation. In addition, upon the
occurrence of such a transaction, the Stock Option Plan provides that all of the
outstanding repurchase rights of the Company with respect to shares of Common
Stock acquired upon exercise of options granted under the Stock Option Plan will
terminate, unless assigned by the Company to the successor corporation. The
Administrator has the authority to amend or terminate the Stock Option Plan as
long as such action does not adversely affect any outstanding option and
provided that stockholder approval will be required for an amendment to increase
the number of shares subject to the Stock Option Plan, to materially modify the
eligibility requirements for the grant of options under the Stock Option Plan,
to materially increase the benefits accruing to participants under the Stock
Option Plan, or to increase the annual limitation on grants to participants
under the Stock Option Plan. If not terminated earlier, the Stock Option Plan
will terminate in 2002.
 
1996 Employee Stock Purchase Plan
The Company's 1996 Employee Stock Purchase Plan (the "Stock Purchase Plan") was
adopted by the Board of Directors in June 1996 and will be submitted for
approval by the stockholders prior to the closing of the Offering. A total of
300,000 shares of Common Stock has been reserved for issuance under the Stock
Purchase Plan. If approved by the stockholders, the Stock Purchase Plan, which
is intended to qualify under Section 423 of the Code, will be implemented by a
series of offering periods of 12 months duration, with new offering periods
(other than the first offering period) commencing on or about January 1 and July
1 of each year. Each offering period consists of two consecutive purchase
periods of six months' duration, with the last day of such period being
designated a purchase date. The first such offering period is expected to
commence on the date of the Offering and continue through June 30, 1997, with
the first purchase date occurring on December 31, 1996 and subsequent purchase
dates to occur every six months thereafter. The Stock Purchase Plan is intended
to be administered by the Board of Directors or by a committee appointed by the
Board of Directors. Under the Stock Purchase Plan, employees (including officers
and employee directors) of the Company, or of any majority owned subsidiary
designated by the Board of Directors, are eligible to participate if they are
employed by the Company or any such subsidiary for at least 20 hours per week
and more than five months per year. No employee will be granted an option if
immediately after the grant, such employee would own stock or options to
purchase stock possessing 5% or more of the voting power or value of all classes
of stock of the Company. The Stock Purchase Plan permits eligible employees to
purchase Common Stock through payroll deductions, which may not exceed 10% of an
employee's compensation and other Stock Purchase Plan limitations, at a price
equal to the lower of 85% of the fair market value of the Common Stock at the
beginning of the offering period or the purchase date. If the fair market
 
                                       40

<PAGE>   43
 
value of the Common Stock on a purchase date is less than the fair market value
at the beginning of the offering period, a new 12 month offering period will
immediately begin on the first business day following the purchase date with a
new fair market value. Employees may end their participation in the offering at
any time during the offering period, and participation ends automatically on
termination of employment with the Company. In addition, participants may
decrease their level of payroll deductions once during an offering period.
 
The Stock Purchase Plan provides that in the event of a merger of the Company
with or into another corporation or a sale of substantially all of the Company's
assets, each right to purchase stock under the plan will be assumed or an
equivalent right substituted by the successor corporation unless the Board of
Directors shortens the offering period so that employees' rights to purchase
stock under the plan are exercised prior to the merger or sale of assets. Under
the Stock Purchase Plan, the Board of Directors has the power to amend or
terminate the plan as long as such action does not adversely affect any
outstanding rights to purchase stock thereunder. If not terminated earlier, the
Stock Purchase Plan will have a term of 20 years.
 
1996 Directors' Stock Option Plan
The Company's Directors' Stock Option Plan (the "Directors Plan") was adopted by
the Board of Directors in June 1996 and will be submitted for approval by the
stockholders prior to the closing of the Offering. A total of 250,000 shares of
Common Stock has been reserved for issuance under the Directors' Plan. The
Directors' Plan provides for the automatic and nondiscretionary grant of
nonstatutory stock options to nonemployee directors of the Company. The
Directors' Plan is designed to work automatically without administration;
however, to the extent administration is necessary, it will be performed by the
Board of Directors.
 
The Directors' Plan provides that each person who first becomes a nonemployee
director of the Company after the date of the Offering will be granted a
nonstatutory stock option to purchase 25,000 shares of Common Stock (the "First
Option") on the date on which the optionee first becomes a nonemployee director
of the Company. The First Option will not be granted to individuals serving as
nonemployee directors as of the date of the Offering. Thereafter, on the date of
each annual meeting of the Company's stockholders, each nonemployee director
(including directors who were not granted a First Option prior to the date of
such annual meeting) will be granted an option to purchase 5,000 shares of
Common Stock (a "Subsequent Option") if, on such date, he or she has served on
the Board of Directors for at least six months.
 
The Directors' Plan sets neither a maximum nor a minimum number of shares for
which options may be granted to any one nonemployee director, but does specify
the number of shares that may be included in any grant and the method of making
a grant. No option granted under the Directors' Plan is transferable by the
optionee other than by will or the laws of descent or distribution or pursuant
to a qualified domestic relations order, and each option is exercisable, during
the lifetime of the optionee, only by such optionee or a transferee under a
qualified domestic relations order. The Directors' Plan provides that the First
Option will become exercisable in installments as to 33 1/3% of the total number
of shares subject to the First Option on each of the first, second and third
anniversaries of the date of grant of the First Option; each Subsequent Option
will become exercisable in full on the first anniversary of the date of grant of
that Subsequent Option. The exercise price of all stock options granted under
the Directors' Plan will be equal to the fair market value of a share of the
Company's Common Stock on the date of grant of the option. Options granted under
the Directors' Plan have a term of ten years.
 
If a nonemployee director ceases to serve as a director, he or she may exercise
his or her option within 90 days after such date, but only to the extent such
option is exercisable. In the event a nonemployee director is unable to continue
to serve as a director as a result of his or her total and permanent disability,
he or she may exercise his or her option within six months from the date of such
termination, but only to the extent such option is exercisable. In the event of
a director's death while serving as a director or within three months of
termination of such service, options may be exercised at any time within six
months following the date of death, but only to the extent of the right to
exercise that had accrued at the time of death unless the director died while
serving on the Board, in which case the option is exercisable to the extent of
the right to exercise that would have accrued had the director continued living
and remained a director without interruption for 12 months after the date of
death.
 
Under the Directors' Plan, in the event of the dissolution or liquidation of the
Company, a sale of all or substantially all of the assets of the Company, the
merger of the Company with or into another corporation in which the Company is
not the surviving corporation or any other capital reorganization in which more
than 50% of the shares of the Company entitled to vote are exchanged, the
Company will give to each nonemployee director either (i) a reasonable time
within which to exercise the option, including any part of the option that would
not otherwise be exercisable, prior to the effectiveness of any such transaction
at the end of which time the Option will terminate, or (ii) the right to
exercise the option, including any part of the option that would not otherwise
be exercisable (or receive a substitute option with comparable terms) as to an
equivalent number of shares of stock of the corporation succeeding the Company
or acquiring its business by reason of any such transaction. The Board of
Directors may amend or terminate the Directors' Plan; provided, however, that no
such action may adversely affect any outstanding option, and the provisions
regarding the grant of options under the plan may be amended only once in any
six month period, other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended. If not terminated earlier,
the Directors' Plan will have a term of ten years.
 
                                       41

<PAGE>   44
 
EMPLOYMENT AGREEMENTS
 
In February 1995, the Company entered into a letter agreement with Dr. Levitt,
pursuant to which Dr. Levitt agreed to serve as Vice President of Drug
Development for the Company. Under the terms of the agreement, Dr. Levitt
received a starting salary of $15,833 per month and is eligible to receive an
annual December bonus of up to 20% of his calendar year gross compensation. Dr.
Levitt's employment with the Company is "at-will" and may be terminated by Dr.
Levitt or the Company at any time for any reason with or without cause. In the
event the Company terminates Dr. Levitt without cause, the Company has agreed to
pay Dr. Levitt's salary for one year. Under the terms of the agreement, Dr.
Levitt was entitled to receive and has been granted an option to purchase 73,529
shares of Common Stock at the fair market value of such shares at the time of
the option grant.
 
                     INVESTMENT COMPANY ACT CONSIDERATIONS
 
The Investment Company Act of 1940, as amended (the "1940 Act"), requires the
registration of, and imposes various substantive restrictions on, certain
companies that engage primarily, or propose to engage primarily, in the business
of investing, reinvesting, or trading in securities, or that fail certain
statistical tests regarding the composition of assets and sources of income, and
are not primarily engaged in businesses other than investing, holding, owning or
trading securities. The Company believes that under the provisions of the 1940
Act, it is, and it intends to remain, primarily engaged in businesses other than
investing, reinvesting, owning, holding, or trading in securities. The Company
will seek temporarily to invest the proceeds of the Offering, pending their use
as described under "Use of Proceeds", and to apply the proceeds of the Offering
in the manner described under "Use of Proceeds" so as to avoid becoming subject
to the registration requirements of the 1940 Act. Such investment is likely to
result in the Company obtaining lower yields on the funds invested than might be
available in the securities market generally. However, there can be no assurance
that such investments and utilization can be made, or that any other exemption
would be available, so as to enable the Company to avoid the registration
requirements of the 1940 Act. If the Company were required to register as an
investment company under the 1940 Act, it would become subject to substantial
regulations with respect to its capital structure, management, operations,
transactions with affiliated persons (as defined in the 1940 Act) and other
matters. Application of the provisions of the 1940 Act would have a material
adverse effect on the Company. Rules have been proposed, but not yet adopted, to
exempt biotechnology companies from the 1940 Act provided they comply with
certain conditions relating to the development of their businesses and
investment of cash.
 
                                       42

<PAGE>   45
 

                              CERTAIN TRANSACTIONS
 
The price per share and number of shares presented herein give effect to the
1-for-3.4 reverse stock split which will be effected prior to the closing of the
Offering.
 
Since January 1993, the Company has issued in private placement transactions
(collectively, the "Private Placement Transactions") shares of Preferred Stock
as follows: an aggregate of 1,477,919 shares of Series A Preferred Stock at
$3.40 per share in March 1993; an aggregate of 1,429,228 shares of Series B
Preferred Stock at $7.65 per share in June 1993 and November 1993; an aggregate
of 1,550,851 shares of Series C Preferred Stock at $8.16 per share in June 1994,
July 1994, October 1995, January 1996 and May 1996; and an aggregate of
1,150,883 shares of Series D Preferred Stock at $10.20 per share in November
1995, December 1995, January 1996 and February 1996.
 
All of the Preferred Stock issued in the Private Placement Transactions will
convert into Common Stock on a 1-for-1 basis upon the closing of the Offering.
The following table summarizes the shares of Preferred Stock purchased by
executive officers, directors and 5% stockholders of the Company and persons and
entities associated with them in the Private Placement Transactions:
 

<TABLE>
<CAPTION>
                                                           ---------------------------------------------------
                                                           SERIES A      SERIES B      SERIES C      SERIES D
                                                           PREFERRED     PREFERRED     PREFERRED     PREFERRED
                                                             STOCK         STOCK         STOCK         STOCK
                                                           ---------     ---------     ---------     ---------
<S>                                                        <C>           <C>           <C>           <C>
INVESTOR
DIRECTORS AND EXECUTIVE OFFICERS
Thomas D. Kiley, Esq.                                             --        14,705        15,318         9,803
Jeryl L. Hilleman                                              7,352            --            --            --
ENTITIES AFFILIATED WITH DIRECTORS
Entities affiliated with CW Group
  (Charles M. Hartman)(1)                                    288,234       164,585       122,549        24,509
Domain Partners II, L.P.
  (Brian H. Dovey)                                                --       370,370       220,588        24,509
Entities affiliated with Kleiner Perkins Caufield & Byers
  (Alexander E. Barkas, Ph.D.)(2)                            366,176       196,078       159,313        34,313
Entities affiliated with Venrock Associates
  (Patrick F. Latterell)(3)                                  307,352       183,899       140,931        24,509
OTHER 5% STOCKHOLDERS
Oxford Venture Fund III, Limited Partnership                 259,411        65,358            --            --
  and Oxford Venture Fund III-A, Limited Partnership
The Aetna Casualty & Surety Company                          220,588       101,307        12,255            --
Biotechnology Investments Limited                                 --       185,185       110,294        98,039
</TABLE>

 
- ---------------
 
(1) Entities affiliated with CW Group include CW Ventures II, L.P. and CW R&D II
    (Financial Fund).
(2) Entities affiliated with Kleiner Perkins Caufield & Byers include Kleiner
Perkins Caufield & Byers VI and KPCB VI Founders' Fund.
(3) Entities affiliated with Venrock Associates include Venrock Associates and
    Venrock Associates II, L.P.
 
In April 1996, the Company entered into a Consulting Agreement with Thomas D.
Kiley, a Director of the Company, pursuant to which Mr. Kiley agreed to provide
such advice and consultation as reasonably requested by the Company to its
officers and scientists on the direction, implementation and operations of its
scientific programs and business plans. As compensation for his services under
this agreement, Mr. Kiley has received an option to purchase 7,352 shares of
Common Stock at an exercise price of $2.04 per share, with vesting over a five
year period. Unless otherwise terminated by either the Company or Mr. Kiley,
this agreement will expire on April 10, 2001.
 
In May 1993, the Company provided an interest-free loan to Jeryl L. Hilleman,
Vice President of Operations, in the principal amount of $50,000, due May 20,
1996, pursuant to a note secured by a second deed of trust to Ms. Hilleman's
residence in Palo Alto, California. On May 20, 1996, the Company agreed to
extend the due date of this note to the earlier of May 22, 1997 or nine months
following the closing of an initial public offering of the Common Stock, with an
interest rate of 6% per annum, beginning as of May 21, 1996. In addition, in
connection with the exercise of an option to purchase Common Stock granted
pursuant to the Stock Option Plan, in March 1995, the Company provided a loan to
Ms. Hilleman, pursuant to a note secured by a stock pledge agreement, in the
 
                                       43

<PAGE>   46
 
principal amount of $9,900, with an interest rate of 7.07%, due upon the earlier
of March 10, 1998 or 30 days following any sale of the shares of Common Stock
purchased with the loan by Ms. Hilleman.
 
In July 1993, the Company provided a loan to Michael D. West, Vice President of
New Technologies and a Director of the Company, in the principal amount of
$55,000, with an interest rate of 3.95%, due July 7, 1996, pursuant to a note
secured by stock pledge agreement. On May 20, 1996, the Company agreed to extend
the due date of this note to the earlier of July 7, 1997 or nine months
following the closing of an initial public offering of the Company's Common
Stock, with an interest rate of 6.0% per annum, beginning as of July 8, 1996.
 
In July 1993, the Company provided an interest-free loan to Ronald W. Eastman,
President, Chief Executive Officer and a Director of the Company, in the
principal amount of $161,200, pursuant to a note secured by a second deed of
trust to Mr. Eastman's residence in Monte Sereno, California. The entire
outstanding principal balance under such note was repaid by Mr. Eastman in
August 1993. In addition, in connection with the exercise of an option to
purchase Common Stock granted pursuant to the Stock Option Plan, in March 1995,
the Company provided a loan to Mr. Eastman, pursuant to a note secured by a
stock pledge agreement, in the principal amount of $44,550, with an interest
rate of 7.07%, due upon the earlier of March 6, 1998 or 30 days following any
sale of the shares of Common Stock purchased with the loan by Mr. Eastman.
 
In December 1993, the Company provided an interest-free loan to Calvin B.
Harley, Vice President of Research, in the principal amount of $150,000, due
December 1, 1996, pursuant to a note secured by a second deed of trust to Dr.
Harley's residence in Palo Alto, California. In addition, in connection with the
exercise of an option to purchase Common Stock granted pursuant to the Stock
Option Plan, in October 1994, the Company provided a loan to Dr. Harley,
pursuant to a note secured by a stock pledge agreement, in the principal amount
of $14,850, with an interest rate of 5.91%, due upon the earlier of October 20,
1997 or 30 days following any sale of the shares of Common Stock purchased with
the loan by Dr. Harley.
 
In July 1995, the Company provided an interest-free loan to Daniel J. Levitt,
Vice President of Drug Development and Chief Medical Officer, in the principal
amount of $120,000, pursuant to a note secured by a second deed of trust to Dr.
Levitt's residence in San Francisco, California. Pursuant to the terms of the
note, the principal balance will be forgiven in four equal annual installments
of $30,000. As of May 31, 1996, $90,000 in principal amount remained outstanding
under such note. In addition, in connection with Dr. Levitt's relocation, the
Company purchased his former residence and resold it at a loss.
 
In September 1995, the Company provided two loans to David L. Greenwood, Chief
Financial Officer, Treasurer and Secretary, one in the principal amount of
$200,000, with an interest rate of 6.00%, due September 30, 1996, and the other
in the principal amount of $120,000, interest-free, due on the earlier of
September 30, 1998 or nine months following the closing of an initial public
offering of the Common Stock. Both loans were made pursuant to notes secured by
a second deed of trust to Mr. Greenwood's residence in Monte Sereno, California.
As of May 31, 1996, an aggregate of $200,000 in principal amount under such
notes remained outstanding.
 
In connection with the exercise of an option to purchase Common Stock granted
pursuant to the Stock Option Plan, in February 1995, the Company provided a loan
to Richard T. Haiduck, Vice President of Corporate Development, pursuant to a
note secured by a stock pledge agreement, in the principal amount of $26,335,
with an interest rate of 7.30%, due upon the earlier of February 27, 1998 or 30
days following any sale of the shares of Common Stock purchased with the loan by
Mr. Haiduck.
 
                                       44

<PAGE>   47
 
                             PRINCIPAL STOCKHOLDERS
 
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of May 31, 1996 and as adjusted to reflect the
sale of shares offered hereby and assuming conversion of all outstanding shares
of the Preferred Stock, as to (i) each person (or group of affiliated persons)
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, (ii) each of the Company's directors, (iii) each of the Named Executive
Officers and (iv) all directors and executive officers of the Company as a
group.
 

<TABLE>
<CAPTION>
                                                                           -----------------------------------------
                                                                                   SHARES BENEFICIALLY OWNED(1)
                                                                           ---------------------------------------------
                                                                                            PERCENT           PERCENT
                                                                                            PRIOR TO           AFTER
                 NAME AND ADDRESS OF BENEFICIAL HOLDER                      NUMBER        THE OFFERING      THE OFFERING
- ------------------------------------------------------------------------   ---------      ------------      ------------
<S>                                                                        <C>            <C>               <C>
Kleiner Perkins Caufield & Byers VI(2)                                       983,082             13.15%             9.65%
  2750 Sand Hill Road
  Menlo Park, California 94025
Venrock Associates(3)                                                        832,421             11.13              8.17
  30 Rockefeller Plaza, Room 5508
  New York, New York 10112
CW Ventures II, L.P.(4)                                                      743,993              9.95              7.30
  1041 Third Avenue
  New York, New York 10021
Domain Partners II, L.P.                                                     635,074              8.50              6.23
  One Palmer Square, Suite 515
  Princeton, New Jersey 08542
Oxford Venture Fund III, Limited Partnership and                             454,471              6.08              4.46
  Oxford Venture Fund III-A, Limited Partnership(5)
  315 Post Road West
  Westport, Connecticut 06880
The Aetna Life Insurance Company                                             444,442              5.95              4.36
  City Place
  Hartford, Connecticut 06156
Biotechnology Investments Limited                                            403,321              5.40              3.96
  St. Peter Port House, Sausmarez Street
  St. Peter Port, Guernsey GX13PH
Alexander E. Barkas, Ph.D.(2)(6)                                           1,035,431             13.79             10.13
Brian H. Dovey(7)                                                            660,073              8.83              6.48
Charles M. Hartman(4)(8)                                                     766,050             10.22              7.50
Thomas D. Kiley, Esq.(9)                                                      79,529              1.06                 *
Patrick F. Latterell(3)(10)                                                  854,478             11.41              8.37
Robert B. Stein, M.D., Ph.D.(11)                                               7,352                 *                 *
Ronald W. Eastman(12)                                                        388,733              5.03              3.72
Richard T. Haiduck(13)                                                       111,673              1.49              1.09
Calvin B. Harley, Ph.D.(14)                                                  145,114              1.92              1.41
Jeryl L. Hilleman(15)                                                        131,535              1.74              1.28
Daniel J. Levitt, M.D., Ph.D.(16)                                            111,278              1.47              1.08
Michael D. West, Ph.D.(17)                                                   271,409              3.59              2.64
All Directors and executive officers as a group (14 persons)(18)           4,774,987             56.83             42.94
</TABLE>

 
- ---------------
 *  Represents beneficial ownership of less than 1% of the Common Stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage of ownership of that person,
shares of Common Stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of May 31, 1996 are deemed
outstanding. Such shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of each other person. The persons named in
this table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them, subject to community property
laws where applicable and except as indicated in the other footnotes to this
table.
(2) Includes 862,181 shares held by Kleiner Perkins Caufield & Byers VI and
120,901 shares held by KPCB VI Founders' Fund. Alexander E. Barkas, a Director
of the Company, is a limited partner of KPCB VI Associates, the general partner
of Kleiner Perkins Caufield & Byers VI and KPCB VI Founders' Fund, and as such,
may be deemed to share voting and investment power with respect to such shares.
Dr. Barkas disclaims beneficial ownership of such shares except to the extent of
his pecuniary interest in such shares.
 
                                       45

<PAGE>   48
 
(3) Includes 574,674 shares held by Venrock Associates and 257,747 shares held
by Venrock Associates II, L.P . Patrick F. Latterell, a Director of the Company,
is a general partner of Venrock Associates and Venrock Associates II, L.P. and,
as such, may be deemed to share voting and investment power with respect to such
shares. Mr. Latterell disclaims beneficial ownership of such shares except to
the extent of his pecuniary interest in such shares.
(4) Includes 434,834 shares held by CW Ventures II, L.P. and 309,159 shares held
by CW R&D II (Financial Fund), L.P. Charles M. Hartman, a Director of the
Company, is a general partner of CW Ventures and CW R&D II (Financial Fund) and,
as such, may be deemed to share voting and investment power with respect to such
shares. Mr. Hartman disclaims beneficial ownership with respect to such shares
except to the extent of his pecuniary interest in such shares.
(5) Includes 363,578 shares held by Oxford Venture Fund III, Limited Partnership
("Oxford III") and 90,893 shares held by Oxford Venture Fund III Adjunct,
Limited Partnership ("Oxford III-A"). Oxford Partners III, Limited Partnership
is the general partner of Oxford III. Oxford Partners III-A, Limited Partnership
is the general partner of Oxford III-A.
(6) Includes 22,056 shares held directly by Alexander E. Barkas and 29,411
shares issuable upon the exercise of outstanding options held by Dr. Barkas
exercisable within 60 days of May 31, 1996, at which date no shares were vested.
Also includes 882 shares issuable upon the exercise of outstanding options held
by Linda Wijcik, the spouse of Dr. Barkas, exercisable within 60 days of May 31,
1996, at which date all of such shares were fully vested. The address of Dr.
Barkas is c/o Kleiner Perkins Caufield & Byers, 2750 Sand Hill Road, Menlo Park,
California 94025.
(7) Includes 635,074 shares held by Domain Partners II, L.P. and 24,999 shares
held by Domain Associates. By contractual arrangement, Domain Associates acts as
the U.S. Capital Advisor to Biotechnology Investments Limited ("BIL"). Domain
Associates and its partners have no voting and investment power over BIL's
shares and disclaim beneficial ownership of these shares. Brian H. Dovey, a
Director of the Company, is a general partner of Domain Associates and a general
partner of the general partner of Domain Partners II, L.P. Mr. Dovey disclaims
beneficial ownership of such shares up and to the extent of his pecuniary
interest in such shares. The address of Mr. Dovey is c/o Domain Associates, One
Palmer Square, Suite 515, Princeton, New Jersey 08542.
(8) Includes 22,057 shares issuable upon the exercise of outstanding options
held by Charles M. Hartman exercisable within 60 days of May 31, 1996, at which
date 2,696 shares were fully vested. The address of Mr. Hartman is c/o CW
Ventures, 1041 Third Avenue, New York, New York 10021.
(9) Includes 7,352 shares held directly by Thomas D. Kiley, 14,705 shares held
by the Kiley Family Partnership and 32,473 shares held by the Thomas D. Kiley
and Nancy L.M. Kiley Revocable Trust under Agreement dated August 7, 1981. Also
includes 24,999 shares issuable upon the exercise of outstanding options held by
Mr. Kiley exercisable within 60 days of May 31, 1996, at which date 368 shares
were fully vested.
(10) Includes 7,352 shares held by the Patrick Latterell Living Trust, of which
Patrick F. Latterell is trustee, and 14,705 shares issuable upon the exercise of
outstanding options held directly by Mr. Latterell exercisable within 60 days of
May 31, 1996, at which date no shares were vested. The address of Mr. Latterell
is c/o Venrock Associates, 755 Page Mill Road, Suite A230, Palo Alto, California
94304.
(11) Represents 7,352 shares issuable upon the exercise of outstanding options
held by Robert B. Stein exercisable within 60 days of May 31, 1996, at which
date no shares were vested.
(12) Includes an aggregate of 29,409 shares held by Patricia Eastman, the spouse
of Ronald W. Eastman, as custodian for Mr. Eastman's three minor children. Also
includes 102,941 shares held directly by Mr. Eastman and 256,383 shares issuable
upon the exercise of outstanding options held by Mr. Eastman exercisable within
60 days of May 31, 1996, at which date 56,753 shares were fully vested. The
address of Mr. Eastman is c/o Geron Corporation, 200 Constitution Drive, Menlo
Park, California 94025.
(13) Includes 86,184 shares held directly by Richard T. Haiduck and 25,489
shares issuable upon the exercise of outstanding options held by Mr. Haiduck
exercisable within 60 days of May 31, 1996, at which date 2,549 shares were
fully vested.
(14) Includes 44,117 shares held by the Harley Family Trust and 100,997 shares
issuable upon the exercise of outstanding options held by Calvin B. Harley
exercisable within 60 days of May 31, 1996, at which date 25,906 shares were
fully vested.
(15) Includes 1,470 shares held by Craig Albright as Trustee of the Colin M.
Albright 1991 Trust, 1,470 shares held by Craig Albright as Trustee of the Evan
M. Albright 1991 Trust and 1,470 shares held by Craig Albright as Trustee of the
Caroline V. Albright 1995 Trust. Also includes 7,352 shares held by the
Hilleman/Albright Family Trust. Also includes 27,941 shares held directly by
Jeryl L. Hilleman and 91,832 shares issuable upon the exercise of outstanding
options held by Ms. Hilleman exercisable within 60 days of May 31, 1996, at
which date 25,590 shares were fully vested.
(16) Includes 26,087 shares held directly by Daniel J. Levitt and 85,191 shares
issuable upon the exercise of outstanding options held by Dr. Levitt exercisable
within 60 days of May 31, 1996, at which date 5,953 shares were fully vested.
(17) Includes 194,765 shares held directly by Michael D. West as of June 7,
1996. Subsequent to May 31, 1996, Dr. West disposed of 88,235 shares. Also
includes 76,644 shares issuable upon the exercise of outstanding options held by
Dr. West exercisable within 60 days of May 31, 1996, at which date 21,814 shares
were fully vested. Additionally, Dr. West has agreed to transfer 8,823 shares to
a charitable trust. After the transfer of such 8,823 shares, Dr. West will have
no voting or investment power over such shares. Effective as of the date of such
transfer, Dr. West disclaims beneficial ownership of such shares.
 
                                       46

<PAGE>   49
 
(18) Includes 21,329 shares held directly by Kevin R. Kaster, an executive
officer of the Company. Also includes 74,992 shares and 116,011 shares issuable
upon the exercise of outstanding options held by Mr. Kaster and David L.
Greenwood, an executive officer of the Company, respectively, exercisable within
60 days of May 31, 1996, at which date 4,820 shares and 18,954 shares,
respectively, were fully vested.
 

                          DESCRIPTION OF CAPITAL STOCK
 
Upon completion of the Offering, the authorized capital stock of the Company
will consist of 25,000,000 shares of Common Stock, $0.001 par value, and
3,000,000 shares of Preferred Stock, $0.001 par value. The price and per share
information presented herein give effect to the 1-for-3.4 reverse stock split
with respect to the Common Stock to be effected prior to the closing of the
Offering, and the conversion of all outstanding shares of Preferred Stock into
shares of Common Stock upon the closing of the Offering.
 
COMMON STOCK
 
As of May 31, 1996, there were 7,475,767 shares of Common Stock outstanding that
were held of record by approximately 122 stockholders, after giving effect to
the conversion of all outstanding shares of the Company's Series A, Series B,
Series C and Series D Preferred Stock into shares of Common Stock at a
one-to-one ratio. There will be 10,191,905 shares of Common Stock outstanding
(assuming no exercise of the Underwriters' over-allotment option) following the
sale of the shares of Common Stock offered hereby. See "Management -- Stock
Plans."
 
The holders of Common Stock are entitled to one vote per share on all matters to
be voted upon by the stockholders. Subject to preferences that may be applicable
to any outstanding shares of Preferred Stock, the holders of Common Stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the Board of Directors out of funds legally available therefor. See
"Dividend Policy." In the event of a liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities, subject to preferences applicable
to shares of Preferred Stock, if any, then outstanding. The Common Stock has no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions available to the Common Stock. All
outstanding shares of Common Stock are, and the shares of Common Stock to be
sold in the Offering will be, fully paid and nonassessable.
 
PREFERRED STOCK
 
Effective upon the closing of the Offering, the Company will be authorized to
issue 3,000,000 shares of undesignated Preferred Stock. The Board of Directors
will have the authority to issue the undesignated Preferred Stock in one or more
series, and to designate the powers, preferences and rights, and the
qualifications, limitations and restrictions granted to or imposed upon any
wholly unissued series of undesignated Preferred Stock and to fix the number of
shares constituting any series and the designation of such series without any
further vote or action by the stockholders. The issuance of Preferred Stock may
have the effect of delaying, deferring or preventing a change in control of the
Company without further action by the stockholders and may adversely affect the
market price and the voting and other rights of the holders of Common Stock. At
present, the Company has no plans to issue any shares of Preferred Stock.
 
WARRANTS AND OTHER RIGHTS
 
The Company has granted a right to purchase 9,703 shares of Common Stock at an
exercise price of $3.40 per share and has outstanding a warrant exercisable for
2,352 shares of Common Stock at an exercise price of $7.65 per share, both of
which will expire, if not exercised, upon the closing of the Offering. The
Company expects this right to purchase Common Stock and the outstanding warrant
to be exercised upon the closing of this Offering. The Company also has
outstanding warrants exercisable for 9,190 shares of Common Stock at an exercise
price of $9.38 per share which expire on June 30, 1999, and outstanding a
warrant exercisable for 47,058 shares of Common Stock at an exercise price of
$7.65 per share which will expire on in February 2004.
 
REGISTRATION RIGHTS OF CERTAIN HOLDERS
 
The holders of 6,880,275 shares of Common Stock, the holders of warrants
exercisable for 56,248 additional shares of Common Stock and the holder of an
option exercisable for 9,703 additional shares of Common Stock (the "Registrable
Securities") or their transferees are entitled to certain rights with respect to
the registration of such shares under the Securities Act. These rights are
provided under the terms of an agreement between the Company and the holders of
Registrable Securities. Subject to certain limitations in the agreement, the
holders of at least 75% of the Registrable Securities may require, on two
occasions at any time after three months from the effective date of the
Offering, that the Company use its best efforts to register the Registrable
Securities for public resale. If the Company registers any of its Common Stock
either for its own account or for the account of other security holders, the
 
                                       47

<PAGE>   50
 
holders of Registrable Securities are entitled to include their shares of Common
Stock in the registration. A holder's right to include shares in an underwritten
registration is subject to the ability of the underwriters to limit the number
of shares included in the Offering. Holders of Registrable Securities holding at
least 15% of the Company's outstanding shares of capital stock may also require
the Company to register all or a portion of their Registrable Securities on Form
S-3 when use of such form becomes available to the Company, provided, among
other limitations, that the proposed aggregate selling price, net of
underwriting discounts and commissions, is at least $500,000. All fees, costs
and expenses of such registrations, excluding those incurred with respect to
registrations on Form S-3, must be borne by the Company and all selling expenses
(including underwriting discounts, selling commissions and stock transfer taxes)
relating to Registrable Securities must be borne by the holders of the
securities being registered. All fees, costs, and expenses (excluding selling
expenses) for the first four registrations on Form S-3 shall be borne by the
Company and, thereafter, by the holders of the securities being registered
(including selling expenses).
 
ANTI-TAKEOVER PROVISIONS OF DELAWARE LAW
 
The Company is subject to the provisions of Section 203 of the Delaware Law. In
general, the statute prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date that the person became an interested
stockholder unless (with certain exceptions) the business combination or the
transaction in which the person became an interested stockholder is approved in
a prescribed manner. Generally, a "business combination" includes a merger,
asset or stock sale or other transaction resulting in a financial benefit to the
stockholder, and an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years prior, did own) 15% or
more of the corporation's outstanding voting stock. This provision may have the
effect of delaying, deferring or preventing a change in control of the Company
without further action by the stockholders. In addition, upon completion of the
Offering, certain provisions of the Company's charter documents, including a
provision eliminating the ability of stockholders to take actions by written
consent, may have the effect of delaying or preventing changes in control or
management of the Company, which could have an adverse effect on the market
price of the Company's Common Stock. The Company's stock option and purchase
plans generally provide for assumption of such plans or substitution of an
equivalent option of a successor corporation or, alternatively, at the
discretion of the Board of Directors, exercise of some or all of the options
stock, including nonvested shares, or acceleration of vesting of shares issued
pursuant to stock grants, upon a change of control or similar event. The Board
of Directors has authority to issue up to 3,000,000 shares of Preferred Stock
and to fix the rights, preferences, privileges and restrictions, including
voting rights, of these shares without any further vote or action by the
stockholders. The rights of the holders of the Common Stock will be subject to,
and may be adversely affected by, the rights of the holders of any Preferred
Stock that may be issued in the future. The issuance of Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire a majority of the outstanding voting stock of the
Company, thereby delaying, deferring or preventing a change in control of the
Company. Furthermore, such Preferred Stock may have other rights, including
economic rights senior to the Common Stock, and, as a result, the issuance of
such Preferred Stock could have a material adverse effect on the market value of
the Common Stock. The Company has no present plan to issue shares of Preferred
Stock.
 
TRANSFER AGENT AND REGISTRAR
 
The Transfer Agent and Registrar for the Common Stock is U.S. Stock Transfer
Corporation.
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
Upon completion of the Offering, the Company will have 10,191,905 shares of
Common Stock outstanding, assuming no exercise of outstanding warrants and
options after May 31, 1996. Of these shares, the 2,500,000 shares sold in the
Offering will be freely transferable without restriction under the Securities
Act unless they are held by "affiliates" of the Company as that term is defined
in Rule 144 under the Securities Act. The remaining 7,691,905 shares of Common
Stock (the "Restricted Shares") held by officers, directors, employees,
consultants and other stockholders of the Company were sold by the Company in
reliance on exemptions from the registration requirements of the Securities Act
and are "restricted securities" within the meaning of Rule 144 under the
Securities Act and may not be sold publicly unless they are registered under the
Securities Act or are sold pursuant to Rule 144 or another exemption from
registration.
 
The officers, directors, employees and stockholders of the Company, who together
hold the Restricted Shares, have agreed not to sell their shares without the
prior written consent of J.P. Morgan Securities Inc. for a period of 180 days
from the date of this Prospectus. Kyowa Hakko has agreed not to sell the shares
of Common Stock to be issued in the Kyowa Hakko Direct Placement for a period of
two years from the closing of the Offering. Beginning 180 days after
commencement of the Offering, approximately 6,290,045 Restricted Shares that are
subject to lock-up agreements (as described below under "Underwriting") will
become eligible for sale in the public market subject to Rule 144 and Rule 701
under the Securities Act. The remaining approximately 1,401,860 Restricted
 
                                       48

<PAGE>   51
 
Shares, which are also subject to such lock-up agreements, will have been held
for less than two years upon the expiration of such lock-up agreements and will
become eligible for sale under Rule 144 at various dates thereafter as the
holding period provisions of Rule 144 are satisfied.
 
In general, under Rule 144 as currently in effect, a person (or persons whose
shares are aggregated) who has beneficially owned Restricted Shares for at least
two years, including persons who may be deemed "affiliates" of the Company, is
entitled to sell, within any three month period commencing 90 days after the
Offering, a number of shares that does not exceed the greater of 1% of the
number of shares of Common Stock then outstanding (approximately 101,919 shares
immediately after the Offering, assuming no exercise of the Underwriters'
over-allotment option) or the average weekly trading volume of the Common Stock
as reported through the Nasdaq National Market during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company. In addition, a person who is not deemed to have been an affiliate of
the Company at any time during the 90 days preceding a sale, and who has
beneficially owned for at least three years the shares proposed to be sold,
would be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above.
 
Under Rule 701 under the Securities Act, any employee, officer or director of or
consultant to the Company, who is not an affiliate of the Company, and who
purchased shares pursuant to a written compensatory plans or contract, including
the Stock Option Plan, is entitled to sell such shares without having to comply
with the public information, holding period, volume limitation or notice
provisions of Rule 144, and affiliates of the Company are permitted to sell such
shares without having to comply with the Rule 144 holding period restrictions,
in each case commencing 90 days after the Offering.
 
The Company presently intends to file a registration statement under the
Securities Act on Form S-8 to register approximately 2,518,758 shares of Common
Stock subject to outstanding stock options or reserved for issuance under the
Stock Option Plan and the Directors' Plan, as well as shares reserved for
issuance under the Purchase Plan. As of May 31, 1996, 1,437,977 shares were
issuable upon exercise of currently outstanding options and, taking into account
the effect of the lock-up agreements with the holders of options, 501,929 of
these shares were fully vested and eligible for sale in the public markets
beginning 180 days after commencement of the Offering, subject, in the case of
sales by affiliates, to the volume, manner of sale, notice and public
information requirements of Rule 144. See "Management -- Stock Plans."
 
The holders of 6,880,275 shares of Common Stock, the holders of warrants
exercisable for 56,248 additional shares of Common Stock and the holder of an
option exercisable for 9,703 additional shares of Common Stock (and such
holders' permitted transferees) are entitled to certain rights with respect to
the registration of such shares under the Securities Act. See "Description of
Capital Stock -- Registration Rights of Certain Holders." Registration of such
shares under the Securities Act would result in such shares becoming freely
tradable without restriction under the Securities Act (except for shares
purchased by affiliates of the Company) immediately upon the effectiveness of
such registration. If such holders, by exercising their demand registration
rights, cause a larger number of securities to be registered and sold in the
public market, such sales could have an adverse effect on the market price for
the Common Stock. If the Company were to include in a Company-initiated
registration any Registrable Securities pursuant to the exercise of piggyback
registration rights, such sales may have an adverse effect on the Company's
ability to raise needed capital.
 
Prior to the Offering, there has been no public market for the Common Stock of
the Company. No predictions can be made of the effect if any, that the sale or
availability for sale of shares of additional Common Stock will have on the
market price of the Common Stock. Nevertheless, sales of a substantial amount of
such shares by existing stockholders or by stockholders purchasing in the
Offering could have a negative impact on the market price of the Common Stock.
 
                                       49

<PAGE>   52
 

                                  UNDERWRITING
 
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date of this Prospectus (the "Underwriting Agreement"), the
Underwriters named below, for whom J.P. Morgan Securities Inc., Montgomery
Securities and Salomon Brothers Inc are acting as representatives (the
"Representatives"), have severally agreed to purchase, and the Company has
agreed to sell to them, the respective numbers of shares of Common Stock set
forth opposite their names below. Under the terms and conditions of the
Underwriting Agreement, the Underwriters are obligated to take and pay for all
such shares of Common Stock, if any are taken. Under certain circumstances, the
commitments of nondefaulting Underwriters may be increased as set forth in the
Underwriting Agreement.
 

<TABLE>
<CAPTION>
                                                                                           ----------------
                                      UNDERWRITERS                                         NUMBER OF SHARES
                                                                                           ----------------
<S>                                                                                        <C>
J.P. Morgan Securities Inc. .............................................................
Montgomery Securities....................................................................
Salomon Brothers Inc.....................................................................
                                                                                               ---------
  Total..................................................................................
                                                                                               =========
</TABLE>

 
The Underwriters propose initially to offer the Common Stock directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $          per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $          per share to certain other dealers. After the
initial public offering of the Common Stock, the public offering price and such
concession may be changed.
 
The Company has granted to the Underwriters an option, expiring at the close of
business on the 30th day after the date of this Prospectus, to purchase up to
375,000 additional shares of Common Stock at the initial public offering price,
less the underwriting discount. The Underwriters may exercise such option solely
for the purpose of covering over-allotments, if any. To the extent the
Underwriters exercise the option, each Underwriter will have a firm commitment,
subject to certain conditions, to purchase approximately the same percentage of
such additional shares as the number set forth next to such Underwriter's name
in the preceding table bears to the total number of shares of Common Stock
offered hereby.
 
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
 
The Company, its officers, directors and stockholders have agreed, subject to
certain exceptions, not to, directly or indirectly, (i) sell, grant any option
to purchase or otherwise transfer or dispose of any shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of Common
Stock or file a registration statement under the Securities Act with respect to
the foregoing or (ii) enter into any swap or other agreement or transaction that
transfers, in whole or in part, the economic consequence of ownership of the
Common Stock, without the prior written consent of J.P. Morgan Securities Inc.,
for a period of 180 days after the date of this Prospectus. The foregoing does
not prohibit the Company's issuance of shares pursuant to the exercise of the
Underwriters over-allotment option or under the Stock Option Plan, the
Directors' Plan or the Stock Purchase Plan. The Company is not aware that any
party to such agreement has requested a consent from J.P. Morgan Securities
Inc., and J.P. Morgan Securities Inc. has advised the Company that it has no
current intention to give such consent, although there can be no assurance that
it will not do so.
 
Application has been made to have the Common Stock quoted on the Nasdaq National
Market, under the symbol "GERN".
 
The Underwriters have advised the Company that they do not expect that sales to
accounts over which they exercise discretionary authority will exceed 5% of the
shares offered hereby.
 
Prior to the Offering, there has been no public market for the Common Stock. The
initial public offering price for the shares of Common Stock offered hereby will
be determined through negotiations among the Company and the Underwriters. Among
the factors to be considered in making such determination are the history of and
the prospects for the industry in which the Company operates, an assessment of
the Company's management, the present operations of the Company, the historical
results of operations of the Company, the prospects for future earnings of the
Company, the general conditions of the securities markets at the time of the
Offering and the prices of similar securities of generally comparable companies.
 
There can be no assurance that an active trading market will develop for the
Common Stock or that the Common Stock will trade in the public market subsequent
to the Offering at or above the initial public offering price.
 
                                       50

<PAGE>   53
 
From time to time in the ordinary course of their respective businesses, the
Representatives and their respective affiliates may in the future provide
investment banking and other financial services to the Company and its
affiliates.
 

                                 LEGAL MATTERS
 
The validity of the Common Stock offered hereby will be passed upon for the
Company by its counsel, Venture Law Group, A Professional Corporation, Menlo
Park, California. Joshua L. Green, a director of Venture Law Group, is Assistant
Secretary of the Company. Certain legal matters in connection with the Offering
will be passed upon for the Underwriters by Skadden, Arps, Slate, Meagher &
Flom, Los Angeles, California. As of the date of this Prospectus, certain
directors and employees of Venture Law Group beneficially own 2,041 shares of
Common Stock.
 

                                    EXPERTS
 
The financial statements of the Company at December 31, 1994 and 1995 and for
the three years in the period ended December 31, 1995 appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, and are included in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
 
The statements in this Prospectus as set forth under the captions "Risk
Factors -- Dependence on Proprietary Technology and Uncertainty of Patent
Protection" and "Business -- Patents, Proprietary Technology and Trade Secrets"
have been passed upon by Townsend and Townsend and Crew LLP, Palo Alto,
California, patent counsel to the Company, as experts on such matters, and are
included herein in reliance upon the review and approval of such firm.
 
                             ADDITIONAL INFORMATION
 
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 under the Securities Act with
respect to the Common Stock offered hereby (the "Registration Statement"). This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to the Company and such Common Stock, reference is made to the
Registration Statement and the exhibits and schedules thereto filed as a part
thereof. Statements contained herein as to the contents of any documents are not
necessarily complete. In each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement, and each such
statement is qualified in its entirety by such reference. Copies of the
Registration Statement, including exhibits and schedules filed therewith, may be
inspected without charge at the Commission's principal office in Washington,
D.C. or obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Company
intends to distribute to its stockholders annual reports containing audited
financial statements and will make available copies of quarterly reports for the
first three quarters of each fiscal year containing unaudited interim financial
information.
 
                                       51

<PAGE>   54
 
                               GERON CORPORATION
 

                         INDEX TO FINANCIAL STATEMENTS
 

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     -----
<S>                                                                                                  <C>
Report of Ernst & Young LLP, Independent Auditors.................................................     F-2
Balance Sheets....................................................................................     F-3
Statements of Operations..........................................................................     F-4
Statements of Stockholders' Equity................................................................     F-5
Statements of Cash Flows..........................................................................     F-6
Notes to Financial Statements.....................................................................     F-7
</TABLE>

 
                                       F-1

<PAGE>   55
 

               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
 
The Board of Directors and Stockholders
Geron Corporation
 
We have audited the accompanying balance sheets of Geron Corporation at December
31, 1994 and 1995, and the related statements of operations, stockholders'
equity, and cash flows for the three years in the period ended December 31,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Geron Corporation at December
31, 1994 and 1995 and the results of its operations and its cash flows for the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
 
Palo Alto, California
February 9, 1996, except as to
Note 10 as to which the date
is           , 1996
 
- --------------------------------------------------------------------------------
 
The foregoing report is in the form that will be signed upon completion of
certain events as described in Note 10 to the Financial Statements.
 
                                            /s/ ERNST & YOUNG LLP
                                            ERNST & YOUNG LLP
 
Palo Alto, California
June 11, 1996

 
                                       F-2

<PAGE>   56
 
                               GERON CORPORATION
 
                                 BALANCE SHEETS
 

<TABLE>
<CAPTION>
                                                               -------------------------------------------------
<S>                                                            <C>         <C>         <C>         <C>
                                                                   DECEMBER 31,
                                                               ---------------------                   PRO FORMA
                                                                                                   STOCKHOLDERS'
                                                                    1994                               EQUITY AT
                                                               ---------               MARCH 31,       MARCH 31,
(In thousands, except share and per share amounts)                              1995        1996            1996
                                                                           ---------   ---------   -------------
                                                                                              (UNAUDITED)
ASSETS
Current assets:
  Cash and cash equivalents                                    $   6,523   $  12,542   $   8,404
  Short-term investments                                           7,392       3,011       5,535
  Other current assets                                               231         349         519
                                                               ---------   ---------   ---------
          Total current assets                                    14,146      15,902      14,458
Property and equipment, net                                        2,382       2,746       2,561
Notes receivable from officers                                       273         817         799
Deposits and other assets                                            271         284         283
                                                               ---------   ---------   ---------
                                                               $  17,072   $  19,749   $  18,101
                                                                ========    ========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                             $     454   $     500   $     342
  Accrued compensation                                               330         445         235
  Accrued liabilities                                                314         513         412
  Deferred revenue                                                    --       1,335          --
  Current portion of capital lease obligations and equipment
     loans                                                           638         994         979
                                                               ---------   ---------   ---------
          Total current liabilities                                1,736       3,787       1,968
Noncurrent portion of capital lease obligations and equipment
  loans                                                            1,647       1,654       1,471
Commitments
Stockholders' equity:
  Preferred stock -- Issuable in series, $0.001 par value;
     5,438,944, 6,410,759 and 6,410,759 shares authorized at
     December 31, 1994 and 1995 and March 31, 1996,
     respectively; 5,212,411, 6,071,390 and 6,364,274 shares
     issued and outstanding at December 31, 1994, December
     31, 1995 and March 31, 1996, respectively (none pro
     forma); (liquidation preference of $39,925,862 at
     December 31, 1995 and $42,911,861 at March 31, 1996)              5           6           6     $      --
  Common stock, $0.001 par value: 8,823,529, 10,294,117 and
     10,294,117 shares authorized at December 31, 1994 and
     1995 and March 31, 1996, respectively; 642,162, 929,089
     and 929,390 shares issued and outstanding at December
     31, 1994 and 1995 and March 31, 1996, respectively
     (7,293,664 shares pro forma)                                      1           1           1             7
  Additional paid-in capital                                      31,325      40,205      43,191        43,191
  Notes receivable from stockholders                                 (38)       (131)       (303)         (303)
  Deferred compensation                                               --          --         (12)          (12)
  Accumulated deficit                                            (17,604)    (25,773)    (28,221)      (28,221)
                                                               ---------   ---------   ---------   -------------
          Total stockholders' equity                              13,689      14,308      14,662     $  14,662
                                                                                                   ===========
                                                               ---------   ---------   ---------
                                                               $  17,072   $  19,749   $  18,101
                                                                ========    ========    ========
</TABLE>

 
                            See accompanying notes.
 
                                       F-3

<PAGE>   57
 
                               GERON CORPORATION
 
                            STATEMENTS OF OPERATIONS
 

<TABLE>
<CAPTION>
                                        ----------------------------------------------------------------------
<S>                                     <C>            <C>            <C>            <C>            <C>
                                                YEAR ENDED DECEMBER 31,
                                        ----------------------------------------
                                              1993                                      THREE MONTHS ENDED
                                        ----------                                           MARCH 31,
(In thousands, except share and per                                                  -------------------------
share amounts)                                               1994           1995                          1996
                                                       ----------     ----------           1995     ----------
                                                                                     ----------
                                                                                            (UNAUDITED)
Revenues -- contract                    $       --     $       --     $    5,490     $       --     $    1,335
Operating expenses:
  Research and development                   3,975          8,099         11,321          2,455          3,294
  General and administrative                 2,220          2,397          2,888            573            681
                                        ----------     ----------     ----------     ----------     ----------
          Total operating expenses           6,195         10,496         14,209          3,028          3,975
                                        ----------     ----------     ----------     ----------     ----------
Loss from operations                        (6,195)       (10,496)        (8,719)        (3,028)        (2,640)
Interest and other income                      351            638            919            167            306
Interest and other expense                    (103)          (320)          (399)           (93)          (101)
                                        ----------     ----------     ----------     ----------     ----------
Net loss                                $   (5,947)    $  (10,178)    $   (8,199)    $   (2,954)    $   (2,435)
                                        ==========     ==========     ==========     ==========     ==========
Pro forma net loss per share (Note 1)                                 $    (1.03)                   $    (0.30)
                                                                      ==========                    ==========
Shares used in computing pro forma net
  loss per share (Note 1)                                              7,954,863                     8,009,240
                                                                      ==========                    ==========
</TABLE>

 
                            See accompanying notes.
 
                                       F-4

<PAGE>   58
 
                               GERON CORPORATION
 
                       STATEMENTS OF STOCKHOLDERS' EQUITY
 

<TABLE>
<CAPTION>
                                    ---------------------------------------------------------------------------------------
<S>                            <C>         <C>      <C>        <C>      <C>          <C>          <C>         <C>        <C>
                                  PREFERRED STOCK
                               ------------------
                                                                                          NOTES
                                  SHARES                                             RECEIVABLE                             TOTAL
                               ---------                 COMMON STOCK   ADDITIONAL         FROM    DEFERRED    ACCUMU-      STOCK
(In thousands, except share                         -----------------      PAID IN       STOCK-   COMPENSA-      LATED   HOLDERS'
and per share amounts)                     AMOUNT              AMOUNT      CAPITAL      HOLDERS        TION    DEFICIT     EQUITY
                                           ------     SHARES   ------   ----------   ----------   ---------   --------   --------
                                                    --------
  Balances at December 31,
    1992                         757,353     $1      463,221     $1      $  2,745      $   --       $  --     $ (1,458)  $  1,289
    Issuance of Series A
      convertible preferred
      stock                    1,477,919      1           --     --         5,024          --          --           --      5,025
    Issuance of common stock
      upon exercise of
      options                         --     --       27,916     --             9          --          --           --          9
    Issuance of Series B
      convertible preferred
      stock net of issuance
      costs of $40             1,394,947      1           --     --        10,631          --          --           --     10,632
    Issuance of common stock          --     --       29,409     --            23          --          --           --         23
    Issuance of Series B
      convertible preferred
      stock                       34,281     --           --     --           262          --          --           --        262
    Net loss                          --     --           --     --            --          --          --       (5,947)    (5,947)
                                             --                  --
                               ---------            --------            ----------   ----------   ---------   --------   --------
  Balances at December 31,
    1993                       3,664,500      3      520,546      1        18,694          --          --       (7,405)    11,293
    Issuance of Series C
      convertible preferred
      stock, net of issuance
      costs of $64             1,547,911      2           --     --        12,565          --          --           --     12,567
    Issuance of common stock
      upon exercise of
      options                         --     --      121,616     --            66         (38)         --           --         28
    Net change in unrealized
      gain (loss) on
      available-for-sale
      securities                      --     --           --     --            --          --          --          (21)       (21)
    Net loss                          --     --           --     --            --          --          --      (10,178)   (10,178)
                                             --                  --
                               ---------            --------            ----------   ----------   ---------   --------   --------
  Balances at December 31,
    1994                       5,212,411      5      642,162      1        31,325         (38)         --      (17,604)    13,689
    Issuance of Series C
      convertible preferred
      stock                          245     --           --     --             2          --          --           --          2
    Issuance of common stock
      to certain research
      institutions                    --     --       32,352     --            26          --          --           --         26
    Issuance of Series D
      convertible preferred
      stock, net of issuance
      costs of $28               858,734      1           --     --         8,730          --          --           --      8,731
    Issuance of common stock
      upon exercise of
      options                         --     --      252,370     --           120         (97)         --           --         23
    Net issuance of common
      stock                           --     --        2,205     --             2           4          --           --          6
    Net change in unrealized
      gain (loss) on
      available-for-sale
      securities                      --     --           --     --            --          --          --           30         30
    Net loss                          --     --           --     --            --          --          --       (8,199)    (8,199)
                                             --                  --
                               ---------            --------            ----------   ----------   ---------   --------   --------
  Balances at December 31,
    1995                       6,071,390      6      929,089      1        40,205        (131)         --      (25,773)    14,308
    Issuance of Series D
      convertible preferred
      stock, net of issuance
      costs of $13
      (unaudited)                292,149     --           --     --         2,967        (180)         --           --      2,787
    Issuance of Series C
      convertible preferred
      stock (unaudited)              735     --           --     --             6          --          --           --          6
    Issuance of common stock
      upon exercise of
      options, net
      (unaudited)                     --     --          301     --             1           8          --           --          9
    Deferred compensation
      related to certain
      options and stock
      purchase rights granted
      to employees and
      consultants (unaudited)         --     --           --     --            12          --         (12)          --         --
    Net change in unrealized
      gain (loss) on
      available-for-sale
      securities (unaudited)          --     --           --     --            --          --          --          (13)       (13)
    Net loss (unaudited)              --     --           --     --            --          --          --       (2,435)    (2,435)
                                             --                  --
                               ---------            --------            ----------   ----------   ---------   --------   --------
  Balances at March 31, 1996
    (unaudited)                6,364,274     $6      929,390     $1      $ 43,191      $ (303)      $ (12)    $(28,221)  $ 14,662
                               =========   =======  ========   =======  =========    =========    =========   ========   ========
</TABLE>

 
                            See accompanying notes.
 
                                       F-5

<PAGE>   59
 
                               GERON CORPORATION
 
                            STATEMENTS OF CASH FLOWS
 

<TABLE>
<CAPTION>
                                                   ---------------------------------------------------------------
<S>                                                <C>          <C>           <C>          <C>          <C>
                                                          YEAR ENDED DECEMBER 31,
                                                   -------------------------------------
                                                                                             THREE MONTHS ENDED
                                                         1993                                     MARCH 31,
                                                   ----------                              -----------------------
(In thousands)                                                         1994         1995                      1996
                                                                -----------   ----------                ----------
                                                                                                 1995
                                                                                           ----------
                                                                                                 (UNAUDITED)
Cash flows from operating activities
  Net loss                                         $   (5,947)  $   (10,178)  $   (8,199)  $   (2,954)  $   (2,435)
  Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                        196           558          780          170          221
     Issuance of common and preferred stock in
       exchange for in-process technology,
       services rendered and research agreements           --            --           82           --            6
     Changes in assets and liabilities:
       Other current assets                               (50)         (164)        (118)           1         (170)
       Notes receivable from officers                    (155)          (18)        (544)         (93)          18

       Deposits and other assets                         (206)            7          (13)          (1)          --
       Accounts payable                                   941          (627)          46         (105)        (158)
       Accrued compensation                               120           210          114         (154)        (210)
       Accrued liabilities                                 74           148          199           66         (101)
       Deferred revenue                                    --            --        1,335           --       (1,335)
                                                   ----------   -----------   ----------   ----------   ----------
Net cash used in operating activities                  (5,027)      (10,064)      (6,318)      (3,070)      (4,164)
                                                   ----------   -----------   ----------   ----------   ----------
Cash flows from investing activities
  Capital expenditures                                   (846)          (78)        (482)         (37)         (15)
  Purchases of short-term investments                 (66,414)           --           --           --           --
  Purchases of securities available-for-sale               --        (5,975)      (7,579)      (1,302)      (6,037)
  Sales of short-term investments                      56,531            --           --           --           --
  Proceeds from sales of securities
     available-for-sale                                    --         8,645          500           --           --
  Proceeds from maturities of securities
     available-for-sale                                    --            --       11,490        6,425        3,500
                                                   ----------   -----------   ----------   ----------   ----------
Net cash (used in) provided by investing
  activities                                          (10,729)        2,592        3,929        5,086       (2,552)
                                                   ----------   -----------   ----------   ----------   ----------
Cash flows from financing activities
  Proceeds from equipment loans                           750            35          471           20           15
  Payments of obligations under capital leases
     and equipment loans                                 (157)         (483)        (769)        (159)        (233)
  Proceeds from issuance of preferred stock            15,919        12,567        8,681           --        2,787
  Proceeds from issuance of common stock                   32            28           25            2            9
                                                   ----------   -----------   ----------   ----------   ----------
Net cash provided by (used in) financing
  activities                                           16,544        12,147        8,408         (137)       2,578
                                                   ----------   -----------   ----------   ----------   ----------
Net increase (decrease) in cash and cash and cash
  equivalents                                             788         4,675        6,019        1,879       (4,138)
Cash and cash equivalents at beginning of period        1,060         1,848        6,523        6,523       12,542
                                                   ----------   -----------   ----------   ----------   ----------
Cash and cash equivalents at end of period         $    1,848   $     6,523   $   12,542   $    8,402   $    8,404
                                                   ==========   ===========   ==========   ==========   ==========
</TABLE>

 
                            See accompanying notes.
 
                                       F-6

<PAGE>   60
 
                               GERON CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Organization
Geron Corporation (the "Company") was incorporated in the State of Delaware on
November 28, 1990. Through April 21, 1995, prior to the signing of the Company's
collaborative agreement (see Note 7), the Company was in the development stage.
Geron is a biopharmaceutical company exclusively focused on discovering and
developing therapeutic and diagnostic products based upon common biological
mechanisms underlying cancer and other age-related diseases. Principal
activities to date have included obtaining financing, recruiting management and
technical personnel, securing operating facilities and conducting research and
development. The Company has no therapeutic products currently available for
sale and does not expect to have any therapeutic products commercially available
for sale for several years. These factors indicate that the Company's ability to
continue its research and development activities is dependent upon the ability
of management to obtain additional financing as required.
 
Interim Financial Information
In the opinion of management, the interim financial statements have been
prepared on the same basis as the annual financial statements and include all
accruals consisting of normal recurring adjustments which the Company considers
necessary for a fair presentation of the financial position at such date and the
operating results and cash flows for those periods. Results for the interim
period are not necessarily indicative of the results to be expected for the
entire year.
 
Net Loss Per Share
Except as noted below, historical net loss per share is computed using the
weighted average number of common shares outstanding. Common equivalent shares
from stock options, convertible preferred stock and warrants are excluded from
the computation as their effect is antidilutive, except that, pursuant to the
Securities and Exchange Commission Staff Accounting Bulletins, common and common
share equivalent shares issued during the period beginning 12 months prior to
the proposed initial filing of the Company's Registration Statement at prices
substantially below the assumed public offering price have been included in the
calculation as if they were outstanding for all periods presented (using the
treasury stock method and the assumed public offering price for stock options
and warrants and the if-converted method for convertible preferred stock).
 
Historical net loss per share information is as follows:
 

<TABLE>
<CAPTION>
                                                    ---------------------------------------------------------
<S>                                                 <C>         <C>         <C>         <C>         <C>
                                                                                         THREE MONTHS ENDED
                                                         YEAR ENDED DECEMBER 31,              MARCH 31,
                                                    ---------------------------------   ---------------------
                                                         1993        1994        1995                    1996
                                                    ---------   ---------   ---------               ---------
                                                                                             1995
                                                                                        ---------
                                                                                             (UNAUDITED)
Net loss per share                                  $   (2.47)  $   (4.13)  $   (2.99)  $   (1.13)  $   (0.87)
                                                    =========   =========   =========   =========   =========
Shares used in computing historical net loss per
  share                                             2,409,497   2,465,726   2,742,452   2,612,380   2,796,829
                                                    =========   =========   =========   =========   =========
</TABLE>

 
Pro forma net loss per share has been computed as described above and also gives
effect to the conversion of convertible preferred shares issued more than 12
months prior to the initial filing of the Registation Statement that will
automatically convert upon completion of the Company's initial public offering
("IPO") (using the if-converted method). Such shares are included from the
original date of issuance.
 
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
 
Revenue Recognition
Contract revenue consists of revenue from one collaboration agreement. The
Company recognizes research and development revenue as the related costs are
incurred. Milestone fees are recognized upon completion of specified milestones
according to contract terms. Deferred revenue represents the portion of research
payments received which have not been earned.
 
                                       F-7

<PAGE>   61
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
Depreciation and Amortization
The Company records property and equipment at cost and calculates depreciation
using the straight-line method over the estimated useful lives of the assets,
generally five years. Furniture and equipment leased under capital leases is
amortized over the useful lives of the assets.
 
Future Accounting Changes
In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards 123 ("SFAS 123"), "Accounting for
Stock-Based Compensation," that will be effective for the Company's 1996 fiscal
year. SFAS 123 allows companies which have stock-based compensation arrangements
with employees to adopt a new fair-value basis of accounting for stock options
and other equity instruments, or to continue to apply the existing accounting
rules under APB Opinion 25, "Accounting for Stock Issued to Employees," but with
additional financial statement disclosure. The Company has elected to continue
to account for stock-based compensation arrangements under APB Opinion 25 and,
therefore, expects the adoption of SFAS 123 to have no material impact on its
financial position, results of operations or cash flows.
 
2. FINANCIAL INSTRUMENTS
 
Cash Equivalents and Short-Term Investments
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. The Company places its
cash and cash equivalents in money market funds, commercial paper, corporate
master notes, and repurchase agreements with United States ("U.S.") financial
institutions. The Company's short-term investments include corporate notes and
U.S. Government bonds with maturities ranging from 3 to 12 months.
 
The Company classifies its marketable debt securities as available-for-sale.
Available-for-sale securities are recorded at fair value with unrealized gains
and losses reported in the accumulated deficit. Fair values for investment
securities are based on quoted market prices, where available. If quoted market
prices are not available, fair values are based on quoted market prices of
comparable instruments. Realized gains and losses are included in interest and
other income and are derived using the specific identification method for
determining the cost of securities sold and have been immaterial to date.
Declines in market value judged other-than-temporary result in a charge to
interest income. Dividend and interest income are recognized when earned.
 
The following is a summary of available-for-sale securities at December 31, 1994
and 1995 and March 31, 1996 (in thousands):
 

<TABLE>
<CAPTION>
                                                                          ---------------------------------
                                                                                ESTIMATED FAIR VALUE
                                                                          ---------------------------------
                                                                             DECEMBER 31,
                                                                          ------------------     MARCH 31,
                             (In thousands)                                1994       1995       ----------
                                                                          ------     -------        1996
                                                                                                 ----------
                                                                                                 (UNAUDITED)
<S>                                                                       <C>        <C>         <C>
Cash and cash equivalents:
  Money market fund                                                       $1,721     $ 9,674     $    5,370
  Commercial paper                                                           990          --            500
  Corporate master notes and repurchase agreements                         2,987       2,115          2,140
                                                                          ------     -------         ------
                                                                          $5,698     $11,789     $    8,010
                                                                          ======     =======         ======
Short-term investments:
  U.S. Government bonds, U.S. Treasury bills, notes and strips            $5,585     $ 1,001     $       --
  Corporate notes                                                          1,807       2,010          5,535
                                                                          ------     -------         ------
                                                                          $7,392     $ 3,011     $    5,535
                                                                          ======     =======         ======
</TABLE>

 
As of December 31, 1994 and 1995 and March 31, 1996, the difference between the
fair value and the amortized cost of available-for-sale securities was
immaterial. As of December 31, 1994 and 1995 and March 31, 1996, the average
portfolio duration was approximately three months, and the contractual maturity
of any single investment did not exceed one year.
 
Management of the Company believes it has established guidelines for investment
of its excess cash relative to diversification and maturities that maintain
safety and liquidity.
 
                                       F-8

<PAGE>   62
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
Notes Receivable from Officers
The Company held notes receivable of $273,000, $817,000 and $799,000 from
officers of the Company at December 31, 1994 and 1995 and March 31, 1996,
respectively. These notes, generally bearing no interest, are collateralized by
certain personal assets of the officers and are generally due upon the earlier
of nine months after the closing of an initial public offering ("IPO") of the
Company's common stock or three years from the date of the notes.
 
Other Fair Value Disclosures
At March 31, 1996, the fair value of the notes receivable from officers is
$679,000 ($700,000 at December 31, 1995). The fair value was estimated using
discounted cash flow analyses, using interest rates currently being offered for
loans with similar terms of borrowers of similar credit quality.
 
The fair market value of the equipment loans approximates the carrying value of
$832,000 at March 31, 1996 ($896,000 at December 31, 1995). The fair value was
estimated using discounted cash flow analyses, based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements.
 
3. PROPERTY AND EQUIPMENT
 
Property and equipment is comprised of the following:
 

<TABLE>
<CAPTION>
                                                                       ------------------------------------
<S>                                                                    <C>          <C>          <C>
                                                                            DECEMBER 31,
                                                                       -----------------------   MARCH 31,
                                                                             1994                ----------
                                                                       ----------
(In thousands)                                                                            1995         1996
                                                                                    ----------   ----------
                                                                                                 (UNAUDITED)
Furniture and equipment                                                $      567   $      907   $      916
Lab equipment                                                               1,668        2,445        2,472
Leasehold improvements                                                        889          915          915
                                                                       ----------   ----------   ----------
                                                                            3,124        4,267        4,303
Less accumulated depreciation and amortization                               (742)      (1,521)      (1,742)
                                                                       ----------   ----------   ----------
                                                                       $    2,382   $    2,746   $    2,561
                                                                       ==========   ==========   ==========
</TABLE>

 
Property and equipment at December 31, 1994 and 1995 and March 31, 1996 includes
assets under capitalized leases of approximately $2,058,000, $2,719,000 and
$2,739,000, respectively. Accumulated amortization related to leased assets was
approximately $443,000, $987,000 and $1,255,000, at December 31, 1994 and 1995
and March 31, 1996, respectively.
 
4. CAPITAL LEASE OBLIGATIONS AND EQUIPMENT LOANS
 
At December 31, 1995, the Company has lease and equipment loan credit lines
available of $1,546,000, of which approximately $787,000 was unused and
available. Under the terms of the master lease agreement, ownership of the
leased equipment will transfer to the Company at the end of the lease term.
 
On May 1, 1996, the Company renewed its existing committed equipment lease and
loan credit facility to provide for an incremental $2,000,000 availability. The
commitment period for additional drawdowns ends on April 30, 1997.
 
                                       F-9

<PAGE>   63
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
As of December 31, 1995, future minimum lease payments under capital leases and
principal payments on equipment loans are as follows:
 

<TABLE>
<CAPTION>
                                                                                      ---------------------
                                                                                      CAPITAL     EQUIPMENT
(In thousands)                                                                        LEASES        LOANS
                                                                                      -------     ---------
<S>                                                                                   <C>         <C>
Years ending December 31:
  1996                                                                                $   904      $   297
  1997                                                                                    623          386
  1998                                                                                    477          141
  1999                                                                                    123           72
                                                                                      -------     ---------
Total minimum lease and principal payments, respectively                                2,127      $   896
                                                                                                  ========
Amount representing interest                                                             (375)
                                                                                      -------
Present value of future lease payments                                                  1,752
Current portion of capital lease obligations                                             (697)
                                                                                      -------
Noncurrent portion of capital lease obligations                                       $ 1,055
                                                                                       ======
</TABLE>

 
The obligations under the equipment loans are secured by the equipment financed,
bear interest at fixed rates of approximately 13% and are due in monthly
installments through December 1999. In December 1993, in conjunction with the
equipment loan agreement, the Company issued a warrant to purchase 2,352 shares
of common stock at $7.65 per share. The warrant is exercisable immediately, may
be exercised on a net exercise basis and expires on the earliest of December 23,
1999, an initial public offering with gross proceeds to the Company in excess of
$18,000,000, a merger or reorganization with or into another corporation or
entity or a sale of all or substantially all of the Company's assets.
 
5. OPERATING LEASES AND OTHER COMMITMENTS
 
On February 1, 1994, the Company leased a facility under a five-year
noncancelable operating lease. Future minimum payments as of December 31, 1995
under the noncancelable operating lease are approximately $279,000 in 1996,
$290,000 in 1997 and $24,000 in 1998. Rent expense under operating leases was
approximately $273,000 for each of the years ended December 31, 1994 and 1995
and $68,000 for the three months ended March 31, 1995 and 1996. The Company has
the option to extend the term of the lease for one additional period of five
years.
 
In March 1996, the Company entered into a lease for additional space of which it
will take possession in November 1996. The term of the lease is five years, with
an option to renew the lease for two consecutive terms of two and one-half years
each. Future minimum lease payments under the new lease are approximately
$51,000 in 1996, $303,000 in 1997, $315,000 in 1998, $327,000 in 1999, $340,000
in 2000 and $296,000 in 2001.
 
The Company has also entered into a number of collaborations with academic
institutions and others to sponsor research in exchange for commercial rights to
any technology developed as a result of such research. In general, these
agreements provide for research payments over one to three years and can be
renewed at the option of the Company. The Company has made research payments of
$833,000, $930,000, $954,000, and $315,000 in 1993, 1994, 1995 and the three
months ended March 31, 1996, respectively. The Company is currently committed to
make research payments of $1,100,000, $275,000, and $75,000, pursuant to
existing research collaborations in 1996, 1997 and 1998, respectively.
 
                                      F-10

<PAGE>   64
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
6.  STOCKHOLDERS' EQUITY
 
Convertible Preferred Stock
Preferred stock is issuable in series, with the rights and preferences
designated by series. The shares designated and outstanding are as follows:
 

<TABLE>
<CAPTION>
                                      -----------------------------------------------------------------------
<S>                                   <C>            <C>            <C>            <C>             <C>
                                                                      ISSUANCE
                                                                     PRICE AND                           NON-
                                                                    LIQUIDATION         AMOUNT     CUMULATIVE
                                                         SHARES     PREFERENCE         PAID IN       DIVIDEND
                                          SHARES     ISSUED AND           (PER         (NET OF         AMOUNT
                                      DESIGNATED     OUTSTANDING        SHARE)        ISSUANCE      PER SHARE
                                      ----------     ----------     ----------          COSTS)     ----------
                                                                                   -----------
                                                                                   (IN THOUSANDS)
Series A Convertible                   2,244,998      2,235,272         $ 3.40     $     7,600         $ 0.34
Series B Convertible                   1,429,240      1,429,228           7.65          10,894           0.77
Series C Convertible                   1,764,706      1,547,911           8.16          12,567           0.82
                                       ---------      ---------                        -------
Balances at December 31, 1994          5,438,944      5,212,411                         31,061
Series C Convertible                    (204,656)           245           8.16               2           0.82
Series D Convertible                   1,176,471        858,734          10.20           8,731           1.02
                                       ---------      ---------                        -------
Balances at December 31, 1995          6,410,759      6,071,390                         39,794
Series C Convertible (unaudited)               -            735           8.16               6           0.82
Series D Convertible (unaudited)               -        292,149          10.20           2,787           1.02
                                       ---------      ---------                        -------
Balances at March 31, 1996
  (unaudited)                          6,410,759      6,364,274                    $    42,587
                                       =========      =========                        =======
</TABLE>

 
Each share of preferred stock is entitled to voting rights equivalent to the
number of shares of common stock into which such shares can be converted, and is
convertible, at the option of the holder, into one share of common stock,
subject to certain antidilution adjustments. Conversion is automatic upon the
closing of a firm commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933 ("initial
public offering"), which results in a price per share of not less than $17.00
(adjusted for any recapitalizations) and aggregate offering proceeds of not less
than $7,500,000. Conversion is also automatic upon the election of 66% or
greater of the outstanding shares of preferred stock.
 
Preferred stockholders have certain rights of first refusal which allow them to
participate ratably in any future issuances of stock to maintain their original
ownership percentages. This right terminates upon an initial public offering. No
dividends have been declared through March 31, 1996.
 
In April 1993, the Company granted an option to purchase 9,703 shares of Series
A convertible preferred stock at $3.40 per share. The option is exercisable
through the earlier of an initial public offering or April 2000, and may be
exercised on a net exercise basis.
 
In February 1994, in conjunction with a research agreement, the Company issued a
warrant to purchase 47,058 shares of common stock at $7.65 per share. The
warrant is exercisable through February 2004.
 
In June 1994, in conjunction with the Series C preferred stock financing, the
Company issued warrants to purchase 9,190 shares of Series C preferred stock at
$9.38 per share. These warrants are exercisable through June 1999.
 
1992 Stock Option Plan
The 1992 Stock Option Plan (the "Stock Option Plan") was adopted in July 1992.
The options granted under the Stock Option Plan may be either incentive stock
options or nonstatutory stock options. As of December 31, 1995 and March 31,
1996, the Company has authorized 1,730,882 shares of common stock for issuance
under the Stock Option Plan. Options granted under the Stock Option Plan expire
no later than ten years from the date of grant. For incentive stock options and
nonqualified stock options, the option price shall be at least 100% and 85%,
respectively, of the fair market value on the date of grant. If, at the time the
Company grants an incentive stock option, and the optionee directly or by
attribution owns stock possessing more than 10% of the total combined voting
 
                                      F-11

<PAGE>   65
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
power of all classes of stock of the Company, the option price shall be at least
110% of the fair market value and shall not be exercisable more than five years
after the date of grant.
 
Options under the plan are immediately exercisable; however, the shares issued
are subject to repurchase rights which lapse in a series of installments
measured from the vesting commencement date of the option. Options generally
vest over a period of five years from the date of grant, with one-tenth vesting
after six months and the remainder vesting ratably over the following 54 months.
Options may be granted with different vesting terms from time to time.
 
Under the Stock Option Plan, employees may exercise options in exchange for a
note payable to the Company. As of December 31, 1995 and March 31, 1996, notes
receivable from stockholders of $131,000 and $123,000, respectively, were
outstanding. These notes generally bear interest at 6% and are due and payable
in one lump sum on the earlier of 30 days after the date the maker transfers for
value any of the shares of the Company's common stock purchased with the note or
three years from the date of the note. Unvested shares are subject to repurchase
by the Company at the original purchase price.
 
Aggregate option activity is as follows:
 

<TABLE>
<CAPTION>
                                                              ---------------------------------------------------
<S>                                                           <C>             <C>         <C>           <C>
                                                                                              OUTSTANDING OPTIONS
                                                                     SHARES   -----------------------------------
                                                                  AVAILABLE                 PRICE PER
                                                                  FOR GRANT                     SHARE   AGGREGATE
                                                              -------------               -----------   ---------
                                                                              NUMBER OF
                                                                                 SHARES
                                                                              ---------
                                                                                                   (IN THOUSANDS)
Balance at December 31, 1993                                      128,724       475,715   $0.34-$0.78     $ 218
  Additional shares authorized                                  1,098,529             -         $   -         -
  Options granted                                                (519,682)      519,682   $0.78-$0.82       419
  Options exercised                                                     -      (121,616)  $0.34-$0.78       (66)
  Options canceled                                                 11,184       (11,184)  $0.34-$0.78        (4)
                                                              -------------   ---------                 ---------
Balance at December 31, 1994                                      718,755       862,597   $0.34-$0.82       567
  Options granted                                                (492,908)      492,908         $0.82       402
  Options exercised                                                     -      (252,370)  $0.34-$0.82      (120)
  Options canceled                                                 35,486       (35,486)  $0.34-$0.82       (25)
                                                              -------------   ---------                 ---------
Balance at December 31, 1995                                      261,333     1,067,649   $0.34-$0.82       824
  Options granted (unaudited)                                      (8,271)        8,271         $1.02         8
  Options exercised (unaudited)                                         -        (2,017)  $0.34-$0.82        (2)
  Options canceled (unaudited)                                     18,482       (18,482)  $0.78-$0.82       (15)
                                                              -------------   ---------                 ---------
Balance at March 31, 1996 (unaudited)                             271,544     1,055,421   $0.34-$1.02     $ 815
                                                               ==========     =========                 ========
</TABLE>

 
At December 31, 1995 and March 31, 1996, options to purchase 272,165 shares and
328,432 shares, respectively, were exercisable. At December 31, 1995 and March
31, 1996, there were 138,785 shares and 111,185 shares outstanding,
respectively, subject to repurchase under the Stock Option Plan.
 
At December 31, 1995 and March 31, 1996, 7,468,675 shares and 7,759,542 shares,
respectively, of common stock are reserved for issuances upon exercise of
options currently outstanding and options available for grant under the Stock
Option Plan, conversion of outstanding convertible preferred stock and exercise
of warrants.
 
Through March 31, 1996, the Company recorded deferred compensation expense for
the difference between the exercise price and the deemed fair value of the
Company's common stock, related to shares issued pursuant to stock purchase
rights and options granted in 1996. This deferred compensation expense
aggregates approximately $12,000 and will be amortized over the related vesting
period.
 
7. COLLABORATIVE AGREEMENT
 
In April 1995, the Company entered into a license and research collaboration
agreement with Kyowa Hakko Kogyo Co., Ltd. ("Kyowa Hakko"). Under the agreement,
the Company granted an exclusive license to Kyowa Hakko to make, use and sell
products based on
 
                                      F-12

<PAGE>   66
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
telomerase inhibition technology within a specified territory in exchange for
royalty payments, payments for certain research and development activities and
payments due on achieving specified development milestones. Costs associated
with research and development activities attributable to products being
developed under this agreement for the year ended December 31, 1995 and for the
three months ended March 31, 1996 were $6,900,000 and $1,900,000 respectively.
Under this agreement, revenues of approximately $5,500,000 and $1,335,000 were
recognized in the year ended December 31, 1995 and in the three months ended
March 31, 1996. No milestone payments have been received or earned to date.
 
8. INCOME TAXES
 
As of December 31, 1995, the Company had federal net operating loss
carryforwards of approximately $24,300,000 and state net operating loss
carryforwards of approximately $4,400,000. The federal net operating loss
carryforwards will expire at various dates beginning in 2006 through 2010, if
not utilized.
 
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
 
Significant components of the Company's deferred tax assets as of December 31
are as follows:
 

<TABLE>
<CAPTION>
                                                                              ----------------------------
<S>                                                                           <C>       <C>       <C>
                                                                                      DECEMBER 31,
                                                                              ----------------------------
                                                                                 1993
                                                                              -------
(In thousands)                                                                             1994       1995
                                                                                        -------   --------
Net operating loss carryforward                                               $ 2,500   $ 5,800   $  8,800
Research credits (expiring 2006-2010)                                             300       700      1,200
Capitalized research and development                                              100       400        500
Other -- net                                                                      100       100        300
                                                                              -------   -------   --------
Total deferred tax assets                                                       3,000     7,000     10,800
Valuation allowance for deferred tax assets                                    (3,000)   (7,000)   (10,800)
                                                                              -------   -------   --------
Total                                                                         $    --   $    --   $     --
                                                                              =======   =======   ========
</TABLE>

 
Because of the Company's lack of earnings history, the deferred tax assets have
been fully offset by a valuation allowance. The valuation allowance increased by
$2,400,000, $4,000,000 and $3,800,000 during the years ended December 31, 1993,
1994 and 1995, respectively.
 
Utilization of the net operating loss and credit carryforwards may be subject to
a substantial annual limitation due to the ownership change provisions of the
Internal Revenue Code of 1986. The annual limitation may result in the
expiration of net operating losses and credits before utilization.
 
9. STATEMENT OF CASH FLOWS DATA
 

<TABLE>
<CAPTION>
                                                           --------------------------------------------------
<S>                                                        <C>         <C>        <C>        <C>        <C>
                                                                    YEAR ENDED                 THREE MONTHS
                                                                   DECEMBER 31,
                                                           -----------------------------          ENDED
                                                              1993                              MARCH 31,
                                                           -------       1994       1995     ----------------
(In thousands)                                                         ------     ------                 1996
                                                                                                        -----
                                                                                               1995
                                                                                             ------
                                                                                               (UNAUDITED)
Supplementary Information
  Interest paid                                            $    76     $  290     $  359     $   80     $  91
Supplementary Investing and Financing Activities
  Equipment acquired under capital leases                  $ 1,003     $  988     $  661     $  352     $  20
  Notes issued to stockholders                             $    --     $   38     $   93     $   95     $ 180
  Net unrealized gain (loss) on available-for-sale         $    --     $  (21)    $   30     $   16     $ (13)
     securities
</TABLE>

 
                                      F-13

<PAGE>   67
 
                               GERON CORPORATION
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
    (INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE-MONTH PERIODS ENDED
                     MARCH 31, 1995 AND 1996 IS UNAUDITED)
 
10. SUBSEQUENT EVENTS
 
The Board of Directors has authorized the Company to proceed with an IPO. In
connection with the IPO, and upon approval by a two-thirds majority of the
holders of the Company's convertible preferred stock, all of the Company's
convertible preferred stock outstanding as of March 31, 1996 will be converted
into 6,364,274 shares of common stock. The pro forma effect of these conversions
has been reflected on the accompanying unaudited pro forma balance sheet
assuming they had occurred at March 31, 1996.
 
In June 1996, the Board of Directors approved a 1-for-3.4 reverse common stock
split. All share and per share amounts have been adjusted to reflect this stock
split retroactively. This reverse stock split will be submitted to the Company's
stockholders for approval.
 
In April 1996 the Board of Directors granted options under the Stock Option Plan
to purchase 540,869 shares of common stock at an exercise price of $2.04 per
share. These options were granted to provide additional incentives to retain
management, key employees and consultants and to offset the dilution caused by
the new shares issued in the initial public offering. The deemed fair value of
common stock at this date was $4.42 per share. The Company will record
$1,300,000 of deferred compensation related to these options in the quarter
ended June 30, 1996. This amount will be amortized over the vesting period of
individual options, generally a 60-month period.
 
On April 30, 1996 the Board of Directors authorized an increase in the number of
shares available for grant under the Stock Option Plan by 823,529 shares.
 
                                      F-14

<PAGE>   68
 
                                   [GRAPHICS]

<PAGE>   69
 
                                     [LOGO]
 
                                     GERON
                                  CORPORATION

<PAGE>   70
 
                   APPENDIX -- DESCRIPTION OF GRAPHIC IMAGES
 
FRONT COVER: LOGO:
 
A stylized hourglass wrapped in a three dimensional double helix, with the name
Geron centered at the narrow portion of the hourglass.
 
INSIDE FRONT:
 
Graphic entitled "Geron's Therapeutic Approaches." At center of graphic is
picture of Normal Dividing Cell showing telomeres breaking off of chromosomes.
Center graphic has following captions: "Normal Dividing Cells; Telomeres Shorten
with Cell Division; Telomerase Off." Arrows from center graphic point to upper
left ("Cancer") and upper right ("Age-Related Diseases"). At upper left of
graphic is picture of three round cancer cells with following captions: "Cancer
Cells; Telomeres Maintained-Replicative Immortality; Telomerase On." At upper
right is picture of one senescent cell with following captions: "Senescent (Old)
Cells; Altered Gene Expression; Telomerase Off." At bottom of graphic, with
arrow pointing to center picture, is "Cell Transplantation" with picture of
Primordial Stem cell with following captions "Primordial Stem Cells; Telomerase
On;" Four separated captions at bottom reading: Normal Dividing Cells.
Telomeres, the repeated sequences of DNA located at the ends of chromosomes,
shorten throughout a normal cell's replicative lifespan and, thus, the Company
has shown act as a molecular "clock" of cellular aging. Senescent (Old) Cells.
When telomeres reach a certain short length, Geron and its collaborators have
shown cells stop dividing and become senescent. Senescent cells display an
altered gene expression relative to replicatively young cells that leads to an
imbalance in the production of proteins and other cell products. Cancer Cells.
Cancer cells escape senescence by reactivating a germ line enzyme called
telomerase that enables them to maintain telomere length and achieve cellular
(replicative) immortality. Primordial Stem Cells. Telomeres is also found in
Primordial Stem cells. PS cells are germ lines cells unique in that they are
both immortal, consistent with their normal telomerase expression, and capable
of differentiating into any and all cell types and tissues in the body.
 
FIGURE 1:
 
Graphic showing a progression of cells with the telomeres shortening with each
cell division.
 
FIGURE 2:
 
Graphic showing a normal dividing cell with telomeres breaking off of
chromosomes with an arrow to a cancer cell with short telomeres, but no
telomeres breaking off.
 
INSIDE BACK COVER:
 
Two graphics. First graphic has two photographs, one of replicatively young
cells under a microscope and one of senescent cells under a microscope. Second
graphic entitled "Glowing Telomere" has photograph of the chromosomes of a cell
with the telomeres (ends of chromosomes) shining.
 
OUTSIDE BACK COVER:
 
Logo: same as front.

<PAGE>   71
 

 
                                   PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
The following table sets forth the costs and expenses, other than underwriting
discounts and commissions, payable by the Company in connection with the sale of
Common Stock being registered. All amounts are estimates except the registration
fee, the NASD filing fee and the Nasdaq National Market listing fee.
 

<TABLE>
<CAPTION>
                                                                                                  AMOUNT
                                                                                                TO BE PAID
                                                                                                ----------
<S>                                                                                             <C>
Registration Fee                                                                                 $  12,888
NASD Filing Fee                                                                                      4,238
Nasdaq National Market Listing Fee                                                                   1,000*
Printing and Engraving Expenses                                                                    110,000
Legal Fees and Expenses                                                                            275,000
Accounting Fees and Expenses                                                                       110,000
Blue Sky Qualification Fees and Expenses                                                            20,000
Directors and Officers' Liability Insurance                                                        250,000
Transfer Agent and Registrar Fees                                                                   10,000
Miscellaneous Fees and Expenses                                                                      6,874
                                                                                                ----------
  Total                                                                                          $ 800,000
                                                                                                  ========
</TABLE>

 
- ---------------
 
* To be completed by amendment.
 

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
Section 145 of the Delaware General Corporation Law authorizes a court to award,
or a corporation's Board of Directors to grant, indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Article XI of the Registrant's Amended and Restated Certificate of
Incorporation (Exhibit 3.3 hereto) provides for indemnification of its directors
and officers to the maximum extent permitted by the Delaware General Corporation
Law and Article VII, Section 6 of the Registrant's Amended and Restated Bylaws
(Exhibit 3.4 hereto) provides for indemnification of its directors, officers,
employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. In addition, the Registrant has entered into
Indemnification Agreements (Exhibit 10.1 hereto) with its directors and officers
containing provisions which are in some respects broader than the specific
indemnification provisions contained in the Delaware General Corporation Law.
The indemnification agreements may require the Company, among other things, to
indemnify its directors against certain liabilities that may arise by reason of
their status or service as directors (other than liabilities arising from
willful misconduct of culpable nature), to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified, and
to obtain directors' insurance if available on reasonable terms. Reference is
also made to Section 7 of the Underwriting Agreement contained in Exhibit 1.1
hereto, indemnifying officers and directors of the Company against certain
liabilities.
 

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES
 
(a) Since May 31, 1993, the Company has sold and issued the following
unregistered securities (without payment of any selling commission to any
person), as adjusted to give effect to the Company's reverse stock split to be
effected prior to the closing of the Offering, pursuant to which one share of
Common Stock will be reissued for each 3.4 shares of Common Stock:
 
     (1) The Company has sold and issued 559,249 shares of its Common Stock to
     directors, officers, employees and consultants pursuant to the exercise of
     options under the Stock Option Plan;
 
     (2) In June 1993, the Company sold and issued to certain investors
     1,394,948 shares of its Series B Preferred Stock for an aggregate of
     $10,671,437.25 in cash, and 29,409 shares of its Common Stock for an
     aggregate of $23,000.00 in cash. In November 1993, the Company also sold
     and issued an additional 34,280 shares of its Series B Preferred Stock for
     an aggregate of $262,248.75 in cash;
 
     (3) During the period from June 1994 through July 1994, the Company sold
     and issued to certain investors an aggregate of 1,547,911 shares of its
     Series C Preferred Stock for an aggregate of $12,631,010.40 in cash. From
     October 1995 through
 
                                      II-1

<PAGE>   72
 
     May 1996, the Company also sold and issued an additional 2,940 shares of
     its Series C Preferred Stock for an aggregate of $13,124.25 in payment of
     past services rendered by a consultant;
 
     (4) During the period from November 1995 through February 21, 1996, the
     Company issued and sold to certain investors an aggregate of 1,150,883
     shares of its Series D Preferred Stock for an aggregate of $11,739,165.00
     in cash;
 
     (5) In December 1993, the Company issued a warrant to purchase 2,352 shares
     of its Common Stock at an exercise price of $7.65 per share in connection
     with an equipment financing agreement;
 
     (6) In February 1994, the Company issued a warrant to purchase 47,058
     shares of its Common Stock at an exercise price of $7.65 per share in
     connection with a research agreement;
 
     (7) In June 1994, the Company issued warrants to purchase an aggregate of
     9,190 shares of its Series C Preferred Stock at an exercise price of $9.38
     per share in connection with its Series C Preferred Stock financing; and
 
     (8) On June 12, 1996, the Company's Board of Directors approved a 1-for-3.4
     reverse stock split of the Common Stock, which will be submitted to the
     stockholders for approval.
 
The sales and issuances of securities in the transactions described in paragraph
(1) were deemed to be exempt from registration under the Securities Act by
virtue of Rule 701 promulgated thereunder in that they were offered and sold
either pursuant to written compensatory benefit plans or pursuant to a written
contract relating to compensation, as provided by Rule 701.
 
The sales and issuances of securities in the transactions described in
paragraphs (2) through (7) above were deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) thereof as transactions by
an issuer not involving any public offering.
 
The transaction described in paragraph (8) will be deemed exempt under the
Securities Act because no "sale" occurred in connection with such transaction
pursuant to Section 2(3) and Rule 145 thereunder.
 
Appropriate legends are affixed to the stock certificates issued in the
aforementioned transactions. In all such transactions, all recipients of
securities represented their intention to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution
thereof and all recipients either received adequate information about the
Registrant or had access, through employment or other relationships, to such
information.
 
(b) There were no underwritten offerings employed in connection with any of the
transactions set forth in Item 15(a).
 

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(A) EXHIBITS
 

<TABLE>
<S>     <C>
 1.1    Form of Underwriting Agreement
 3.1    Amended and Restated Certificate of Incorporation of Registrant
 3.2    Bylaws of Registrant
 3.3    Form of Amended and Restated Certificate of Incorporation to be filed with the Delaware Secretary
        of State to effect the Company's 1-for-3.4 reverse stock split
 3.4    Form of Amended and Restated Bylaws to be effective upon the closing of the Offering
 4.1    Form of Common Stock Certificate
 5.1*   Opinion of Venture Law Group, A Professional Corporation
10.1    Form of Indemnification Agreement
10.2    1992 Stock Option Plan
10.3    1996 Employee Stock Purchase Plan
10.4    1996 Directors' Stock Option Plan
10.5    Investors' Rights Agreement dated November 10, 1995 among the Registrant and certain security
        holders of the Registrant
10.6+   Agreement with Respect to Option dated August 31, 1992 between the Registrant and Cold Spring
        Harbor Laboratory and Amendments No. 1 and 2 thereto dated May 3, 1993 and January 1994
10.7+   Patent License Agreement dated September 8, 1992 between the Registrant and University of Texas
        Southwestern Medical Center at Dallas
10.8+   Sponsored Research Agreement dated as of September 8, 1992 between the Registrant and University
        of Texas Southwestern Medical Center at Dallas
</TABLE>

 
                                      II-2

<PAGE>   73
 

<TABLE>
<S>     <C>
10.9+   Exclusive License Agreement dated February 2, 1994 between the Registrant and the Regents of the
        University of California
10.10+  License and Research Collaboration Agreement dated April 24,1995 between the Registrant and Kyowa
        Hakko Kogyo Co., Ltd. and Amendment No. 1 thereto dated July 15, 1995
10.11+  Standard Nonexclusive License Agreement dated January 1, 1996 between the Registrant and
        Wisconsin Alumni Research Foundation
10.12   Business Park Lease dated March 25, 1996 between the Registrant and David D. Bohannon
        Organization
10.13   Business Park Lease dated January 20, 1993 between the Registrant and David D. Bohannon
        Organization and Amendments Nos. 1, 2 and 3 thereto dated July 26, 1993, February 22, 1994 and
        March 25, 1996, respectively
10.14   Equipment Financing Agreement dated January 5, 1992 between the Registrant and Lease Management
        Services, Inc.
10.15   Master Lease Agreement dated January 5, 1993 between the Registrant and Lease Management
        Services, Inc.
10.16   Note Secured by Stock Pledge Agreement dated July 7, 1993 between the Registrant and Michael West
        and Amendment thereto dated May 20, 1996
10.17   Employment Letter Agreement dated February 15, 1995 between the Registrant and Daniel Levitt
10.18   Note Secured by Second Deed of Trust dated July 1, 1995 between the Registrant and Daniel Levitt
        and Amendment thereto dated May 31, 1996
10.19   Note Secured by Second Deed of Trust dated May 20, 1993 between the Registrant and Jeryl Lynn
        Hilleman and Amendment thereto dated May 20, 1996
10.20   Note Secured by Second Deed of Trust dated December 1993 between the Registrant and Calvin B.
        Harley
10.21   Note Secured by Second Deed of Trust dated September 30, 1995 between the Registrant and David L.
        Greenwood
10.22   Note Secured by Second Deed of Trust dated September 30, 1995 between the Registrant and David L.
        Greenwood
10.23   Common Stock Warrant dated May 4, 1994, issued by the Registrant to Cold Spring Harbor Laboratory
10.24*  Form of Series C Preferred Stock Purchase Warrant issued to certain investors on June 29, 1994
11.1    Statement of Computation of Net Loss per Share
23.1    Consent of Ernst & Young LLP, Independent Auditors (see page II-6)
23.2    Consent of Counsel (included in Exhibit 5.1)
23.3    Consent of Townsend and Townsend and Crew LLP
24.1    Power of Attorney (see page II-5)
27.1    Financial Data Schedule
</TABLE>

 
- ---------------
 
* To be supplied by amendment.
 
+ Certain portions of this Exhibit have been omitted for which confidential
  treatment has been requested and filed separately with the Securities and
  Exchange Commission.
 
(B) FINANCIAL STATEMENT SCHEDULES
 
Financial statement schedules are omitted because the information required to be
set forth therein is not applicable or is shown in the financial statements or
notes thereto.
 
                                      II-3

<PAGE>   74
 

ITEM 17.  UNDERTAKINGS
 
The undersigned Registrant hereby undertakes to provide to the Underwriters at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
 
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions referenced in Item 14 of this Registration Statement
or otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered hereunder, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
 
The undersigned registrant hereby undertakes that:
 
     (1) For purposes of determining any liability under the Securities Act, the
     information omitted from the form of prospectus filed as part of this
     Registration Statement in reliance upon Rule 430A and contained in a form
     of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
     497(h) under the Securities Act shall be deemed to be part of this
     Registration Statement as of the time it was declared effective; and
 
     (2) For the purpose of determining any liability under the Securities Act,
     each post-effective amendment that contains a form of prospectus shall be
     deemed to be a new registration statement relating to the securities
     offered therein, and the offering of such securities at that time shall be
     deemed to be the initial bona fide offering thereof.
 
                                      II-4

<PAGE>   75
 

                                   SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1933, Registrant has duly
caused this Registration Statement on Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Menlo Park, State of
California, on this 12th day of June, 1996.
 
                                        GERON CORPORATION
 
                                        By: /s/ Ronald W. Eastman
 
                                         ---------------------------------------
                                         Ronald W. Eastman
                                         (President and Chief Executive Officer)
 
                               POWER OF ATTORNEY
 
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Ronald W. Eastman and David L. Greenwood,
and each of them acting individually, as his attorney-in-fact, each with full
power of substitution, for him in any and all capacities, to sign any and all
amendments to this Registration Statement (including post-effective amendments),
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming his signature as it may be signed by either of said attorneys to any
and all amendments to said Registration Statement. Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by
the following persons in the capacities and on the dates indicated:
 

<TABLE>
<CAPTION>
                SIGNATURE                                         TITLE                            DATE
- ------------------------------------------    ----------------------------------------------  --------------
<C>                                           <S>                                             <C>
          /s/ Ronald W. Eastman               President, Chief Executive Officer               June 12, 1996
- ------------------------------------------    and Director (Principal Executive Officer)
            Ronald W. Eastman
          /s/ David L. Greenwood              Chief Financial Officer, Treasurer and           June 12, 1996
- ------------------------------------------    Secretary (Principal Financial and Accounting
            David L. Greenwood                Officer)
         /s/ Alexander E. Barkas              Director                                         June 12, 1996
- ------------------------------------------
           Alexander E. Barkas
            /s/ Brian H. Dovey                Director                                         June 12, 1996
- ------------------------------------------
              Brian H. Dovey
          /s/ Charles M. Hartman              Director                                         June 12, 1996
- ------------------------------------------
            Charles M. Hartman
           /s/ Thomas D. Kiley                Director                                         June 12, 1996
- ------------------------------------------
             Thomas D. Kiley
         /s/ Patrick F. Latterell             Director                                         June 12, 1996
- ------------------------------------------
           Patrick F. Latterell
           /s/ Robert B. Stein                Director                                         June 12, 1996
- ------------------------------------------
             Robert B. Stein
           /s/ Michael D. West                Director                                         June 12, 1996
- ------------------------------------------
             Michael D. West
</TABLE>

 
                                      II-5

<PAGE>   76
 
          CONSENT OF ERNST & YOUNG LLP, INDEPENDENT PUBLIC ACCOUNTANTS
 
We consent to the reference to our firm under the captions "Selected Financial
Data" and "Experts" and to the use of our report dated February 9, 1996, except
as to Note 10 as to which the date is                , 1996, in the Registration
Statement (Form S-1) and the related Prospectus of Geron Corporation for the
registration of 2,875,000 shares of its Common Stock.
 
                                       ERNST & YOUNG LLP
 
Palo Alto, California
          , 1996
 
- --------------------------------------------------------------------------------
 
The foregoing consent is in the form that will be signed upon completion of
certain events as described in Note 10 to the Financial Statements.
 
                                       /S/  ERNST & YOUNG LLP
 
                                       -----------------------------------------
                                       ERNST & YOUNG LLP
 
Palo Alto, California
June 11, 1996
 
                                      II-6

<PAGE>   77
 

                               INDEX TO EXHIBITS
 

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ------
<C>      <S>
 1.1     Form of Underwriting Agreement
 3.1     Amended and Restated Certificate of Incorporation of Registrant
 3.2     Bylaws of Registrant
 3.3     Form of Amended and Restated Certificate of Incorporation to be filed with the Delaware
         Secretary of State to effect the Company's 1-for-3.4 reverse stock split
 3.4     Form of Amended and Restated Bylaws to be effective upon the closing of the Offering
 4.1     Form of Common Stock Certificate
 5.1*    Opinion of Venture Law Group, A Professional Corporation
10.1     Form of Indemnification Agreement
10.2     1992 Stock Option Plan
10.3     1996 Employee Stock Purchase Plan
10.4     1996 Directors' Stock Option Plan
10.5     Investors' Rights Agreement dated November 10, 1995 among the Registrant and certain security
         holders of the Registrant
10.6+    Agreement with Respect to Option dated August 31, 1992 between the Registrant and Cold Spring
         Harbor Laboratory and Amendments No. 1 and 2 thereto dated May 3, 1993 and January 1994
10.7+    Patent License Agreement dated September 8, 1992 between the Registrant and University of Texas
         Southwestern Medical Center at Dallas
10.8+    Sponsored Research Agreement dated as of September 8, 1992 between the Registrant and University
         of Texas Southwestern Medical Center at Dallas
10.9+    Exclusive License Agreement dated February 2, 1994 between the Registrant and the Regents of the
         University of California
10.10+   License and Research Collaboration Agreement dated April 24,1995 between the Registrant and
         Kyowa Hakko Kogyo Co., Ltd. and Amendment No. 1 thereto dated July 15, 1995
10.11+   Standard Nonexclusive License Agreement dated January 1, 1996 between the Registrant and
         Wisconsin Alumni Research Foundation
10.12    Business Park Lease dated March 25, 1996 between the Registrant and David D. Bohannon
         Organization
10.13    Business Park Lease dated January 20, 1993 between the Registrant and David D. Bohannon
         Organization and Amendments No. 1, 2 and 3 thereto dated July 26, 1993, February 22, 1994 and
         March 25, 1996, respectively
10.14    Equipment Financing Agreement dated January 5, 1992 between the Registrant and Lease Management
         Services, Inc.
10.15    Master Lease Agreement dated January 5, 1993 between the Registrant and Lease Management
         Services, Inc.
10.16    Note Secured by Stock Pledge Agreement dated July 7, 1993 between the Registrant and Michael
         West and Amendment thereto dated May 20, 1996
10.17    Employment Letter Agreement dated February 15, 1995 between the Registrant and Daniel Levitt
10.18    Note Secured by Second Deed of Trust dated July 1, 1995 between the Registrant and Daniel Levitt
         and Amendment thereto dated May 31, 1996
10.19    Note Secured by Second Deed of Trust dated May 20, 1993 between the Registrant and Jeryl Lynn
         Hilleman and Amendment thereto dated May 20, 1996
10.20    Note Secured by Second Deed of Trust dated December 1993 between the Registrant and Calvin B.
         Harley
10.21    Note Secured by Second Deed of Trust dated September 30, 1995 between the Registrant and David
         L. Greenwood
10.22    Note Secured by Second Deed of Trust dated September 30, 1995 between the Registrant and David
         L. Greenwood
10.23    Common Stock Warrant dated May 4, 1994 issued by the Registrant to Cold Spring Harbor Laboratory
10.24*   Form of Series C Preferred Stock Purchase Warrant issued to certain investors on June 29, 1994
11.1     Statement of Computation of Net Loss per Share
23.1     Consent of Ernst & Young LLP, Independent Auditors (see page II-6)
23.2     Consent of Counsel (included in Exhibit 5.1)
23.3     Consent of Townsend and Townsend and Crew LLP
24.1     Power of Attorney (see page II-5)
27.1     Financial Data Schedule
</TABLE>

 
- ---------------
 
* To be supplied by amendment.
 
+ Certain portions of this Exhibit have been omitted for which confidential
  treatment has been requested and filed separately with the Securities and
  Exchange Commission.





<PAGE>   1
                                                                    EXHIBIT 1.1 

                                GERON CORPORATION

                         [______] Shares of Common Stock

                             Underwriting Agreement


                                               _______________, 1996


J.P. Morgan Securities Inc.
Montgomery Securities
Salomon Brothers Inc
As Representatives of the several underwriters
 listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York  10260

Ladies and Gentlemen:

         Geron Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the several underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of [_______] shares (the "Underwritten Shares")
of common stock, par value $.001 per share, of the Company (the "Common Stock")
and, for the sole purpose of covering over-allotments in connection with the
sale of the Underwritten Shares, at the option of the Underwriters, up to an
additional [_______] shares of Common Stock (the "Option Shares"). The
Underwritten Shares and the Option Shares are herein referred to as the
"Shares". The shares of Common Stock of the Company to be outstanding after
giving effect to the sale of the Shares are herein referred to as the "Stock".

         The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the
 provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement, as amended at the time when it shall become effective, including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any

<PAGE>   2
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462 Registration Statement.

         The Company hereby agrees with the Underwriters as follows:

         1. The Company agrees to issue and sell the Underwritten Shares to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective number of Underwritten Shares set forth opposite
such Underwriter's name in Schedule I hereto at a purchase price per share (the
"Purchase Price") of $[_____].

         In addition, the Company agrees to issue and sell the Option Shares to
the several Underwriters as hereinafter provided, and the Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company up to an aggregate of [_____] Option Shares at the
Purchase Price, for the sole purpose of covering over-allotments (if any) in the
sale of Underwritten Shares by the several Underwriters.

         If any Option Shares are to be purchased, the number of Option Shares
to be purchased by each Underwriter shall be the number of Option Shares which
bears the same ratio to the aggregate number of Option Shares being purchased as
the number of Underwritten Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 10 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representatives in
their sole discretion shall make.

         The Underwriters may exercise the option to purchase the Option Shares
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as to
which the option is being exercised and the date and time when the Option Shares
are to be delivered and paid for, which may be the same date and time as the
Closing Date (as hereinafter defined), but shall not be earlier than the Closing
Date nor later than the tenth full Business Day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). Any such notice shall be given at
least two Business Days prior to the date and time of delivery specified
therein.

                                       2

<PAGE>   3
         2. The Company understands that the Underwriters intend (i) to make a
public offering of the Shares as soon after (A) the Registration Statement has
become effective and (B) the parties hereto have executed and delivered this
Agreement, as in the judgment of the Representatives is advisable, and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.

         3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives,
no later than noon the Business Day (as defined below) prior to the Closing Date
(as defined below), in the case of the Underwritten Shares, on [_____], 1996, or
at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives and the Company may agree upon
in writing and, in the case of the Option Shares, on the date and at the time
specified by the Representatives in the written notice of the Underwriters'
election to purchase such Option Shares. The time and date of such payment for
the Underwritten Shares are referred to herein as the "Closing Date", and the
time and date for such payment for the Option Shares, if other than the Closing
Date, are herein referred to as the "Additional Closing Date". As used herein,
the term "Business Day" means any day other than a day on which banks are
permitted or required to be closed in New York City.

         Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives, for the respective accounts of the several Underwriters, of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates for
the Shares shall be made available for inspection and packaging by the
Representatives at the office of J.P. Morgan Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.

         4.      The Company represents and warrants to each Underwriter that:

                 (a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and 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 under the
Securities Act, complied when so filed in all material respects with the

                                        3

<PAGE>   4
Securities Act, and did not contain an 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, in the light of the circumstances under which they were
made, not misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;

                 (b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, contemplated by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material respects
with the Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as of the
date of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented, if applicable, at the Closing
Date or Additional Closing Date, as the case may be, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing representations and warranties
shall not apply to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use therein;

                 (c) the financial statements, and the related notes thereto,
included in the Registration Statement and the Prospectus present fairly the
financial position of the Company as of the dates indicated and the results of
operations and changes in cash flows for the periods specified; and said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein; the selected financial data and the summary
financial information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
financial statements included in the Prospectus;

                                        4

<PAGE>   5
                 (d) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any change
in the capital stock or long-term debt of the Company, or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company otherwise
than as set forth or contemplated in the Prospectus; and, except as set forth or
contemplated in the Prospectus, the Company has not entered into any transaction
or agreement (whether or not in the ordinary course of business) material to the
Company;

                 (e) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good standing would not have a material
adverse effect on the Company;

                 (f) this Agreement has been duly authorized, executed and
delivered by the Company;

                 (g) the Company has authorized capital stock as set forth in
the Prospectus and such authorized capital stock conforms as to legal matters to
the description thereof set forth in the Prospectus; all of the outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully-paid and non-assessable and are not subject to any pre-emptive
or similar rights; and, except as described in or expressly contemplated by the
Prospectus, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity interest
in the Company, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company, any such convertible or exchangeable securities or any such rights,
warrants or options;

                 (h) the Shares have been duly authorized, and, when issued and
delivered to and paid for by the Underwriters in accordance with the terms of
this Agreement, will be validly issued and will be fully paid and non-assessable
and will conform to the descriptions thereof in the Prospectus; and the issuance
of the Shares is not subject to any preemptive or similar rights;

                                        5

<PAGE>   6
                 (i) the Company is not, nor with the giving of notice or lapse
of time or both would be, in violation of or in default under, its Certificate
of Incorporation or By-Laws or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which it or its properties is bound, except for violations and defaults which
individually and in the aggregate are not material to the Company; the issue and
sale of the Shares and the performance by the Company of its obligations under
this Agreement and the consummation of the transactions contemplated herein will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the properties or assets of the
Company is subject, nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Company or
any applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky Laws in connection with the purchase
and distribution of the Shares by the Underwriters;

                 (j) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its properties or to which the Company is or may be a party or
to which any property of the Company is or may be subject which, if determined
adversely to the Company, could individually or in the aggregate have, or
reasonably be expected to have, a material adverse effect on the general
affairs, business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;

                 (k) the Company has good and marketable title in fee simple to
all items of real property and good and marketable

                                        6

<PAGE>   7
title to all personal property owned by it, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company; and any real property and buildings held under lease by the
Company are held under valid, existing and enforceable leases with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company;

                 (l) no relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required by
the Securities Act to be described in the Registration Statement and the
Prospectus which is not so described;

                 (m) no person has the right to require the Company to register
any securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and sale
of the Shares;

                 (n) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");

                 (o) the Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate located in
Cuba;

                 (p) Ernst & Young LLP, who have certified certain financial
statements of the Company, are independent public accountants as required by the
Securities Act;

                 (q) the Company has filed all federal, state, local and foreign
tax returns which have been required to be filed and have paid all taxes shown
thereon and all assessments received by them or any of them to the extent that
such taxes have become due and are not being contested in good faith; and,
except as disclosed in the Registration Statement and the Prospectus, there is
no tax deficiency which has been or might reasonably be expected to be asserted
or threatened against the Company;

                 (r) the Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might be

                                        7

<PAGE>   8
reasonably expected to, cause or result in stabilization or manipulation of the
price of the Common Stock;

                 (s) the Company owns, possesses or has obtained all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof, and
the Company has not received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the Registration
Statement and the Prospectus; and the Company is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of the date
hereof;

                 (t) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with any employees of the Company which are
likely to have a material adverse effect on the Company;

                 (u) 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 ("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;

                 (v) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company for
employees or former employees of the Company has been maintained in compliance
with its terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended, (the "Code"). No prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan, excluding transactions effected pursuant to a
statutory or administrative exemption. For each such plan which

                                        8

<PAGE>   9
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeded the present value of all benefits accrued under such
plan determined using reasonable actuarial assumptions;

                 (w)  the Company has no subsidiaries;

                 (x) the Company owns or possesses adequate patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names and other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business it now operates, and the Company has not received any notice or is not
otherwise aware of any claim, action or demand of any person in the United
States or elsewhere or any proceeding in the United States or elsewhere, pending
or threatened, which (a) challenges the ownership interests of the Company in
any of the Intellectual Property or (b) alleges that any product or service of
the Company infringes or misappropriates the Intellectual Property rights of
others or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company therein,
and which action or proceeding (including without limitation infringement,
misappropriation, and unfair competition), if the subject of any unfavorable
decision, ruling or finding, or invalidity or inadequacy, singly or in the
aggregate, could reasonably be expected to have a material adverse effect on the
Company;

                 (y) application has been made to list the Shares for quotation
on the Nasdaq National Market; and

                 (z) the Company maintains insurance of the types and in the
amounts generally deemed adequate for its business, including, without
limitation, insurance covering real and personal property owned or leased by the
Company against theft, damage, destruction, acts of vandalism and all other
material risks customarily insured against, all of which insurance is in full
force and effect. The Company has no reason to believe that it will not be able
to renew 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.

              5. The Company covenants and agrees with each of the several
Underwriters as follows:

                                        9

<PAGE>   10
                 (a) to use its best efforts to cause the Registration Statement
to become effective at the earliest possible time and, if required, to file the
final Prospectus with the Commission within the time periods specified by Rule
424(b) and Rule 430A under the Securities Act; and to furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 A.M., New York
City time, on the Business Day next succeeding the date of this Agreement in
such quantities as the Representatives may reasonably request;

                 (b) to deliver, at the expense of the Company, to the
Representatives four signed copies of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits, and to each
other Underwriter a conformed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case without exhibits and, during the
period mentioned in paragraph (e) below, to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements thereto) as
the Representatives may reasonably request;

                 (c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to the Representatives a
copy of the proposed amendment or supplement for review and not to file any such
proposed amendment or supplement to which the Representatives object;

                 (d) to advise the Representatives promptly, and to confirm such
advice in writing, (i) when the Registration Statement has become effective,
(ii) when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in paragraph (e) below, as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vii) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding

                                       10

<PAGE>   11
for such purpose; and to use its best efforts to prevent the issuance of any
such stop order, or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any order suspending any such
qualification of the Shares, or notification of any such order thereof and, if
issued, to obtain as soon as possible the withdrawal thereof;

                 (e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the Underwriters
a prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall occur
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 it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Company) to
which Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary 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 will comply with law;

                 (f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; provided that the
Company shall not be required to file a general consent to service of process in
any jurisdiction;

                 (g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of the
Company occurring after the effective date of the Registration Statement, which
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
of the Commission promulgated thereunder;

                 (h) so long as the Shares are outstanding, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;

                                       11

<PAGE>   12
                 (i) for a period of 180 days after the date of the initial
public offering of the Shares not to (i) 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 Stock or any securities
convertible into or exercisable or exchangeable for Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise, without the prior written consent of J.P.
Morgan Securities Inc., other than the Shares to be sold hereunder and any
shares of Stock of the Company issued upon the exercise of options granted under
existing employee stock option plans;

                 (j) to use the net proceeds received by the Company from the
sale of the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";

                 (k) to use its best efforts to effect the listing for quotation
of the Shares on the Nasdaq National Market;

                 (l) to file with the Commission such reports on Form SR as may
be required by Rule 463 under the Securities Act; and

                 (m) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing all costs
and expenses (i) incident to the preparation, issuance, execution and delivery
of the Shares, (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification of
the Shares under the laws of such jurisdictions as the Representatives may
designate (including fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the Shares on the Nasdaq
National Market, (v) related to the filing with, and clearance of the offering
by, the National Association of Securities Dealers, Inc., (vi) in connection
with the printing (including word processing and duplication costs) and delivery
of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the Registration
Statement and the Prospectus, including mailing and

                                       12

<PAGE>   13
shipping, as herein provided, (vii) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors, (viii) the
cost of preparing stock certificates and (ix) the cost and charges of any
transfer agent and any registrar.

              6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional Closing Date, as the
case may be, are subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:

                 (a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than 5:00
P.M., New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;

                 (b) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date or the Additional
Closing Date, as the case may be, as if made on and as of the Closing Date or
the Additional Closing Date, as the case may be, and the Company shall have
complied with all agreements and all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date or the Additional Closing
Date, as the case may be;

                 (c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Additional Closing Date, as the case may
be, there shall not have occurred any downgrading, nor shall any notice have
been given of (i) any downgrading, (ii) any intended or potential downgrading or
(iii) any review or possible change that does not indicate an improvement, in
the rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;

                 (d) since the respective dates as of which information is given
in the Prospectus, there shall not have been any change in the capital stock or
long-term debt of the Company or any material adverse change, or any development
involving a

                                       13

<PAGE>   14
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity or
results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus, the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated in
the Prospectus; and the Company shall have not sustained since the date of the
latest audited financial statements included in the Prospectus any material loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus;

                 (e) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a certificate
of David L. Greenwood, Chief Financial Officer of the Company, satisfactory to
the Representatives to the effect set forth in subsections (a) through (c) (with
respect to the respective representations, warranties, agreements and conditions
of the Company) of this Section 6 and to the further effect that there has not
occurred any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results of
operations of the Company from that set forth or contemplated in the
Registration Statement;

                 (f) Venture Law Group, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Closing Date
or the Additional Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:

                     (i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement;

                     (ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company;

                                       14

<PAGE>   15
                     (iii) the Company has no subsidiaries;

                     (iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the best of such counsel's knowledge, threatened
against or affecting the Company or any of its properties or to which the
Company is or may be a party or to which any property of the Company is or may
be subject which, if determined adversely to the Company, could individually or
in the aggregate have, or reasonably be expected to have, a material adverse
effect on the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company; to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and such
counsel does not know of any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement that are not described or
filed as required;

                     (v) this Agreement has been duly authorized, executed and
delivered by the Company;

                     (vi) the authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus in the column captioned
"Actual" under "Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement); the shares of issued and outstanding Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable; no holder of Common Stock is or will be subject to personal
liability by reason of being such a holder; and none of the outstanding shares
of capital stock of the Company was issued in violation of pre-emptive or other
similar rights of any stockholder of the Company arising by operation of law,
under the Certificate of Incorporation or By-Laws of the Company or under any
agreement to which the Company is a party;

                     (vii) all outstanding shares of preferred stock, par value
$.001 per share, of the Company will be converted into shares of Common Stock on
the Closing Date;

                     (viii) the Shares have been duly authorized, and when
delivered to and paid for by the Underwriters in accordance with the terms of
this Agreement, will be validly issued, fully paid and non-assessable and the
issuance of the Shares is not subject to any preemptive or similar rights;

                     (ix) except as disclosed in or specifically contemplated by
the Prospectus, to the best of such counsel's knowledge, there are no
outstanding options, warrants or other

                                       15

<PAGE>   16
rights calling for the issuance of, and no commitments, obligation, plans or
arrangements to issues, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the Company; the
outstanding stock options relating to the Common Stock have been duly authorized
and validly issued and the description thereof contained in the Prospectus is
accurate in all material respects;

                     (x) the statements in the Prospectus under "Business --
Strategic Collaborations, -- Research Collaborations, -- Government Regulation,
- -- Facilities, -- Legal Proceedings", "Management", "Certain Transactions",
"Description of Capital Stock", "Shares Eligible for Future Sale" and
"Underwriting", and in the Registration Statement in Items 14 and 15, insofar as
such statements constitute a summary of the terms of the Stock, legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such terms, legal matters, documents or proceedings;

                     (xi) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements thereto (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material respects with
the requirements of the Securities Act and believes that (other than the
financial statements and related schedules therein, as to which such counsel
need express no belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective did 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, and that the Prospectus, as amended or supplemented, if applicable,
does 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;

                     (xii) the Company is not, nor with the giving of notice or
lapse of time or both would be, in violation of or in default under, its
Certificate of Incorporation or By-Laws or any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel to
which the Company is a party or by which it or any of its properties is bound,
except for violations and defaults which individually and in the aggregate are
not material to the Company; the execution and delivery of this Agreement, issue
and sale of the Shares being delivered on the Closing Date or the Additional
Closing Date, as the case may be, and the performance by the Company of its
obligations under this Agreement and the consummation of the transactions
contemplated herein will not, with or without the

                                       16

<PAGE>   17
giving of notice or lapse of time or both, conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a party or by which the
Company is bound or to which any of the properties or assets of the Company is
subject, nor will any such action result in any violation of the provisions of
the Certificate of Incorporation or the By-Laws of the Company or any applicable
law or statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its properties;

         (xiii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental agency or
body is required for the issue and sale of the Shares or the consummation of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act and as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters;

         (xiv) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act;

         (xv) the Company owns, possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof, and
the Company has not received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the Registration
Statement and the Prospectus; and the Company is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of the date
of the Prospectus;

         (xvi) 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, in each case free and clear of all liens, encumbrances and defects except
such as are

                                       17

<PAGE>   18
described or referred to 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 under valid, existing and enforceable
leases with such exceptions as are not material and do not interfere with the
use made or proposed to be made of such property and buildings by the Company;

         (xvii) the Company owns or possesses the Intellectual Property
necessary to carry on the business it now operates, and, to the best of such
counsel's knowledge, the Company has not received any notice or is not otherwise
aware of any claim, action or demand of any person in the United States or
elsewhere or any proceeding in the United States or elsewhere, pending or
threatened, which (a) challenges the ownership interests of the Company in any
of the Intellectual Property or (b) alleges that any product or service of the
Company infringes or misappropriates the Intellectual Property rights of others
or of any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company therein, and which
action or proceeding (including without limitation infringement,
misappropriation, and unfair competition), if the subject of any unfavorable
decision, ruling or finding, or invalidity or inadequacy, singly or in the
aggregate, could reasonably be expected to have a material adverse effect on the
Company; and

         (viii) the form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the Certificate of Incorporation and By-Laws
of the Company and the requirements of the Nasdaq National Market.

    In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Delaware and California, to the extent such counsel deems proper
and to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions having
custody of documents respecting the corporate existence or good standing of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in

                                       18

<PAGE>   19
subparagraph (xi) above, counsel may state their opinion and belief is based
upon their participation in the preparation of the Registration Statement and
the Prospectus and any amendment or supplement thereto and review and discussion
of the contents thereof but is without independent check or verification except
as specified.

         The opinion of Venture Law Group described above shall be rendered to
the Underwriters at the request of the Company and shall so state therein.

                 (g) Townsend and Townsend and Crew, special patent counsel for
the Company, shall have furnished to the Representatives their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be, in
the form of Exhibit A hereto;

                 (h) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing Date,
as the case may be, Ernst & Young LLP shall have furnished to you letters, dated
the respective dates of delivery thereof, in form and substance satisfactory to
you, containing statements and information of the type customarily 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;

                 (i) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion of
Skadden, Arps, Slate, Meagher & Flom, counsel to the Underwriters, with respect
to the due authorization and valid issuance of the Shares, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;

                 (j) the Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
quotation on the Nasdaq National Market, subject only to official notice of
issuance;

                 (k) on or prior to the Closing Date or Additional Closing Date,
as the case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives shall reasonably
request; and

                 (l) The "lock-up" agreements, each substantially in the form of
Exhibit B hereto, between you and each stockholder of

                                       19

<PAGE>   20
the Company relating to sales and certain other dispositions of shares of Stock
or certain other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date or Additional Closing
Date, as the case may be.

         7. 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, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, 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 untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein.

         Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any preliminary prospectus.

         If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its

                                       20

<PAGE>   21
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person 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 Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters and such control persons of Underwriters
shall be designated in writing by J.P. Morgan Securities Inc. and any such
separate firm for the Company, its directors, its officers who sign the
Registration Statement and such control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person 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 Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Person 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 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.

         If the indemnification provided for in the first or second paragraphs
of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person there-

                                       21

<PAGE>   22
under, shall contribute to the amount paid or payable by such Indemnified Person
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
Company on the one hand and the Underwriters 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 Company on the one hand and the Underwriters on the other 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 shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and the 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 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 Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as
one entity for such purposes) 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 Person 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 incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter 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 ll(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
con-

                                       22

<PAGE>   23
tribute pursuant to this Section 7 are several in proportion to the respective
number of Shares set forth opposite their names in Schedule I hereto, and not
joint.

         The remedies provided for in this Section 7 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 agreements contained in this Section 7
and the representations and warranties of the Company set forth 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 by or on behalf
of the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Shares.

         8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Shares, prior to the
Additional 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 or the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of or
guaranteed by 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 or California 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 the judgment of the Representatives, is material and adverse
and that, in the judgment of the Representatives, makes it impracticable to
market the Shares being delivered at the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated in the
Prospectus.

     9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment) by the Commission.

                                       23

<PAGE>   24
         10. If on the Closing Date or the Additional Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares which 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 Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 hereof be increased pursuant to this Section 10
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 Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, 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 the Representatives and the
Company for the purchase of such Shares are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be) 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, in the case of the Option Shares, the Additional Closing Date), 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 Section 10 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.

     11. 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 if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to 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 expenses of their counsel)

                                       24

<PAGE>   25
reasonably incurred by the Underwriters in connection with this Agreement or the
offering contemplated hereunder.

         12. This Agreement shall inure to the benefit of and be binding upon
the Company, the Underwriters, any controlling persons referred to herein and
their respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Shares from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.

         13. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260, (telefax: 212-648- 5705); Attention: Syndicate Department. Notices
to the Company shall be given to it at Geron Corporation, 200 Constitution
Drive, Menlo Park, California 94025, (telefax: 415-473-7750); Attention: Chief
Executive Officer.

         14. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.

         15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.

                                       25

<PAGE>   26
         If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.

                                 Very truly yours,

                                GERON CORPORATION


                                 By:
                                    -------------------------------
                                    Name:
                                    Title:


Accepted:_________, 1996

J.P. Morgan Securities Inc.
Montgomery Securities
Salomon Brothers Inc

Acting severally on behalf 
  of themselves and the 
  several Underwriters listed
  in Schedule I hereto.

By: J.P. MORGAN SECURITIES INC.

 By:
    ---------------------------
    Name:
    Title:

                                       26

<PAGE>   27
                                                                      SCHEDULE I


<TABLE>
<CAPTION>
                                                         Number of Shares
Underwriter                                              To Be Purchased 
- -----------                                              ----------------
<S>                                                       <C>
J.P. Morgan Securities Inc..........................
Montgomery Securities...............................
Salomon Brothers Inc................................
                                                           ----------

          Total           ================
</TABLE>


                                       27

<PAGE>   28
                                                                       EXHIBIT A

                   [FORM OF OPINION OF SPECIAL PATENT COUNSEL]

Ladies and Gentlemen:

                 This opinion is furnished to you pursuant to Section 6(g) of
the Underwriting Agreement dated _____, 1996 (the "Underwriting Agreement")
between you, as Representatives on behalf of the several Underwriters named in
Schedule I thereto (the "Underwriters"), and Geron Corporation, a Delaware
corporation (the "Company").

                 We have acted as special patent counsel to the Company in
connection with the sale by the Company and the purchase by the Underwriters,
severally and not jointly, of an aggregate of [________] shares of common stock,
par value $.001 per share, of the Company. Capitalized terms not defined herein
shall have the meanings ascribed to them in the Underwriting Agreement.

                 In connection with our responsibilities as special patent
counsel to the Company, we have filed and prosecuted certain patent applications
that have issued to patents, a listing of which has previously been provided to
counsel for the Underwriters (the "Patents"), and have filed and are prosecuting
certain other patent applications, a listing of which has previously been
delivered to counsel for the Underwriters (with the applications underlying the
Patents, collectively, the "Patent Applications").

                 Prior to the filing of the Patent Applications, this firm
conducted investigations for the published prior art relating to the inventions
claimed in such applications. Based on the information obtained in these
investigations, we disclosed to the United States Patent and Trademark Office
(the "PTO") in the Patent Applications all pertinent prior art references known
to us and the Company. To our best knowledge, all information submitted to the
PTO in the Patent Applications, and in connection with the prosecution of the
Patent Applications, was complete and accurate. Neither this firm nor, to our
best knowledge, the Company made any misrepresentation or concealed any material
fact from the PTO in any of the Patent Applications, or in connection with the
prosecution of the Patent Applications.

                 We are of the opinion that:

                 To our best knowledge, the Company is not subject to any
         current claim or notice of infringement or other

                                       28

<PAGE>   29
         violation of any patent, trade secret or other intellectual property
         rights of others; to our best knowledge and except as set forth in the
         Prospectus, (i) there are no legal or governmental proceedings pending
         relating to the patent rights or trade secrets owned or used by the
         Company, other than a standard review of the pending Patent
         Applications, and (ii) no such proceedings, including without
         limitation interference proceedings, are currently threatened by
         governmental authorities or others; we have no knowledge of any facts
         that would preclude the Company from having clear title to the Patents
         and Patent Applications; each of the Patents and Patent Applications
         has been assigned to the Company by the inventors named therein; each
         of the Patent Applications was filed by, or on behalf of, the Company
         with the PTO in accordance with the rules and regulations of the PTO,
         and substantially all of the pending Patent Applications have been
         awarded a filing date by the PTO; we are unaware of any facts which
         form a basis for a finding of unenforceability or invalidity of any of
         the Patents or Patent Applications that are material to the Company's
         business.

                 We have no reason to believe that the pending Patent
Applications will not eventuate in issued patents or that the Patents or any
patents issued in respect of the pending Patent Applications will not be valid
or will not afford the Company reasonable patent protection relative to the
subject matter thereof.

                 In addition, nothing has come to our attention that would lead
us to believe that the Registration Statement (insofar as it discusses patents),
at the time it became effective, contained an 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 the Prospectus
(insofar as it discusses patents), at the time it was first provided to the
Underwriters by the Company for use in connection with the offering of the
Shares or at the date hereof, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact with reference to
patents, trade secrets and other intellectual property necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

                                               Very truly yours,

                                       29

<PAGE>   30
                                                                       EXHIBIT B

                                   _____, 1996

         Re:     Proposed Public Offering by Geron Corporation

Dear Sirs:

                 The undersigned, a stockholder of Geron Corporation, a Delaware
corporation (the "Company"), understands that J.P. Morgan Securities Inc. ("J.P.
Morgan"), Montgomery Securities and Salomon Brothers Inc propose to enter into
an Underwriting Agreement (the "Underwriting Agreement") with the Company
providing for the public offering of shares (the "Securities") of the Company's
common stock, par value $.001 per share (the "Common Stock") which will set
forth, among other things, the initial public offering price of the Securities.
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Underwriting
Agreement that, during a period of 180 days from the date of thereof, the
undersigned will not, without the prior written consent of J.P. Morgan, directly
or indirectly, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of or transfer, whether directly or synthetically, any shares
of Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or request the Company to file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing.

                 Notwithstanding the foregoing, the undersigned may transfer
shares of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock without written consent of J.P. Morgan to the
following: (i) if the undersigned is an individual, to his or her immediate
family or to a trust, the beneficiaries of which are exclusively the undersigned
and/or a member or members of his or her immediate family, either during his or
her lifetime or on death by will or intestacy, and (ii) if the undersigned is a
partnership or corporation, to limited partners or shareholders of the
undersigned as a distribution,

                                       30

<PAGE>   31
provided that the transferees described in (i) and (ii) above will have agreed
in writing to be bound by the terms hereof.

                                Very truly yours,

                                Signature:
                                          --------------------------------

                                Print Name:
                                           -------------------------------

                                       31



<PAGE>   1
                                                                     EXHIBIT 3.1



                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
                              OF GERON CORPORATION,
                             a Delaware Corporation

         The undersigned, Ronald W. Eastman and David L. Greenwood hereby
certify that:

         FIRST: They are the duly elected and acting President and Secretary,
respectively, of said corporation.

         SECOND: The Certificate of Incorporation of said corporation was
originally filed with the Secretary of State of Delaware on November 28, 1990.

         THIRD: The Certificate of Incorporation of said corporation shall be
amended and restated to read in full as follows:

                                    ARTICLE I

         The name of the corporation (herein called the "Corporation") is GERON
CORPORATION.

                                   ARTICLE II

         The address of the registered office of the Corporation in the State of
Delaware is Prentice Hall Corporation Systems, Inc., 32 Loockerman Square, Suite
L-100, Dover, Delaware 19901. The name of the registered agent of the
Corporation at such address is The Prentice-Hall Corporation System, Inc.

                                   ARTICLE III

         The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.

                                   ARTICLE IV

         (A) Classes of Stock. The Corporation is authorized to issue two
classes
 of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares which the Corporation is authorized to issue
is Fifty-Six Million Seven Hundred Ninety-Six Thousand Five Hundred Seventy-Nine
(56,796,579) shares. Thirty-Five Million (35,000,000) shares shall be Common
Stock, par value $0.001 per share and Twenty-One Million Seven Hundred
Ninety-Six Thousand Five Hundred Seventy-Nine (21,796,579) shares shall be
Preferred Stock, par value $0.001 per share. The Preferred Stock shall be
divided into series, namely, Series A Preferred Stock consisting of Seven
Million Six Hundred Thirty-Two Thousand Nine Hundred Ninety-Two (7,632,992)
shares (the "Series A Preferred Stock"), Series B Preferred Stock consisting of
Four Million Eight Hundred Fifty-Nine Thousand Four Hundred Sixteen (4,859,416)
shares (the "Series B Preferred Stock"), Series C Preferred Stock consisting of
Five Million Three Hundred Four Thousand One Hundred Seventy-One (5,304,171)
shares (the

<PAGE>   2
"Series C Preferred Stock"), and Series D Preferred Stock consisting of Four
Million (4,000,000) shares (the "Series D Preferred Stock").

         (B) Rights, Preferences and Restrictions of Preferred Stock. The
Preferred Stock authorized by this Amended and Restated Certificate of
Incorporation may be issued from time to time in series. The rights,
preferences, privileges, and restrictions granted to and imposed on the
Preferred Stock are as set forth below in this Article IV(B). Subject to the
protective voting rights which have been or may be granted to the Preferred
Stock or series thereof in Certificates of Determination or the Corporation's
Certificate of Incorporation, ("Protective Provisions"), the Board of Directors
is hereby authorized to fix or alter the rights, preferences, privileges and
restrictions granted to or imposed upon additional series of Preferred Stock,
and the number of shares constituting any such series and the designation
thereof, or of any of them. Subject to compliance with applicable Protective
Provisions, but notwithstanding any other rights of the Preferred Stock or any
series thereof, the rights, privileges, preferences and restrictions of any such
additional series may be subordinated to, pari passu with (including, without
limitation, inclusion in provisions with respect to liquidation and acquisition
preferences, redemption and/or approval of matters by vote or written consent),
or senior to any of those of any present or future class or series of Preferred
or Common Stock. Subject to compliance with applicable Protective Provisions,
the Board of Directors is also authorized to increase or decrease the number of
shares of any series, prior or subsequent to the issue of that series, but not
below the number of shares of such series then outstanding or reserved for
future issuance. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such series.

         1. Dividend Provisions. The holders of shares of Series A, Series B,
Series C and Series D Preferred Stock shall be entitled to receive dividends,
out of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend (payable other than in Common Stock or
other securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock of the
Corporation) on the Common Stock of the Corporation, at the rate of $.10 per
share for each outstanding share of Series A Preferred Stock, $.225 per share
for each outstanding share of Series B Preferred Stock, $0.24 per share for each
outstanding share of Series C Preferred Stock and $0.30 per share for each
outstanding share of Series D Preferred Stock (the "Original Dividend Rate" with
respect to each such series), on a per annum basis, or if greater than the
applicable Original Dividend Rate (as determined on a per annum basis and on as
converted basis for the Series A, Series B, Series C and Series D Preferred
Stock), an amount equal to that paid on any other outstanding shares of the
Corporation, payable quarterly when, as and if declared by the Board of
Directors. Thereafter, the holders of Preferred Stock and Common Stock shall be
entitled, when, as and if declared by the Board of Directors, to dividends out
of the corporation's assets legally available therefor; provided, however, that
no such dividends may be declared or paid on any shares of Common Stock or
Preferred Stock unless at the same time an equivalent dividend is declared and
paid on all outstanding shares of Common Stock and Preferred Stock; and provided
further that the dividend on any series of any Preferred Stock shall be payable
at the same rate per share as would be payable on the shares of Common Stock or
other securities into which such series of Preferred Stock is convertible
immediately prior to the record date for such dividend. The right

                                      -2-

<PAGE>   3
to such dividends on shares of the Common Stock or Preferred Stock shall not be
cumulative, and no right shall accrue to holders of Common Stock or Preferred
Stock by reason of the fact that dividends on said shares are not declared in
any prior period.

         2. Liquidation Preference.

            (a) In the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the holders of Series A,
Series B, Series C and Series D Preferred Stock shall be entitled to receive, on
a pari passu basis, prior and in preference to any distribution of any of the
assets of the Corporation to the holders of Common Stock and any such additional
series which may be subordinated to any present class or series of Preferred
Stock with respect to the liquidation preference set forth in this Section 2 by
reason of their ownership thereof, an amount per share (as adjusted for any
stock split, stock division or consolidation) (i) equal to $1.00 for each
outstanding share of Series A Preferred Stock (the "Original Issue Price" with
respect to such series) and (ii) equal to $2.25 for each outstanding share of
Series B Preferred Stock (the "Original Issue Price" with respect to such
series), (iii) equal to $2.40 for each outstanding share of Series C Preferred
Stock (the "Original Issue Price" with respect to such series) and (iv) equal to
$3.00 for each outstanding share of Series D Preferred Stock (the "Original
Issue Price" with respect to such series) plus, for such shares of the Preferred
Stock, an amount equal to declared but unpaid dividends on each such share of
Preferred Stock (such amount of declared but unpaid dividends being referred to
herein as the "Premium" with respect to the Series A, Series B, Series C and
Series D Preferred Stock). If upon the occurrence of such event, the assets and
funds thus distributed among the holders of the Series A, Series B, Series C and
Series D Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then the entire assets and
funds of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Series A, Series B, Series C and Series D
Preferred Stock in proportion to the aggregate preferential amount each such
holder would otherwise be entitled to receive.

            (b) Upon the completion of the distribution required by subparagraph
(a) of this Section 2, and any other distribution which may be required with
respect to series of Preferred Stock which may from time to time come into
existence, if assets remain in the Corporation, the holders of the Common Stock
and Series A, Series B, Series C and Series D Preferred Stock shall receive all
of the remaining assets of the Corporation pro-rata on an as-converted basis.

            (c) A consolidation or merger of the Corporation with or into any
other corporation or corporations, or a sale, conveyance or disposition of all
or substantially all of the assets of the Corporation or the effectuation by the
Corporation or its stockholders of a transaction or series of related
transactions in which more than 50% of the voting power of the Corporation
entitled to vote in an election of the Board of Directors of the Corporation at
a regular or special meeting of the stockholders of the Corporation or by way of
written consent in lieu of such meeting is disposed of, shall not be deemed to
be a liquidation, dissolution or winding up within the meaning of this Section
2, but shall instead be treated pursuant to Section 5 hereof.

         3. Redemption. The Preferred Stock is not redeemable.

                                      -3-

<PAGE>   4
         4. Conversion. The holders of the Series A, Series B, Series C and
Series D Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):

            (a) Right to Convert.

                (i) Subject to subsection (c) below and Section 8 hereof, each
share of Series A, Series B, Series C and Series D Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for the Preferred Stock of that series into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the Original
Issue Price for each share of that series by the conversion price at the time in
effect for each such share (the "Conversion Price"). The initial Conversion
Price for shares of Series A Preferred Stock shall be the Original Issue Price
for the Series A Preferred Stock; the initial Conversion Price for shares of
Series B Preferred Stock shall be the Original Issue Price for the Series B
Preferred Stock; the initial Conversion Price for shares of Series C Preferred
Stock shall be the Original Issue Price for the Series C Preferred Stock; and
the Initial Conversion Price for shares of Series D Preferred Stock shall be the
Original Issue Price for the Series D Preferred Stock; provided, however, that
the Conversion Price for the Series A, Series B, Series C and Series D Preferred
Stock shall be subject to adjustment as set forth in subsection (c) below.

                (ii) Each share of Series A, Series B, Series C and Series D
Preferred Stock shall automatically be converted into shares of Common Stock at
the Conversion Price at the time in effect for such Series A, Series B and
Series C Preferred Stock immediately upon the consummation of the Corporation's
sale of its Common Stock in a bona fide, firm commitment underwriting pursuant
to a registration statement on Form S-1 under the Securities Act of 1933, as
amended, the public offering price of which was not less than $5.00 per share
(adjusted to reflect subsequent stock dividends, stock splits or
recapitalizations) and which resulted in at least $7,500,000 of aggregate
proceeds.

            (b) Mechanics of Conversion. Before any holder of Series A, Series
B, Series C or Series D Preferred Stock shall be entitled to convert the same
into shares of Common Stock, he shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Preferred Stock of that series, and shall give written notice by
mail, postage prepaid, to the Corporation at its principal corporate office, of
the election to convert the same and shall state therein the name or names in
which the certificate or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable, issue and deliver at such
office to such holder of Preferred Stock or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Series A, Series B, Series C or Series D
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date. If the conversion is in connection with an underwritten offer of
securities registered pursuant to the Securities Act of 1933, the conversion
will, unless otherwise notified by the holder tendering Series A, Series B,
Series C or Series D Preferred Stock for conversion, be conditioned

                                      -4-

<PAGE>   5
upon the closing with the underwriter of the sale of securities pursuant to such
offering, in which event the person(s) entitled to receive the Common Stock
issuable upon such conversion of the Series A, Series B, Series C or Series D
Preferred Stock shall not be deemed to have converted such Preferred Stock until
immediately prior to the closing of such sale of securities.

            (c) Conversion Price Adjustments of Preferred Stock. The Conversion
Price of the Series A, Series B, Series C and Series D Preferred Stock shall be
subject to adjustment from time to time as follows:

                (i) (A) If the corporation shall issue any Additional Stock (as
defined below) without consideration or for a consideration per share less than
the Conversion Price for the Series A, Series B, Series C or Series D Preferred
Stock in effect immediately prior to the issuance of such Additional Stock, the
respective Conversion Price for the Series A, Series B, Series C or Series D
Preferred Stock, as applicable, in effect immediately prior to each such
issuance shall forthwith (except as otherwise provided in this clause (i)) be
adjusted to a price equal to the quotient obtained by dividing the total
computed under clause (x) below by the total computed under clause (y) below as
follows:

                (x) for each applicable series, an amount equal to the sum of:

                (1) the aggregate purchase price of the shares of such Series A,
         Series B, Series C and Series D Preferred Stock sold (or deemed to be
         sold pursuant to subsection 4(c)(i)(E)) pursuant to the agreement to
         which such shares of Series A, Series B, Series C or Series D Preferred
         Stock are first issued (the "Series A Stock Purchase Agreement," the
         "Series B Purchase Agreement," the "Series C Purchase Agreement" or the
         "Series D Purchase Agreement," as applicable), plus

                (2) the aggregate consideration, if any, received by the
         corporation for all Additional Stock issued on or after the date of
         such series' respective Stock Purchase Agreement (the "Purchase Date"
         for each such series), other than shares of Common Stock issued or
         issuable upon conversion of such series of Preferred Stock;

                (y) for each such series, an amount equal to the sum of

                (1) the aggregate purchase price of such shares of Series A
         Preferred Stock sold pursuant to the Series A Stock Purchase Agreement,
         Series B Preferred Stock sold pursuant to the Series B Stock Purchase
         Agreement, Series C Preferred Stock sold pursuant to the Series C
         Purchase Agreement and Series D Preferred Stock sold pursuant to the
         Series D Purchase Agreement divided by the Conversion Price for such
         shares of Series A, Series B, Series C and Series D Preferred Stock in
         effect at the Purchase Date, as applicable (or such higher or lower
         Conversion Price for the Series A, Series B, Series C or Series D
         Preferred Stock, as applicable, as results from the application of
         subsections 4(c)(iii) and (iv)

                                      -5-

<PAGE>   6
         and assuming that this Amended and Restated Certificate was in effect
         as of the Purchase Date) plus

                (2) the number of shares of Additional Stock issued since the
         Purchase Date (increased or decreased to the extent that the number of
         such shares of Additional Stock shall have been increased or decreased
         as the result of the application of subsections 4(c)(iii) and (iv)).

                    (B) No adjustment of the Conversion Price for the Series A,
Series B, Series C or Series D Preferred Stock shall be made in an amount less
than one cent per share, provided that any adjustments which are not required to
be made by reason of this sentence shall be carried forward and shall be either
taken into account in any subsequent adjustment made prior to 3 years from the
date of the event giving rise to the adjustment being carried forward, or shall
be made at the end of 3 years from the date of the event giving rise to the
adjustment being carried forward. Except to the limited extent provided for in
subsections (E)(3) and (E)(4), no adjustment of such Conversion Price pursuant
to this subsection 4(c)(i) shall have the effect of increasing the applicable
Conversion Price above the Conversion Price in effect immediately prior to such
adjustment.

                    (C) In the case of the issuance of Common Stock for cash,
the consideration shall be deemed to be the amount of cash paid therefor before
deducting any reasonable discounts, commissions or other expenses allowed, paid
or incurred by the Corporation for any underwriting or otherwise in connection
with the issuance and sale thereof.

                    (D) In the case of the issuance of the Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as determined in good faith by
the Board of Directors irrespective of any accounting treatment.

                    (E) In the case of the issuance (whether before, on or after
the Purchase Date) of options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock or options to purchase or rights to subscribe for such convertible or
exchangeable securities (including, without limitation, the Series A, Series B,
Series C and Series D Preferred Stock), the following provisions shall apply for
all purposes of this subsection 4(c)(i) and 4(c)(ii):

                        1. The aggregate maximum number of shares of Common
Stock deliverable upon exercise (to the extent exercisable) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in subsections
4(c)(i)(C) and (c)(i)(D)), if any, received by the Corporation upon the issuance
of such options or rights plus the minimum exercise price provided in such
options or rights (without taking into account potential antidilution
adjustments) for the Common Stock covered thereby.

                                      -6-

<PAGE>   7
                        2. The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange (to the extent then
convertible or exchangeable) for any such convertible or exchangeable securities
or upon the exercise of options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent conversion or exchange
thereof shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration equal to
the consideration, if any, received by the Corporation for any such securities
and related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional consideration, if
any, to be received by the Corporation (without taking into account potential
antidilution adjustments) upon the conversion or exchange of such securities or
the exercise of any related options or rights (the consideration in each case to
be determined in the manner provided in subsections 4(c)(i)(C) and (c)(i)(D)).

                        3. In the event of any change in the number of shares of
Common Stock deliverable or in the consideration payable to the Corporation upon
exercise of such options or rights or upon conversion of or in exchange for such
convertible or exchangeable securities, including, but not limited to, a change
resulting from the antidilution provisions thereof, the Conversion Price of the
Series A, Series B, Series C and/or Series D Preferred Stock, to the extent in
any way affected by or computed using such options, rights or securities, shall
be recomputed to reflect such change, but no further adjustment shall be made
for the actual issuance of Common Stock or any payment of such consideration
upon the exercise of any such options or rights or the conversion or exchange of
such securities.

                        4. Upon the expiration of any such options or rights,
the termination of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable securities,
the Conversion Price of the Series A, Series B, Series C and/or Series D
Preferred Stock, to the extent in any way affected by or computed using such
options, rights or securities or options or rights related to such securities,
shall be recomputed to reflect the issuance of only the number of shares of
Common Stock (and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise of such options or rights, upon the conversion
or exchange of such securities or upon the exercise of the options or rights
related to such securities.

                        5. The number of shares of Common Stock deemed issued
and the consideration deemed paid therefor pursuant to subsections 4(c)(i)(E)(1)
and (2) shall be appropriately adjusted to reflect any change, termination or
expiration of the type described in either subsection 4(c)(i)(E)(3) or (4).

                (ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to subsection 4(c)(i)(E)) by the
Corporation after the Purchase Date other than:

                     (A) Common Stock issued pursuant to a transaction described
in subsection 4(c)(iii) hereof;

                                      -7-

<PAGE>   8
                    (B) Shares of Common Stock issued or issuable to officers,
employees, consultants and directors of the Corporation directly or pursuant to
a stock benefit plan adopted by the Board of Directors;

                    (C) Common Stock issued to non-profit institutions primarily
in connection with research or other collaborative arrangements; or

                    (D) Up to 9,617 shares of Common Stock issuable to
StratiPoint Group, Inc. in connection with consulting services.

              (iii) In the event the Corporation should at any time or from time
to time after the Purchase Date for the Series D Preferred Stock fix a record
date for the effectuation of a split or subdivision of the outstanding shares of
Common Stock or the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Series A, Series B, Series C and Series D Preferred
Stock shall be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be increased in
proportion to such increase of the aggregate of shares of Common Stock
outstanding and those issuable with respect to such Common Stock Equivalents
with the number of shares issuable with respect to such Common Stock Equivalents
determined in the manner provided for deemed issuances in subsection 4(c)(i)(E).

              (iv) If the number of shares of Common Stock outstanding at any
time after the Purchase Date for the Series D Preferred Stock is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for the Series A, Series
B, Series C and Series D Preferred Stock shall be appropriately increased so
that the number of shares of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to such decrease in outstanding
shares.

          (d) Other Distributions. In the event the Corporation shall declare a
distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons, assets (excluding cash dividends) or
options or rights not referred to in subsection 4(c)(iii), then, in each such
case for the purpose of this subsection 4(d), the holders of the Series A,
Series B, Series C and Series D Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders of
the number of shares of Common Stock of the Corporation into which their shares
of Series A, Series B, Series C and Series D Preferred Stock are convertible as
of the record date fixed for the determination of the holders of Common Stock of
the Corporation entitled to receive such distribution.

                                      -8-

<PAGE>   9
            (e) Recapitalizations. Subject to the Protective Provisions provided
for herein, if at any time or from time to time there shall be a
recapitalization of the Common Stock or merger with the Corporation as the
surviving entity (other than a subdivision, combination or merger or sale of
assets transaction provided for elsewhere in this Section 4 or Section 5)
provision shall be made so that the holders of the Series A, Series B, Series C
and Series D Preferred Stock shall thereafter be entitled to receive upon
conversion of their Series A, Series B, Series C and/or Series D Preferred Stock
the number of shares of stock or other securities or property of the Company or
otherwise, to which a holder of Common Stock deliverable upon conversion would
have been entitled on such recapitalization. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 4
with respect to the rights of the holders of the Series A, Series B, Series C
and Series D Preferred Stock after the recapitalization to the end that the
provisions of this Section 4 (including adjustment of the Conversion Price then
in effect and the number of shares purchasable upon conversion of the Series A,
Series B, Series C and Series D Preferred Stock) shall be applicable after that
event as nearly equivalent as may be practicable. Notwithstanding anything in
this subsection (e) to the contrary, the provisions of this subsection (e) shall
not apply in the case of a merger which will result in the Corporation's
stockholders immediately prior to such merger not holding at least 50% of the
voting power of the surviving or continuing entity, entitled to vote in an
election of the Board of Directors of such entity at a regular or special
meeting of the stockholders of such entity or by way of written consent on lieu
of such meeting.

            (f) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 4 and in the taking of all such action as may
be necessary or appropriate in order to protect the conversion rights of the
holders of the Series A, Series B, Series C and Series D Preferred Stock against
impairment.

            (g) No Fractional Shares and Certificate as to Adjustments.

                (i) No fractional shares shall be issued upon conversion of the
Series A, Series B, Series C and Series D Preferred Stock, and the number of
shares of Common Stock to be issued shall be rounded down to the nearest whole
share. Whether or not fractional shares are issuable upon such conversion shall
be determined on the basis of the total number of shares of Preferred Stock the
holder is at the time converting into Common Stock and the number of shares of
Common Stock issuable upon such aggregate conversion.

                (ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price of a series of Preferred Stock pursuant to this Section 4,
the Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of such series of Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Preferred Stock, furnish or cause to be
furnished to such holder a like certificate

                                      -9-

<PAGE>   10
setting forth (A) such adjustment and readjustment, (B) the Conversion Price at
the time in effect, and (C) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversion of a share of Preferred Stock.

            (h) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Corporation
shall mail to each holder of Series A, Series B, Series C and Series D Preferred
Stock, at least 20 days prior to the date specified therein, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right.

            (i) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A, Series B, Series C and Series D Preferred Stock such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series A, Series B,
Series C and Series D Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series A, Series B, Series
C and Series D Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Preferred Stock, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes.

            (j) Notices. Any notice required by the provisions of this Section 4
to be given to the holders of shares of Series A, Series B, Series C and Series
D Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at his address appearing
on the books of the Corporation.

         5. Merger, Consolidation.

            (a) At any time, in the event of:

                (i) any transaction (or series of related transactions
including, without limitation, any reorganization, merger or consolidation)
which will result in the Corporation's stockholders as constituted immediately
prior to such transaction not holding, immediately after such transaction, at
least 50% of the voting power of the surviving or continuing entity, entitled to
vote in an election of the Board of Directors of such entity at a regular or
special meeting of the stockholders of such entity or by way of written consent
in lieu of such meeting; or

                (ii) a sale of all or substantially all of the assets of the
Corporation, unless the Corporation's stockholders as constituted immediately
prior to such sale 

                                      -10-

<PAGE>   11
will hold, immediately after such transaction, at least 50% of the voting power
entitled to vote in an election of the Board of Directors of the purchasing
entity at a regular or special meeting of the stockholders of such entity or by
way of written consent in lieu of such meeting. 

                then, holders of the Series A, Series B, Series C and Series D
Preferred Stock shall receive for each share of such stock in cash or in
securities received from the acquiring corporation, or in a combination thereof,
at the closing of any such transaction, an amount equal to the Original Issue
Price for such series, plus an amount equal to the Premium for such series as of
the date of closing of such transaction, and the remaining proceeds of such
transaction shall be distributed as a Shared Allocation (as defined in
subsection 5(b)). Such payments (including the Shared Allocation) shall be made
with respect to the Series A, Series B, Series C and Series D Preferred Stock by
purchase of such shares of the Preferred Stock by the surviving corporation,
entity or person or by the Corporation. In the event the proceeds of the
transaction are not sufficient to make full payment of the aforesaid
preferential amounts to the holders of the Series A, Series B, Series C and
Series D Preferred Stock in accordance herewith, then the entire amount payable
in respect of the proposed transaction shall be distributed among the holders of
the Series A, Series B, Series C and Series D Preferred Stock in proportion to
the aggregate preferential amount each such holder would otherwise be entitled
to receive.

            (b) The term "Shared Allocation" shall mean that the holders of
Series A, Series B, Series C and Series D Preferred Stock and Common Stock of
this Corporation shall share the remaining consideration, or all of the
consideration, as the case may be, to be paid by the acquiring corporation in
such transaction in the same proportion as the number of shares of outstanding
Common Stock and Common Stock issuable upon the conversion of outstanding
Preferred Stock then held by each of them bears to the total number of shares of
outstanding Common Stock and Common Stock issuable upon conversion of
outstanding Preferred Stock.

            (c) Any securities to be delivered to the holders of the Series A,
Series B, Series C and/or Series D Preferred Stock pursuant to subsection 5(a)
above shall be valued as follows:

                (i) Securities not subject to investment letter or other similar
restrictions on free marketability covered by (ii) below:

                    (A) If traded on a securities exchange, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the 30-day period ending three (3) days prior to the closing;

                    (B) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever are
applicable) over the 30-day period ending three (3) days prior to the closing;
and

                    (C) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by the Corporation and the
holders of Preferred Stock which would be entitled to receive such securities or
the same type of securities

                                      -11-

<PAGE>   12
and which Preferred Stock represents at least a majority of the voting power of
all then outstanding shares of such Preferred Stock.

                (ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined as above in (i) (A), (B) or (C) to reflect the approximate fair
market value thereof, as mutually determined by the Corporation and the holders
of Preferred Stock which would be entitled to receive such securities or the
same type of securities and which represent at least a majority of the voting
power of all then outstanding shares of such Preferred Stock.

            (d) In the event the requirements of subsection 5(a) are not
complied with, the Corporation shall forthwith either:

                (i) cause such closing to be postponed until such time as the
requirements of this Section 5 have been complied with, or

                (ii) cancel such transaction, in which event the rights,
preferences and privileges of the holders of the Series A, Series B, Series C
and Series D Preferred Stock shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date of the first
notice referred to in subsection 5(e) hereof.

            (e) The Corporation shall give each holder of record of Series A,
Series B, Series C and Series D Preferred Stock (or securities exercisable
therefor) written notice of such impending transaction not later than twenty
(20) days prior to the stockholders' meeting called to approve such transaction,
or twenty (20) days prior to the closing of such transaction, whichever is
earlier, and shall also notify such holders in writing of the final approval of
such transaction. The first of such notices shall describe the material terms
and conditions of the impending transaction and the provisions of this Section
5, and the Corporation shall thereafter give such holders prompt notice of any
material changes. The transaction shall in no event take place sooner than
twenty (20) days after the Corporation has given the first notice provided for
herein or sooner than ten (10) days after the Corporation has given notice of
any material changes provided for herein; provided, however, that such periods
may be shortened upon the written consent of the holders of Preferred Stock
which is entitled to such notice rights or similar notice rights and which
represents at least a majority of the voting power of all then outstanding
shares of such Preferred Stock.

            (f) The provisions of this Section 5 are in addition to the
protective provisions of Section 7 hereof.

         6. Voting Rights. The holder of each share of Series A, Series B,
Series C and Series D Preferred Stock shall have the right to one vote for each
share of Common Stock into which such Series A, Series B, Series C and Series D
Preferred Stock could then be converted (with any fractional share determined on
an aggregate conversion basis being rounded to the nearest whole share), and
with respect to such vote, such holder shall have full voting rights

                                      -12-

<PAGE>   13
and powers equal to the voting rights and powers of the holders of Common Stock,
and shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the by-laws of the Corporation, and
shall be entitled to vote, together with holders of Common Stock, with respect
to any question upon which holders of Common Stock have the right to vote.

         7. Protective Provisions. In addition to any vote required by law, so
long as any shares of Series A, Series B, Series C and/or Series D Preferred
Stock are outstanding, the Corporation shall not without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least a majority of the then outstanding Series A, Series B, Series C and Series
D Preferred Stock, voting together as a single class:

            (a) sell, convey, or otherwise dispose of or encumber all or
substantially all of its property or business or merge into or consolidate with
any other corporation or entity or effect any transaction or series of related
transactions in which more than 50% of the voting power entitled to vote in an
election of the Board of Directors of the Corporation at a regular or special
meeting of stockholders or by way of written consent in lieu of such meeting is
disposed of;

            (b) adversely alter or change the rights, preferences or privileges
of the shares of Series A, Series B, Series C or Series D Preferred Stock;

            (c) create any new class or series of stock or any other securities
convertible into equity securities of the Corporation having a preference over,
or being on a parity with, the Series A, Series B, Series C or Series D
Preferred Stock with respect to dividends, liquidation or redemption;

            (d) pay or declare any dividend on its Common Stock or any other
junior equity security other than a dividend in Common Stock of the Corporation;

            (e) Redeem, purchase or otherwise acquire (or pay into or set aside
for a sinking fund for such purpose) any of the Common Stock; provided, however,
that this restriction shall not apply to the repurchase of shares of Common
Stock: (i) from employees, officers, directors, consultants or other persons
performing services for the Corporation or any subsidiary pursuant to agreements
under which the Corporation has the option to repurchase such shares at cost or
at cost plus interest upon the occurrence of certain events, such as the
termination of employment, or (ii) in settlement of disputes with third parties
if such redemption, purchase or acquisition or the payment into or setting aside
into a sinking fund is unanimously approved by the Board of Directors;

            (f) do any act or thing which would result in taxation of the
holders of Preferred Stock under Section 305 of the Internal Revenue Code;

            (g) Increase the number of authorized shares of Series A, Series B,
Series C or Series D Preferred Stock.

                                      -13-

<PAGE>   14
         8. Special Mandatory Conversion. On or at any time the holders of a
least sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of
Preferred Stock elect to convert their shares of Preferred Stock, all shares of
Preferred Stock including the shares of those holders of Preferred Stock who did
not elect to convert, shall automatically convert into Common Stock. Conversion
pursuant to this Section 8 shall be governed by Section 4.

         9. Status of Converted Stock. In the event any shares of Series A,
Series B, Series C or Series D Preferred Stock shall be converted pursuant to
Section 4, the shares so converted shall be canceled and shall not be issuable
by the Corporation, and the Certificate of Incorporation of the Corporation
shall be appropriately amended to effect the corresponding reduction in the
Corporation's authorized capital stock.

     (C) Common Stock.

         1. Dividend Rights. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the Corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.

         2. Liquidation Rights. Upon the liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation shall be distributed as
provided in Section 2 of Division (B) of this Article IV hereof.

         3. Redemption. The Common Stock is not redeemable.

         4. Voting Rights. The holder of each share of Common Stock shall have
the right to one vote, and shall be entitled to notice of any stockholders'
meeting in accordance with the By-laws of the Corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.

                                    ARTICLE V

         Except as otherwise provided in this Amended and Restated Certificate
of Incorporation, in furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, repeal,
alter, amend and rescind any or all of the Bylaws of the Corporation.

                                   ARTICLE VI

         The number of directors of the Corporation shall be fixed from time to
time by a bylaw or amendment thereof duly adopted by the Board of Directors or
by the stockholders.

                                   ARTICLE VII

         Elections of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.

                                      -14-

<PAGE>   15
                                  ARTICLE VIII

         Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.

                                   ARTICLE IX

         In the event the Corporation is subject to Section 2115 of the
California Corporations Code, Section A of this Article shall apply. Otherwise,
Section B of this Article shall apply.

         (A) California. The liability of each and every director of this
Corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law. If California law is hereafter amended to
authorize, with the approval of a Corporation's stockholders, further reductions
in the liability of the Corporation's directors for breach of fiduciary duty,
then a director of the Corporation shall not be liable for any such breach to
the fullest extent permitted by California law, as so amended.

         (B) Delaware. To the fullest extent permitted by the General
Corporation Law of Delaware, as the same may be amended from time to time, a
director of the Corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. If the General Corporation Law of Delaware is hereafter amended to
authorize, with the approval of a corporation's stockholders, further reductions
in the liability of the corporation's directors for breach of fiduciary duty,
then a director of the corporation shall not be liable for any such breach to
the fullest extent permitted by the General Corporation Law of Delaware, as so
amended.

         (C) Effect of Repeal or Modification. Any repeal or modification of the
foregoing provisions of this Article IX shall not adversely affect any right or
protection of a director of the Corporation with respect to any acts or
omissions of such director occurring prior to such repeal or modification.

                                    ARTICLE X

         In the event the Corporation is subject to Section 2115 of the
California Corporations Code, Section A of this Article shall apply. Otherwise,
Section B of this Article shall apply.

         (A) California. To the fullest extent permitted by California law, the
Corporation is authorized to provide indemnification of (and advancement of
expenses to) agents (as defined in Section 317 of the California Corporations
Code) through bylaw provision, agreements with agents, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 317 of the California Corporations
Code, subject only to applicable limits set forth in Section 204 of the
California Corporations Code, with respect to actions for breach of duty to a
corporation and its stockholders.

                                      -15-

<PAGE>   16
         (B) Delaware. To the fullest extent permitted by applicable law, the
Corporation is also authorized to provide indemnification of (and advancement of
expenses to) such agents (and any other persons to which Delaware law permits
the Corporation to provide indemnification) though bylaw provisions, agreements
with such agents or other persons, vote of stockholders or disinterested
directors or otherwise, in excess of the indemnification and advancement
otherwise permitted by Section 145 of the Delaware General Corporation Law,
subject only to limits created by applicable Delaware law (statutory or
non-statutory), with respect to actions for breach of duty to a corporation, its
stockholders, and others.

         (C) Effect of Repeal or Modification. Any repeal or modification of any
of the foregoing provisions of this Article X shall not adversely affect any
right or protection of a director, officer, agent or other person existing at
the time of, or increase the liability of any director of the Corporation with
respect to any acts or omissions of such director, officer or agent occurring
prior to such repeal or modification.

                                   ARTICLE XI

         The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.

                                   ARTICLE XII

         The Corporation shall have perpetual existence.

                                      -16-

<PAGE>   17
         FOURTH: The foregoing Amended and Restated Certificate of Incorporation
has been duly adopted by the Corporation's Board of Directors and stockholders
in accordance with the applicable provisions of Section 228, 242 and 245 of the
General Corporation Law of the State of Delaware.

         IN WITNESS WHEREOF, the undersigned have executed this certificate on
November 9, 1995.

                                             GERON CORPORATION




                                             By: /s/ Ronald W. Eastman
                                                 ----------------------------
                                                 Ronald W. Eastman, President


Attest: /s/ David L. Greenwood
        -----------------------------
        David L. Greenwood, Secretary

                                      -17-



<PAGE>   1

                                                                     EXHIBIT 3.2


                          AS AMENDED ON MARCH 17, 1992,

                             SEPTEMBER 11, 1992 AND
                                  JUNE 2, 1993

                                     BYLAWS

                                       OF

                                GERON CORPORATION

                                    ARTICLE I

                                     OFFICES

         Section 1. The registered office shall be in the City of Dover, County
of Kent, State of Delaware.

         Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         Section 1. All meetings of the stockholders for the election of
directors shall be held at such time and place as may be fixed from time to time
by the Board of Directors, and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.

<PAGE>   2
         Section 2. Annual meetings of stockholders, commencing with the year
1992, shall be held on such date and time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting, at which
they shall elect by a plurality vote a board of directors, and transact such
other business as
 may properly be brought before the meeting.

         Section 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten (10) nor more than sixty (60) days before the
date of the meeting.

         Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole

                                       2.

<PAGE>   3
time thereof, and may be inspected by any stockholder who is present.

         Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.

         Section 6. Written notice of a special meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting, to each stockholder entitled to vote at such
meeting.

         Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.

         Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of 

                                       3.

<PAGE>   4
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.

         Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question.

         Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power 

                                       4.

<PAGE>   5
held by such stockholder, but no proxy shall be voted on after three years from
its date, unless the proxy provides for a longer period.

         At all elections of directors of the corporation each stockholder
having voting power shall be entitled to exercise the right of cumulative voting
as provided in the certificate of incorporation.

         Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.

                                   ARTICLE III

                                    DIRECTORS




                                       5.

<PAGE>   6
         Section 1. The number of directors which shall constitute the whole
board shall not be less than three (3) nor more than five (5). The first board
shall consist of three (3) directors. (1)Thereafter, within the limits above
specified, the number of directors shall be determined by resolution of the
Board of Directors or by the stockholders at any meeting of the stockholders,
except as provided in Section 2 of this Article, and each director elected shall
hold office until his success is elected and qualified. Directors need not be
stockholders.

         Section 2. Vacancies and new created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders 

- --------

         (1)Current range set at not less than five (5) nor more than eight (8),
with the current number set at eight (8) pursuant to the resolutions adopted by
the Board by unanimous written consent dated June 2, 1993 and as approved by the
requisite stockholders effective as of June 2, 1993.

                                       6.

<PAGE>   7
holding at least ten percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office.

         Section 3. The business of the corporation shall be managed by or under
the direction of its board of directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation or by these bylaws directed or required to
be exercised or done by the stockholders.

                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 4. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.

         Section 5. The first meeting of each newly elected Board of Directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as 
                                       7.

<PAGE>   8
shall be specified in a notice given as hereinafter provided for special 
meetings of the Board of Directors, or as shall be specified in a written waiver
signed by all of the directors.

         Section 6. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.

         Section 7. Special meetings of the board may be called by the president
on ten (10) days' notice to each director by mail or forty-eight (48) hours'
notice to each director either personally or by telegram; special meetings shall
be called by the president or secretary in like manner and on like notice on the
written request of two directors unless the board consists of only one director,
in which case special meetings shall be called by the president or secretary in
like manner and on like notice on the written request of the sole director.

         Section 8. At all meetings of the board a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.



                                       8.

<PAGE>   9
         Section 9. Unless otherwise restricted by the certificate of
incorporation of these bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.

         Section 10. Unless otherwise restricted by the certificate of
incorporation or these bylaws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.

                             COMMITTEES OF DIRECTORS

         Section 11. The Board of Directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee.


                                       9.

<PAGE>   10
         In the absence of disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

         Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the bylaws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the Board of Directors.

                                      10.

<PAGE>   11
         Section 12. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.

                            COMPENSATION OF DIRECTORS

         Section 13. Unless otherwise restricted by the certificate of
incorporation or these bylaws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

                              REMOVAL OF DIRECTORS

         Section 14. Unless otherwise restricted by the certificate of
incorporation or bylaw, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.

                                   ARTICLE IV

                                     NOTICES



                                      11.

<PAGE>   12
         Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.

         Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.

                                    ARTICLE V

                                    OFFICERS

         Section 1. The officers of the corporation shall be chosen by the Board
of Directors and shall be a president and a secretary. The Board of Directors
may elect from among its members a Chairman of the Board and a Vice Chairman of
the Board. The Board of Directors may also choose one or more vice-presidents,
assistant secretaries and assistant treasurers. Any 



                                      12.

<PAGE>   13
number of offices may be held by the same person, unless the certificate of
incorporation or these bylaws otherwise provide.

         Section 2. The Board of Directors at its first meeting after each
annual meeting of stockholders shall choose a president and a secretary and may
choose a vice president and a treasurer.

         Section 3. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.

         Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.

         Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
Board of Directors may be removed at any time by the affirmative vote of a
majority of the Board of Directors. Any vacancy occurring in any office of the
corporation shall be filled by the Board of Directors.

                            THE CHAIRMAN OF THE BOARD

         Section 6. The Chairman of the Board, if any, shall preside at all
meetings of the Board of Directors and of the stockholders at which he shall be
present. He shall have and may exercise such powers as are, from time to time,
assigned to him by the Board and as may be provided by law.



                                      13.

<PAGE>   14
         Section 7. In the absence of the Chairman of the Board, the Vice
Chairman of the Board, if any, shall preside at all meetings of the Board of
Directors and of the stockholders at which he shall be present. He shall have
and may exercise such powers as are, from time to time, assigned to him by the
Board and as may be provided by law.

                                       14.

<PAGE>   15
                        THE PRESIDENT AND VICE-PRESIDENT

         Section 8. The president shall be the chief executive officer of the
corporation unless the Board selects the Chairman as chief executive officer, in
which case the chairman shall have all the authority set forth below; and in the
absence of the Chairman and Vice Chairman of the Board he shall preside at all
meetings of the stockholders and the Board of Directors; he shall have general
and active management of the business of the corporation and shall see that all
orders and resolutions of the Board of Directors are carried into effect.

         Section 9. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the corporation.

         Section 10. In the absence of the president or in the event of his
inability or refusal to act, the vice-president, if any, (or in the event there
be more than one vice- president, the vice-presidents in the order designated by
the directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall 


                                       15.

<PAGE>   16
perform such other duties and have such other powers as the Board of Directors 
may from time to time prescribe.


                      THE SECRETARY AND ASSISTANT SECRETARY

         Section 11. The secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.

         Section 12. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the Board of Directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,


                                       16.

<PAGE>   17
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.

                     THE TREASURER AND ASSISTANT TREASURERS

         Section 13. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.

         Section 14. He shall disburse the funds of the corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.

         Section 15. If required by the Board of Directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and 


                                      17.

<PAGE>   18
other property of whatever kind in his possession or under his control belonging
to the corporation.

         Section 16. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the Board of Directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.

                                   ARTICLE VI

                              CERTIFICATE OF STOCK

         Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by, the
chairman or vice- chairman of the Board of Directors, or the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, certifying the number of shares owned
by him in the corporation.

         Certificates may be issued for partly paid shares and in such case upon
the face or back of the certificates issued to represent any such partly paid
shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.





                                      18.

<PAGE>   19
         If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.

         Section 2. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect 


                                      19.

<PAGE>   20
as if he were such officer, transfer agent or registrar at the date of issue.

                                LOST CERTIFICATES

         Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.

                                TRANSFER OF STOCK

         Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled


                                      20.

<PAGE>   21
thereto, cancel the old certificate and record the transaction upon its books.

                               FIXING RECORD DATE

         Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholder or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting: provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

                             REGISTERED STOCKHOLDERS

         Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares and shall
not be bound to recognize any equitable or other claim to or interest in 



                                      21.

<PAGE>   22
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Delaware.

                                   ARTICLE VII

                               GENERAL PROVISIONS

                                    DIVIDENDS

         Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.

         Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purposes as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.

                                     CHECKS



                                      22.

<PAGE>   23
         Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.

                                   FISCAL YEAR

         Section 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.

                                      SEAL

         Section 5. The Board of Directors may adopt a corporate seal having
inscribed thereon the name of the corporation, the year of its organization and
the words "Corporate Seal, Delaware". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.

                                 INDEMNIFICATION

         Section 6. The corporation shall, to the fullest extent authorized
under the laws of the State of Delaware, as those laws may be amended and
supplemented from time to time, indemnify any director made, or threatened to be
made, a party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of being a director of the
corporation or a predecessor corporation or, at the corporation's request, a
director or officer of another corporation. The indemnification provided for in
this Section 6 shall: (i) not be deemed exclusive of any other rights to which
those indemnified 


                                      23.

<PAGE>   24
may be entitled under any bylaw, agreement or vote of stockholders or
disinterested directors or otherwise, both as to action in their official
capacities and as to action in another capacity while holding such office, (ii)
continue as to a person who has ceased to be a director, and (iii) inure to the
benefit of the heirs, executors and administrators of such a person. The
corporation's obligation to provide indemnification under this Section 6 shall
be offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage under a policy maintained by the corporation or
any other person.

         Expenses incurred by a director of the corporation in defending a civil
or criminal action, suit or proceeding by reason of the fact that he is or was a
director of the corporation (or was serving at the corporation's request as a
director or officer of another corporation) shall be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
corporation as authorized by relevant sections of the General Corporation Law of
Delaware.

         The foregoing provisions of this Section 6 shall be deemed to be a
contract between the corporation and each director who serves in such capacity
at any time while this bylaw is in effect, and any repeal or modification
thereof shall not affect 


                                      24.

<PAGE>   25
any rights or obligations then existing with respect to any state of facts then
or theretofore existing or any action, suit or proceeding theretofore or
thereafter brought based in whole or in part upon any such state of facts.

         The Board of Directors in its discretion shall have power on behalf of
the corporation to indemnify any person, other than a director, made a party to
any action, suit or proceeding by reason of the fact that he, his testator or
intestate, is or was an officer or employee of the corporation.

         To assure indemnification under this Section 6 of all directors,
officers and employees who are determined by the corporation or otherwise to be
or to have been "fiduciaries" of any employee benefit plan of the corporation
which may exist from time to time, Section 145 of the General Corporation Law of
Delaware shall, for the purposes of this Section 6, be interpreted as follows:
an "other enterprise" shall be deemed to include such an employee benefit plan,
including without limitation, any plan of the corporation which is governed by
the Act of Congress entitled "Employee Retirement Income Security Act of 1974,"
as amended from time to time; the corporation shall be deemed to have requested
a person to serve an employee benefit plan where the performance by such person
of his duties to the corporation also imposes duties on, or otherwise involves
services by, such person to the plan or participants or beneficiaries of the
plan; excise taxes assessed on a person with 



                                      25.

<PAGE>   26
respect to an employee benefit plan pursuant to such Act of Congress shall be 
deemed "fines."

                                  ARTICLE VIII

                                   AMENDMENTS

         Section 1. These bylaws may be altered, amended or repealed or new
bylaws may be adopted by the stockholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the certificate of
incorporation at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
bylaws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal bylaws is conferred upon the Board of Directors by the
certificate or incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal bylaws.

                                       26.




<PAGE>   1
                                                                     EXHIBIT 3.3




                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
                              OF GERON CORPORATION,
                             A DELAWARE CORPORATION


         The undersigned, Ronald W. Eastman and David L. Greenwood hereby
certify that:

         FIRST:    They are the duly elected and acting President and Secretary,
respectively, of said corporation.

         SECOND:   The Certificate of Incorporation of said corporation was
originally filed with the Secretary of State of Delaware on November 28, 1990.

         THIRD:    The Certificate of Incorporation of said corporation shall be
amended and restated to read in full as follows:


                                    ARTICLE I

         The name of the corporation (herein called the "Corporation") is GERON
CORPORATION.


                                   ARTICLE II

         The address of the registered office of the Corporation in the State of
Delaware is Prentice Hall Corporation Systems, Inc., 1013 Centre Road,
Wilmington, New Castle County, Delaware 19805. The name of the registered agent
of the Corporation at such address is Corporation Service Company.


                                   ARTICLE III

         The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.

                                   ARTICLE IV

         Upon the effective date of the filing of this Amended and Restated
Certificate
 of Incorporation, each 3.4 shares of this corporation's outstanding
Common Stock and each 3.4 shares of this corporation's outstanding Preferred
Stock shall be converted and reconstituted into one share of the like class and
series of the corporation's capital stock from which such share was converted
(the "Reverse Stock Split"). In lieu of the issuance of fractional shares, the
corporation shall pay to the holder thereof in cash an amount equal to the
fraction of a share to which such holder is entitled multiplied by the fair
market value of such share, as determined by the corporation's Board of
Directors. All share amounts and amounts per share set forth in this Amended and
Restated Certificate of Incorporation have been appropriately adjusted to
reflect the Reverse Stock Split. No further adjustment of any Dividend
Preference, Conversion Price, or Liquidation Preference pursuant to Sections 1,
2, or 4, respectively, of Part B of this Article IV shall be made as a result of
the Reverse Stock Split.

<PAGE>   2
         (A)      Classes of Stock. The Corporation is authorized to issue two
classes of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares which the Corporation is authorized to issue
is Thirty-Four Million Three Hundred Sixty-Six Thousand Two Hundred Thirty-Four
(34,366,234) shares. Twenty-Five Million (25,000,000) shares shall be Common
Stock, par value $0.001 per share and Nine Million Three Hundred Sixty-Six
Thousand Two Hundred Thirty-Four (9,366,234) shares shall be Preferred Stock,
par value $0.001 per share. The Preferred Stock shall be divided into series,
namely, Series A Preferred Stock consisting of Two Million Two Hundred
Thirty-Five Thousand Two Hundred Seventy-Two (2,235,272) shares (the "Series A
Preferred Stock"), Series B Preferred Stock consisting of One Million Four
Hundred Twenty-Nine Thousand Two Hundred Twenty-Eight (1,429,228) shares (the
"Series B Preferred Stock"), Series C Preferred Stock consisting of One Million
Five Hundred Fifty Thousand Eight Hundred Fifty-One (1,550,851) shares (the
"Series C Preferred Stock"), and Series D Preferred Stock consisting of One
Million One Hundred Fifty Thousand Eight Hundred Eighty-Three (1,150,883) shares
(the "Series D Preferred Stock") and such additional number of series as the
Board of Directors may determine.

         (B)      Rights, Preferences and Restrictions of Preferred Stock. The
Preferred Stock authorized by this Amended and Restated Certificate of
Incorporation may be issued from time to time in series. The rights,
preferences, privileges, and restrictions granted to and imposed on the
Preferred Stock are as set forth below in this Article IV(B). Subject to the
protective voting rights which have been or may be granted to the Preferred
Stock or series thereof in Certificates of Determination or the Corporation's
Certificate of Incorporation, ("Protective Provisions"), the Board of Directors
is hereby authorized to determine or alter the rights, preferences, privileges
and restrictions granted to or imposed upon any additional series of Preferred
Stock, and the number of shares constituting any such series and the designation
thereof, or of any of them. Subject to compliance with applicable Protective
Provisions, but notwithstanding any other rights of the Preferred Stock or any
series thereof, the rights, privileges, preferences and restrictions of any such
additional series may be subordinated to, pari passu with (including, without
limitation, inclusion in provisions with respect to liquidation and acquisition
preferences, redemption and/or approval of matters by vote or written consent),
or senior to any of those of any present or future class or series of Preferred
or Common Stock. Subject to compliance with applicable Protective Provisions,
the Board of Directors is also authorized to increase or decrease the number of
shares of any series, prior or subsequent to the issue of that series, but not
below the number of shares of such series then outstanding or reserved for
future issuance. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such series.

                  1.       Dividend Provisions. The holders of shares of Series
A, Series B, Series C and Series D Preferred Stock shall be entitled to receive
dividends, out of any assets legally available therefor, prior and in preference
to any declaration or payment of any dividend (payable other than in Common
Stock or other securities and rights convertible into or entitling the holder
thereof to receive, directly or indirectly, additional shares of Common Stock of
the Corporation) on the Common Stock of the Corporation, at the rate of $.34
per share for each outstanding share of Series A Preferred Stock, $.765 per
share for each outstanding share of Series B



                                      -2-

<PAGE>   3
Preferred Stock, $.816 per share for each outstanding share of Series C
Preferred Stock and $1.02 per share for each outstanding share of Series D
Preferred Stock (the "Original Dividend Rate" with respect to each such series),
on a per annum basis, or if greater than the applicable Original Dividend Rate
(as determined on a per annum basis and on as converted basis for the Series A,
Series B, Series C and Series D Preferred Stock), an amount equal to that paid
on any other outstanding shares of the Corporation, payable quarterly when, as
and if declared by the Board of Directors. Thereafter, the holders of Preferred
Stock and Common Stock shall be entitled, when, as and if declared by the Board
of Directors, to dividends out of the corporation's assets legally available
therefor; provided, however, that no such dividends may be declared or paid on
any shares of Common Stock or Preferred Stock unless at the same time an
equivalent dividend is declared and paid on all outstanding shares of Common
Stock and Preferred Stock; and provided further that the dividend on any series
of any Preferred Stock shall be payable at the same rate per share as would be
payable on the shares of Common Stock or other securities into which such series
of Preferred Stock is convertible immediately prior to the record date for such
dividend. The right to such dividends on shares of the Common Stock or Preferred
Stock shall not be cumulative, and no right shall accrue to holders of Common
Stock or Preferred Stock by reason of the fact that dividends on said shares are
not declared in any prior period.

                  2.       Liquidation Preference.

                           (a)      In the event of any liquidation, dissolution
or winding up of the Corporation, either voluntary or involuntary, the holders
of Series A, Series B, Series C and Series D Preferred Stock shall be entitled
to receive, on a pari passu basis, prior and in preference to any distribution
of any of the assets of the Corporation to the holders of Common Stock and any
such additional series which may be subordinated to any present class or series
of Preferred Stock with respect to the liquidation preference set forth in this
Section 2 by reason of their ownership thereof, an amount per share (as adjusted
for any stock split, stock division or consolidation) (i) equal to $3.40 for
each outstanding share of Series A Preferred Stock (the "Original Issue Price"
with respect to such series) and (ii) equal to $7.65 for each outstanding
share of Series B Preferred Stock (the "Original Issue Price" with respect to
such series), (iii) equal to $8.16 for each outstanding share of Series C
Preferred Stock (the "Original Issue Price" with respect to such series) and
(iv) equal to $10.20 for each outstanding share of Series D Preferred Stock
(the "Original Issue Price" with respect to such series) plus, for such shares
of the Preferred Stock, an amount equal to declared but unpaid dividends on each
such share of Preferred Stock (such amount of declared but unpaid dividends
being referred to herein as the "Premium" with respect to the Series A, Series
B, Series C and Series D Preferred Stock). If upon the occurrence of such event,
the assets and funds thus distributed among the holders of the Series A, Series
B, Series C and Series D Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Corporation legally available for distribution
shall be distributed ratably among the holders of the Series A, Series B, Series
C and Series D Preferred Stock in proportion to the aggregate preferential
amount each such holder would otherwise be entitled to receive.

                           (b)      Upon the completion of the distribution
required by subparagraph (a) of this Section 2, and any other distribution which
may be required with respect to series of Preferred Stock which may from time to
time come into existence, if assets remain in the 



                                      -3-

<PAGE>   4
Corporation, the holders of the Common Stock and Series A, Series B, Series C
and Series D Preferred Stock shall receive all of the remaining assets of the
Corporation pro-rata on an as-converted basis.

                           (c)      A consolidation or merger of the Corporation
with or into any other corporation or corporations, or a sale, conveyance or
disposition of all or substantially all of the assets of the Corporation or the
effectuation by the Corporation or its stockholders of a transaction or series
of related transactions in which more than 50% of the voting power of the
Corporation entitled to vote in an election of the Board of Directors of the
Corporation at a regular or special meeting of the stockholders of the
Corporation or by way of written consent in lieu of such meeting is disposed of,
shall not be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section 2, but shall instead be treated pursuant to Section 5
hereof.

                  3.       Redemption.  The Preferred Stock is not redeemable.

                  4.       Conversion.  The holders of the Series A, Series B,
Series C and Series D Preferred Stock shall have conversion rights as follows
(the "Conversion Rights"):

                           (a)      Right to Convert.

                                    (i)     Subject to subsection (c) below and
Section 8 hereof, each share of Series A, Series B, Series C and Series D
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share at the office of the
Corporation or any transfer agent for the Preferred Stock of that series into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing the Original Issue Price for each share of that Series By
the conversion price at the time in effect for each such share (the "Conversion
Price"). The initial Conversion Price for shares of Series A Preferred Stock
shall be the Original Issue Price for the Series A Preferred Stock; the initial
Conversion Price for shares of Series B Preferred Stock shall be the Original
Issue Price for the Series B Preferred Stock; the initial Conversion Price for
shares of Series C Preferred Stock shall be the Original Issue Price for the
Series C Preferred Stock; and the Initial Conversion Price for shares of Series
D Preferred Stock shall be the Original Issue Price for the Series D Preferred
Stock; provided, however, that the Conversion Price for the Series A, Series B,
Series C and Series D Preferred Stock shall be subject to adjustment as set
forth in subsection (c) below.

                                    (ii)    Each share of Series A, Series B,
Series C and Series D Preferred Stock shall automatically be converted into
shares of Common Stock at the Conversion Price at the time in effect for such
Series A, Series B and Series C Preferred Stock immediately upon the
consummation of the Corporation's sale of its Common Stock in a bona fide, firm
commitment underwritten public offering pursuant to a registration statement on
Form S-1 under the Securities Act of 1933, as amended, which resulted in at
least $7,500,000 of aggregate proceeds.

                           (b)      Mechanics of Conversion.  Before any holder
of Series A, Series B, Series C or Series D Preferred Stock shall be entitled to
convert the same into shares of Common Stock, he shall surrender the certificate
or certificates therefor, duly endorsed, at the office of the



                                      -4-

<PAGE>   5
Corporation or of any transfer agent for the Preferred Stock of that series, and
shall give written notice by mail, postage prepaid, to the Corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. The Corporation shall, as soon as practicable,
issue and deliver at such office to such holder of Preferred Stock or to the
nominee or nominees of such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series A, Series B,
Series C or Series D Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock as of such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of
1933, the conversion will, unless otherwise notified by the holder tendering
Series A, Series B, Series C or Series D Preferred Stock for conversion, be
conditioned upon the closing with the underwriter of the sale of securities
pursuant to such offering, in which event the person(s) entitled to receive the
Common Stock issuable upon such conversion of the Series A, Series B, Series C
or Series D Preferred Stock shall not be deemed to have converted such Preferred
Stock until immediately prior to the closing of such sale of securities.

                           (c)      Conversion Price Adjustments of Preferred
Stock. The Conversion Price of the Series A, Series B, Series C and Series D
Preferred Stock shall be subject to adjustment from time to time as follows:

                                    (i)     (A)      If the corporation shall
issue any Additional Stock (as defined below) without consideration or for a
consideration per share less than the Conversion Price for the Series A, Series
B, Series C or Series D Preferred Stock in effect immediately prior to the
issuance of such Additional Stock, the respective Conversion Price for the
Series A, Series B, Series C or Series D Preferred Stock, as applicable, in
effect immediately prior to each such issuance shall forthwith (except as
otherwise provided in this clause (i)) be adjusted to a price equal to the
quotient obtained by dividing the total computed under clause (x) below by the
total computed under clause (y) below as follows:

                                    (x)     for each applicable series, an
                                            amount equal to the sum of:

                                    (1)     the aggregate purchase price of the
                  shares of such Series A, Series B, Series C and Series D
                  Preferred Stock sold (or deemed to be sold pursuant to
                  subsection 4(c)(i)(E)) pursuant to the agreement to which such
                  shares of Series A, Series B, Series C or Series D Preferred
                  Stock are first issued (the "Series A Stock Purchase
                  Agreement," the "Series B Purchase Agreement," the "Series C
                  Purchase Agreement" or the "Series D Purchase Agreement," as
                  applicable), plus

                                    (2)     the aggregate consideration, if any,
                  received by the corporation for all Additional Stock issued on
                  or after the date of such series' respective Stock Purchase
                  Agreement (the "Purchase Date" for each such series), 




                                      -5-

<PAGE>   6
                  other than shares of Common Stock issued or issuable upon
                  conversion of such series of Preferred Stock;

                                    (y)     for each such series, an amount
                                            equal to the sum of

                                    (1)     the aggregate purchase price of such
                  shares of Series A Preferred Stock sold pursuant to the Series
                  A Stock Purchase Agreement, Series B Preferred Stock sold
                  pursuant to the Series B Stock Purchase Agreement, Series C
                  Preferred Stock sold pursuant to the Series C Purchase
                  Agreement and Series D Preferred Stock sold pursuant to the
                  Series D Purchase Agreement divided by the Conversion Price
                  for such shares of Series A, Series B, Series C and Series D
                  Preferred Stock in effect at the Purchase Date, as applicable
                  (or such higher or lower Conversion Price for the Series A,
                  Series B, Series C or Series D Preferred Stock, as applicable,
                  as results from the application of subsections 4(c)(iii) and
                  (iv) and assuming that this Amended and Restated Certificate
                  was in effect as of the Purchase Date) plus

                                    (2)     the number of shares of Additional
                  Stock issued since the Purchase Date (increased or decreased
                  to the extent that the number of such shares of Additional
                  Stock shall have been increased or decreased as the result of
                  the application of subsections 4(c)(iii) and (iv)).

                                            (B)      No adjustment of the
Conversion Price for the Series A, Series B, Series C or Series D Preferred
Stock shall be made in an amount less than one cent per share, provided that any
adjustments which are not required to be made by reason of this sentence shall
be carried forward and shall be either taken into account in any subsequent
adjustment made prior to 3 years from the date of the event giving rise to the
adjustment being carried forward, or shall be made at the end of 3 years from
the date of the event giving rise to the adjustment being carried forward.
Except to the limited extent provided for in subsections (E)(3) and (E)(4), no
adjustment of such Conversion Price pursuant to this subsection 4(c)(i) shall
have the effect of increasing the applicable Conversion Price above the
Conversion Price in effect immediately prior to such adjustment.

                                            (C)      In the case of the issuance
of Common Stock for cash, the consideration shall be deemed to be the amount of
cash paid therefor before deducting any reasonable discounts, commissions or
other expenses allowed, paid or incurred by the Corporation for any underwriting
or otherwise in connection with the issuance and sale thereof.

                                            (D)      In the case of the issuance
of the Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value thereof as
determined in good faith by the Board of Directors irrespective of any
accounting treatment.

                                            (E)      In the case of the issuance
(whether before, on or after the Purchase Date) of options to purchase or rights
to subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or 




                                      -6-

<PAGE>   7
rights to subscribe for such convertible or exchangeable securities (including,
without limitation, the Series A, Series B, Series C and Series D Preferred
Stock), the following provisions shall apply for all purposes of this subsection
4(c)(i) and 4(c)(ii):

                                                     1.       The aggregate
maximum number of shares of Common Stock deliverable upon exercise (to the
extent exercisable) of such options to purchase or rights to subscribe for
Common Stock shall be deemed to have been issued at the time such options or
rights were issued and for a consideration equal to the consideration
(determined in the manner provided in subsections 4(c)(i)(C) and (c)(i)(D)), if
any, received by the Corporation upon the issuance of such options or rights
plus the minimum exercise price provided in such options or rights (without
taking into account potential antidilution adjustments) for the Common Stock
covered thereby.

                                                     2.       The aggregate
maximum number of shares of Common Stock deliverable upon conversion of or in
exchange (to the extent then convertible or exchangeable) for any such
convertible or exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be deemed to have been
issued at the time such securities were issued or such options or rights were
issued and for a consideration equal to the consideration, if any, received by
the Corporation for any such securities and related options or rights (excluding
any cash received on account of accrued interest or accrued dividends), plus the
minimum additional consideration, if any, to be received by the Corporation
(without taking into account potential antidilution adjustments) upon the
conversion or exchange of such securities or the exercise of any related options
or rights (the consideration in each case to be determined in the manner
provided in subsections 4(c)(i)(C) and (c)(i)(D)).

                                                     3.       In the event of
any change in the number of shares of Common Stock deliverable or in the
consideration payable to the Corporation upon exercise of such options or rights
or upon conversion of or in exchange for such convertible or exchangeable
securities, including, but not limited to, a change resulting from the
antidilution provisions thereof, the Conversion Price of the Series A, Series B,
Series C and/or Series D Preferred Stock, to the extent in any way affected by
or computed using such options, rights or securities, shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such options or rights or the conversion or exchange of such securities.

                                                     4.       Upon the
expiration of any such options or rights, the termination of any such rights to
convert or exchange or the expiration of any options or rights related to such
convertible or exchangeable securities, the Conversion Price of the Series A,
Series B, Series C and/or Series D Preferred Stock, to the extent in any way
affected by or computed using such options, rights or securities or options or
rights related to such securities, shall be recomputed to reflect the issuance
of only the number of shares of Common Stock (and convertible or exchangeable
securities which remain in effect) actually issued upon the exercise of such
options or rights, upon the conversion or exchange of such securities or upon
the exercise of the options or rights related to such securities.




                                      -7-

<PAGE>   8
                                                     5.       The number of
shares of Common Stock deemed issued and the consideration deemed paid therefor
pursuant to subsections 4(c)(i)(E)(1) and (2) shall be appropriately adjusted to
reflect any change, termination or expiration of the type described in either
subsection 4(c)(i)(E)(3) or (4).

                                    (ii)    "Additional Stock" shall mean any
shares of Common Stock issued (or deemed to have been issued pursuant to
subsection 4(c)(i)(E)) by the Corporation after the Purchase Date other than:

                                            (A)      Common Stock issued
pursuant to a transaction described in subsection 4(c)(iii) hereof;

                                            (B)      Shares of Common Stock
issued or issuable to officers, employees, consultants and directors of the
Corporation directly or pursuant to a stock benefit plan adopted by the Board of
Directors;

                                            (C)      Common Stock issued to
non-profit institutions primarily in connection with research or other
collaborative arrangements; or

                                            (D)      Up to 2,695 shares of
Common Stock issuable to StratiPoint Group, Inc. in connection with consulting
services.

                                    (iii)   In the event the Corporation should
at any time or from time to time after the Purchase Date for the Series D
Preferred Stock fix a record date for the effectuation of a split or subdivision
of the outstanding shares of Common Stock or the determination of holders of
Common Stock entitled to receive a dividend or other distribution payable in
additional shares of Common Stock or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as "Common Stock
Equivalents") without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise thereof),
then, as of such record date (or the date of such dividend distribution, split
or subdivision if no record date is fixed), the Conversion Price of the Series
A, Series B, Series C and Series D Preferred Stock shall be appropriately
decreased so that the number of shares of Common Stock issuable on conversion of
each share of such series shall be increased in proportion to such increase of
the aggregate of shares of Common Stock outstanding and those issuable with
respect to such Common Stock Equivalents with the number of shares issuable with
respect to such Common Stock Equivalents determined in the manner provided for
deemed issuances in subsection 4(c)(i)(E).

                                    (iv)    If the number of shares of Common
Stock outstanding at any time after the Purchase Date for the Series D Preferred
Stock is decreased by a combination of the outstanding shares of Common Stock,
then, following the record date of such combination, the Conversion Price for
the Series A, Series B, Series C and Series D Preferred Stock shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of each share of such series shall be decreased in proportion to such
decrease in outstanding shares.




                                      -8-

<PAGE>   9
                           (d)      Other Distributions.  In the event the
Corporation shall declare a distribution payable in securities of other persons,
evidences of indebtedness issued by the Corporation or other persons, assets
(excluding cash dividends) or options or rights not referred to in subsection
4(c)(iii), then, in each such case for the purpose of this subsection 4(d), the
holders of the Series A, Series B, Series C and Series D Preferred Stock shall
be entitled to a proportionate share of any such distribution as though they
were the holders of the number of shares of Common Stock of the Corporation into
which their shares of Series A, Series B, Series C and Series D Preferred Stock
are convertible as of the record date fixed for the determination of the holders
of Common Stock of the Corporation entitled to receive such distribution.

                           (e)      Recapitalizations.  Subject to the
Protective Provisions provided for herein, if at any time or from time to time
there shall be a recapitalization of the Common Stock or merger with the
Corporation as the surviving entity (other than a subdivision, combination or
merger or sale of assets transaction provided for elsewhere in this Section 4 or
Section 5) provision shall be made so that the holders of the Series A, Series
B, Series C and Series D Preferred Stock shall thereafter be entitled to receive
upon conversion of their Series A, Series B, Series C and/or Series D Preferred
Stock the number of shares of stock or other securities or property of the
Company or otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 4 with respect to the rights of the holders of the Series A, Series
B, Series C and Series D Preferred Stock after the recapitalization to the end
that the provisions of this Section 4 (including adjustment of the Conversion
Price then in effect and the number of shares purchasable upon conversion of the
Series A, Series B, Series C and Series D Preferred Stock) shall be applicable
after that event as nearly equivalent as may be practicable. Notwithstanding
anything in this subsection (e) to the contrary, the provisions of this
subsection (e) shall not apply in the case of a merger which will result in the
Corporation's stockholders immediately prior to such merger not holding at least
50% of the voting power of the surviving or continuing entity, entitled to vote
in an election of the Board of Directors of such entity at a regular or special
meeting of the stockholders of such entity or by way of written consent on lieu
of such meeting.

                           (f)      No Impairment.  The Corporation will not, by
amendment of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series A, Series B, Series C and Series
D Preferred Stock against impairment.

                           (g)      No Fractional Shares and Certificate as to
Adjustments.

                                    (i)     No fractional shares shall be issued
upon conversion of the Series A, Series B, Series C and Series D Preferred
Stock, and the number of shares of Common Stock to be issued shall be rounded
down to the nearest whole share. Whether or not fractional shares are issuable
upon such conversion shall be determined on the basis of the total number of



                                      -9-

<PAGE>   10
shares of Preferred Stock the holder is at the time converting into Common Stock
and the number of shares of Common Stock issuable upon such aggregate
conversion.

                                    (ii)    Upon the occurrence of each
adjustment or readjustment of the Conversion Price of a series of Preferred
Stock pursuant to this Section 4, the Corporation, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to each holder of such series of Preferred Stock
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any holder of
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (A) such adjustment and readjustment, (B) the
Conversion Price at the time in effect, and (C) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of a share of Preferred Stock.

                           (h)      Notices of Record Date.  In the event of any
taking by the Corporation of a record of the holders of any class of securities
for the purpose of determining the holders thereof who are entitled to receive
any dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Corporation
shall mail to each holder of Series A, Series B, Series C and Series D Preferred
Stock, at least 20 days prior to the date specified therein, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right.

                           (i)      Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of the Series A, Series B, Series C and
Series D Preferred Stock such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding shares of
the Series A, Series B, Series C and Series D Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the Series
A, Series B, Series C and Series D Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Preferred Stock, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes.

                           (j)      Notices.  Any notice required by the
provisions of this Section 4 to be given to the holders of shares of Series A,
Series B, Series C and Series D Preferred Stock shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at his address appearing on the books of the Corporation.

                  5.       Merger, Consolidation.

                           (a)      At any time, in the event of:




                                      -10-

<PAGE>   11
                                    (i)     any transaction (or series of
related transactions including, without limitation, any reorganization, merger
or consolidation) which will result in the Corporation's stockholders as
constituted immediately prior to such transaction not holding, immediately after
such transaction, at least 50% of the voting power of the surviving or
continuing entity, entitled to vote in an election of the Board of Directors of
such entity at a regular or special meeting of the stockholders of such entity
or by way of written consent in lieu of such meeting; or

                                    (ii)    a sale of all or substantially all
of the assets of the Corporation, unless the Corporation's stockholders as
constituted immediately prior to such sale will hold, immediately after such
transaction, at least 50% of the voting power entitled to vote in an election of
the Board of Directors of the purchasing entity at a regular or special meeting
of the stockholders of such entity or by way of written consent in lieu of such
meeting.

                                    then, holders of the Series A, Series B,
Series C and Series D Preferred Stock shall receive for each share of such stock
in cash or in securities received from the acquiring corporation, or in a
combination thereof, at the closing of any such transaction, an amount equal to
the Original Issue Price for such series, plus an amount equal to the Premium
for such series as of the date of closing of such transaction, and the remaining
proceeds of such transaction shall be distributed as a Shared Allocation (as
defined in subsection 5(b)). Such payments (including the Shared Allocation)
shall be made with respect to the Series A, Series B, Series C and Series D
Preferred Stock by purchase of such shares of the Preferred Stock by the
surviving corporation, entity or person or by the Corporation. In the event the
proceeds of the transaction are not sufficient to make full payment of the
aforesaid preferential amounts to the holders of the Series A, Series B, Series
C and Series D Preferred Stock in accordance herewith, then the entire amount
payable in respect of the proposed transaction shall be distributed among the
holders of the Series A, Series B, Series C and Series D Preferred Stock in
proportion to the aggregate preferential amount each such holder would otherwise
be entitled to receive.

                           (b)      The term "Shared Allocation" shall mean that
the holders of Series A, Series B, Series C and Series D Preferred Stock and
Common Stock of this Corporation shall share the remaining consideration, or all
of the consideration, as the case may be, to be paid by the acquiring
corporation in such transaction in the same proportion as the number of shares
of outstanding Common Stock and Common Stock issuable upon the conversion of
outstanding Preferred Stock then held by each of them bears to the total number
of shares of outstanding Common Stock and Common Stock issuable upon conversion
of outstanding Preferred Stock.

                           (c)      Any securities to be delivered to the
holders of the Series A, Series B, Series C and/or Series D Preferred Stock
pursuant to subsection 5(a) above shall be valued as follows:

                                    (i)     Securities not subject to investment
letter or other similar restrictions on free marketability covered by (ii)
below:




                                      -11-

<PAGE>   12
                                            (A)      If traded on a securities
exchange, the value shall be deemed to be the average of the closing prices of
the securities on such exchange over the 30-day period ending three (3) days
prior to the closing;

                                            (B)      If actively traded
over-the-counter, the value shall be deemed to be the average of the closing bid
or sale prices (whichever are applicable) over the 30-day period ending three
(3) days prior to the closing; and

                                            (C)      If there is no active
public market, the value shall be the fair market value thereof, as mutually
determined by the Corporation and the holders of Preferred Stock which would be
entitled to receive such securities or the same type of securities and which
Preferred Stock represents at least a majority of the voting power of all then
outstanding shares of such Preferred Stock.

                                    (ii)    The method of valuation of
securities subject to investment letter or other restrictions on free
marketability (other than restrictions arising solely by virtue of a
stockholder's status as an affiliate or former affiliate) shall be to make an
appropriate discount from the market value determined as above in (i) (A), (B)
or (C) to reflect the approximate fair market value thereof, as mutually
determined by the Corporation and the holders of Preferred Stock which would be
entitled to receive such securities or the same type of securities and which
represent at least a majority of the voting power of all then outstanding shares
of such Preferred Stock.

                           (d)      In the event the requirements of subsection
5(a) are not complied with, the Corporation shall forthwith either:

                                    (i)     cause such closing to be postponed
until such time as the requirements of this Section 5 have been complied with,
or

                                    (ii)    cancel such transaction, in which
event the rights, preferences and privileges of the holders of the Series A,
Series B, Series C and Series D Preferred Stock shall revert to and be the same
as such rights, preferences and privileges existing immediately prior to the
date of the first notice referred to in subsection 5(e) hereof.

                           (e)      The Corporation shall give each holder of
record of Series A, Series B, Series C and Series D Preferred Stock (or
securities exercisable therefor) written notice of such impending transaction
not later than twenty (20) days prior to the stockholders' meeting called to
approve such transaction, or twenty (20) days prior to the closing of such
transaction, whichever is earlier, and shall also notify such holders in writing
of the final approval of such transaction. The first of such notices shall
describe the material terms and conditions of the impending transaction and the
provisions of this Section 5, and the Corporation shall thereafter give such
holders prompt notice of any material changes. The transaction shall in no event
take place sooner than twenty (20) days after the Corporation has given the
first notice provided for herein or sooner than ten (10) days after the
Corporation has given notice of any material changes provided for herein;
provided, however, that such periods may be shortened upon the written consent
of the holders of Preferred Stock which is entitled to such notice rights or
similar notice rights and 



                                      -12-

<PAGE>   13
which represents at least a majority of the voting power of all then outstanding
shares of such Preferred Stock.

                           (f)      The provisions of this Section 5 are in
addition to the protective provisions of Section 7 hereof.

                  6.       Voting Rights. The holder of each share of Series A,
Series B, Series C and Series D Preferred Stock shall have the right to one vote
for each share of Common Stock into which such Series A, Series B, Series C and
Series D Preferred Stock could then be converted (with any fractional share
determined on an aggregate conversion basis being rounded to the nearest whole
share), and with respect to such vote, such holder shall have full voting rights
and powers equal to the voting rights and powers of the holders of Common Stock,
and shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the by-laws of the Corporation, and
shall be entitled to vote, together with holders of Common Stock, with respect
to any question upon which holders of Common Stock have the right to vote.

                  7.       Protective Provisions. In addition to any vote
required by law, so long as any shares of Series A, Series B, Series C and/or
Series D Preferred Stock are outstanding, the Corporation shall not without
first obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least a majority of the then outstanding Series A, Series B,
Series C and Series D Preferred Stock, voting together as a single class:

                           (a)      sell, convey, or otherwise dispose of or
encumber all or substantially all of its property or business or merge into or
consolidate with any other corporation or entity or effect any transaction or
series of related transactions in which more than 50% of the voting power
entitled to vote in an election of the Board of Directors of the Corporation at
a regular or special meeting of stockholders or by way of written consent in
lieu of such meeting is disposed of;

                           (b)      adversely alter or change the rights,
preferences or privileges of the shares of Series A, Series B, Series C or
Series D Preferred Stock;

                           (c)      create any new class or series of stock or
any other securities convertible into equity securities of the Corporation
having a preference over, or being on a parity with, the Series A, Series B,
Series C or Series D Preferred Stock with respect to dividends, liquidation or
redemption;

                           (d)      pay or declare any dividend on its Common
Stock or any other junior equity security other than a dividend in Common Stock
of the Corporation;

                           (e)      Redeem, purchase or otherwise acquire (or
pay into or set aside for a sinking fund for such purpose) any of the Common
Stock; provided, however, that this restriction shall not apply to the
repurchase of shares of Common Stock: (i) from employees, officers, directors,
consultants or other persons performing services for the Corporation or any
subsidiary pursuant to agreements under which the Corporation has the option to
repurchase such shares at 



                                      -13-

<PAGE>   14
cost or at cost plus interest upon the occurrence of certain events, such as the
termination of employment, or (ii) in settlement of disputes with third parties
if such redemption, purchase or acquisition or the payment into or setting aside
into a sinking fund is unanimously approved by the Board of Directors;

                           (f)      do any act or thing which would result in
taxation of the holders of Preferred Stock under Section 305 of the Internal
Revenue Code;

                           (g)      Increase the number of authorized shares of
Series A, Series B, Series C or Series D Preferred Stock.

                  8.       Special Mandatory Conversion. On or at any time the
holders of a least sixty-six and two-thirds percent (66 2/3%) of the outstanding
shares of Preferred Stock elect to convert their shares of Preferred Stock, all
shares of Preferred Stock including the shares of those holders of Preferred
Stock who did not elect to convert, shall automatically convert into Common
Stock. Conversion pursuant to this Section 8 shall be governed by Section 4.

                  9.       Status of Converted Stock. In the event any shares of
Series A, Series B, Series C or Series D Preferred Stock shall be converted
pursuant to Section 4, the shares so converted shall be canceled and shall not
be issuable by the Corporation, and the Certificate of Incorporation of the
Corporation shall be appropriately amended to effect the corresponding reduction
in the Corporation's authorized capital stock.

         (C)      Common Stock.

                  1.       Dividend Rights. Subject to the prior rights of
holders of all classes of stock at the time outstanding having prior rights as
to dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.

                  2.       Liquidation Rights.  Upon the liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
shall be distributed as provided in Section 2 of Division (B) of this Article IV
hereof.

                  3.       Redemption.  The Common Stock is not redeemable.

                  4.       Voting Rights. The holder of each share of Common
Stock shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the By-laws of the Corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.




                                      -14-

<PAGE>   15
                                    ARTICLE V

         Except as otherwise provided in this Amended and Restated Certificate
of Incorporation, in furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, repeal,
alter, amend and rescind any or all of the Bylaws of the Corporation.

                                   ARTICLE VI

         The number of directors of the Corporation shall be fixed from time to
time by a bylaw or amendment thereof duly adopted by the Board of Directors or
by the stockholders.

                                   ARTICLE VII

         Elections of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.

                                  ARTICLE VIII

         Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.

                                   ARTICLE IX

         Effective upon the consummation of the Corporation's sale of Common
Stock in a bona fide, firm commitment underwritten public offering pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, no action
required to be taken or that may be taken at any annual or special meeting of
the stockholders of this corporation may be taken without a meeting, and the
power of stockholders to consent in writing, without a meeting, to the taking of
any action is specifically denied.

                                    ARTICLE X

         In the event the Corporation is subject to Section 2115 of the
California Corporations Code, Section A of this Article shall apply. Otherwise,
Section B of this Article shall apply.

         (A)      California. The liability of each and every director of this
Corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law. If California law is hereafter amended to
authorize, with the approval of a Corporation's stockholders, further reductions
in the liability of the Corporation's directors for breach of fiduciary duty,
then a director of the Corporation shall not be liable for any such breach to
the fullest extent permitted by California law, as so amended.

         (B)      Delaware. To the fullest extent permitted by the General
Corporation Law of Delaware, as the same may be amended from time to time, a
director of the Corporation shall not 



                                      -15-

<PAGE>   16
be personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director. If the General Corporation Law of
Delaware is hereafter amended to authorize, with the approval of a corporation's
stockholders, further reductions in the liability of the corporation's directors
for breach of fiduciary duty, then a director of the corporation shall not be
liable for any such breach to the fullest extent permitted by the General
Corporation Law of Delaware, as so amended.

         (C)      Effect of Repeal or Modification. Any repeal or modification
of the foregoing provisions of this Article IX shall not adversely affect any
right or protection of a director of the Corporation with respect to any acts or
omissions of such director occurring prior to such repeal or modification.

                                   ARTICLE XI

         In the event the Corporation is subject to Section 2115 of the
California Corporations Code, Section A of this Article shall apply. Otherwise,
Section B of this Article shall apply.

         (A)      California. To the fullest extent permitted by California law,
the Corporation is authorized to provide indemnification of (and advancement of
expenses to) agents (as defined in Section 317 of the California Corporations
Code) through bylaw provision, agreements with agents, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 317 of the California Corporations
Code, subject only to applicable limits set forth in Section 204 of the
California Corporations Code, with respect to actions for breach of duty to a
corporation and its stockholders.

         (B)      Delaware. To the fullest extent permitted by applicable law,
the Corporation is also authorized to provide indemnification of (and
advancement of expenses to) such agents (and any other persons to which Delaware
law permits the Corporation to provide indemnification) though bylaw provisions,
agreements with such agents or other persons, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to a
corporation, its stockholders, and others.

         (C)      Effect of Repeal or Modification. Any repeal or modification
of any of the foregoing provisions of this Article X shall not adversely affect
any right or protection of a director, officer, agent or other person existing
at the time of, or increase the liability of any director of the Corporation
with respect to any acts or omissions of such director, officer or agent
occurring prior to such repeal or modification.

                                   ARTICLE XII

         The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.




                                      -16-

<PAGE>   17
                                  ARTICLE XIII

         The Corporation shall have perpetual existence.




                                      -17-

<PAGE>   18
         FOURTH: The foregoing Amended and Restated Certificate of Incorporation
has been duly adopted by the Corporation's Board of Directors and stockholders
in accordance with the applicable provisions of Section 228, 242 and 245 of the
General Corporation Law of the State of Delaware.

         IN WITNESS WHEREOF, the undersigned have executed this certificate on
June __, 1996.



                                        GERON CORPORATION


                                        By: /s/ Ronald W. Eastman
                                           ----------------------------------
                                           Ronald W. Eastman, President




Attest: /s/ David L. Greenwood
        ----------------------------
       David L. Greenwood, Secretary




                                      -18-



<PAGE>   1

                                                                     EXHIBIT 3.4



                           AMENDED AND RESTATED BYLAWS

                                       OF

                                GERON CORPORATION



                                    ARTICLE I

                                     OFFICES


                  Section 1. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.

                  Section 2. The corporation may also have offices at such other
places both within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the corporation may require.


                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

                  Section 1. All meetings of the stockholders for the election
of directors shall be held at such time and place as may be fixed from time to
time by the Board of Directors, and stated in the notice of the meeting.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.

                  Section 2. Annual meetings of stockholders shall be held on
such date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a board of directors, and transact such other business as may
properly be brought before the meeting.

                  Section 3. Written
 notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less than ten (10) nor more than sixty (60) days
before the date of the meeting.

<PAGE>   2
                  Section 4. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

                  Section 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and shall be called
by the president or secretary at the request in writing of a majority of the
Board of Directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.

                  Section 6. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting, to each stockholder entitled to vote
at such meeting.

                  Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.

                  Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present 


                                      -2-

<PAGE>   3
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.

                  Section 9. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question.

                  Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.

                  Section 11. Nominations for election to the Board of Directors
must be made by the Board of Directors or by any stockholder of any outstanding
class of capital stock of the corporation entitled to vote for the election of
directors. Nominations, other than those made by the Board of Directors of the
corporation, must be preceded by notification in writing received by the
Secretary of the corporation not less than ten (10) days nor more than sixty
(60) days prior to any meeting of stockholders called for the election of
directors. Such notification shall contain the written consent of each proposed
nominee to serve as a director if so elected and the following information as to
each proposed nominee and as to each person, acting alone or in conjunction with
one or more other persons as a partnership, limited partnership, syndicate or
other group, who participates or is expected to participate in making such
nomination or in 


                                      -3-

<PAGE>   4
organizing, directing or financing such nomination or solicitation of proxies to
vote for the nominee:

                           (a)      the name, age, residence, address, and
business address of each proposed nominee and of each such person;

                           (b)      the principal occupation or employment, the
name, type of business and address of the corporation or other organization in
which such employment is carried on of each proposed nominee and of each such
person;

                           (c)      the amount of stock of the corporation owned
beneficially, either directly or indirectly, by each proposed nominee and each
such person; and

                           (d)      a description of any arrangement or
understanding of each proposed nominee and of each such person with each other
or any other person regarding future employment or any future transaction to
which the corporation will or may be a party.

                  The presiding officer of the meeting shall have the authority
to determine and declare to the meeting that a nomination not preceded by
notification made in accordance with the foregoing procedure shall be
disregarded.

                  Section 12. At any meeting of the stockholders, only such
business shall be conducted as shall have been brought before the meeting (a)
pursuant to the corporation's notice of meeting, (b) by or at the direction of
the Board of Directors or (c) by any stockholder of the corporation who is a
stockholder of record at the time of giving of the notice provided for in this
Bylaw, who shall be entitled to vote at such meeting and who complies with the
notice procedures set forth in this Bylaw.

                  For business to be properly brought before any meeting by a
stockholder pursuant to clause (c) of the first paragraph of this Section 12,
the stockholder must have given timely notice thereof in writing to the
Secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than ten (10) days nor more than sixty (60) days prior to
the date of the meeting. A stockholder's notice to the Secretary shall set forth
as to each matter the stockholder proposes to 


                                      -4-

<PAGE>   5
bring before the meeting (a) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting, (b) the name and address, as they appear on the corporation's books, of
the stockholder proposing such business, and the name and address of the
beneficial owner, if any, on behalf of whom the proposal is made, (c) the class
and number of shares of the corporation which are owned beneficially and of
record by such stockholder of record and by the beneficial owner, if any, on
whose behalf the proposal is made and (d) any material interest of such
stockholder of record and the beneficial owner, if any, on whose behalf the
proposal is made in such business.

                  Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at a meeting except in accordance with the
procedures set forth in this Section 12. The presiding officer of the meeting
shall, if the facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting and in accordance with the
procedures prescribed by this Section 12, and if such person should so
determine, such person shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted. Notwithstanding the
foregoing provisions of this Section 12, a stockholder shall also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the matters set forth
in this Section 12.

                                   ARTICLE III

                                    DIRECTORS

                  Section 1. The number of directors which shall constitute the
whole board shall not be less than five (5) nor more than eight (8). Upon
adoption of these Amended and Restated Bylaws, the board shall consist of eight
(8) directors. Thereafter, within the limits above specified, the number of
directors shall be determined by resolution of the Board of Directors or by the
stockholders at any meeting of the stockholders, except as provided in Section 2
of this Article, and each director elected shall hold office until his successor
is elected and qualified or 




                                      -5-

<PAGE>   6
until he shall resign, become disqualified or disabled, or be otherwise removed.
Directors need not be stockholders.

                  Section 2. Classes of Directors. The directors shall be
divided and elected into three classes designated as Class I, Class II and Class
III, respectively. At the first annual meeting of stockholders following the
adoption of this Article III Section 2, the term of office of the Class I
directors shall expire and Class I directors shall be elected for a full term of
three years. At the second annual meeting of stockholders following the adoption
of this Article III Section 2, the term of office of the Class II directors
shall expire and Class II directors shall be elected for a full term of three
years. At the third annual meeting of stockholders following the adoption of
this Article III Section 2, the term of office of the Class III directors shall
expire and Class III directors shall be elected for a full term of three years.
At each succeeding annual meeting of stockholders, directors shall be elected
for a full term of three years to succeed the directors of the class whose terms
expire at such annual meeting.

                  Section 3. Vacancies and new created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the
next election of the class for which such directors have been chosen, and until
their successors are duly elected and shall qualify, unless sooner displaced. If
there are no directors in office, then an election of directors may be held in
the manner provided by statute. If, at the time of filling any vacancy or any
newly created directorship, the directors then in office shall constitute less
than a majority of the whole board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of the shares at
the time outstanding having the right to vote for such directors, summarily
order an election to be held to fill any such vacancies or newly created
directorships, or to replace the directors chosen by the directors then in
office.

                  Section 4. The business of the corporation shall be managed by
or under the direction of its board of directors which may exercise all such
powers of the corporation and do 


                                      -6-

<PAGE>   7
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these bylaws directed or required to be exercised or done by
the stockholders.

                       MEETINGS OF THE BOARD OF DIRECTORS

                  Section 5. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.

                  Section 6. The first meeting of each newly elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.

                  Section 7. Regular meetings of the Board of Directors may be
held without notice at such time and at such place as shall from time to time be
determined by the board.

                  Section 8. Special meetings of the board may be called by the
president on ten (10) days' notice to each director by mail or forty-eight (48)
hours' notice to each director either personally or by telegram; special
meetings shall be called by the president or secretary in like manner and on
like notice on the written request of two directors unless the board consists of
only one director, in which case special meetings shall be called by the
president or secretary in like manner and on like notice on the written request
of the sole director.

                  Section 9. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall 




                                      -7-

<PAGE>   8
not be present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

                  Section 10. Unless otherwise restricted by the certificate of
incorporation of these bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.

                  Section 11. Unless otherwise restricted by the certificate of
incorporation or these bylaws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.

                             COMMITTEES OF DIRECTORS

                  Section 12. The Board of Directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee.

                  In the absence of disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

                  Any such committee, to the extent provided in the resolution
of the Board of Directors, shall have and may exercise all the powers and
authority of the Board of Directors in 



                                      -8-

<PAGE>   9
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority in reference to amending
the certificate of incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, recommending
to the stockholders a dissolution of the corporation or a revocation of a
dissolution, or amending the bylaws of the corporation; and, unless the
resolution or the certificate of incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the Board of Directors.

                  Section 13. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.

                            COMPENSATION OF DIRECTORS

                  Section 14. Unless otherwise restricted by the certificate of
incorporation or these bylaws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

                              REMOVAL OF DIRECTORS

                  Section 15. Unless otherwise restricted by the certificate of
incorporation or bylaw, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.




                                      -9-

<PAGE>   10
                                   ARTICLE IV

                                     NOTICES

                  Section 1. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these bylaws, notice is required to be
given to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram or facsimile.

                  Section 2. Whenever any notice is required to be given under
the provisions of the statutes or of the certificate of incorporation or of
these bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.

                                    ARTICLE V

                                    OFFICERS

                  Section 1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a president and a secretary. The Board of
Directors may elect from among its members a Chairman of the Board and a Vice
Chairman of the Board. The Board of Directors may also choose one or more
vice-presidents, assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these bylaws otherwise provide.

                  Section 2. The Board of Directors at its first meeting after
each annual meeting of stockholders shall choose a president and a secretary and
may choose a vice president and a treasurer.

                  Section 3. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.


                                      -10-

<PAGE>   11
                  Section 4. The salaries of all officers of the corporation
shall be fixed by the Board of Directors. The salaries of agents of the
corporation shall, unless fixed by the Board of Directors, be fixed by the
president of the corporation.

                  Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or appointed
by the Board of Directors may be removed at any time by the affirmative vote of
a majority of the Board of Directors. Any vacancy occurring in any office of the
corporation shall be filled by the Board of Directors.

                            THE CHAIRMAN OF THE BOARD

                  Section 6. The Chairman of the Board, if any, shall preside at
all meetings of the Board of Directors and of the stockholders at which he shall
be present. He shall have and may exercise such powers as are, from time to
time, assigned to him by the Board and as may be provided by law.

                  Section 7. In the absence of the Chairman of the Board, the
Vice Chairman of the Board, if any, shall preside at all meetings of the Board
of Directors and of the stockholders at which he shall be present. He shall have
and may exercise such powers as are, from time to time, assigned to him by the
Board and as may be provided by law.

                        THE PRESIDENT AND VICE-PRESIDENT

                  Section 8. The president shall be the chief executive officer
of the corporation unless the Board selects the Chairman as chief executive
officer, in which case the chairman shall have all the authority set forth
below; and in the absence of the Chairman and Vice Chairman of the Board he
shall preside at all meetings of the stockholders and the Board of Directors; he
shall have general and active management of the business of the corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect.

                  Section 9. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise




                                      -11-

<PAGE>   12
signed and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.

                  Section 10. In the absence of the president or in the event of
his inability or refusal to act, the vice-president, if any, (or in the event
there be more than one vice- president, the vice-presidents in the order
designated by the directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the president, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the president. The vice-presidents shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.

                      THE SECRETARY AND ASSISTANT SECRETARY

                  Section 11. The secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or president, under whose supervision he shall be. He shall have
custody of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The Board of Directors may give general authority to
any other officer to affix the seal of the corporation and to attest the
affixing by his signature.

                  Section 12. The assistant secretary, or if there be more than
one, the assistant secretaries in the order determined by the Board of Directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the secretary and
shall 




                                      -12-

<PAGE>   13
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.

                     THE TREASURER AND ASSISTANT TREASURERS

                  Section 13. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors.

                  Section 14. He shall disburse the funds of the corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.

                  Section 15. If required by the Board of Directors, he shall
give the corporation a bond (which shall be renewed every six years) in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.

                  Section 16. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.




                                      -13-

<PAGE>   14
                                   ARTICLE VI

                              CERTIFICATE OF STOCK

                  Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by,
the chairman or vice- chairman of the Board of Directors, or the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, certifying the number of shares owned
by him in the corporation.

                  Certificates may be issued for partly paid shares and in such
case upon the face or back of the certificates issued to represent any such
partly paid shares, the total amount of the consideration to be paid therefor,
and the amount paid thereon shall be specified.

                  If the corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.

                  Section 2. Any of or all the signatures on the certificate may
be facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.


                                      -14-

<PAGE>   15
                                LOST CERTIFICATES

                  Section 3. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.

                                TRANSFER OF STOCK

                  Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

                               FIXING RECORD DATE

                  Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholder or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a



                                      -15-

<PAGE>   16
meeting of stockholders shall apply to any adjournment of the meeting: provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

                             REGISTERED STOCKHOLDERS

                  Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.

                                   ARTICLE VII

                               GENERAL PROVISIONS

                                    DIVIDENDS

                  Section 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.

                  Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purposes as the directors shall think conducive to the interest
of the corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

                                     CHECKS

                  Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.




                                      -16-

<PAGE>   17
                                   FISCAL YEAR

                  Section 4. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.

                                      SEAL

                  Section 5. The Board of Directors may adopt a corporate seal
having inscribed thereon the name of the corporation, the year of its
organization and the words "Corporate Seal, Delaware". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.

                                 INDEMNIFICATION

                  Section 6. The corporation shall, to the fullest extent
authorized under the laws of the State of Delaware, as those laws may be amended
and supplemented from time to time, indemnify any director made, or threatened
to be made, a party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of being a director of the
corporation or a predecessor corporation or, at the corporation's request, a
director or officer of another corporation. The indemnification provided for in
this Section 6 shall: (i) not be deemed exclusive of any other rights to which
those indemnified may be entitled under any bylaw, agreement or vote of
stockholders or disinterested directors or otherwise, both as to action in their
official capacities and as to action in another capacity while holding such
office, (ii) continue as to a person who has ceased to be a director, and (iii)
inure to the benefit of the heirs, executors and administrators of such a
person. The corporation's obligation to provide indemnification under this
Section 6 shall be offset to the extent of any other source of indemnification
or any otherwise applicable insurance coverage under a policy maintained by the
corporation or any other person.

                  Expenses incurred by a director of the corporation in
defending a civil or criminal action, suit or proceeding by reason of the fact
that he is or was a director of the corporation (or was serving at the
corporation's request as a director or officer of another corporation) shall be
paid by the corporation in advance of the final disposition of such action, suit
or proceeding upon 


                                      -17-

<PAGE>   18
receipt of an undertaking by or on behalf of such director to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the corporation as authorized by relevant sections of the General Corporation
Law of Delaware.

                  The foregoing provisions of this Section 6 shall be deemed to
be a contract between the corporation and each director who serves in such
capacity at any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought based in whole or in part
upon any such state of facts.

                  The Board of Directors in its discretion shall have power on
behalf of the corporation to indemnify any person, other than a director, made a
party to any action, suit or proceeding by reason of the fact that he, his
testator or intestate, is or was an officer or employee of the corporation.

                  To assure indemnification under this Section 6 of all
directors, officers and employees who are determined by the corporation or
otherwise to be or to have been "fiduciaries" of any employee benefit plan of
the corporation which may exist from time to time, Section 145 of the General
Corporation Law of Delaware shall, for the purposes of this Section 6, be
interpreted as follows: an "other enterprise" shall be deemed to include such an
employee benefit plan, including without limitation, any plan of the corporation
which is governed by the Act of Congress entitled "Employee Retirement Income
Security Act of 1974," as amended from time to time; the corporation shall be
deemed to have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the corporation also imposes duties
on, or otherwise involves services by, such person to the plan or participants
or beneficiaries of the plan; excise taxes assessed on a person with respect to
an employee benefit plan pursuant to such Act of Congress shall be deemed
"fines."




                                      -18-

<PAGE>   19
                                  ARTICLE VIII

                                   AMENDMENTS

Section 1. These bylaws may be altered, amended or repealed or new bylaws may be
adopted by the stockholders or by the Board of Directors, when such power is
conferred upon the Board of Directors by the certificate of incorporation at any
regular meeting of the stockholders or of the Board of Directors or at any
special meeting of the stockholders or of the Board of Directors if notice of
such alteration, amendment, repeal or adoption of new bylaws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal bylaws is
conferred upon the Board of Directors by the certificate or incorporation it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal bylaws.




                                      -19-

<PAGE>   20
                         CERTIFICATE OF ADOPTION BY THE
                                  SECRETARY OF

                                GERON CORPORATION

                  The undersigned, David Greenwood, hereby certifies that he is
the duly elected and acting Secretary of Geron Corporation, a Delaware
corporation (the "Corporation"), and that the Bylaws attached hereto constitute
the Bylaws of said Corporation as duly adopted by the Corporation's Board of
Directors on June __, 1996.

                  IN WITNESS WHEREOF, the undersigned has hereunto subscribed
his name this ___day of June 1996.




                                             -----------------------------------
                                             David Greenwood
                                             Secretary



<PAGE>   1

                                                                   EXHIBIT 4.1



<TABLE>
<S>                                                        <C>                                          <C>
           NUMBER                                                                                       SHARES

                                                            GERON

INCORPORATED UNDER THE LAWS OF                                                            SEE REVERSE FOR STATEMENTS RELATING
    THE STATE OF DELAWARE                                                                      TO RIGHTS, PREFERENCES,
                                                                                          PRIVILEGES AND RESTRICTIONS, IF ANY

                                                                                                   CUSIP 374163 10 3


This Certifies that










is the owner of



                      FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE, OF

                                                      GERON CORPORATION

      transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney
      upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned and 
      registered by the Transfer Agent and Registrar.

         WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.


      Dated


                                                       GERON CORPORATION
                                                          CORPORATE
              /s/ David L. Greenwood                         SEAL                          /s/ Ronald W. Eastman
                                                           NOV. 28,
      VICE PRESIDENT AND CHIEF FINANCIAL OFFICER             1990                   PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                                           DELAWARE



COUNTERSIGNED AND REGISTERED:
   U.S. STOCK TRANSFER CORPORATION
         (GLENDALE, CA)
           TRANSFER AGENT AND REGISTRAR

BY

                   AUTHORIZED SIGNATURE

</TABLE>




<PAGE>   2
        A statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof
 and the qualifications, limitations or restrictions of such preferences
and/or rights as established, from time to time, by the Certificate of
Incorporation of the Corporation and by any certificate of determination, the
number of shares constituting each class and series, and the designations
thereof, may be obtained by the holder hereof upon request and without charge
at the principal office of the Corporation.

        The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:


<TABLE>
<S>                                                             <C>
TEN COM -- as tenants in common                                 UNIF GIFT MIN ACT -- _______________ Custodian _______________
TEN ENT -- as tenants by the entireties                                                  (Cust)                    (Minor)
JT TEN  -- as joint tenants with right of                                            under Uniform Gifts to Minors
           survivorship and not as tenants                                           Act _____________________________________
           in common                                                                                  (State)
                                                                UNIF TRF MIN ACT  -- ____________ Custodian (until age _______)
                                                                                        (Cust)
                                                                                     ________________  under Uniform Transfers
                                                                                         (Minor)
                                                                                     to Minors Act ___________________________
                                                                                                              (State)



                          Additional abbreviations may also be used though not in the above list.
</TABLE>



        FOR VALUE RECEIVED, _________________________________ hereby sell,
assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE
______________________________________

______________________________________



_______________________________________________________________________________
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

_______________________________________________________________________________

_______________________________________________________________________________

________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

______________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated ___________________________________



                                      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 WHATEVER.


Signature(s) Guaranteed




By _____________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH 
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.








<PAGE>   1
                                                                    EXHIBIT 10.1





                            INDEMNIFICATION AGREEMENT


         THIS AGREEMENT is made and entered into this ______ of __________,
199__ between Geron Corporation, a Delaware corporation ("Corporation"), and
____________________ ("Indemnitee").

                                    RECITALS:

                  A.       Indemnitee, a member of the Board of Directors or an
officer of Corporation, performs a valuable service in such capacity for
Corporation; and

                  B.       The stockholders of Corporation have adopted By-laws
(the "By-laws") providing for the indemnification of the officers, directors,
agents and employees of Corporation to the maximum extent authorized by Section
145 of the Delaware Corporations Code, as amended ("Code"); and

                  C.       The By-laws and the Code, by their non-exclusive
nature, permit contracts between Corporation and the members of its Board of
Directors or officers with respect to indemnification of such directors and/or
officers; and

                  D.       In accordance with the authorization as provided by
the Code, Corporation has purchased and presently maintains a policy or policies
of Directors and Officers Liability Insurance ("D & O Insurance"), covering
certain liabilities which may be incurred by its directors and officers in the
performance as directors of Corporation; and

                  E.       As a result of developments affecting the terms,
scope
 and availability of D & O Insurance there exists general uncertainty as to
the extent of protection afforded members of the Board of Directors or officers
by such D & O Insurance and by statutory and by-law indemnification provisions;
and

                  F.       In order to induce Indemnitee to continue to serve as
a member of the Board of Directors and/or an officer of Corporation, Corporation
has determined and agreed to enter into this contract with Indemnitee;

                  NOW, THEREFORE, in consideration of Indemnitee's continued
service as a director and/or an officer after the date hereof, the parties
hereto agree as follows:

                  1.       INDEMNITY OF INDEMNITEE.  Corporation hereby agrees
to hold harmless and indemnify Indemnitee to the fullest extent authorized or
permitted by the provisions of the Code, as may be amended from time to time.

<PAGE>   2
                  2.       ADDITIONAL INDEMNITY.  Subject only to the exclusions
set forth in Section 3 hereof, Corporation hereby further agrees to hold
harmless and indemnify Indemnitee:

                           (a)      against any and all expenses (including
attorneys' fees), witness fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of Corporation) to which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the fact that
Indemnitee is, was or at any time becomes a director, officer, employee or agent
of Corporation, or is or was serving or at any time serves at the request of
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and

                           (b)      otherwise to the fullest extent as may be
provided to Indemnitee by Corporation under the non-exclusivity provisions of
Section 6 of Article VII of the Bylaws of Corporation and the Code.

                  3.       LIMITATIONS ON ADDITIONAL INDEMNITY.  No indemnity
pursuant to Section 2 hereof shall be paid by Corporation:

                           (a)      except to the extent the aggregate of losses
to be indemnified thereunder exceeds the sum of such losses for which the
Indemnitee is indemnified pursuant to Section 1 hereof or pursuant to any D & O
Insurance purchased and maintained by Corporation;

                           (b)      in respect to remuneration paid to
Indemnitee if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;

                           (c)      on account of any suit in which judgment is
rendered against Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee of securities of Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law;

                           (d)      on account of Indemnitee's conduct which is
finally adjudged to have been knowingly fraudulent or deliberately dishonest, or
to constitute willful misconduct;

                           (e)      on account of Indemnitee's conduct which is
the subject of an action, suit or proceeding described in Section 7(c)(ii)
hereof;

                           (f)      on account of any action, claim or
proceeding (other than a proceeding referred to in Section 8(b) hereof)
initiated by the Indemnitee unless such action, claim or proceeding was
authorized in the specific case by action of the Board of Directors;




                                      -2-

<PAGE>   3
                           (g)      if a final decision by a Court having
jurisdiction in the matter shall determine that such indemnification is not
lawful (and, in this respect, both Corporation and Indemnitee have been advised
that the Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public policy
and is, therefore, unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication).

                  4.       CONTRIBUTION. If the indemnification provided in
Sections 1 and 2 hereof is unavailable by reason of a Court decision described
in Section 3(g) hereof based on grounds other than any of those set forth in
paragraphs (b) through (f) of Section 3 hereof, then in respect of any
threatened, pending or completed action, suit or proceeding in which Corporation
is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), Corporation shall contribute to the amount of expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by Corporation on the
one hand and Indemnitee on the other hand from the transaction from which such
action, suit or proceeding arose, and (ii) the relative fault of Corporation on
the one hand and of Indemnitee on the other in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of Corporation
on the one hand and of Indemnitee on the other shall be determined by reference
to, among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting in
such expenses, judgments, fines or settlement amounts. Corporation agrees that
it would not be just and equitable if contribution pursuant to this Section 4
were determined by pro rata allocation or any other method of allocation which
does not take account of the foregoing equitable considerations.

                  5.       CONTINUATION OF OBLIGATIONS. All agreements and
obligations of Corporation contained herein shall continue during and pertain to
the period Indemnitee is or was a director, officer, employee or agent of
Corporation (or is or was serving at the request of Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise) and shall continue thereafter
so long as Indemnitee shall be subject to any possible claim or threatened,
pending or completed action, suit or proceeding, whether civil, criminal or
investigative, by reason of the fact that Indemnitee was a director and/or an
officer of Corporation or serving in any other capacity referred to herein.

                  6.       NOTIFICATION AND DEFENSE OF CLAIM. Not later than
thirty (30) days after receipt by Indemnitee of notice of the commencement of
any action, suit or proceeding, Indemnitee will, if a claim in respect thereof
is to be made against Corporation under this Agreement, notify Corporation of
the commencement thereof; but the omission so to notify Corporation will not
relieve it from any liability which it may have to Indemnitee otherwise than
under this Agreement. With respect to any such action, suit or proceeding as to
which Indemnitee notifies Corporation of the commencement thereof:

                           (a)      Corporation will be entitled to participate
therein at its own expense;


                                      -3-

<PAGE>   4
                           (b)      except as otherwise provided below, to the
extent that it may wish, Corporation jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After notice from Corporation to
Indemnitee of its election so as to assume the defense thereof, Corporation will
not be liable to Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ its counsel in such action, suit or
proceeding but the fees and expenses of such counsel incurred after notice from
Corporation of its assumption of the defense thereof shall be at the expense of
Indemnitee unless (i) the employment of counsel by Indemnitee has been
authorized by Corporation, (ii) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between Corporation and Indemnitee in the
conduct of the defense of such action or (iii) Corporation shall not in fact
have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of Indemnitee's separate counsel shall be at the
expense of Corporation. Corporation shall not be entitled to assume the defense
of any action, suit or proceeding brought by or on behalf of Corporation or as
to which Indemnitee shall have made the conclusion provided for in (ii) above;
and

                           (c)      Corporation shall not be liable to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. Corporation shall be permitted to
settle any action except that it shall not settle any action or claim in any
manner which would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent. Neither Corporation nor Indemnitee will
unreasonably withhold its consent to any proposed settlement.

                  7.       ADVANCEMENT AND REPAYMENT OF EXPENSES.

                           (a)      In the event that Indemnitee employs his own
counsel pursuant to Section 6(b)(i) through (iii) above, Corporation shall
advance to Indemnitee, prior to any final disposition of any threatened or
pending action, suit or proceeding, whether civil, criminal, administrative or
investigative, any and all reasonable expenses (including legal fees and
expenses) incurred in investigating or defending any such action, suit or
proceeding within ten (10) days after receiving copies of invoices presented to
Indemnitee for such expenses.

                           (b)      Indemnitee agrees that Indemnitee will
reimburse Corporation for all reasonable expenses paid by Corporation in
defending any civil or criminal action, suit or proceeding against Indemnitee in
the event and only to the extent it shall be ultimately determined by a final
judicial decision (from which there is no right of appeal) that Indemnitee is
not entitled, under the provisions of the Code, the By-laws, this Agreement or
otherwise, to be indemnified by Corporation for such expenses.

                           (c)      Notwithstanding the foregoing, Corporation
shall not be required to advance such expenses to Indemnitee if Indemnitee (i)
commences any action, suit or proceeding as a plaintiff unless such advance is
specifically approved by a majority of the Board of Directors 

                                      -4-

<PAGE>   5
or (ii) is a party to an action, suit or proceeding brought by Corporation and
approved by a majority of the Board which alleges willful misappropriation of
corporate assets by Indemnitee, disclosure of confidential information in
violation of Indemnitee's fiduciary or contractual obligations to Corporation,
or any other willful and deliberate breach in bad faith of Indemnitee's duty to
Corporation or its stockholders.

                  8.       ENFORCEMENT.

                           (a)      Corporation expressly confirms and agrees
that it has entered into this Agreement and assumed the obligations imposed on
Corporation hereby in order to induce Indemnitee to continue as a director
and/or an officer of Corporation, and acknowledges that Indemnitee is relying
upon this Agreement in continuing in such capacity.

                           (b)      In the event Indemnitee is required to bring
any action to enforce rights or to collect moneys due under this Agreement and
is successful in such action, the Corporation shall reimburse Indemnitee for all
Indemnitee's reasonable fees and expenses in bringing and pursuing such action.

                  9.       SUBROGATION. In the event of payment under this
agreement, Corporation shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all documents
required and shall do all acts that may be necessary to secure such rights and
to enable Corporation effectively to bring suit to enforce such rights.

                  10.      NON-EXCLUSIVITY OF RIGHTS. The rights conferred on
Indemnitee by this Agreement shall not be exclusive of any other right which
Indemnitee may have or hereafter acquire under any statute, provision of
Corporation's Certificate of Incorporation or Bylaws, agreement, vote of
stockholders or directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding office.

                  11.      SURVIVAL OF RIGHTS.  The rights conferred on
Indemnitee by this Agreement shall continue after Indemnitee has ceased to be a
director, officer, employee or other agent of Corporation and shall inure to the
benefit of Indemnitee's heirs, executors and administrators.

                  12.      SEPARABILITY. Each of the provisions of this
Agreement is a separate and distinct agreement and independent of the others, so
that if any or all of the provisions hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions hereof or the
obligation of the Corporation to indemnify the Indemnitee to the full extent
provided by the By-laws or the Code.

                  13.      GOVERNING LAW.  This Agreement shall be interpreted
and enforced in accordance with the laws of the State of Delaware.

                  14.      BINDING EFFECT.  This Agreement shall be binding upon
Indemnitee and upon Corporation, its successors and assigns, and shall inure to
the benefit of Indemnitee, his 


                                      -5-

<PAGE>   6
heirs, personal representatives and assigns and to the benefit of Corporation,
its successors and assigns.

                  15.      AMENDMENT AND TERMINATION.  No amendment,
modification, termination or cancellation of this Agreement shall be effective
unless in writing signed by both parties hereto.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.

                                    GERON CORPORATION,
                                    a Delaware corporation



                                    By:
                                           ---------------------------

                                    Title:
                                           ---------------------------


                                    INDEMNITEE



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




                                      -6-



<PAGE>   1
                                                                    EXHIBIT 10.2

                                GERON CORPORATION

                             1992 STOCK OPTION PLAN
                        (AS AMENDED THROUGH MAY 22, 1996)

I.       PURPOSES OF THE PLAN

         This 1992 Stock Option Plan (the "Plan") is intended to promote the
interests of Geron Corporation, a Delaware corporation (the "Corporation"), by
providing a method whereby eligible individuals who provide valuable services to
the Corporation (or its parent or subsidiary corporations) may be offered
incentives and rewards which will encourage them to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
and continue to render services to the Corporation (or its parent or subsidiary
corporations).

         For purposes of the Plan, the following provisions shall be applicable
in determining the parent and subsidiary corporations of the Corporation:

            (i)  Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered to be a
parent corporation of the Corporation, provided each such corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in
 one of the other corporations
in such chain.

            (ii) Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be considered to be a
subsidiary of the Corporation, provided each such corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

II.      ADMINISTRATION OF THE PLAN

         A. The Primary Committee shall have sole and exclusive authority to
administer the Plan with respect to Section 16 Insiders. No non-employee Board
member shall be eligible to serve on the Primary Committee if such individual
has, during the twelve (12)-month period immediately preceding the date of his
or her appointment to the Committee or (if shorter) the period commencing with
the date on which the Corporation's outstanding Common Stock is registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Section
12(g) Registration Date") and ending with the date of his or her appointment to
the Primary Committee, received an option grant or direct stock issuance under
the Plan or any stock option, stock appreciation, stock bonus or other stock
plan of the Corporation (or any Parent or Subsidiary), other than pursuant to
the Corporation's 1996 Directors' Stock Option Plan.

         B. Administration of the Plan with respect to all other persons
eligible to participate in the Plan may, at the Board's discretion, be vested in
the Primary Committee or a Secondary Committee, or the Board may retain the
power to administer the Plan with respect to all such persons. The members of
the Secondary Committee may be individuals who are Employees 

<PAGE>   2
eligible to receive option grants under the Plan or any stock option, stock
appreciation, stock bonus or other stock plan of the Corporation (or any Parent
or Subsidiary).

         C. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions of
any Secondary Committee and reassume all powers and authority previously
delegated to such committee.

         D. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the provisions of the
Plan and any outstanding options thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator within the scope of its
administrative functions under the Plan shall be final and binding on all
parties who have an interest in the Plan under its jurisdiction or any option
thereunder.

         E. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any grants under the Plan.

III.     ELIGIBILITY FOR OPTION GRANTS

         A. The persons eligible to receive option grants under the Plan are as
follows:

            (i)  key employees (including officers and directors) of the
Corporation (or its parent or subsidiary corporations);

            (ii) those Consultants who provide valuable services to the
Corporation (or its parent or subsidiary corporations), provided, however, that
after the Section 12(g) Registration Date, the term Consultant shall thereafter
not include directors who are not compensated for their services or are paid
only a director's fee by the Corporation.

         B. Each Plan Administrator shall have full authority to determine which
eligible individuals are to receive option grants under the Plan, the number of
shares to be covered by each such grant, whether the granted option is to be an
incentive stock option ("Incentive Option") which satisfies the requirements of
Section 422 of the Internal Revenue Code or a non-statutory option not intended
to meet such requirements, the time or times at which each such option is to
become exercisable, and the maximum term for which the option is to remain
outstanding.

                                      -2-

<PAGE>   3
IV.      STOCK SUBJECT TO THE PLAN

         A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock. The aggregate
number of shares which may be issued over the term of the Plan shall not exceed
8,685,000 shares. The total number of shares issuable under the Plan shall be
subject to adjustment from time to time in accordance with the provisions of
this Section IV.

         B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day of the 1997,
1998, 1999, 2000 and 2001 calendar years by an amount equal to two percent (2%)
of the shares of Common Stock outstanding on December 31 of the immediately
preceding calendar year; but in no event shall any such annual increase exceed
300,000 shares.

         C. No one person participating in the Plan may receive options for more
than 500,000 shares of Common Stock per calendar year, beginning with the 1996
calendar year.

         D. Shares subject to outstanding options shall be available for
subsequent option grants under the Plan to the extent (i) options expire or
terminate for any reason prior to exercise in full and (ii) options are
cancelled in accordance with the cancellation-regrant provisions of Section VIII
of the Plan. Shares subject to outstanding options shall not be available for
subsequent option grants under the Plan to the extent options are surrendered in
accordance with the limited cash-out rights provisions of Section IX of the
Plan. Shares repurchased by the Corporation pursuant to its repurchase rights
under the Plan shall not be available for subsequent option grants.

         E. In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without receipt of consideration, appropriate adjustments shall be made to
(i) the aggregate number and/or class of shares issuable under the Plan, (ii)
the number of shares for which any one person may be granted options per
calendar year and (iii) the aggregate number and/or class of shares and the
option price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.

V.       TERMS AND CONDITIONS OF OPTIONS

         A. Options granted pursuant to the Plan shall be authorized by action
of the Plan Administrator and may, at the Plan Administrator's discretion, be
either Incentive Options or non-statutory options. Individuals who are not
Employees (as defined in subsection D.3 below) may only be granted non-statutory
options. Each granted option shall be evidenced by one or more instruments in
the form approved by the Plan Administrator; provided, however, that each such
instrument shall comply with and incorporate the terms and conditions specified
below. Each instrument evidencing an Incentive Option shall, in addition, be
subject to the applicable provisions of Section VI.


                                      -3-

<PAGE>   4
         B. Option Price.

            1. The option price per share shall be fixed by the Plan
Administrator. In no event, however, shall the option price per share be less
than eighty-five percent (85%) of the Fair Market Value (as defined below) of a
share of Common Stock on the date of the option grant.

            2. The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section X and the instrument
evidencing the grant, be payable in one or more of the forms specified below:

               (i)   cash or check drawn to the Corporation's order;

               (ii)  in shares of Common Stock held by the optionee for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date; or

               (iii) to the extent the option in exercised for vested shares,
through a special sale and remittance procedure pursuant to which the optionee
is to provide irrevocable written instructions (I) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the settlement date, an
amount sufficient to cover the aggregate option price payable for the purchased
shares plus all applicable Federal, state and local income and employment taxes
required to be withheld by the Corporation by reason of such purchase and (II)
concurrently to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to effect the sale transaction.

               For purposes of this subparagraph 2, the Exercise Date shall be
the first date on which there shall have been delivered to the Corporation both
written notice of the exercise of the option and, except to the extent such sale
and remittance procedure is utilized, payment of the option price for the
purchased shares.

            3. The Fair Market Value of a share of Common Stock on any relevant
date under subparagraphs 1 or 2 above (and for all other valuation purposes
under the Plan) shall be determined in accordance with the following provisions:

               (i)  If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded on the Nasdaq National Market, the
Fair Market Value shall be the closing selling price of one share of Common
Stock on the date in question, as such price is reported by the National
Association of Securities Dealers through its Nasdaq system or any successor
system. If there is no closing selling price for the Common Stock on the date in
question, then the closing selling price on the last preceding date for which
such quotation exists shall be determinative of Fair Market Value.

               (ii) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question on the stock
exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted 


                                      -4-

<PAGE>   5
in the composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on such exchange on the date in question, then the Fair
Market Value shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.

               (iii) If the Common Stock at the time is neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter
market, or if the Plan Administrator determines that the value determined
pursuant to subparagraphs (i) and (ii) above does not accurately reflect the
Fair Market Value of the Common Stock, then such Fair Market Value shall be
determined by the Plan Administrator after taking into account such factors as
the Plan Administrator shall deem appropriate, including one or more independent
professional appraisals.

         C. Term and Exercise of Options.

            Each option granted under the Plan shall be exercisable at such time
or times, during such period, and for such number of shares as shall be
determined by the Plan Administrator and set forth in the instrument evidencing
such option. No such option, however, shall have a maximum term in excess of ten
(10) years from the grant date and no Incentive Option granted to a 10%
Stockholder shall have a maximum term in excess of five (5) years from the grant
date. During the lifetime of the optionee, the option shall be exercisable only
by the optionee and shall not be assignable or transferable by the optionee
otherwise than by will or by the laws of descent and distribution.

         D. Effect of Termination of Employment.

            1. Except to the extent otherwise provided pursuant to subparagraph
4 below, the following provisions shall govern the exercise period applicable to
any options held by the optionee at the time of cessation of Service or death.

               - Should the optionee cease to remain in Service for any reason
other than death or Disability, then the period during which each outstanding
option held by such optionee is to remain exercisable shall be limited to the
three (3)-month period following the date of such cessation of Service.

               - Should the optionee's Service terminate by reason of
Disability, then the period during which each outstanding option held by the
optionee is to remain exercisable shall be limited to the six (6)-month period
following the date of such cessation of Service. However, should such Disability
be deemed to constitute Permanent Disability, then the period during which each
outstanding option held by the optionee is to remain exercisable shall be
extended by an additional six (6) months so that the exercise period shall be
limited to the twelve (12)-month period following the date of the optionee's
cessation of Service by reason of such Permanent Disability. For the purposes of
the Plan, Disability shall mean the inability of an individual to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and shall be determined by the Plan Administrator on the basis
of such medical evidence as the Plan Administrator deems warranted under the
circumstances. Disability shall be deemed to constitute Permanent Disability in
the event that such Disability is 


                                      -5-

<PAGE>   6
expected to result in death or has lasted or can be expected to last for a 
continuous period of not less than twelve (12) months.

               - Should the optionee die while holding one or more outstanding
options, then the period during which each such option is to remain exercisable
shall be limited to the twelve (12)-month period following the date of the
optionee's death. During such limited period, the option may be exercised by the
personal representative of the optionee's estate or by the person or persons to
whom the option is transferred pursuant to the optionee's will or in accordance
with the laws of descent and distribution.

               - During the applicable post-Service exercise period, the option
may not be exercised in the aggregate for more than the number of vested shares
for which the option is exercisable on the date of the optionee's cessation of
Service. Upon the expiration of the applicable exercise period or (if earlier)
upon the expiration of the option term, the option shall terminate and cease to
be exercisable for any vested shares for which the option has not been
exercised. However, the option shall, immediately upon the optionee's cessation
of Service, terminate and cease to be outstanding with respect to any option
shares for which the option is not at that time exercisable or in which the
optionee is not otherwise at that time vested.

            2. Under no circumstances shall any option be exercisable after the
specified expiration date of the option term.

            3. For all purposes under the Plan, unless specifically provided
otherwise in the option agreement evidencing the option grant and/or the
purchase agreement evidencing the purchased shares, the optionee shall be deemed
to remain in Service for so long as such individual renders services on a
periodic basis to the Corporation or any parent or subsidiary corporation in the
capacity of an Employee, a non-employee member of the Board of Directors or a
consultant. The optionee shall be considered to be an Employee for so long as
such individual remains in the employ of the Corporation or one or more of its
parent or subsidiary corporations, subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of
performance.

            4. The Board shall have full power and authority to extend the
period of time for which the option is to remain exercisable following the
optionee's termination of Service from the three (3)-month (six (6) months in
the case of Disability or twelve (12) months in the case of death or Permanent
Disability) or shorter period set forth in the option agreement to such greater
period of time as the Board shall deem appropriate; provided, that in no event
shall such option be exercisable after the specified expiration date of the
option term.

         E. Stockholder Rights. An optionee shall have none of the rights of a
stockholder with respect to the shares subject to the option until such
individual shall have exercised the option and paid the option price.

         F. Repurchase Rights. The shares of Common Stock acquired upon the
exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:


                                      -6-

<PAGE>   7
            1. The Plan Administrator may in its discretion determine that it
shall be a term and condition of one or more options exercised under the Plan
that the Corporation (or its assignees) shall have the right, exercisable upon
the optionee's cessation of Service, to repurchase at the option price all or
(at the discretion of the Corporation and with the consent of the optionee) part
of the unvested shares of Common Stock at the time held by the optionee. Any
such repurchase right shall be exercisable by the Corporation (or its assignees)
upon such terms and conditions (including the establishment of the appropriate
vesting schedule and other provision for the expiration of such right in one or
more installments over the optionee's period of Service) as the Plan
Administrator may specify in the instrument evidencing such right.

            2. All of the Corporation's outstanding repurchase rights shall
automatically terminate upon the occurrence of any Corporate Transaction under
Section VII, except to the extent the Corporation's outstanding repurchase
rights are to be assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction.

         G. Limited Transferability of Options. During the lifetime of the
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death. However, a Non-Statutory Option may
be assigned in accordance with the terms of a Qualified Domestic Relations
Order. The assigned option may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to such Qualified Domestic
Relations Order. The terms applicable to the assigned option (or portion
thereof) shall be the same as those in effect for the option immediately prior
to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate

VI.      INCENTIVE OPTIONS

         The terms and conditions specified below shall be applicable to all
Incentive Options granted under the Plan. Incentive Options may only be granted
to individuals who are Employees of the Corporation. Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.

         A. Option Price. The option price per Share of the Common Stock subject
to an Incentive Option shall in no event be less than one hundred percent (100%)
of the Fair Market Value of a share of Common Stock on the date of grant. If the
individual to whom the option is granted is the owner of stock (as determined
under Section 424(d) of the Internal Revenue Code) possessing ten percent (10%)
or more of the total combined voting power of all classes of stock of the
Corporation or any one of its parent or subsidiary corporations (such person to
be herein referred to as a 10% Stockholder), then the option price per share
shall not be less than one hundred and ten percent (110%) of the Fair Market
Value of one share of Common Stock on the grant date.

         B. Dollar Limitation. The aggregate Fair Market Value (determined as of
the respective date or dates of grant) of the Common Stock for which one or more
options granted to any Employee under this Plan (or any other option plan of the
Corporation or its parent or subsidiary corporations) may for the first time
become exercisable as incentive stock options under the Federal tax laws during
any one calendar year shall not exceed the sum of One Hundred 



                                      -7-

<PAGE>   8
Thousand Dollars ($100,000). To the extent the Employee holds two or more such
options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability thereof as incentive stock
options under the Federal tax laws shall be applied on the basis of the order in
which such options are granted.

               Except as modified by the preceding provisions of this Section
VI, all the provisions of the Plan shall be applicable to the Incentive Options
granted hereunder.

VII.     CORPORATE TRANSACTIONS

            A. In the event of one or more of the following transactions (a
"Corporate Transaction"):

                    (i)   a merger or consolidation in which the Corporation is
not the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Corporation's incorporation,

                    (ii)  the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation or
dissolution of the Corporation, or

                    (iii) any reverse merger in which the Corporation is the
surviving entity but in which all of the Corporation's outstanding voting stock
is transferred to the acquiring entity or its wholly-owned subsidiary,

then each option outstanding under the Plan shall automatically accelerate so
that each such option shall, immediately prior to the effective date of the
Corporate Transaction, become fully exercisable for all of the shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock.

         B. Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor Corporation (or parent thereof).

         C. Each outstanding option which is assumed in connection with the
Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would be issuable, in
consummation of such Corporate Transaction, to an actual holder of the same
number of shares of Common Stock as are subject to such option immediately prior
to such Corporate Transaction, and appropriate adjustments shall also be made to
the option price payable per share, provided the aggregate option price payable
for such securities shall remain the same. Appropriate adjustments shall also be
made to the class and number of securities available for issuance under the Plan
following the consummation of such Corporate Transaction.

         D. Any options which are assumed or replaced in the Corporate
Transaction and do not otherwise accelerate at that time shall automatically
accelerate (and any of the Corporation's outstanding repurchase rights which do
not otherwise terminate at the time of the Corporate 


                                      -8-

<PAGE>   9
Transaction shall automatically terminate and the shares of Common Stock subject
to those terminated rights shall immediately vest in full) in the event the
Optionee's Service should subsequently terminated by reason of an Involuntary
Termination within eighteen (18) months following the effective date of such
Corporate Transaction. Any options so accelerated shall remain exercisable for
fully-vested shares until the earlier of (i) the expiration of the option term
or (ii) the expiration of the one (1)-year period measured from the effective
date of the Involuntary Termination.

         E. The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains
outstanding, to (i) provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the shares of Common Stock
subject to these rights) upon the occurrence of a Change in Control or (ii)
condition any such option acceleration (and the termination of any outstanding
repurchase rights) upon the subsequent Involuntary Termination of the Optionee's
Service within a specified period following the effective date of such Change in
Control. Any options accelerated in connection with a Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term.

         F. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.

         G. The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

VIII.    CANCELLATION AND REGRANT OF OPTIONS

         The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than eighty-five percent (85%) of Fair Market Value of the Common Stock on the
new grant date (or one hundred percent (100%) of such Fair Market Value in the
case of an Incentive Option or, in the case of an Incentive Option granted to a
10% Stockholder, not less than one hundred and ten percent (110%) of such Fair
Market Value).

IX.      CASH-OUT OF OPTIONS

         A. Once the Corporation's outstanding Common Stock is registered under
Section 12(g) of the 1934 Act, one or more optionees subject to the short-swing
profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be 


                                      -9-

<PAGE>   10
granted limited cash-out rights to operate in tandem with their outstanding
options under the Plan. Any option with such a limited right in effect for at
least six (6) months shall automatically be cancelled upon the acquisition of
fifty percent (50%) or more of the Corporation's outstanding Common Stock
(excluding the Common Stock holdings of officers and directors of the
Corporation who participate in this Plan) pursuant to a tender or exchange offer
made by a person or group of related persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by or is under common
control with the Corporation) which the Board does not recommend the
Corporation's stockholders to accept. In return for the cancelled option, the
optionee shall be entitled to a cash distribution from the Corporation in an
amount equal to the excess of (i) the Cash-Out Price of the shares of Common
Stock in which the optionee is vested under the cancelled option over (ii) the
aggregate option price payable for such vested shares. The cash distribution
payable upon such cancellation shall be made within five (5) days following the
completion of such tender or exchange offer, and neither the approval of the
Plan Administrator nor the consent of the Board shall be required in connection
with such cancellation and distribution.

         B. For purposes of calculating the cash distribution, the Cash-Out
Price per share of the vested Common Stock subject to the cancelled option shall
be deemed to be equal to the greater of (i) the Fair Market Value per share on
the date of surrender, as determined in accordance with the valuation provisions
of subsection V.B.3, or (ii) the highest reported price per share paid in
effecting the tender or exchange offer. However, if the cancelled option is an
Incentive Option, then the Cash-Out Price shall not exceed the value per share
determined under clause (i) above.

         C. The shares of Common Stock subject to any option cancelled for an
appreciation distribution in accordance with this Section IX shall not be
available for subsequent option grants under the Plan.

X.       TAX WITHHOLDING

         A. The Corporation's obligation to deliver shares of Common Stock upon
the exercise of options or upon the vesting of such shares under the Plan shall
be subject to the satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements.

         B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan with the right to use shares of Common Stock in satisfaction of all or part
of the Taxes incurred by such holders in connection with the exercise of their
options . Such right may be provided to any such holder in either or both of the
following formats:

            (i) Stock Withholding. The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.



                                      -10-

<PAGE>   11
            (ii) Stock Delivery. The election to deliver to the Corporation, at
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.

XI.      LOANS

         A. The Plan Administrator may assist any optionee (including an
optionee who is an officer or director of the Corporation) in the exercise of
one or more options granted to such optionee, including the satisfaction of any
Federal, state and local income and employment tax obligations arising
therefrom, by

            (i)  authorizing the extension of a loan from the Corporation to 
such optionee, or

            (ii) permitting the optionee to pay the option price for the
purchased Common Stock in installments over a period of years.

         B. The terms of any loan or installment method of payment (including
the interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans or installment payments may be
granted with or without security or collateral. However, any loan made to a
consultant or other non-employee advisor must be secured by property other than
the purchased shares of Common Stock. In all events, the maximum credit
available to each optionee may not exceed the sum of (i) the aggregate option
price payable for the purchased shares plus (ii) any Federal, state and local
income and employment tax liability incurred by the optionee in connection with
such exercise.

         C. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under the financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Board in its discretion deems appropriate.

XII.     NO EMPLOYMENT OR SERVICE RIGHTS

         Nothing in the Plan shall confer upon the optionee any right to
continue in the service or employ of the Corporation (or any parent or
subsidiary corporation of the Corporation employing or retaining such optionee)
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any parent or subsidiary corporation
of the Corporation employing or retaining such optionee) or of the optionee,
which rights are hereby expressly reserved by each, to terminate the Service of
the optionee at any time for any reason, with or without cause.


                                      -11-

<PAGE>   12
XIII.    AMENDMENT OF THE PLAN

         A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever; provided, however,
that no such amendment or modification shall, without the consent of the
holders, adversely affect the rights and obligations with respect to options at
the time outstanding under the Plan; and provided, further that the Board shall
not, without the approval of the Corporation's stockholders, (i) increase the
maximum number of shares issuable under the Plan or the maximum number of shares
for which any person may be granted options per calendar year, except for
permissible adjustments under Section IV, (ii) materially modify the eligibility
requirements for the grant of options under the Plan or (iii) materially
increase the benefits accruing to Plan participants.

         B. Options may be granted under this Plan to purchase shares of Common
Stock in excess of the number of shares then available for issuance under the
Plan, provided (i) an amendment to increase the maximum number of shares
issuable under the Plan is adopted by the Board prior to the initial grant of
any such option and within one (1) year thereafter such amendment is approved by
the Corporation's stockholders and (ii) each option granted is not to become
exercisable, in whole or in part, at any time prior to the obtaining of such
stockholder approval.

XIV.     EFFECTIVE DATE AND TERM OF PLAN

         A. The Plan became effective when adopted by the Board on May 21, 1992
and was approved by the Corporation's stockholders on July 8, 1992. On November
13, 1992 the Board adopted an increase in the maximum aggregate number of shares
issuable over the term of the Plan from 650,000 to 1,650,000 shares. The
increase was approved by the Corporation's stockholders on December 8, 1992. On
August 11, 1993 the Board adopted a further increase in the maximum aggregate
number of shares issuable over the term of the Plan from 1,650,000 to 2,150,000
shares. The increase was approved by the Corporation's stockholders on October
8, 1993. On January 13, 1994, the Board approved a further increase in the
aggregate number of shares issuable over the term of the Plan from 2,150,000 to
2,500,000 shares. The increase was approved by the Corporation's stockholders on
June 28, 1994. On September 14, 1994, the Board approved a further increase of
3,385,000 shares in the aggregate number of shares issuable over the term of the
Plan bringing the new aggregate to 5,885,000 shares. The increase was approved
by the Corporation's stockholders on October 5, 1994. On April 25, 1996, the
Board approved a further increase of 2,800,000 shares in the aggregate number of
shares issuable over the term of the Plan bringing the new aggregate to
8,685,000 shares, subject to stockholder approval of the 2,800,000-share
increase within twelve (12) months of the date of approval by the Board. On May
22, 1996, the Board approved certain amendments to the Plan in connection with
the filing of a Registration Statement for the initial public offering of the
Company's Common Stock, subject to shareholder approval of such changes within
twelve (12) months of the date of approval by the Board. Options may be granted
in reliance on the 2,800,000 share increase prior to approval of such increase
by the Corporation's stockholders but no option granted in reliance on such
increase shall become exercisable, in whole or in part, unless and until the
increase shall have been approved by the Corporation's stockholders. If such
stockholder approval is not obtained within twelve (12) months after the date of
the Board's adoption of the increase, then all 


                                      -12-

<PAGE>   13
options previously granted in reliance on such increase shall terminate and no
further options shall be granted. Subject to such limitation, the Plan
Administrator may grant options under the Plan at any time after the effective
date and before the date fixed herein for termination of the Plan.

         B. Unless sooner terminated in accordance with Section VII, the Plan
shall terminate upon the earlier of (i) the expiration of the ten (10) year
period measured from the date of the Board's adoption of the Plan, (ii) the date
on which all shares available for issuance under the Plan shall have been issued
pursuant to the exercise or surrender of options granted hereunder or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. If the date of termination is determined under clause (i) or (iii)
above, then options outstanding on such date shall thereafter continue to have
force and effect in accordance with the provisions of the instruments evidencing
such options.

XV.      USE OF PROCEEDS

         Any cash proceeds received by the Corporation from the sale of shares
pursuant to options granted under the Plan shall be used for general corporate
purposes.

XVI.     REGULATORY APPROVALS

         The implementation of the Plan, the granting of any option hereunder,
and the issuance of stock upon the exercise or surrender of any such option
shall be subject to the procurement by the Corporation of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the stock issued pursuant to it, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.




                                      -13-

<PAGE>   14
                                GERON CORPORATION

                             STOCK OPTION AGREEMENT

                                   WITNESSETH:

RECITALS

            A. The Board of Directors of the Corporation has adopted the Geron
Corporation 1992 Stock Option Plan (the "Plan") for the purpose of attracting
and retaining the services of selected key employees (including officers and
directors), non-employee members of the Board of Directors and consultants who
contribute to the financial success of the Corporation or its parent or
subsidiary corporations.

            B. Optionee is an individual who is to render valuable services to
the Corporation or its parent or subsidiary corporations, and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation's grant of a stock option to Optionee.

            NOW, THEREFORE, it is hereby agreed as follows:

            1. GRANT OF OPTION. Subject to and upon the terms and conditions set
forth in this Agreement, the Corporation hereby grants to Optionee, as of the
grant date (the "Grant Date") specified in the accompanying Notice of Grant of
Stock Option (the "Grant Notice"), a stock option to purchase up to that number
of shares of the Corporation's Common Stock (the "Option Shares") as is
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term at the option price per share (the "Option
Price") specified in the Grant Notice.

            2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the expiration date (the "Expiration Date") specified in the Grant
Notice, unless sooner terminated in accordance with Paragraph 5, 6 or 18.

            3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.

            4. DATES OF EXERCISE. This option may not be exercised in whole or
in part at any time prior to the time the 3,385,000-share increase in the
aggregate number of shares issuable over the term of the Plan is approved by the
Corporation's stockholders in accordance with Paragraph 18. Provided such
stockholder approval is obtained, this option shall thereupon become exercisable
for the Option Shares in one or more installments as is specified in the Grant
Notice. As the option becomes exercisable in one or more installments, the
installments shall accumulate and the option shall remain 

<PAGE>   15
exercisable for such installments until the Expiration Date or the sooner 
termination of the option term under Paragraph 5 or Paragraph 6 of this 
Agreement.

            5. ACCELERATED TERMINATION OF OPTION TERM. The option term specified
in Paragraph 2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should any of the following provisions become
applicable:

               (i) Except as otherwise provided in subparagraph (ii) or (iii)
         below, should Optionee cease to remain in Service while this option is
         outstanding, then the period for exercising this option shall be
         reduced to a three (3)-month period commencing with the date of such
         cessation of Service, but in no event shall this option be exercisable
         at any time after the Expiration Date. Upon the expiration of such
         three (3)-month period or (if earlier) upon the Expiration Date, this
         option shall terminate and cease to be outstanding.

               (ii) Should Optionee die while this option is outstanding, then
         the personal representative of the Optionee's estate or the person or
         persons to whom the option is transferred pursuant to the Optionee's
         will or in accordance with the law of descent and distribution shall
         have the right to exercise this option. Such right shall lapse and this
         option shall cease to be exercisable upon the earlier of (A) the
         expiration of the twelve (12) month period measured from the date of
         Optionee's death or (B) the Expiration Date. Upon the expiration of
         such twelve (12) month period or (if earlier) upon the Expiration Date,
         this option shall terminate and cease to be outstanding.

               (iii) Should Optionee cease Service by reason of Disability while
         this option is outstanding, then Optionee shall have a period of six
         (6) months (commencing with the date of such cessation of Service)
         during which to exercise this option. However, should such Disability
         be deemed to constitute Permanent Disability, then the period during
         which this option is to remain exercisable shall be extended by an
         additional six (6) months so that the exercise period shall be limited
         to the twelve (12)-month period following the date of the Optionee's
         cessation of Service by reason of such Permanent Disability. In no
         event shall this option be exercisable at any time after the Expiration
         Date. Upon the expiration of the applicable six (6) or twelve
         (12)-month period or (if earlier) upon the Expiration Date, this option
         shall terminate and cease to be outstanding. For the purposes of the
         Plan and of this Agreement, DISABILITY shall mean the inability of the
         Optionee to engage in any substantial gainful activity by reason of any
         medically determinable physical or mental impairment and shall be
         determined by the Plan Administrator on the basis of such medical
         evidence as the Plan Administrator deems warranted under the
         circumstances. Disability shall be deemed to constitute PERMANENT
         DISABILITY in the event that such Disability is expected to result in
         death or has lasted or can be expected to last for a continuous period
         of not less than twelve (12) months.

               Note: Exercise of this option on a date later than three (3)
               months following cessation of Service due to Disability will
               result in loss of 



                                      -2-

<PAGE>   16
         favorable incentive stock option treatment, unless such Disability
         constitutes Permanent Disability. In the event that incentive stock
         option treatment is not available, this option will be treated as a
         non-statutory stock option.

               (iv) During the limited period of exercisability applicable under
         subparagraph (i), (ii) or (iii) above, this option may not be exercised
         in the aggregate for more than the lesser of (a) the number of Option
         Shares for which this option is, at the time of the Optionee's
         cessation of Service, exercisable in accordance with the exercise
         schedule specified in the Grant Notice or (ii) the number of Option
         Shares in which Optionee is, at the time of the Optionee's cessation of
         Service, vested in accordance with the vesting schedule specified in
         the Grant Notice.

               (v) For purposes of this Paragraph 5 and for all other purposes
         under this Agreement:

               A. The Optionee shall be deemed to remain in SERVICE for so long
         as the Optionee continues to render periodic services to the
         Corporation or any parent or subsidiary corporation, whether as an
         Employee, a non-employee member of the Board of Directors, or a
         consultant.

               B. The Optionee shall be deemed to be an EMPLOYEE of the
         Corporation and to continue in the Corporation's employ for so long as
         the Optionee remains in the employ of the Corporation or one or more of
         its parent or subsidiary corporations, subject to the control and
         direction of the employer entity as to both the work to be performed
         and the manner and method of performance.

               C. A corporation shall be considered to be a SUBSIDIARY
         corporation of the Corporation if it is a member of an unbroken chain
         of corporations beginning with the Corporation, provided each such
         corporation in the chain (other than the last corporation) owns, at the
         time of determination, stock possessing fifty percent (50%) or more of
         the total combined voting power of all classes of stock in one of the
         other corporations in such chain.

               D. A corporation shall be considered to be a PARENT corporation
         of the Corporation if it is a member of an unbroken chain ending with
         the Corporation, provided each such corporation in the chain (other
         than the Corporation) owns, at the time of determination, stock
         possessing fifty percent (50%) or more of the total combined voting
         power of all classes of stock in one of the other corporations in such
         chain.

            6. SPECIAL TERMINATION OF OPTION.

            A. In the event of one or more of the following stockholder-approved
transactions (a "Corporate Transaction"):


                                      -3-

<PAGE>   17
               (i) a merger or consolidation in which the Corporation is not the
         surviving entity, except for a transaction the principal purpose of
         which is to change the State of the Corporation's incorporation;

               (ii) the sale, transfer or other disposition of all or
         substantially all of the assets of the Corporation in complete
         liquidation or dissolution of the Corporation; or

               (iii) any reverse merger in which the Corporation is the
         surviving entity but in which all of the Corporation's outstanding
         voting stock is transferred to the acquiring entity or its wholly-owned
         subsidiary,

then this option, to the extent not previously exercised, shall terminate upon
the consummation of the Corporate Transaction and cease to be exercisable,
unless it is expressly assumed by the successor corporation or parent thereof.

            B. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

            7. ADJUSTMENT IN OPTION SHARES.

            A. In the event any change is made to the Corporation's outstanding
Common Stock by reason of any stock split, stock dividend, combination of
shares, exchange of shares, or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the total number of Option Shares subject to this option,
(ii) the number of Option Shares for which this option is to be exercisable from
and after each installment date specified in the Grant Notice and (iii) the
Option Price payable per share in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder.

            B. If this option is to be assumed in connection with a Corporate
Transaction described in Paragraph 6 or is otherwise to remain outstanding, then
this option shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issuable to the Optionee in the consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Option Price
payable per share, provided the aggregate Option Price payable hereunder shall
remain the same.

            8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall not
have any of the rights of a stockholder with respect to the Option Shares until
such individual shall have exercised the option and paid the Option Price.

            9. MANNER OF EXERCISING OPTION.



                                      -4-

<PAGE>   18
            A. In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, the Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:

               (i) Execute and deliver to the Secretary of the Corporation a
         stock purchase agreement (the "Purchase Agreement") in substantially
         the form of Exhibit B to the Grant Notice.

               (ii) Pay the aggregate Option Price for the purchased shares in
         one or more of the following alternative forms:

                     1. full payment in cash or check; or

                     2. any other form which the Plan Administrator may, in its
               discretion, approve at the time of exercise in accordance with
               the provisions of paragraph 15 of this Agreement.(1)

               Should the Corporation's outstanding Common Stock be registered
            under Section 12(g) of the Securities Exchange Act of 1934, as
            amended (the "1934 Act") at the time the option is exercised, then
            the Option Price may also be paid as follows:

                     3. in shares of Common Stock held by the Optionee for the
               requisite period necessary to avoid a charge to the Corporation's
               earnings for financial reporting purposes and valued at Fair
               Market Value (as defined below) on the Exercise Date; or

                     4. through a special sale and remittance procedure pursuant
               to which the Optionee is to provide irrevocable written
               instructions (a) to a Corporation-designated brokerage firm to
               effect the immediate sale of the purchased shares and remit to
               the Corporation, out of the sale proceeds available on the
               settlement date, sufficient funds to cover the aggregate Option
               Price payable for the purchased shares plus all applicable
               Federal, state and local income and employment taxes required to
               be withheld by the Corporation by reason of such purchase and (b)
               to the Corporation to deliver the certificates for the purchased
               shares directly to such brokerage firm in order to effect the
               sale transaction.


- ------------------
    (1) Authorization of a loan or installment payment method under such 
provisions may, under currently proposed Treasury Regulations, result in the 
loss of incentive stock option treatment under the Federal tax laws.



                                      -5-

<PAGE>   19
               (iii) Furnish to the Corporation appropriate documentation that
         the person or persons exercising the option, if other than Optionee,
         have the right to exercise this option.

            Except to the extent the sale and remittance procedure is utilized
in connection with the exercise of the option, payment of the Option Price must
accompany the Purchase Agreement delivered to the Corporation.

            B. For purposes of this Agreement, the Exercise Date shall be the
date on which the executed Purchase Agreement shall have been delivered to the
Corporation, and the Fair Market Value of a share of Common Stock on any
relevant date shall be determined in accordance with subparagraphs (i) through
(iii) below:

               (i) If the Common Stock is not at the time listed or admitted to
         trading on any stock exchange but is traded on the Nasdaq National
         Market, the Fair Market Value shall be the closing selling price of one
         share of Common Stock on the date in question, as such price is
         reported by the National Association of Securities Dealers through its
         Nasdaq system or any successor system. If there is no closing selling
         price for the Common Stock on the date in question, then the closing
         selling price on the last preceding date for which such quotation
         exists shall be determinative of Fair Market Value.

               (ii) If the Common Stock is at the time listed or admitted to
         trading on any stock exchange, then the Fair Market Value shall be the
         closing selling price per share of Common Stock on the date in question
         on the stock exchange determined by the Plan Administrator to be the
         primary market for the Common Stock, as such price is officially quoted
         in the composite tape of transactions on such exchange. If there is no
         reported sale of Common Stock on such exchange on the date in question,
         then the Fair Market Value shall be the closing selling price on the
         exchange on the last preceding date for which such quotation exists.

               (iii) If the Common Stock at the time is neither listed nor
         admitted to trading on any stock exchange nor traded in the
         over-the-counter market, or if the Plan Administrator determines that
         the value determined pursuant to subparagraphs (i) and (ii) above does
         not accurately reflect the Fair Market Value of the Common Stock, then
         such Fair Market Value shall be determined by the Plan Administrator
         after taking into account such factors as the Plan Administrator shall
         deem appropriate, including one or more independent professional
         appraisals.

            C. As soon after the Exercise Date as practical, the Corporation
shall mail or deliver to Optionee or to the other person or persons exercising
this option a certificate or certificates representing the shares so purchased
and paid for, with the appropriate legends affixed thereto.

            D. In no event may this option be exercised for any fractional
shares.


                                      -6-

<PAGE>   20
            10. REPURCHASE RIGHTS. THE OPTIONEE HEREBY AGREES THAT ALL OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN
RIGHTS OF THE CORPORATION AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT.

            11. COMPLIANCE WITH LAWS AND REGULATIONS.

            A. The exercise of this option and the issuance of Option Shares
upon such exercise shall be subject to compliance by the Corporation and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the
Corporation's Common Stock may be listed at the time of such exercise and
issuance.

            B. In connection with the exercise of this option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and state securities laws.

            12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Corporation.

            13. LIABILITY OF CORPORATION.

            A. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without stockholder
approval be issued under the Plan, then this option shall be void with respect
to such excess shares, unless stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of Section XII of the Plan.

            B. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.

            14. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated below Optionee's
signature line on the Grant Notice. All notices shall be deemed to have been
given or delivered upon personal delivery or upon deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified.



                                      -7-

<PAGE>   21
            15. LOANS. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, assist the Optionee in the exercise of this
option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting the Optionee to pay the Option Price for the
purchased Common Stock in installments over a period of years. The terms of any
such loan or installment method of payment (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.

            16. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.

            17. GOVERNING LAW. The interpretation, performance, and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.

            18. STOCKHOLDER APPROVAL. The grant of this option is subject to
approval by the Corporation's stockholders of the 3,385,000-share increase in
the aggregate number of shares issuable over the term of the Plan within twelve
(12) months after September 14, 1994, the date of the adoption of the increase
by the Board of Directors. Notwithstanding any provision of this Agreement to
the contrary, this option may not be exercised in whole or in part until such
stockholder approval is obtained. In the event that such stockholder approval is
not obtained, then this option shall thereupon terminate in its entirety and the
Optionee shall have no further rights to acquire any Option Shares hereunder.

            19. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK OPTION. In the
event this option is designated an incentive stock option in the Grant Notice,
the following terms and conditions shall also apply to the grant:

            A. This option shall cease to qualify for favorable tax treatment as
an incentive stock option under the Federal tax laws if (and to the extent) this
option is exercised for one or more Option Shares: (i) more than three (3)
months after the date the Optionee ceases to be an Employee for any reason other
than death or Permanent Disability or (ii) more than one (1) year after the date
the Optionee ceases to be an Employee by reason of Permanent Disability.

            B. Should this option be designated as immediately exercisable in
the Grant Notice, then this option shall not become exercisable in the calendar
year in which granted if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Corporation's Common Stock for which this
option would otherwise first become exercisable in such calendar year would,
when added to the aggregate Fair Market Value (determined as of the respective
date or dates of grant) of the Corporation's Common Stock for which this option
or one or more other incentive stock options granted to the Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the
Corporation or its parent or subsidiary corporations) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. To the 




                                      -8-

<PAGE>   22
extent the exercisable of this option is deferred by reason of the foregoing
limitation, the deferred portion will first become exercisable in the first
calendar year or years thereafter in which the One Hundred Thousand Dollar
($100,000) limitation of this Paragraph 19.B would not be contravened, but such
deferral shall in all events end immediately prior to the effective date of a
Corporate Transaction in which this option is not to be assumed, whereupon the
option shall become exercisable as a non-statutory stock option for the balance
of the Option Shares.

            C. Should this option be designated as exercisable in installments
in the Grant Notice, then no installment under this option (whether annual or
monthly) shall qualify for favorable tax treatment as an incentive stock option
under the Federal tax laws if (and to the extent) the aggregate Fair Market
Value (determined at the Grant Date) of the Corporation's Common Stock for which
such installment first becomes exercisable hereunder will, when added to the
aggregate Fair Market Value (determined as of the respective date or dates of
grant) of the Corporation's Common Stock for which one or more other incentive
stock options granted to the Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any parent or subsidiary
corporation) first become exercisable during the same calendar year, exceed One
Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred
Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this
option shall nevertheless become exercisable for the option shares in such
calendar year as a non-statutory stock option.

            D. Should Optionee hold, in addition to this option, one or more
other options to purchase the Corporation's Common Stock which became
exercisable for the first time in the same calendar year as this option, then
the foregoing limitations on the exercisability of such options as incentive
stock options shall be applied on the basis of the order in which such options
are granted.

            20. WITHHOLDING. Optionee hereby agrees to make appropriate
arrangements with the Corporation or parent or subsidiary corporation employing
Optionee for the satisfaction of all Federal, state or local income tax
withholding requirements and Federal social security employee tax requirements
applicable to the exercise of this option.


                                      -9-



<PAGE>   1
                                                                    EXHIBIT 10.3



                                GERON CORPORATION

                        1996 EMPLOYEE STOCK PURCHASE PLAN

         The following constitute the provisions of the 1996 Employee Stock
Purchase Plan of Geron Corporation.

         1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.

         2. Definitions.

            (a) "Board" shall mean the Board of Directors of the Company.

            (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

            (c) "Common Stock" shall mean the Common Stock of the Company.

            (d) "Company" shall mean Geron Corporation, a Delaware corporation.

            (e) "Compensation" shall mean all regular straight time gross
earnings, overtime and shift premium and shall not include payments for
incentive compensation, incentive payments, bonuses, commissions and other
compensation.

            (f) "Continuous Status as an Employee" shall mean the absence of
 any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.

            (g) "Contributions" shall mean all amounts credited to the account
of a participant pursuant to the Plan.

            (h) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

            (i) "Employee" shall mean any person, including an Officer, who is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.

<PAGE>   2
            (j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

            (k) "Purchase Date" shall mean the last day of each Purchase Period
of the Plan.

            (l) "Offering Date" shall mean the first business day of each
Offering Period of the Plan.

            (m) "Offering Period" shall mean a period of twelve (12) months
commencing on January 1 and July 1 of each year, except for the first Offering
Period as set forth in Section 4(a).

            (n) "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

            (o) "Plan" shall mean this Employee Stock Purchase Plan.

            (p) "Purchase Period" shall mean a period of six (6) months within
an Offering Period, except for the first Purchase Period as set forth in Section
4(b).

            (q) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

         3. Eligibility.

            (a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code.

            (b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) if such option would permit
his or her rights to purchase stock under all employee stock purchase plans
(described in Section 423 of the Code) of the Company and its Subsidiaries to
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair
market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

         4. Offering Periods and Purchase Periods.

            (a) Offering Periods. The Plan shall be implemented by a series of
Offering Periods of twelve (12) months duration, with new Offering Periods
commencing on or about January 1 and July 1 of each year (or at such other time
or times as may be determined by the 




                                      -2-

<PAGE>   3
Board of Directors). The first Offering Period shall commence on the beginning
of the effective date of the Registration Statement on Form S-1 for the initial
public offering of the Company's Common Stock (the "IPO Date") and continue
until June 30, 1997. The Plan shall continue until terminated in accordance with
Section 19 hereof. The Board of Directors of the Company shall have the power to
change the duration and/or the frequency of Offering Periods with respect to
future offerings without shareholder approval if such change is announced at
least fifteen (15) days prior to the scheduled beginning of the first Offering
Period to be affected. Eligible employees may not participate in more than one
Offering Period at a time.

            (b) Purchase Periods. Each Offering Period shall consist of two (2)
consecutive purchase periods of six (6) months duration. The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period. A
Purchase Period commencing on January 1 shall end on the next June 30. A
Purchase Period commencing on July 1 shall end on the next December 31. The
first Purchase Period shall commence on the IPO Date and shall end on December
31, 1996. The Board of Directors of the Company shall have the power to change
the duration and/or frequency of Purchase Periods with respect to future
purchases without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Purchase Period
to be affected.

         5. Participation.

            (a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement on the form provided by the Company and
filing it with the Company's payroll office prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Board for all eligible Employees with respect to a given offering. The
subscription agreement shall set forth the percentage of the participant's
Compensation (which shall be not less than 1% and not more than 10%) to be paid
as Contributions pursuant to the Plan.

            (b) Payroll deductions shall commence on the first payroll following
the Offering Date and shall end on the last payroll paid on or prior to the last
Purchase Period of the Offering Period to which the subscription agreement is
applicable, unless sooner terminated by the participant as provided in Section
10.

         6. Method of Payment of Contributions.

            (a) The participant shall elect to have payroll deductions made on
each payday during the Offering Period in an amount not less than one percent
(1%) and not more than ten percent (10%) of such participant's Compensation on
each such payday. All payroll deductions made by a participant shall be credited
to his or her account under the Plan. A participant may not make any additional
payments into such account.

            (b) A participant may discontinue his or her participation in the
Plan as provided in Section 10, or, on one occasion only during the Offering
Period, may decrease the rate of his or her Contributions during the Offering
Period by completing and filing with the 



                                      -3-

<PAGE>   4
Company a new subscription agreement. The change in rate shall be effective as
of the beginning of the next calendar month following the date of filing of the
new subscription agreement, if the agreement is filed at least ten (10) business
days prior to such date and, if not, as of the beginning of the next succeeding
calendar month.

            (c) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such Offering
Period and any other Offering Period ending within the same calendar year equal
$21,250. Payroll deductions shall re-commence at the rate provided in such
participant's subscription Agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.

         7. Grant of Option.

            (a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common Stock
determined by dividing such Employee's Contributions accumulated prior to such
Purchase Date and retained in the participant's account as of the Purchase Date
by the lower of (i) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date, or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Purchase Date; provided however, that the maximum number of shares an
Employee may purchase during each Offering Period shall be determined at the
Offering Date by dividing $25,000 by the fair market value of a share of the
Company's Common Stock on the Offering Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 13.
The fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b).

            (b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Purchase Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion based on the closing
price of the Common Stock for such date (or, in the event that the Common Stock
is not traded on such date, on the immediately preceding trading date), as
reported by the National Association of Securities Dealers Automated Quotation
(Nasdaq) National Market or, if such price is not reported, the mean of the bid
and asked prices per share of the Common Stock as reported by Nasdaq or, in the
event the Common Stock is listed on a stock exchange, the fair market value per
share shall be the closing price on such exchange on such date (or, in the event
that the Common Stock is not traded on such date, on the immediately preceding
trading date), as reported in The Wall Street Journal. For purposes of the
Offering Date under the first Offering Period under the Plan, the fair market
value of a share of the Common Stock of the Company shall be the Price to Public
as set forth in the final prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424 under the Securities Act of 1933, as amended.



                                      -4-

<PAGE>   5
         8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 10, his or her option for the purchase of shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of full shares subject to the option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Purchase Date. During his or
her lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.

         9. Delivery. As promptly as practicable after each Purchase Date of
each Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option or the deposit of such number of shares with
the broker selected by the Company for administration of Plan stock purchases,
as determined by the Company. Any cash remaining to the credit of a
participant's account under the Plan after a purchase by him or her of shares at
the termination of each Purchase Period, or which is insufficient to purchase a
full share of Common Stock of the Company, shall be carried over to the next
Purchase Period if the Employee continues to participate in the Plan, or if the
Employee does not continue to participate, shall be returned to said
participant.

         10. Voluntary Withdrawal; Termination of Employment.

             (a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior to
each Purchase Date by giving written notice to the Company. All of the
participant's Contributions credited to his or her account will be paid to him
or her promptly after receipt of his or her notice of withdrawal and his or her
option for the current period will be automatically terminated, and no further
Contributions for the purchase of shares will be made during the Offering
Period.

             (b) Upon termination of the participant's Continuous Status as an
Employee prior to the Purchase Date of an Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 14, and his or her option will
be automatically terminated.

             (c) In the event an Employee fails to remain in Continuous Status
as an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option terminated.

             (d) A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.

         11. Automatic Withdrawal. If the fair market value of the shares on the
first Purchase Date of an Offering Period is less than the fair market value of
the shares on the Offering Date for 



                                      -5-

<PAGE>   6
such Offering Period, then every participant shall automatically (i) be
withdrawn from such Offering Period at the close of such Purchase Date and after
the acquisition of shares for such Purchase Period, and (ii) be enrolled in the
Offering Period commencing on the first business day subsequent to such Purchase
Period.

         12. Interest. No interest shall accrue on the Contributions of a
participant in the Plan.

         13. Stock.

             (a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 300,000 shares
(on a post-split basis), subject to adjustment upon changes in capitalization of
the Company as provided in Section 18. If the total number of shares which would
otherwise be subject to options granted pursuant to Section 7(a) on the Offering
Date of an Offering Period exceeds the number of shares then available under the
Plan (after deduction of all shares for which options have been exercised or are
then outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Employee affected thereby and shall similarly
reduce the rate of Contributions, if necessary.

             (b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

             (c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

         14. Administration. The Board, or a committee named by the Board, shall
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration
of the Plan. The composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the operation of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.

         15. Designation of Beneficiary.

             (a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to the end of
a Purchase Period but prior to delivery to him or her of such shares and cash.
In addition, a participant may file a written designation of a beneficiary who
is to receive any cash from the participant's account under the Plan in the
event of such participant's death prior to the Purchase Date of an Offering
Period. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.


                                      -6-

<PAGE>   7
             (b) Such designation of beneficiary may be changed by the
participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

         16. Transferability. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.

         17. Use of Funds. All Contributions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such Contributions.

         18. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees promptly following the Purchase Date, which statements will set forth
the amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.

         19. Adjustments Upon Changes in Capitalization; Corporate Transactions.

             (a) Adjustment. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each option
under the Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under the Plan but have not
yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under the Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to an option.



                                      -7-

<PAGE>   8
             (b) Corporate Transactions. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. In the event of a proposed sale of all or substantially
all of the assets of the Company, or the merger of the Company with or into
another corporation, each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
to shorten the Offering Period then in progress by setting a new Purchase Date
(the "New Purchase Date"). If the Board shortens the Offering Period then in
progress in lieu of assumption or substitution in the event of a merger or sale
of assets, the Board shall notify each participant in writing, at least ten (10)
days prior to the New Purchase Date, that the Purchase Date for his or her
option has been changed to the New Purchase Date and that his or her option will
be exercised automatically on the New Purchase Date, unless prior to such date
he or she has withdrawn from the Offering Period as provided in Section 10. For
purposes of this paragraph, an option granted under the Plan shall be deemed to
be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board may, with the consent of the successor corporation and
the participant, provide for the consideration to be received upon exercise of
the option to be solely common stock of the successor corporation or its parent
equal in fair market value to the per share consideration received by holders of
Common Stock and the sale of assets or merger.

             The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.

         20. Amendment or Termination.

             (a) The Board of Directors of the Company may at any time terminate
or amend the Plan. Except as provided in Section 19, no such termination may
affect options previously granted, nor may an amendment make any change in any
option theretofore granted which adversely affects the rights of any
participant. In addition, to the extent necessary to comply with Rule 16b-3
under the Exchange Act, or under Section 423 of the Code (or any successor rule
or provision or any applicable law or regulation), the Company shall obtain
shareholder approval in such a manner and to such a degree as so required.

                                      -8-

<PAGE>   9
             (b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

         21. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

             As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

         23. Term of Plan; Effective Date. The Plan shall become effective upon
the earlier to occur of its adoption by the Board of Directors or its approval
by the shareholders of the Company. It shall continue in effect for a term of
twenty (20) years unless sooner terminated under Section 20.

         24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.



                                      -9-

<PAGE>   10
                                GERON CORPORATION

                        1996 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT


                                                             New Election ______
                                                       Change of Election ______


         1. I, ________________________, hereby elect to participate in the
GERON CORPORATION 1996 Employee Stock Purchase Plan (the "Plan") for the
Offering Period ______________, 19__ to _______________, 19__, and subscribe to
purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the Plan.

         2. I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than 1% and not more than 10% of
my Compensation during the Offering Period. (Please note that no fractional
percentages are permitted).

         3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement. I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan. I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Purchase
Date of each Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.

         4. I understand that I may discontinue at any time prior to the
Purchase Date my participation in the Plan as provided in Section 10 of the
Plan. I also understand that I can decrease the rate of my Contributions to not
less than 1% of my Compensation on one occasion only during any Offering Period
by completing and filing a new Subscription Agreement with such decrease taking
effect as of the beginning of the calendar month following the date of filing of
the new Subscription Agreement, if filed at least ten (10) business days prior
to the beginning of such month. Further, I may change the rate of deductions for
future Offering Periods by filing a new Subscription Agreement, and any such
change will be effective as of the beginning of the next Offering Period. In
addition, I acknowledge that, unless I discontinue my participation in the Plan
as provided in Section 10 of the Plan, my election will continue to be effective
for each successive Offering Period.

<PAGE>   11
         5. I have received a copy of the Company's most recent description of
the Plan and a copy of the complete "GERON CORPORATION 1996 Employee Stock
Purchase Plan." I understand that my participation in the Plan is in all
respects subject to the terms of the Plan.

         6. Shares purchased for me under the Plan should be issued in the
name(s) of (name of employee or employee and spouse only):

                                         _____________________________________

                                         _____________________________________


         7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:


NAME:  (Please print)                    _____________________________________
                                         (First)       (Middle)        (Last)

_________________________                _____________________________________
(Relationship)                           (Address)

                                         _____________________________________


         8. I understand that if I dispose of any shares received by me pursuant
to the Plan within 2 years after the Offering Date (the first day of the
Offering Period during which I purchased such shares) or within 1 year after the
Purchase Date, I will be treated for federal income tax purposes as having
received ordinary compensation income at the time of such disposition in an
amount equal to the excess of the fair market value of the shares on the
Purchase Date over the price which I paid for the shares, regardless of whether
I disposed of the shares at a price less than their fair market value at the
Purchase Date. The remainder of the gain or loss, if any, recognized on such
disposition will be treated as capital gain or loss.

            I hereby agree to notify the Company in writing within 30 days after
the date of any such disposition, and I will make adequate provision for
federal, state or other tax withholding obligations, if any, which arise upon
the disposition of the Common Stock. The Company may, but will not be obligated
to, withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to the sale or early
disposition of Common Stock by me.

         9. If I dispose of such shares at any time after expiration of the
2-year and 1-year holding periods, I understand that I will be treated for
federal income tax purposes as having received compensation income only to the
extent of an amount equal to the lesser of (1) the excess of the fair market
value of the shares at the time of such disposition over the purchase price
which I paid for the shares under the option, or (2) 15% of the fair market
value of the 

<PAGE>   12
shares on the Offering Date. The remainder of the gain or loss, if any, 
recognized on such disposition will be treated as capital gain or loss.

         I understand that this tax summary is only a summary and is subject to
change. I further understand that I should consult a tax advisor concerning the
tax implications of the purchase and sale of stock under the Plan.

         10. I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility to
participate in the Plan.



SIGNATURE: ______________________

SOCIAL SECURITY #: ______________

DATE: ___________________________



SPOUSE'S SIGNATURE (necessary 
if beneficiary is not spouse):


_________________________________
(Signature)


_________________________________
(Print name)



                                      -3-

<PAGE>   13
                                GERON CORPORATION

                        1996 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         I, __________________________, hereby elect to withdraw my
participation in the GERON CORPORATION 1996 Employee Stock Purchase Plan (the
"Plan") for the Offering Period _________. This withdrawal covers all
Contributions credited to my account and is effective on the date designated
below.

         I understand that all Contributions credited to my account will be paid
to me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.

         The undersigned further understands and agrees that he or she shall be
eligible to participate in succeeding offering periods only by delivering to the
Company a new Subscription Agreement.

         If the undersigned is an Officer or Director of GERON CORPORATION or
other person subject to Section 16 of the Securities Exchange Act of 1934, the
undersigned further understands that under rules promulgated by the U.S.
Securities and Exchange Commission he or she may not re-enroll in the Plan for a
period of six (6) months after withdrawal.


Dated:___________________                  ______________________________
                                           Signature of Employee


                                           ______________________________
                                           Social Security Number



<PAGE>   1
                                                                    EXHIBIT 10.4



                                GERON CORPORATION

                        1996 DIRECTORS' STOCK OPTION PLAN

         1.       Purposes of the Plan. The purposes of this Directors' Stock
Option Plan are to attract and retain the best available personnel for service
as Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.

                  All options granted hereunder shall be "nonstatutory stock
options".

         2.       Definitions.  As used herein, the following definitions shall
apply:

                  (a)      "Board" shall mean the Board of Directors of the
Company.

                  (b)      "Code" shall mean the Internal Revenue Code of 1986,
as amended.

                  (c)      "Common Stock"  shall mean the Common Stock of the
Company.

                  (d)      "Company"  shall mean Geron Corporation, a Delaware
corporation.

                  (e)      "Continuous Status as a Director" shall mean the
absence of any interruption or termination of service as a Director.

                  (f)      "Director" shall mean a member of the Board.

                  (g)      "Employee" shall mean any person, including officers
and directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a director's fee by the Company shall not be sufficient
in and of itself to constitute "employment" by the Company.

                  (h)      "Exchange Act" shall mean
 the Securities Exchange Act
of 1934, as amended.

                  (i)      "Option" shall mean a stock option granted pursuant
to the Plan. All options shall be nonstatutory stock options (i.e., options that
are not intended to qualify as incentive stock options under Section 422 of the
Code).

                  (j)      "Optioned Stock"  shall mean the Common Stock subject
to an Option.

                  (k)      "Optionee"  shall mean an Outside Director who
receives an Option.

                  (l)      "Outside Director" shall mean a Director who is not
an Employee.

                  (m)      "Parent"  shall mean a "parent corporation", whether
now or hereafter existing, as defined in Section 424(e) of the Code.

                  (n)      "Plan"  shall mean this 1996 Directors' Stock Option
Plan.

<PAGE>   2
                  (o)      "Share"  shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.

                  (p)      "Subsidiary"  shall mean a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 250,000 Shares (on a post-split basis) (the
"Pool") of Common Stock. The Shares may be authorized, but unissued, or
reacquired Common Stock.

                  If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. If Shares which were acquired upon
exercise of an Option are subsequently repurchased by the Company, such Shares
shall not in any event be returned to the Plan and shall not become available
for future grant under the Plan.

         4.       Administration of and Grants of Options under the Plan.

                  (a)      Administrator.  Except as otherwise required herein,
the Plan shall be administered by the Board.

                  (b)      Procedure for Grants.  All grants of Options
hereunder shall be automatic and non discretionary and shall be made strictly in
accordance with the following provisions:

                          (i)       No person shall have any discretion to
select which Outside Directors shall be granted Options or to determine the
number of Shares to be covered by Options granted to Outside Directors.

                         (ii)       Each Outside Director shall be automatically
granted an Option to purchase Shares 25,000 Shares (on a post-split basis) (the
"First Option") on the date on which such person first becomes an Outside
Director, whether through election by the shareholders of the Company or
appointment by the Board of Directors to fill a vacancy.

                        (iii)       Each Outside Director shall be automatically
granted an Option to purchase 5,000 Shares (on a post-split basis) (a
"Subsequent Option") on the date of each Annual Meeting of the Company's
shareholders following which such Outside Director is serving on the Board,
provided that, on such date, he or she shall have served on the Board for at
least six (6) months prior to the date of such Annual Meeting.

                         (iv)       Notwithstanding the provisions of
subsections (ii) and (iii) hereof, in the event that a grant would cause the
number of Shares subject to outstanding Options plus the number of Shares
previously purchased upon exercise of Options to exceed the Pool, then each such
automatic grant shall be for that number of Shares determined by dividing the
total number of Shares remaining available for grant by the number of Outside
Directors receiving an Option on such date on the automatic grant date. Any
further grants shall then be deferred until such time, if 



                                      -2-

<PAGE>   3
any, as additional Shares become available for grant under the Plan through
action of the shareholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.

                          (v)       Notwithstanding the provisions of
subsections (ii) and (iii) hereof, any grant of an Option made before the
Company has obtained shareholder approval of the Plan in accordance with Section
17 hereof shall be conditioned upon obtaining such shareholder approval of the
Plan in accordance with Section 17 hereof.

                         (vi)       The terms of each First Option granted
hereunder shall be as follows:

                                    (1)     the First Option shall be
exercisable only while the Outside Director remains a Director of the Company,
except as set forth in Section 9 hereof.

                                    (2)     the exercise price per Share shall
be 100% of the fair market value per Share on the date of grant of the First
Option, determined in accordance with Section 8 hereof.

                                    (3)     the First Option shall become
exercisable in installments cumulatively as to 33 1/3% of the Shares subject to
the First Option on each of the first, second and third anniversaries of the
date of grant of the Option.

                        (vii)       The terms of each Subsequent Option granted
hereunder shall be as follows:

                                    (1)     the Subsequent Option shall be
exercisable only while the Outside Director remains a Director of the Company,
except as set forth in Section 9 hereof.

                                    (2)     the exercise price per Share shall
be 100% of the fair market value per Share on the date of grant of the
Subsequent Option, determined in accordance with Section 8 hereof.

                                    (3)     the Subsequent Option shall become
exercisable as to one hundred percent 100% of the Shares subject to the
Subsequent Option on the first anniversary of the date of grant of the
Subsequent Option.

                  (c)      Powers of the Board. Subject to the provisions and
restrictions of the Plan, the Board shall have the authority, in its discretion:
(i) to determine, upon review of relevant information and in accordance with
Section 8(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which exercise
price shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.




                                      -3-

<PAGE>   4
                  (d)      Effect of Board's Decision.  All decisions,
determinations and interpretations of the Board shall be final and binding on
all Optionees and any other holders of any Options granted under the Plan.

                  (e)      Suspension or Termination of Option. If the President
or his or her designee reasonably believes that an Optionee has committed an act
of misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an obligation
owed to the Company, breach of fiduciary duty or deliberate disregard of the
Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any option whatsoever. In making such determination, the
Board of Directors (excluding the Outside Director accused of such misconduct)
shall act fairly and shall give the Optionee an opportunity to appear and
present evidence on Optionee's behalf at a hearing before the Board or a
committee of the Board.

         5.       Eligibility.  Options may be granted only to Outside
Directors. All Options shall be automatically granted in accordance with the
terms set forth in Section 4(b) hereof. An Outside Director who has been granted
an Option may, if he or she is otherwise eligible, be granted an additional
Option or Options in accordance with such provisions.

                  The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any time.

         6.       Term of Plan; Effective Date. The Plan shall become effective
on the effectiveness of the registration statement under the Securities Act of
1933 relating to the Company's initial public offering of securities. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 13 of the Plan.

         7.       Term of Options.  The term of each Option shall be ten (10)
years from the date of grant thereof.




                                      -4-

<PAGE>   5
         8.       Exercise Price and Consideration.

                  (a)      Exercise Price.  The per Share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be 100% of the fair
market value per Share on the date of grant of the Option.

                  (b)      Fair Market Value. The fair market value shall be
determined by the Board; provided, however, that where there is a public market
for the Common Stock, the fair market value per Share shall be the mean of the
bid and asked prices of the Common Stock in the over-the-counter market on the
date of grant, as reported in The Wall Street Journal (or, if not so reported,
as otherwise reported by the National Association of Securities Dealers
Automated Quotation ("Nasdaq") System) or, in the event the Common Stock is
traded on the Nasdaq National Market or listed on a stock exchange, the fair
market value per Share shall be the closing price on such system or exchange on
the date of grant of the Option, as reported in The Wall Street Journal. With
respect to any Options granted hereunder concurrently with the initial
effectiveness of the Plan, the fair market value shall be the Price to Public as
set forth in the final prospectus relating to such initial public offering.

                  (c)      Form of Consideration. The consideration to be paid
for the Shares to be issued upon exercise of an Option shall consist entirely of
cash, check, other Shares of Common Stock having a fair market value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised (which, if acquired from the Company, shall have
been held for at least six months), or any combination of such methods of
payment and/or any other consideration or method of payment as shall be
permitted under applicable corporate law.

         9.       Exercise of Option.

                  (a)      Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof; provided, however, that no Options shall be exercisable
prior to shareholder approval of the Plan in accordance with Section 17 hereof
has been obtained.

                           An Option may not be exercised for a fraction of a
Share.

                           An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may consist of any consideration and
method of payment allowable under Section 8(c) of the Plan. Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. A share certificate for the number of Shares so acquired
shall be issued to the Optionee as soon as practicable after exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.




                                      -5-

<PAGE>   6
                           Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.

                  (b)      Termination of Status as a Director. If an Outside
Director ceases to serve as a Director, he or she may, but only within ninety
(90) days after the date he or she ceases to be a Director of the Company,
exercise his or her Option to the extent that he or she was entitled to exercise
it at the date of such termination. Notwithstanding the foregoing, in no event
may the Option be exercised after its term set forth in Section 7 has expired.
To the extent that such Outside Director was not entitled to exercise an Option
at the date of such termination, or does not exercise such Option (which he or
she was entitled to exercise) within the time specified herein, the Option shall
terminate.

                  (c)      Disability of Optionee. Notwithstanding Section 9(b)
above, in the event a Director is unable to continue his or her service as a
Director with the Company as a result of his or her total and permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue Code), he or
she may, but only within six (6) months (or such other period of time not
exceeding twelve (12) months as is determined by the Board) from the date of
such termination, exercise his or her Option to the extent he or she was
entitled to exercise it at the date of such termination. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 7 has expired. To the extent that he or she was not entitled to exercise
the Option at the date of termination, or if he or she does not exercise such
Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.

                  (d)      Death of Optionee.  In the event of the death of an
Optionee:

                          (i)       During the term of the Option who is, at the
time of his or her death, a Director of the Company and who shall have been in
Continuous Status as a Director since the date of grant of the Option, the
Option may be exercised, at any time within six (6) months following the date of
death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as Director for twelve (12) months (or such lesser
period of time as is determined by the Board) after the date of death.
Notwithstanding the foregoing, in no event may the Option be exercised after its
term set forth in Section 7 has expired.

                         (ii)       Within three (3) months after the
termination of Continuous Status as a Director, the Option may be exercised, at
any time within six (6) months following the date of death, by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent of the right to exercise that had accrued
at the date of termination. Notwithstanding the foregoing, in no event may the
option be exercised after its term set forth in Section 7 has expired.

         10.      Nontransferability of Options. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution or pursuant to a
qualified domestic relations order (as defined by the Code or the rules
thereunder). The designation of a beneficiary by an Optionee does not constitute
a transfer. 


                                      -6-

<PAGE>   7
An Option may be exercised during the lifetime of an Optionee only by the
Optionee or a transferee permitted by this Section.

         11.      Adjustments Upon Changes in Capitalization; Corporate
Transactions.

                  (a)      Adjustment. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, and the number of shares of Common Stock to be granted under the
provisions set forth in Section 4 of the Plan, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

                  (b)      Corporate Transactions. In the event of (i) a
dissolution or liquidation of the Company, (ii) a sale of all or substantially
all of the Company's assets, (iii) a merger or consolidation in which the
Company is not the surviving corporation, or (iv) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, the Company shall give to the Eligible
Director, at the time of adoption of the plan for liquidation, dissolution,
sale, merger, consolidation or reorganization, either a reasonable time
thereafter within which to exercise the Option, including Shares as to which the
Option would not be otherwise exercisable, prior to the effectiveness of such
liquidation, dissolution, sale, merger, consolidation or reorganization, at the
end of which time the Option shall terminate, or the right to exercise the
Option, including Shares as to which the Option would not be otherwise
exercisable (or receive a substitute option with comparable terms), as to an
equivalent number of shares of stock of the corporation succeeding the Company
or acquiring its business by reason of such liquidation, dissolution, sale,
merger, consolidation or reorganization.

         12.      Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date determined in accordance with Section 4(b)
hereof. Notice of the determination shall be given to each Outside Director to
whom an Option is so granted within a reasonable time after the date of such
grant.

         13.      Amendment and Termination of the Plan.

                  (a)      Amendment and Termination. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable; provided that, to the extent necessary and desirable to comply with
Rule 16b-3 under the Exchange Act (or any other 


                                      -7-

<PAGE>   8
applicable law or regulation), the Company shall obtain approval of the
shareholders of the Company to Plan amendments to the extent and in the manner
required by such law or regulation. Notwithstanding the foregoing, the
provisions set forth in Section 4 of this Plan (and any other Sections of this
Plan that affect the formula award terms required to be specified in this Plan
by Rule 16b-3) shall not be amended more than once every six months, other than
to comport with changes in the Code, the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder.

                  (b)      Effect of Amendment or Termination. Any such
amendment or termination of the Plan that would impair the rights of any
Optionee shall not affect Options already granted to such Optionee and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

         14.      Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

         15.     Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan. Inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

         16.      Option Agreement.  Options shall be evidenced by written
option agreements in such form as the Board shall approve.

         17.      Shareholder Approval. Continuance of the Plan shall be subject
to approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the granting of an Option hereunder.
If such shareholder approval is obtained at a duly held shareholders' meeting,
it may be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present or represented and entitled to vote
thereon. If such shareholder approval is obtained by written consent, it may be
obtained by the written consent of the holders of a majority of the outstanding
shares of the Company. Options may be granted, but not exercised, before such
shareholder approval.




                                      -8-



<PAGE>   1
                                                                    EXHIBIT 10.5






                                GERON CORPORATION

                           INVESTORS' RIGHTS AGREEMENT

                                NOVEMBER 10, 1995

<PAGE>   2
                                TABLE OF CONTENTS

                                                                        Page
                                                                        ----

1.  Registration Rights  . . . . . . . . . . . . . . . . . . . . . . .    1

         1.1  Definitions  . . . . . . . . . . . . . . . . . . . . . .    1
         1.2  Request for Registration . . . . . . . . . . . . . . . .    2
         1.3  Company Registration . . . . . . . . . . . . . . . . . .    4
         1.4  Obligations of the Company . . . . . . . . . . . . . . .    4
         1.5  Furnish Information  . . . . . . . . . . . . . . . . . .    5
         1.6  Expenses of Demand Registration  . . . . . . . . . . . .    5
         1.7  Expenses of Company Registration . . . . . . . . . . . .    6
         1.8  Underwriting Requirements  . . . . . . . . . . . . . . .    6
         1.9  Delay of Registration  . . . . . . . . . . . . . . . . .    7
         1.10 Indemnification  . . . . . . . . . . . . . . . . . . . .    7
         1.11 Reports Under Securities Exchange Act of 1934  . . . . .    9
         1.12 Form S-3 Registration  . . . . . . . . . . . . . . . . .   10
         1.13 Assignment of Registration Rights  . . . . . . . . . . .   11
         1.14 Limitations on Subsequent Registration Rights  . . . . .   11
         1.15 "Market Stand-Off" Agreement . . . . . . . . . . . . . .   11
         1.16 Termination of Registration Rights . . . . . . . . . . .   12

2.  Covenants of the Company . . . . . . . . . . . . . . . . . . . . .   12

         2.1  Delivery of Financial Statements . . . . . . . . . . . .   12
         2.2  Inspection . . . . . . . . . . . . . . . . . . . . . . .   13
         2.3  Termination of Information and Inspection Covenants  . .   13
         2.4  Right of First Offer . . . . . . . . . . . . . . . . . .   13
         2.5  Observer Rights  . . . . . . . . . . . . . . . . . . . .   15
         2.6  Termination of Certain Covenants . . . . . . . . . . . .   15

3.  Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . .   15

         3.1  Successors and Assigns . . . . . . . . . . . . . . . . .   15
         3.2  Governing Law  . . . . . . . . . . . . . . . . . . . . .   16
         3.3  Counterparts . . . . . . . . . . . . . . . . . . . . . .   16
         3.4  Titles and Subtitles . . . . . . . . . . . . . . . . . .   16
         3.5  Notices  . . . . . . . . . . . . . . . . . . . . . . . .   16
         3.6  Expenses . . . . . . . . . . . . . . . . . . . . . . . .   16
         3.7  Amendments and Waivers . . . . . . . . . . . . . . . . .   16
         3.8  Severability . . . . . . . . . . . . . . . . . . . . . .   16
         3.9  Termination of Prior Agreement . . . . . . . . . . . . .   17
         3.10 Aggregation of Stock . . . . . . . . . . . . . . . . . .   17
         3.11 Entire Agreement . . . . . . . . . . . . . . . . . . . .   17

                                      -i-

<PAGE>   3
         Schedule
 A   List of Investors
         Schedule B   List of Founders and Certain Other Holders of Common Stock
         Schedule C   List of Holders of Series A Preferred Stock
         Schedule D   List of Holders of Series B Preferred Stock
         Schedule E   List of Holders of Series C Preferred Stock

                                      -ii-

<PAGE>   4
                           INVESTORS' RIGHTS AGREEMENT

     THIS INVESTORS' RIGHTS AGREEMENT is made as of the 10th day of November,
1995, by and among Geron Corporation, a Delaware corporation (the "Company"),
the investors listed on Schedule A hereto, each of which is herein referred to
as an "Investor," certain holders of the Company's Common Stock listed on
Schedule B hereto, each of which is herein referred to as a "Founder" or as a
"Common Stockholder" as indicated on Schedule B, the holders of the Company's
Series A Preferred Stock listed on Schedule C hereto, the holders of the
Company's Series B Preferred Stock listed on Schedule D hereto, and the holders
of the Company's Series C Preferred Stock listed on Schedule E hereto. The
holders of the Series A, Series B and Series C Preferred Stock shall hereinafter
be referred to as the "Prior Investors." All terms not otherwise defined herein
shall have the meaning ascribed such terms in the Series D Preferred Stock
Purchase Agreement of even date herewith by and among the Company and the
Investors (the "Series D Agreement").

                                    RECITALS

     WHEREAS, the Company and certain of the parties to this Agreement (the
"Prior Holders") are parties to that certain Investors' Rights Agreement dated
as of June 29, 1994 (the "Prior Agreement"), pursuant to which the Company
granted to the Prior Holders certain registration rights, rights of first offer,
and certain other information and inspection rights.

     WHEREAS, the Company and the Investors are parties to the Series D
Agreement;

     WHEREAS, in order to induce the Investors to enter into the Series D
Agreement, the Company and the Prior Holders have agreed to amend and replace
the Prior Agreement in its entirety as set forth herein, and have further agreed
that this Agreement shall govern the rights set forth herein;

     NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

     1. Registration Rights. The Company covenants and agrees as follows:

        1.1 Definitions. For purposes of this Section 1:

            (a) The term "Act" shall mean the Securities Act of 1933, as
amended;

            (b) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended;

            (c) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document;

<PAGE>   5
            (d) The term "Registrable Securities" means (i) the Common Stock
held by the Founders (the "Founders' Stock") and the Common Stockholders in the
amounts set forth opposite their names on Schedule B, (ii) the Common Stock
issuable or issued upon conversion of the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock
of the Company, and (iii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, the securities referred to in subsections (i) and (ii)
above, excluding in all cases, however, any Registrable Securities sold by a
person in a transaction in which his rights under this Section 1 are not
assigned; provided, however, that Common Stock or other securities shall only be
treated as Registrable Securities if and so long as (A) they have not been sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, (B) they have not been sold in a transaction
exempt from the registration and prospectus delivery requirements of the Act
under Section 4(1) thereof so that all transfer restrictions and restrictive
legends with respect thereto are removed upon the consummation of such sale, and
(C) the registration rights associated with such securities have not been
terminated pursuant to Section 1.16 hereof.

            (e) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.

            (f) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.13 hereof; and

            (g) The term "Form S-3" means such form under the Act as in effect
on the date hereof or any registration form under the Act subsequently adopted
by the Securities and Exchange Commission ("SEC") which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.

        1.2 Request for Registration.

            (a) If the Company shall receive at any time after the earlier of
(i) November 10, 1998, or (ii) three (3) months after the effective date of the
first registration statement for a public offering of securities of the Company
(other than a registration statement relating either to the sale of securities
to employees of the Company pursuant to a stock option, stock purchase or
similar plan or a SEC Rule 145 transaction), a written request from the Holders
of seventy-five percent (75%) of the Registrable Securities then outstanding
that the Company file a registration statement under the Act covering the
registration of at least twenty percent (20%) of the Registrable Securities then
outstanding (or a lesser percent if the anticipated aggregate offering price,
net of underwriting discounts and commissions, would exceed $5,000,000), then
the Company shall, within ten (10) days of the receipt thereof, give written
notice of such request to all Holders and shall, subject to the limitations of
subsection 1.2(b), use its best efforts to effect as soon as practicable, and in
any event within sixty (60) days of the receipt of such request, the filing of
such registration statement under the Act covering the registration of all
Registrable

                                       -2-

<PAGE>   6
Securities which the Holders request to be registered within twenty (20) days of
the mailing of such notice by the Company in accordance with Section 3.5.

            (b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 1.2 and the Company
shall include such information in the written notice referred to in subsection
1.2(a). The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting as provided above. Notwithstanding any other
provision of this Section 1.2, if the underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that (i) the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting and (ii) the number of shares of Registrable
Securities held by an Investor or Prior Investor to be included in such
underwriting shall not be reduced unless all the Founders' Stock is first
entirely excluded from the underwriting.

            (c) The Company is obligated to effect only two (2) such
registrations pursuant to this Section 1.2; provided, that the Company shall not
be obligated to effect a registration within ninety (90) days after the
effective date of a registration statement covering stock or securities sold by
the Company other than a registration relating solely to the sale of securities
to participants in a Company stock plan, or a registration on any form which
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities or a registration in which the only Common Stock being registered is
Common Stock issuable upon conversion of debt securities which are also being
registered.

            (d) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than sixty (60) days after receipt of the request of
the Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period.

                                       -3-

<PAGE>   7
        1.3 Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for stockholders other than the Holders) any of its stock or
other securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a registration on
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.

        1.4 Obligations of the Company. Whenever required under this Section 1
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:

            (a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of seventy-five percent (75%) of the Registrable Securities registered
thereunder, keep such registration statement effective for at least one hundred
twenty (120) days or until the distribution contemplated by the registration
statement has been completed, but in no event for more than one hundred eighty
(180) days;

            (b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement;

            (c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;

            (d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions;

            (e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;

                                       -4-

<PAGE>   8
            (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; and

            (g) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.

        1.5 Furnish Information.

            (a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.

            (b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, due to the
operation of subsection 1.5(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in subsection 1.2(a) or subsection
1.12(b)(2), whichever is applicable.

        1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of seventy-five percent (75%) of the Registrable
Securities to be registered (in which case all Participating Holders shall bear
such

                                       -5-

<PAGE>   9
expenses), unless the Holders of seventy-five percent (75%) of the Registrable
Securities agree to forfeit their right to one demand registration pursuant to
Section 1.2; provided further, however, that if at the time of such withdrawal,
the Holders have learned of a material adverse change in the condition,
business, or prospects of the Company from that known to the Holders at the time
of their request and have withdrawn the request with reasonable promptness
following disclosure by the Company of such material adverse change, then the
Holders shall not be required to pay any of such expenses and shall retain their
rights pursuant to Section 1.2.

        1.7 Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.3 for each Holder (which right may be assigned as provided in Section 1.13),
including (without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or apportionable thereto and the fees and
disbursements of one counsel for the selling Holders selected by them, but
excluding underwriting discounts and commissions relating to Registrable
Securities.

        1.8 Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 1.3 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it (or by other persons
entitled to select the underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not, jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders,
provided that the number of shares of Registrable Securities to be included in
such underwriting shall not be reduced unless the Founders' Stock is first
entirely excluded from the underwriting) but in no event shall (i) the amount of
securities of the selling stockholders included in the offering be reduced below
thirty percent (30%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company's
securities in which case the selling stockholders may be excluded if the
underwriters make the determination described above and no other stockholder's
securities are included or (ii) notwithstanding (i) above, any shares being sold
by a stockholder exercising a demand registration right similar to that granted
in Section 1.2 be excluded from such offering. For purposes of the preceding
parenthetical concerning apportionment, for any selling stockholder which is a
holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and stockholders of such holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
stockholder", and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate

                                       -6-

<PAGE>   10
amount of shares carrying registration rights owned by all entities and
individuals included in such "selling stockholder", as defined in this sentence.

         1.9 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.

        1.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:

             (a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or other federal, state or foreign law or regulation, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state or foreign
securities law or any rule or regulation promulgated under the Act, the 1934 Act
or any state or foreign securities law; and the Company will pay to each such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.

             (b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the 1934 Act or other federal, state or
foreign law or regulation, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection

                                       -7-

<PAGE>   11
1.10(b), in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this subsection 1.10(b) exceed the gross proceeds from the offering
received by such Holder.

             (c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.

             (d) If the indemnification provided for in this Section 1.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The Company and each of the Holders agrees that it would
not be just and equitable if contributions pursuant to this paragraph were
determined by pro rata allocation (even if all of the Holders of such
Registrable Securities were treated as one entity for such purpose) or by any
other method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or action in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in

                                       -8-

<PAGE>   12
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph, no Holder shall be required to
contribute any amount in excess of the lesser of (i) the proportion that the
public offering price of shares sold by such Holder under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not to exceed the proceeds received by such Holder for the sale
of Registrable Securities covered by such registration statement and (ii) the
amount of any damages which they would have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission. No person guilty
of fraudulent misrepresentations (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.

             (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.

             (f) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.

        1.11 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:

             (a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;

             (b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;

             (c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and

             (d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 and
Rule 144A (at any time after ninety (90) days after the effective date of the
first registration statement filed by the Company), the Act and the 1934 Act (at
any time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such

                                       -9-

<PAGE>   13
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.

        1.12 Form S-3 Registration. In case the Company shall receive from any
Holder or Holders of fifteen percent (15%) or more of the Registrable Securities
then outstanding a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:

             (a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and

             (b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this section 1.12: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $500,000; (3) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than sixty (60) days after
receipt of the request of the Holder or Holders under this Section 1.12;
provided, however, that the Company shall not utilize this right more than once
in any twelve month period; or (4) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.

             (c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. All expenses incurred in connection with the first four (4)
registrations requested pursuant to Section 1.12, including (without limitation)
all registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the selling Holder or Holders
and counsel for the Company, but excluding any underwriters' discounts or
commissions associated with Registrable Securities, shall be borne by the
Company. Thereafter, such expenses shall be borne pro-rata by the Holder or
Holders participating in the Form S-3 Registration. Registrations effected
pursuant to this Section 1.12 shall not be counted as demands for registration
or registrations effected pursuant to Section 1.2.

                                      -10-

<PAGE>   14
        1.13 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 1 may be assigned
(but only with all related obligations) by a Holder to a transferee or assignee
of such securities who, after such assignment or transfer, holds at least
100,000 shares of Registrable Securities (subject to appropriate adjustment for
stock splits, stock dividends, combinations and other recapitalizations),
provided the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act. For the purposes of
determining the number of shares of Registrable Securities held by a transferee
or assignee, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership; provided that all assignees and
transferees who would not qualify individually for assignment of registration
rights shall have a single attorney-in-fact for the purpose of exercising any
rights, receiving notices or taking any action under this Section 1.

        1.14 Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities, enter
into any agreement with any holder or prospective holder of any securities of
the Company which would allow such holder or prospective holder (a) to include
such securities in any registration filed under Section 1.2 hereof, unless under
the terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of his
securities will not reduce the amount of the Registrable Securities of the
Holders which is included or (b) to make a demand registration which could
result in such registration statement being declared effective prior to the
earlier of either of the dates set forth in subsection 1.2(a) or within one
hundred twenty (120) days of the effective date of any registration effected
pursuant to Section 1.2.

        1.15 "Market Stand-Off" Agreement. Each holder of Registrable Securities
hereby agrees that, during the period of duration specified by the Company or an
underwriter of common stock or other securities of the Company, following the
effective date of a registration statement of the Company filed under the Act,
it shall not, to the extent requested by the Company and such underwriter,
directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any
securities of the Company held by it at any time during such period except
Common Stock included in such registration; provided, however, that:

             (a) such agreement shall be applicable only to the first such
registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and

             (b) all officers and directors of the Company and all other persons
with registration rights (whether or not pursuant to this Agreement) enter into
similar agreements;

                                      -11-

<PAGE>   15
             (c) such period shall not exceed one hundred eighty (180) days
beginning the day after the effective date of such registration statement.

             In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

        1.16 Termination of Registration Rights. No Holder shall be entitled to
exercise any right provided for in this Section 1 after five (5) years following
the consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the initial firm
commitment underwritten offering of its securities to the general public.

     2. Covenants of the Company.

        2.1  Delivery of Financial Statements. The Company shall deliver to each
Investor and each Prior Investor:

             (a) as soon as practicable, but in any event within ninety (90)
days after the end of each fiscal year of the Company, an income statement for
such fiscal year, a balance sheet of the Company and statement of stockholder's
equity as of the end of such year, and a schedule as to the sources and
applications of funds for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles ("GAAP"), and audited and certified by independent public accountants
of nationally recognized standing selected by the Company. If applicable the
Company shall also distribute the management letter delivered by such
accountants;

             (b) as soon as practicable, but in any event within forty-five (45)
days after the end of each of the first three (3) quarters of each fiscal year
of the Company, an unaudited profit or loss statement, schedule as to the
sources and application of funds for such fiscal quarter, an unaudited balance
sheet, a statement of stockholder's equity as of the end of such fiscal quarter,
and a statement showing the number of shares of each class and series of capital
stock and securities convertible into or exercisable for shares of capital stock
outstanding at the end of the period, the number of common shares issuable upon
conversion or exercise of any outstanding securities convertible or exercisable
for common shares and the exchange ratio or exercise price applicable thereto,
all in sufficient detail as to permit the Investor or Prior Investor to
calculate its percentage equity ownership in the Company;

             (c) as soon as practicable, but in any event thirty (30) days prior
to the end of each fiscal year, a budget and business plan for the next fiscal
year, prepared on a monthly basis, including balance sheets and sources and
applications of funds statements for such months and, as soon as prepared, any
other budgets or revised budgets prepared by the Company, all of which will be
updated semi-annually throughout the year and delivered to the Investors and the
Prior Investors within thirty (30) days after the end of each second quarter;

                                      -12-

<PAGE>   16
            (d) with respect to the financial statements called for in
subsection (b) of this Section 2.1, an instrument executed by the Chief
Financial Officer or President of the Company and certifying that such
financials were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and
its results of operation for the period specified, subject to year-end audit
adjustment;

            (e) such other information relating to the financial condition,
business, prospects or corporate affairs of the Company as the Investor or Prior
Investor or any assignee of the Investor or Prior Investor may from time to time
request, provided, however, that the Company shall not be obligated under this
subsection (e) or any other subsection of Section 2.1 to provide information
which it deems in good faith to be a trade secret or similar confidential
information.

        2.2 Inspection. The Company shall permit each Investor and Prior
Investor, at such Investor's or Prior Investor's expense, to visit and inspect
the Company's properties, to examine its books of account and records and to
discuss the Company's affairs, finances and accounts with its officers, all at
such reasonable times as may be requested by the Investor or the Prior Investor;
provided, however, that the Company shall not be obligated pursuant to this
Section 2.2 to provide access to any information which it reasonably considers
to be a trade secret or similar confidential information.

        2.3 Termination of Information and Inspection Covenants. The covenants
set forth in Sections 2.1 (c) and (e) and Section 2.2 shall terminate as to the
Investors and Prior Investors and be of no further force or effect when the sale
of securities pursuant to a registration statement filed by the Company under
the Act in connection with the firm commitment underwritten offering of its
securities to the general public is consummated or when the Company first
becomes subject to the periodic reporting requirements of Sections 12(g) or
15(d) of the 1934 Act, whichever event shall first occur.

        2.4 Right of First Offer. Subject to the terms and conditions specified
in this paragraph 2.4, the Company hereby grants to each Major Investor (as
hereinafter defined) a right of first offer with respect to future sales by the
Company of its Shares (as hereinafter defined). For purposes of this Section
2.4, a Major Investor shall mean any Investor or Prior Investor who holds at
least 500,000 shares (adjusted for any stock split, stock division or
consolidation) of Common Stock (i) issued pursuant to the Series A Agreement and
Series B Agreement, (ii) issued upon exercise of the warrants to purchase Common
Stock (the "Common Stock Warrants") issued pursuant to the Series A Agreement
(the "Common Warrants"), or (iii) issued or issuable upon conversion of the
Series A, Series B, Series C and/or Series D Preferred Stock. For purposes of
this Section 2.4, Investor includes any general partners and affiliates of an
Investor. An Investor or Prior Investor shall be entitled to apportion the right
of first offer hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.

        Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall

                                      -13-

<PAGE>   17
first make an offering of such Shares to each Major Investor in accordance with
the following provisions:

            (a) The Company shall deliver a notice by certified mail ("Notice")
to the Major Investors stating (i) its bona fide intention to offer such Shares,
(ii) the number of such Shares to be offered, and (iii) the price and terms, if
any, upon which it proposes to offer such Shares.

            (b) Within twenty (20) calendar days after receipt of the Notice,
the Major Investor may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares which equals
the proportion that the number of shares of Common Stock (i) issued pursuant to
the Series A Agreement and Series B Agreement and held, (ii) issued upon
exercise of Common Stock Warrants and held or (iii) issuable upon conversion of
the Series A, Series B, Series C or Series D Preferred Stock (or securities
exercisable therefor) then held by such Major Investor (including partners and
affiliates) bears to the total number of shares of Common Stock of the Company
then outstanding (assuming full conversion and exercise of all convertible or
exercisable securities). The Company shall promptly, in writing, inform each
Major Investor which purchases all the shares available to it ("Fully-Exercising
Investor") of any other Major Investor's failure to do likewise. During the
ten-day period commencing after receipt of such information, each
Fully-Exercising Investor shall be entitled to obtain that portion of the Shares
for which Major Investors were entitled to subscribe but which were not
subscribed for by the Major Investors which is equal to the proportion that the
number of shares of Common Stock (i) issued pursuant to the Series A Agreement
and Series B Agreement and held, (ii) issued upon the exercise of the Common
Stock Warrants then held, or (iii) issuable upon conversion of Series A, Series
B, Series C or Series D Preferred Stock (or securities exercisable therefor)
then held, by such Fully-Exercising Investor bears to the total number of shares
of Common Stock (i) issued and held, (ii) issued upon exercise of the Common
Stock Warrants then held, and (iii) issuable upon conversion of the Series A,
Series B, Series C or Series D Preferred Stock (or securities exercisable
therefor) then held, by all Fully-Exercising Investors who wish to purchase some
of the unsubscribed shares.

            (c) If all Shares referred to in the Notice are not elected to be
obtained as provided in subsection 2.4(b) hereof, the Company may, during the
thirty-day period following the expiration of the period provided in subsection
2.4(b) hereof, offer the remaining unsubscribed portion of such Shares to any
person or persons at a price not less than, and upon terms no more favorable to
the offeree than those specified in the Notice. If the Company does not enter
into an agreement for the sale of the Shares within such period, or if such
agreement is not consummated within thirty (30) days of the execution thereof,
the right provided hereunder shall be deemed to be revived and such Shares shall
not be offered unless first reoffered to the Major Investors in accordance
herewith.

            (d) The right of first offer in this paragraph 2.4 shall not be
applicable (i) to the issuance or sale of shares of Common Stock (or options
therefor) to officers, employees, consultants and directors of the Company
issued or sold directly or pursuant to a stock benefit plan adopted by the Board
of Directors, (ii) to the issuance or sale of shares of Common Stock to
non-profit institutions issued or sold primarily in connection with research or
other collaborative

                                      -14-

<PAGE>   18
arrangements, (iii) to or after consummation of a bona fide, firmly underwritten
public offering of shares of Common Stock, registered under the Act pursuant to
a registration statement on Form S-1, at an offering price of at least $5.00 per
share (appropriately adjusted for any stock split, dividend, combination or
other recapitalization) and $7,500,000 in the aggregate, (iv) the issuance of
securities pursuant to the conversion or exercise of convertible or exercisable
securities, including the Series A, Series B, Series C and Series D Preferred
Stock and options and warrants to purchase such securities, (v) the issuance of
securities in connection with a bona fide business acquisition of or by the
Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock or otherwise, or (vi) the issuance of warrants to persons or entities with
which the Company has bona fide business relationships which are not primarily
directed to the raising of capital, including, without limitation, corporate
partners.

        2.5 Observer Rights. As long as a Prior Investor owns not less than
500,000 shares of the Common stock (i) issued pursuant to the Series A Agreement
or the Series B Agreement or (ii) issued or issuable upon conversion of the
Series A or Series B Preferred Stock, the Company shall invite a representative
of such Prior Investor to attend all meetings of its Board of Directors in a
nonvoting observer capacity and, in this respect, shall give such representative
copies of all notices, minutes, consents, and other materials that it provides
to its directors; provided, however, that such representative shall agree to
hold in confidence and trust and to act in a fiduciary manner with respect to
all information so provided; and, provided further, that the Company reserves
the right to withhold any information and to exclude such representative from
any meeting or portion thereof if access to such information or attendance at
such meeting could adversely affect the attorney-client privilege between the
Company and its counsel. In addition, any Prior Investor which is not
represented on the Board and which is an entity that is intended to qualify as a
"venture capital operating company" within the meaning of Department of Labor
Regulation Section 2510.3-101 shall be entitled to consult with and advise
management of the Company on significant business issues, including management's
proposed operating plans, and management will meet with such Prior Investor
regularly during each year at the Company's facilities at mutually agreeable
times for such consultation and advice and to review progress in achieving said
plans.

        2.6 Termination of Certain Covenants. The covenants set forth in
Sections 2.4 and 2.5 shall terminate and be of no further force or effect upon
the consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the firm commitment
underwritten offering of its securities to the general public.

     3. Miscellaneous.

        3.1 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

                                      -15-

<PAGE>   19
        3.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.

        3.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        3.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

        3.5 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or five (5) days after
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.

        3.6 Expenses. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.

        3.7 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Common Stock (i) issued pursuant to the Series A Agreement and Series B
Agreement (ii) issued upon conversion of the Common Stock Warrants, and (iii)
issuable upon conversion of the Series A, Series B, Series C or Series D
Preferred Stock then held; provided that if such amendment has the effect of
affecting the Founders' Stock (i) in a manner different than the securities
issued to the Investors pursuant to the Series A Agreement, Series B Agreement,
Series C Agreement and/or Series D Agreement and (ii) in a manner adverse to the
interests of the holders of the Founders' Stock, then such amendment shall
require the consent of the holder or holders of a majority of the Founders'
Stock; and provided further that Section 1.12 herein shall not be amended
without the consent of the holders of eighty percent (80%) of the outstanding
Registrable Securities (including securities exercisable therefor). Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any of such securities (including the securities into which
such securities are convertible or exercisable) then outstanding, each future
holder of all such Registrable Securities, and the Company.

        3.8 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

                                      -16-

<PAGE>   20
        3.9  Amendment and Termination of Prior Agreement.

             (a) The Company and the Prior Holders, (i) as holders of a majority
of the "Registrable Securities" (as defined in the Prior Agreement) and (ii)
holders of a majority of the Common Stock (A) issued pursuant to the Series A
Agreement, (B) issued pursuant to the Series B Agreement, (C) issued or issuable
upon conversion of the Common Stock Warrants, and (D) issuable upon conversion
of the Series A, Series B and Series C Preferred Stock hereby agree that all
rights granted and covenants made under the Prior Agreement are hereby waived,
released and terminated in their entirety and shall have no further force or
effect whatsoever and shall be replaced by the terms and conditions provided
herein. Without limiting the foregoing, the Prior Holders hereby waive the right
of first offer granted pursuant to Section 2.4 of the Prior Agreement to the
extent such right of first offer applies to the transactions contemplated by the
Series D Agreement. The rights and covenants provided herein set forth the sole
and entire agreement between the Company and the Investors, the Prior Investors
and the Founders with respect to the subject matter hereof.

             (b) The Company and certain of the parties to this Agreement, as
the holders of a majority of the Common Stock issuable upon conversion of the
Series C Preferred Stock hereby agree that Section 1.3 of the Series C Agreement
shall terminate as of the date of this Agreement and be of no further force or
effect.

        3.10 Aggregation of Stock. All shares of Registrable Securities held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.

        3.11 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.

                                      -17-

<PAGE>   21
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   GERON CORPORATION


                                                   By: /s/ Ronald W. Eastman
                                                       ---------------------
                                                         Ronald W. Eastman
                                                   Its:  President

                                         Address:  200 Constitution Drive
                                                   Menlo Park, CA  94025




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   22
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                     INVESTORS AND PRIOR INVESTORS:

                                     KLEINER PERKINS CAUFIELD & BYERS VI


                                     By: /s/ Kleiner Perkins Caufield & Byers VI
                                         ---------------------------------------
                                     Its:
                                         ---------------------------------------


                                     KPCB VI FOUNDERS' FUND


                                     By: /s/ KPCB VI Founders' Fund
                                         --------------------------------------
                                     Its:
                                         --------------------------------------


                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   23
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   GIMV


                                                   By: /s/ GIMV
                                                       -------------------------
                                                   Its:
                                                       -------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   24
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   LEHMAN BROTHERS INC.


                                                   By: /s/ Lehman Brothers, Inc.
                                                       -------------------------
                                                   Its:
                                                        ------------------------



                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   25
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                          INVESTOR:

                                          ALEX. BROWN & SONS EMPLOYEES'
                                          VENTURE FUND PARTNERSHIP


                                          By: /s/ Alex. Brown & Sons Employees'
                                                  Venture Fund Partnership
                                              ----------------------------------
                                          Its:
                                               ---------------------------------



                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   26
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                INVESTOR:

                                                LOMBARD ODIER ZURICH AG


                                                By: /s/ Lombard Odier Zurich AG
                                                    ----------------------------

                                                Its:
                                                     ---------------------------



                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   27
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                        INVESTORS AND PRIOR INVESTORS:

                                        CW R&D II (FINANCIAL) FUND,
                                        LIMITED PARTNERSHIP

                                        By: /s/ CW R&D II (Financial) Fund,
                                                Limited Partnership
                                           ------------------------------------
                                        Its:
                                            -----------------------------------

                                        CW VENTURES II, L.P.

                                        By: /s/ CW Ventures II, L.P.
                                           ------------------------------------

                                        Its:
                                            -----------------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   28
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                INVESTORS AND PRIOR INVESTORS:

                                DOMAIN PARTNERS II, L.P.

                                By:   One Palmer Square Associates II, L.P.,
                                      its General Partner

                                By: /s/ One Palmer Square Associates II, L.P.
                                   ------------------------------------------

                                BIOTECHNOLOGY INVESTMENTS LIMITED

                                By:   Old Court Limited

                                By: /s/ Old Court Limited
                                   ------------------------------------------
                                       Attorney-in-Fact




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                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   29
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                              INVESTORS AND PRIOR INVESTORS:

                              OXFORD VENTURE FUND III, LIMITED
                              PARTNERSHIP

                              By:   Oxford Partners III, Limited Partnership
                              Its:  General Partner


                              By: /s/ Oxford Partners III, Limited Partnership
                                 ---------------------------------------------
                              Its:  General Partner


                              OXFORD VENTURE FUND III ADJUNCT,
                              LIMITED PARTNERSHIP

                              By:   Oxford Partners III-A,
                                    Limited Partnership
                              Its:  General Partner

                              By: /s/ Oxford Partners III-A, Limited Partnership
                                 -----------------------------------------------
                              Its:  General Partner


                              OXFORD BIOSCIENCE PARTNERS L.P.

                              By:   OBP Management L.P.
                              Its:  General Partner

                              By: /s/ OBP Management L.P.
                                 -----------------------------------------------
                              Its:  General Partner




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   30
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                 INVESTORS AND PRIOR INVESTORS:

                                                 OXFORD BIOSCIENCE PARTNERS
                                                 (BERMUDA) LIMITED PARTNERSHIP

                                                 By:   OBP Management L.P.
                                                 Its:  General Partner


                                                 By: /s/ OBP Management L.P.
                                                    --------------------------
                                                 Its:  General Partner




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   31
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                             INVESTORS AND PRIOR INVESTORS:
 
                                             VENROCK ASSOCIATES


                                             By: /s/ Venrock Associates
                                                 --------------------------
                                             Its:


                                             VENROCK ASSOCIATES II, L.P.


                                             By: /s/ Venrock Associates II, L.P.
                                                 -------------------------------
                                             Its:



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                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   32
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                  INVESTORS AND PRIOR INVESTORS:

                                                  THE KILEY FAMILY PARTNERSHIP


                                                  By: /s/ Thomas D. Kiley
                                                     ---------------------------
                                                        Thomas D. Kiley
                                                  Its:  Managing Partner


                                                  KILEY REV TR DTD 8/7/81


                                                  By: /s/ Thomas D. Kiley
                                                     ---------------------------
                                                        Thomas D. Kiley
                                                  Its:  Trustee




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                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   33
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                     INVESTOR AND PRIOR INVESTOR:

                                     FRAZIER HEALTHCARE INVESTMENTS, L.P.


                                    By: /s/ Frazier Healthcare Investments, L.P.
                                        ----------------------------------------

                                    Its:
                                        ----------------------------------------
                                        

                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT


<PAGE>   34
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR AND PRIOR INVESTOR:

                                                   /s/ Michael Fossel
                                                   -----------------------------
                                                   MICHAEL FOSSEL




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT


<PAGE>   35
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                           INVESTOR AND PRIOR INVESTOR:

                                           GRAND RIVER EMERGENCY MEDICAL
                                           CENTER 401(K) PROFIT SHARING PLAN FBO
                                           MICHAEL FOSSEL


                                           By: /s/ Michael Fossel
                                               ---------------------------------

                                           Its:
                                               ---------------------------------



                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT



<PAGE>   36
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   /s/ Steven J. Tillinger
                                                   -----------------------------
                                                   STEVEN J. TILLINGER




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT


<PAGE>   37
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                   INVESTOR:

                                   /s/ Walter H. Singer Inc. Profit Sharing Plan
                                   ---------------------------------------------
                                   WALTER H. SINGER INC PROFIT SHARING PLAN




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT


<PAGE>   38
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:


                                                   /s/ David Carpi
                                                   _____________________________
                                                   DAVID CARPI




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT




<PAGE>   39
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written

                                                   INVESTOR AND PRIOR INVESTOR:

                                                   VULCAN VENTURES, INC.


                                                       /s/ Vulcan Ventures, Inc.
                                                   By:__________________________

                                                   Its:_________________________




                    SIGNATURE PAGES TO THE GERON CORPORATION
                          INVESTORS' RIGHTS AGREEMENT

<PAGE>   40
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR AND PRIOR INVESTOR:


                                                   /s/ David H. Smith
                                                   _____________________________
                                                   DAVID H. SMITH, M.D.




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   41
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                              INVESTOR:

                                              CHARTER VENTURES II L.P.


                                              By: /s/ Charter Ventures II L.P.
                                                 -----------------------------

                                              Its:
                                                  ----------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   42
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                               INVESTOR:

                                               THE HEALTH CARE AND BIOTECHNOLOGY
                                               VENTURE FUND


                                               By: /s/ The Health Care and
                                                   Biotechnology Venture Fund
                                                   -----------------------------
                                               Its:
                                                   -----------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   43
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                  INVESTORS AND PRIOR INVESTORS:


                                                  /s/ Sandra Whitmore
                                                  ------------------------------
                                                  SANDRA WHITMORE


                                                  /s/ David Whitmore
                                                  ------------------------------
                                                  DAVID WHITMORE




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   44
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   BEAGLE LTD.


                                                   By: /s/ Beagle Ltd.
                                                       -------------------------
                                                   Its:
                                                        ------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   45
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                               INVESTOR:

                               NAIMAN 1994 CHARITABLE REMAINDER
                               UNITRUST


                               By: /s/ Naiman 1994 Charitable Remainder Unitrust
                                  ----------------------------------------------
                               Its:




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   46
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   MORNINGSIDE GROUP


                                                   By: /s/ Morningside Group
                                                      --------------------------
                                                   Its:
                                                       -------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   47
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   FOUR PARTNERS


                                                   By: /s/ Four Partners
                                                      --------------------------
                                                   Its:
                                                       -------------------------



                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   48
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   MC GROUP


                                                   By: /s/ MC Group
                                                      --------------------------
                                                   Its:
                                                       -------------------------




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   49
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                   INVESTOR:

                                                   /s/ Chester Waxman        
                                                   -----------------------------
                                                   Chester Waxman




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   50
                                   SCHEDULE B

                       LIST OF FOUNDERS AND CERTAIN OTHER
                             HOLDERS OF COMMON STOCK

                                    Founders

Name                                                          Number of Shares
- ----                                                          ----------------

Altschul Investment Group, L.P.                                      8,248

Arthur G. Altschul, Jr.                                              4,124

Rose Marion Day                                                      8,248

Robert W. Peabody                                                  192,440

Miller Quarles                                                      16,495

William A. Ryan, Jr.                                                 8,248

Michael D. West, Ph.D.                                             962,200

                          Other Holders of Common Stock

Alexander Barkas                                      50,000

Cold Spring Harbor Laboratory                        160,000

                                                     160,000
                                                     (shares issuable
                                                     upon exercise of
                                                     the CSHL Warrants)
                                                                 

<PAGE>   51
                          Other Holders of Common Stock

Name                                                         Number of Shares
- ----                                                         ----------------

Patrick F. Latterell                                               25,000

Kleiner Perkins Caufield & Byers VI                               144,851

KPCB VI Founders' Fund                                              5,149

McMaster University                                                25,000

Venrock Associates                                                 51,783

Venrock Associates II, L.P.                                        23,217

Domain Partners II, L.P.                                           66,667

Biotechnology Investments Limited, Registered
  in the name of Old Court Limited                                 33,333




                    SIGNATURE PAGES TO THE GERON CORPORATION
                           INVESTORS' RIGHTS AGREEMENT

<PAGE>   52
                                   SCHEDULE C

                               LIST OF HOLDERS OF
                            SERIES A PREFERRED STOCK

  
Name                                                           Number of Shares
- ----                                                           ----------------

The Aetna Casualty and Surety Company                              1,125,000

Arthur G. Altschul, Jr.                                               12,500

Altschul Investment Group, L.P.                                       12,500

Chestnut Capital International III, Limited Partnership              147,000

CW R&D II (Financial) Fund, Limited Partnership                      882,000

CW Ventures II, L.P.                                                 588,000

Jeryl L. Hilleman and William A. Albright, Jr.
  as Trustees of the Hilleman/Albright
  Family Trust dated July 24, 1990                                    25,000

Kiley Rev Tr Dtd 8/7/81                                               25,000

Kleiner Perkins Caufield & Byers VI                                1,637,798

KPCB VI Founders' Fund                                               229,702

S. Leslie Misrock                                                     25,000

Oxford Venture Fund III, Limited Partnership                       1,058,400

Oxford Venture Fund III Adjunct, Limited Partnership                 264,600

Venrock Associates                                                 1,082,262

Venrock Associates II, L.P.                                          485,238

<PAGE>   53
                                   SCHEDULE D

                               LIST OF HOLDERS OF
                            SERIES B PREFERRED STOCK


Name                                                        Number of Shares
- ----                                                        ----------------

Thomas H. Adams, Ph.D.                                           10,000

The Aetna Casualty and Surety Company                           344,444

Allenwood Ventures Inc.                                          22,222

Biotechnology Investments Limited, Registered
  in the name of Old Court Limited                              629,630

Catherine G. Blair                                                1,000

Dr. David Botstein                                                4,444

Edgar B. Cale, III                                                  889

Chestnut Capital International III, L.P.                         55,960

CW R&D II (Financial) Fund, L.P.                                169,148

CW Ventures II, L.P.                                            390,445

Domain Partners II, L.P.                                      1,259,259

Joshua L. Green                                                   2,222

Kiley Family Partnership                                         50,000

Kleiner Perkins Caufield & Byers VI                             578,000

KPCB VI Founders' Fund                                           88,667

<PAGE>   54
                               LIST OF HOLDERS OF
                            SERIES B PREFERRED STOCK


Name                                                           Number of Shares
- ----                                                           ----------------

Dr. Arnold J. Levine                                                  1,750

Oxford Bioscience Partners (Bermuda) Limited Partnership             61,115

Oxford Bioscience Partners L.P.                                     220,296

Oxford Venture Fund III Adjunct, Limited Partnership                 44,444

Oxford Venture Fund III Limited Partnership                         177,778

Timothy Rink, M.D., Ph.D.                                             3,000

Swanson Family Fund, Ltd.                                           111,111

United Missouri Bank, n.a., Successor
  Trustee for Brobeck, Phleger & Harrison
  Retirement Savings Trust FBO Jeffrey Y. Suto                        1,333

Venrock Associates                                                  431,703

Venrock Associates II, L.P.                                         193,556

Richard Warburg                                                       7,000

<PAGE>   55
                                   SCHEDULE E

                               LIST OF HOLDERS OF
                            SERIES C PREFERRED STOCK


Name                                                         Number of Shares
- ----                                                         ----------------

The Aetna Casualty and Surety Company                              41,667

Bayview Investors, Ltd.                                           118,477

Biotechnology Investments Limited, Registered in
  the name of Old Court Limited                                   375,000

CW Ventures II, L.P.                                              416,667

Domain Partners II, L.P.                                          750,000

Michael Fossel                                                     15,000

Frazier Healthcare Investments, L.P.                              833,334

Grand River Emergency Medical Center 401(k)
  Profit Sharing Plan FBO Michael Fossel                           78,750

Donald and Gail Guabello                                            2,500

Kiley Rev Tr Dtd. 8/7/81                                           52,084

KPCB VI Founders' Fund                                             72,042

Kleiner Perkins Caufield & Byers VI                               469,625

Oxford Bioscience Partners (Bermuda)                               45,244
  Limited Partnership

Oxford Bioscience Partners L.P.                                   163,089

Miller Quarles                                                     72,917

The Robertson Stephens Orphan Fund                                194,023

<PAGE>   56
                               LIST OF HOLDERS OF
                            SERIES C PREFERRED STOCK


Name                                                         Number of Shares
- ----                                                         ----------------

David H. Smith, M.D.                                              416,667

Oliver Stone                                                      416,667

Venrock Associates                                                330,835

Venrock Associates II, L.P.                                       148,332

Vulcan Ventures, Inc.                                             208,334

Sandra and David Whitmore                                          41,667



<PAGE>   1
                                                                    EXHIBIT 10.6
                                                                       SECTION 1


                                 AMENDMENT NO. 2
                        TO AGREEMENT IN RESPECT OF OPTION
                            BETWEEN GERON CORPORATION
                                       AND
                          COLD SPRING HARBOR LABORATORY

            THIS AMENDMENT is made on this ____ day of January, 1994, by and
between COLD SPRING HARBOR LABORATORY ("CSHL"), a New York not-for-profit
corporation, and GERON CORPORATION ("GERON"), a corporation organized and
existing under the laws of the State of Delaware.

            WHEREAS, GERON and CSHL entered into a sponsored research agreement
dated August 31, 1992 (the "Sponsored Research Agreement") pursuant to which
Geron agreed to sponsor the research of Dr. Carol Greider in the area of
telomeres and telomerase;

            WHEREAS, GERON and CSHL entered into an agreement dated August 31,
1992 (the "Agreement in Respect of Option") whereby CSHL granted GERON an option
to acquire an exclusive license to inventions resulting from the Sponsored
Research Agreement in the form of an agreement appended as Appendix I thereto
(the "Patent License Agreement");

            WHEREAS, GERON and CSHL have agreed to expand the scope of the
Sponsored Research Agreement; and

            WHEREAS, GERON and CSHL desire to amend the Agreement in Respect of
Option and the Patent License Agreement to reflect the terms and conditions of
the expanded collaboration.


            NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree that effective
February 1, 1994:

            1. All terms not otherwise defined herein shall have the meaning
given such terms in the Agreement in Respect of Option.

            2. Both parties agree and acknowledge that GERON has performed in
full its obligations to CSHL under the Option Agreement as of January 31, 1993.

            3. Section 3.4 shall be added to Article III of the Patent License
Agreement which is appended as Appendix I of the Agreement in Respect of Option
and shall read as follows:

            "3.4 Subject to the waiver provisions contained in 37 C.F.R.
            Section 401 and only to the extent required by such

<PAGE>   2
            regulation, Geron agrees that LICENSED PRODUCT sold in the United
            States shall be substantially manufactured in the United States. In
            the event that GERON can demonstrate the applicability of one or
            more of the waivers contained in 37 C.F.R. Section 401, CSHL agrees
            to cooperate with GERON in applying for such a waiver."

            4. In partial consideration of this Amendment, GERON agrees to issue
to CSHL promptly after the date of this Agreement warrants to purchase 160,000
shares of the Common Stock of GERON in the form attached hereto as Exhibit A
(the "Warrants"). The Warrants shall have a term of ten years from the date of
this Agreement and shall have an exercise price of $2.25. The Company shall use
commercially reasonable efforts to amend that certain Investors' Rights
Agreement dated June 3, 1993, as amended, to include such shares in the
definition of "Registrable Securities." CSHL agrees to execute the appropriate
documentation for the proper issuance of the Warrants, including, without
limitation, a warrant purchase agreement containing customary investor
representations.

            5. In the event that CSHL, GERON or its collaborators are the first
to achieve one or both of the following milestones, and completion by CSHL,
GERON or its collaborators is prior to February 1, 1997, GERON agrees to issue
55,000 shares of the Common Stock of GERON ("Milestone Shares") to CSHL for each
such milestone:

               a.   purification and cloning of human telomerase RNA, DNA or
                    protein component;

               b.   specific manipulation, by inhibition and/or activation, of
                    telomerase activity in mammalian cells.

CSHL shall not be entitled to Milestone Shares for a particular milestone in the
event such milestone is first achieved by a third party (excluding scientific
collaborators of GERON). GERON shall use commercially reasonable efforts to
amend that certain Investors' Rights Agreement dated June 3, 1993, as amended,
to include such shares in the definition of "Registrable Securities." CSHL
agrees to execute the appropriate documentation for the proper issuance of the
Milestone Shares, including, without limitation, a stock purchase agreement
containing customary investor representations.

            6. Except as otherwise provided for herein, the Agreement in Respect
of Option shall remain in full force and effect.

                                       2.

<PAGE>   3
            7. This Amendment may be executed in one or more counterparts each
of which shall be deemed an original, but all of which together shall constitute
one and the same.





                                       3.

<PAGE>   4
            IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers and representatives have set their hands hereunder effective
upon the date referenced above.

                                        GERON CORPORATION

                                        By: /s/ Ronald Eastman
                                            -----------------------------------
                                            Ronald Eastman
                                            President and Chief
                                            Executive Officer

                                        COLD SPRING HARBOR LABORATORY

                                        By: /s/ John Maroney
                                            -----------------------------------
                                        Name:  John Maroney
                                        Title: Assistant Administrative Officer






                                       4.

<PAGE>   5
                                                                    
                                                                       SECTION 2


                                 AMENDMENT NO. 1
                        TO AGREEMENT IN RESPECT OF OPTION
                            BETWEEN GERON CORPORATION
                                       AND
                          COLD SPRING HARBOR LABORATORY

            THIS AMENDMENT is made and is effective as of May 3, 1993, by and
between COLD SPRING HARBOR LABORATORY (CSHL), a New York not-for-profit
corporation, and GERON CORPORATION (GERON), a corporation organized and existing
under the laws of the State of Delaware.

            WHEREAS, CSHL and GERON have entered into that certain Sponsored
Research Agreement effective August 31, 1992 (the "Sponsored Research
Agreement") and that certain Agreement with Respect of Option also effective
August 31, 1992 ("Option");

            WHEREAS, CSHL and GERON desire to amend the Patent License Agreement
attached as Appendix I to the Option (the "Patent License Agreement").

            NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

            1. Paragraph 5.2 of the Patent License Agreement is amended to add
the following subparagraphs (d) and (e):

            "5.2(d) Up to [ * ] of NET SALES of products, which are not LICENSED
         PRODUCTS, which result from GERON's use of a LABORATORY PROCESS. In no
         event shall this subparagraph 5.2(d) apply to NET SALES of LICENSED
         PRODUCTS. The computation of the royalty shall be negotiated prior to
         the first commercial sale of such products, giving weight to prevailing
         industry standards with respect to royalties paid for exclusive and
         non-exclusive licenses on similar laboratory processes and also
         considering such factors as market potential, profit potential,
         additional research and development costs required to bring the
         products to commercialization, economic value added and the value and
         extent of contribution by each party, including the funding of the
         Research Program as defined in the SPONSORED RESEARCH AGREEMENT by
         GERON. [ * ] 

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.



  

<PAGE>   6
            "5.2(e) In no event shall a royalty under more than one subparagraph
         of this paragraph 5.2 be due to LICENSOR for the SALE of any product by
         LICENSEE, whether for LICENSED PRODUCTS or non-LICENSED PRODUCTS."

            2. Except as expressly provided for herein, the Option shall remain
in full force and effect.

            3. This Amendment may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

            4. This Amendment shall be governed by the laws of the State of
California.

            IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers and representatives have set their hands hereunder effective
upon the date referenced above.

                                     COLD SPRING HARBOR LABORATORY

                                     By: /s/ John Maroney                
                                         ------------------------------------
                                     Name:  John Maroney
                                     Title: Assistant Administrative Director

                                     GERON CORPORATION

                                     By: /s/ Michael D. West
                                         ------------------------------------
                                     Name:  Michael D. West
                                     Title: V.P. Business Acc.

<PAGE>   7
                                                                    
                                                                       SECTION 3


                         AGREEMENT IN RESPECT OF OPTION
           BETWEEN GERON CORPORATION AND COLD SPRING HARBOR LABORATORY

            THIS AGREEMENT is made by and between COLD SPRING HARBOR LABORATORY
(CSHL), a New York not-for-profit corporation, and GERON CORPORATION (GERON), a
corporation organized and existing under the laws of the State of Delaware.

            WHEREAS, GERON wishes to obtain and CSHL wishes to grant an option
to acquire an exclusive license in the form of the agreement appended hereto as
Appendix I (PATENT LICENSE AGREEMENT);

            NOW, THEREFORE, in consideration of the SPONSORED RESEARCH AGREEMENT
and the mutual covenants and premises herein contained, the parties hereto agree
as follows:

            I. EFFECTIVE DATE

            This Agreement shall be effective August 31, 1992 (the "EFFECTIVE
DATE").

            II. DEFINITIONS

            As used in this Agreement, terms in capital letters shall have the
meaning assigned them in the PATENT LICENSE AGREEMENT, unless otherwise
indicated.

            III. OPTION

            3.1 CSHL grants to GERON an option to enter into the PATENT LICENSE
AGREEMENT, exercisable upon written notice to CSHL at any time during the term
of, or within one (1) year after termination of, the SPONSORED RESEARCH
AGREEMENT. In consideration of such option, GERON will enter into the SPONSORED
RESEARCH AGREEMENT. If and when the option is exercised, the PATENT LICENSE
AGREEMENT (and each of the parties' rights and obligations thereunder) will
automatically come into effect, however, the parties will execute copies of the
PATENT LICENSE AGREEMENT within thirty (30) days of the date the option is
exercised.

            3.2 From the EFFECTIVE DATE and throughout the option term, GERON
shall reimburse reasonable expenditures incurred during that period by CSHL
according to the terms of the PATENT LICENSE AGREEMENT in respect of preparing,
filing, prosecuting and maintaining PATENT RIGHTS in the U.S. and in preparing,
filing, prosecuting and maintaining corresponding patent applica-

<PAGE>   8
tions and patents outside the United States of America in countries as agreed in
writing by GERON. In any event, if GERON requests that any patent or patent
application that is or would be within PATENT RIGHTS be prepared, filed,
prosecuted or maintained, anywhere in the world, CSHL will diligently undertake
such activity to the extent and for so long as GERON reimburses CSHL'S
reasonable expenditures therefor.

            IV. STOCK

            In partial consideration of the option granted by CSHL to GERON
herein, GERON agrees to hereby issue to CSHL promptly after the EFFECTIVE DATE
of this Agreement 50,000 shares of GERON'S Common Stock pursuant to the terms of
the Investor Representation Letter attached hereto as Appendix II. Such shares
will be included as part of Registrable Securities under the Investors' Rights
Agreement dated March 20, 1992 between GERON and certain investors.

            V. TERM AND TERMINATION

            5.1 This Agreement will terminate upon GERON's failure to timely
exercise the option provided in paragraph 3.1 hereof.

            5.2 This Agreement will earlier terminate:

                (a)  automatically if GERON shall enter into a liqui- dating
                     bankruptcy and/or if the business of GERON shall be placed
                     in the hands of a receiver, assignee, or trustee, whether
                     by voluntary act of GERON or otherwise; provided that if it
                     is involuntary, termination shall not take place unless the
                     act is not reversed within ninety (90) days;

                (b)  upon ninety (90) days written notice if GERON shall be
                     materially in breach or default of any obligation under
                     this Agreement; provided however, GERON may avoid such
                     termination if before the end of such period GERON notifies
                     CSHL that such breach has been cured and states the manner
                     of such cure.

                (c)  upon the written agreement of both parties.

                (d)  at any time upon thirty (30) days written notice given by
                     GERON, with or without cause.

            5.3 Upon termination of this Agreement for any cause, nothing herein
shall be construed to release any party from any

                                       2.

<PAGE>   9
liability or obligation for breach of this Agreement incurred prior to the
EFFECTIVE DATE of such termination.

            VI. ASSIGNMENT

            This Agreement may be assigned by GERON (i) only in connection with
an acquisition of GERON, by any means, or the sale or merger of substantially
all of its related business to or with another, or (ii) otherwise only with the
consent of CSHL, not to be unreasonably withheld. CSHL may assign its right to
receive money payments hereunder, but may not otherwise assign this Agreement.

            VII. USE OF CSHL'S OR COMPONENT'S NAME

            GERON shall not, unless as required by any law or governmental
regulation, use the name of CSHL without express written consent.

            VIII. CONFIDENTIAL INFORMATION

            8.1 The confidentiality obligations of the parties will be as
specified in the SPONSORED RESEARCH AGREEMENT and, when and if it comes into
effect, the LICENSE AGREEMENT.

            IX. GENERAL

            9.1 This Agreement and the SPONSORED RESEARCH AGREEMENT (and the
PATENT LICENSE AGREEMENT if the option hereunder is exercised) constitute the
entire and only agreement between the parties and all other prior negotiations,
representations, understandings and agreements are superseded hereby. No
agreements altering or supplementing the terms hereof may be made except by
means of a written document signed by the duly authorized representatives of the
parties.

            9.2 Any notice required by this License Agreement shall be given by
prepaid, first class, certified mail, return receipt requested, effective upon
receipt addressed in the case of CSHL to:

                        COLD SPRING HARBOR LABORATORY
                        1 Bungtown Road
                        Cold Spring Harbor, NY 11724
                        Attn: John Maroney
                        Assistant Administrative Director



                                       3.

<PAGE>   10
or in the case of GERON to:

                     GERON CORPORATION
                     21375 Cabot Blvd.
                     Hayward, CA  94545
                     Attention: Vice President, Finance and
                                Administration

or such other address as may be given from time to time under the terms of this
notice provision.

            9.3 Each party shall comply with all applicable laws and regulations
in connection with its activities pursuant to this Agreement.

            9.4 This Agreement shall be governed by and construed in accordance
with, and any controversy or claim arising out of or relating to this Agreement,
shall be resolved in accordance with, the laws of the State of California,
without regard to the conflicts of laws provisions thereof. If any dispute
arises under this Agreement, the parties will first attempt in good faith to
amicably resolve the issue between themselves. Any dispute that cannot be so
resolved will be submitted to arbitration pursuant to the rules of the American
Arbitration Association. Such arbitration will take place in Chicago, Illinois.
The ruling of the arbitrators will be final and binding on the parties and will
be enforceable by any court of competent jurisdiction.

            9.5 Failure of CSHL or GERON to enforce a right under this Agreement
shall not act as a waiver of that right or the ability to assert that right
relative to the particular situation involved.

            9.6 Headings included herein are for convenience only and shall not
be used to construe this Agreement.

            9.7 If any provision of this Agreement shall be found by a court to
be void, invalid or unenforceable, the same shall be reformed to comply with
applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of the remainder of this Agreement.

                                       4.

<PAGE>   11
            IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement.

COLD SPRING HARBOR LABORATORY               GERON CORPORATION

By  /s/ G. Morgan Browne                    By  /s/ Geron Corporation
    -------------------------                   ------------------------ 
Name:   G. Morgan Browne                    Name:
Title:  Administrative Director             Title:


                                       5.




<PAGE>   12
                                   APPENDIX I

                            PATENT LICENSE AGREEMENT

        THIS AGREEMENT is made by and between COLD SPRING HARBOR LABORATORY
(CSHL), a New York not-for-profit corporation, and GERON CORPORATION (GERON), a
corporation organized and existing under the laws of the State of Delaware.

                                   WITNESSETH

        WHEREAS, CSHL may now or in the future own certain PATENT RIGHTS and
TECHNOLOGY RIGHTS relating to LICENSED SUBJECT MATTER and developed at CSHL,
including without limitation PATENT RIGHTS and TECHNOLOGY RIGHTS developed
pursuant to a Sponsored Research Agreement (SPONSORED RESEARCH AGREEMENT)
between CSHL and GERON performed under the direction of Professor Grelder and
described in Schedule A hereto, which is incorporated herein;

        WHEREAS, CSHL desires to have the LICENSED SUBJECT MATTER developed and
used for the benefit of GERON, the inventor(s), CSHL and the public as outlined
below; and

        WHEREAS, GERON wishes to obtain a license from CSHL to practice
LICENSED SUBJECT MATTER;

        NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, the parties hereto agree as follows:

                               I. EFFECTIVE DATE

        This agreement shall be effective upon written exercise by GERON of the
option provided by that certain "Agreement in Respect of Option" between GERON
and CSHL dated August __, 1992.

                                II. DEFINITIONS

        As used in this Agreement, the following terms shall have the meanings
indicated:

        2.1 LICENSED SUBJECT MATTER shall mean inventions and discoveries that
are covered by PATENT RIGHTS within the LICENSED FIELD.

        2.2 PATENT RIGHTS shall mean any:

            (a) domestic and foreign rights under patent applications submitted
or to be submitted based on inventions in whole or in part reduced to practice
under or arising out of the Research Program as defined in the SPONSORED
RESEARCH AGREEMENT;

            (b) continuation, continuation-in-part, division or reissue
applications and any applications equivalent to those set forth in (a) herein;
and

            (c) patents that issue on the applications set forth in (a) and (b)
herein and all reissues, reexaminations and extensions thereof.


<PAGE>   13
        2.3  TECHNOLOGY RIGHTS shall mean CSHL's rights in any KNOW-HOW.
KNOW-HOW shall mean all technical information, know-how, process, procedure,
composition, device, method, formula, protocol, technique, software, design,
drawing or data relating to LICENSED SUBJECT MATTER or LICENSED FIELD which is
not disclosed in a patent, but which is necessary or useful for practicing
LICENSED SUBJECT MATTERS or the LICENSED FIELD.

        2.4  LICENSED FIELD shall mean fields relating to cell senescence, cell
immortalization, cellular or molecular bases of aging or age related
degenerative diseases, and shall include, without limitation, telomeres and
telomerase. The LICENSED FIELD also includes any process, machine, manufacture,
composition of matter (including methods of production or use thereof) or other
invention or know-how related to any of the foregoing or to the diagnosis,
prevention, treatment or manipulation of any of the foregoing.

        2.5  LICENSED TERRITORY shall mean the world.

        2.6  LICENSED PRODUCT shall mean any product, the manufacture, use or
sale of which, in the absence of this Agreement, would infringe upon PATENT 
RIGHTS.

        2.7  LABORATORY PROCESS shall mean any laboratory process or method (as
opposed to a commercial or production process or method) which would infringe
upon Patent Rights if not licensed.

        2.8  COMPOSITE PRODUCTS shall mean any product SOLD by GERON with
active ingredients comprising both LICENSED SUBJECT MATTER within PATENT RIGHTS
and active ingredients other than LICENSED SUBJECT MATTER.

        2.9  SALE or SOLD shall mean the transfer or disposition of a LICENSED
PRODUCT for value to a party other than GERON or a SUBSIDIARY.

        2.10 SUBSIDIARY shall mean any business entity more than 50% owned by
GERON, any business entity which owns more than 50% of GERON, or any business
entity that is more than 50% owned by a business entity that owns more than 50%
of GERON.

        2.11 NET SALES shall mean the gross revenues (whether or not in cash)
actually received by GERON from the SALE of LICENSED PRODUCTS less sales,
V.A.T. and/or use taxes, duties and similar governmental assessments actually
paid, transportation, packing, shipping insurance and amounts allowed or
credited due to returns (not to exceed the original billing or invoice amount).

        2.12 OTHER INSTITUTION shall mean McMaster University.

                         III. WARRANTY; SUPERIOR RIGHTS

        3.1  Except for the rights, if any, of the Government of the United
States, as set forth hereinbelow and except for any joint ownership of the
OTHER INSTITUTION that has arisen by law on account of joint invention by Drs.
Harley and Greider, CSHL represents and warrants that to its knowledge it is
the owner of the entire right, title and interest in and to LICENSED PATENTS,
and that it has the sole right to grant licenses thereunder, and that it has
not granted licenses thereunder to any other entity that would restrict rights
granted hereunder except as stated herein and except for the non-exclusive
license originally granted to ICOS Corporation under the first sentence of
Section 3.1(e) of the October 16, 1991

                                       2.



<PAGE>   14
Amended and Restated ICOS Discovery Grants Agreement as partially provided to
GERON. CSHL is not aware that any additional rights or licenses are necessary
for GERON to exercise its license rights.

        3.2  GERON understands that the LICENSED SUBJECT MATTER may have been
developed under a funding agreement with the Government of the United States of
America and, if so, that the Government may have certain statutory nonexclusive
rights relative thereto for use for government purposes, as well as statutory
"march-in rights." This Agreement is explicitly made subject to such Government
rights. To the extent there is any conflict between any such rights and this
Agreement, such Government rights shall prevail.

        3.3  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, CSHL
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, OR VALIDITY OR ENFORCEMENT OF PATENT RIGHTS. EXCEPT
AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NOTHING IN THIS AGREEMENT
SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY CSHL THAT THE
PRACTICE BY GERON OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE
PATENT RIGHTS OF ANY THIRD PARTY.

                                  IV. LICENSE

        4.1  CSHL hereby grants to GERON an exclusive license to manufacture,
have manufactured, use, have used, and/or sell or have sold LICENSED PRODUCTS
and to otherwise exploit the PATENT RIGHTS and TECHNOLOGY RIGHTS within
LICENSED TERRITORY and LICENSED FIELD. This grant shall be subject to the
payment by GERON to CSHL of all consideration as provided by this Agreement,
and shall be further subject to non-exclusive rights retained by CSHL to:

                (a) Publish the general scientific findings from research done
by CSHL related to LICENSED SUBJECT MATTER; and

                (b) Use any information contained in LICENSED SUBJECT MATTER
and any PATENT RIGHTS for CSHL'S own research, teaching, and other
educationally-related purposes, provided that none of the foregoing is done for
any commercial purpose. CSHL may not extend any such right to any third party
except that it may allow other not-for-profit institutions (i) to practice
LABORATORY PROCESSES and (ii) access to materials created by CSHL pursuant to
the foregoing sentence; provided that in either case such institutions limit
use of such processes and materials to research, teaching and other
educationally-related purposes that do not support any commercial purpose.

        4.2  GERON shall have the right to extend the license granted herein to
any SUBSIDIARY provided that such SUBSIDIARY consents to be bound by this
Agreement to the same extent as GERON (provided that the foregoing does not and
is not intended to create redundant or double obligations regarding royalties,
reimbursement, marketing efforts or any other matter).

        4.3  GERON shall have the right to grant sublicenses consistent with
this Agreement provided that, with respect to CSHL, GERON shall be responsible
for (and entitled to credit for) the operations of its sublicensees relevant to
this Agreement as if such operations were carried out by GERON provided that
matters dealt with in Section 5 in respect of such sublicenses shall be
governed by the terms of Section 5. GERON further agrees to deliver to CSHL a
true and correct copy of each sublicense granted by GERON, and any modification
or termination thereof, within thirty (30) days after execution, modification
or termination. GERON will have the right to delete portions it considers
confidential. Upon termination of 

<PAGE>   15
this Agreement under Section 6.2 any and all existing sublicenses granted by
GERON shall be assigned to CSHL as their terms permit, or shall terminate (if
their terms don't so permit).

     4.4 CSHL shall have the right at any time after five (5) years from the
date of this Agreement and as its sole remedy for any alleged want of diligence
to terminate the exclusivity of the license granted herein as to those national
jurisdictions of the LICENSED TERRITORY in which GERON has not commercialized
and is not intending to commercialize an invention hereunder if GERON, within
ninety (90) days after written notice from CSHL as to such intended termination
of exclusivity, fails to provide written evidence of present, attempted or
anticipated commercialization in a manner and on a schedule reasonably
commensurate with the scope of LICENSED TERRITORY and GERON'S resources.
Evidence provided by GERON that it has on ongoing and active or anticipated
research, development, manufacturing, marketing or licensing program as
appropriate, directed toward production and sale of products based on the
invention disclosed and claimed in PATENT RIGHTS shall be deemed satisfactory
evidence. CSHL agrees that in the discretion of GERON commercialization efforts
may be directed first to industrialized nations of the world commencing with the
United States of America, and only subsequently to other regions as reasonably
and commercially practicable for GERON given its strategies and resources; that
particular fields within the LICENSED FIELD and portions of the LICENSED
TERRITORY may in the discretion of GERON best be commercialized by sublicense;
and that GERON may in the exercise of prudent business judgment elect to defer
commercialization efforts in particular fields until the LICENSED SUBJECT MATTER
has undergone substantial and appropriate further development. In the event of
any termination of exclusivity under this Section or Section 7.1, CSHL agrees to
negotiate in good faith with GERON to adjust the terms hereof to reflect GERON'S
diminished rights (including, without limitation, royalty rates), with relation
back to the date of termination of exclusivity; provided, however, that pending
the completion of such negotiation GERON'S obligations shall be as provided
hereunder for the case of exclusivity; and GERON shall have the benefit of any
more favorable terms granted by CSHL to any subsequent non-exclusive licensee of
LICENSED SUBJECT MATTER in those national jurisdictions where exclusivity is
terminated.

                            V. PAYMENTS AND REPORTS

     5.1 Subject to the other terms of this Article V and in consideration of
rights granted by CSHL to GERON under this AGREEMENT, GERON agrees to pay CSHL
the following:

         (a) A running royalty as provided in paragraph 5.2 in the case of SALES
by GERON or its SUBSIDIARIES; and

         (b) In the case that GERON receives revenues from any sublicensee that
is not a SUBSIDIARY, the lesser of [ * ] of the gross revenues (which may
include but are not limited to royalties on the SALE of LICENSED PRODUCTS by the
sublicensee, provided that in no event will CSHL receive more than [ * ] in
the aggregate of amounts that are not royalties determined by such SALES)
received by GERON from any sublicensee in consideration of sublicense under
PATENT RIGHTS or the royalty that would be due were sublicensee sales made by
GERON; provided that CSHL shall receive hereunder the equivalent of a royalty on
NET SALES at a rate of not less than [ * ] of the applicable rate under
Section 5.2.

     5.2 Royalty on NET SALES by GERON and any SUBSIDIARY shall be:

         (a) [ * ] of NET SALES in respect of LICENSED PRODUCTS SOLD for use
as a human therapeutic; and


* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.


                                       4.




<PAGE>   16
                (b) [ * ] percent of NET SALES in respect of LICENSED PRODUCTS 
SOLD for other applications.

                (c) However, within 90 days of the effective date of this
AGREEMENT either party may request that either or both royalty rates specified
above be increased or decreased up to one-half percentage point. The parties
will negotiate in good faith with respect to such possible adjustment taking
into account the past and future contributions of the parties with respect to
research, development and commercialization. The adjustment will be effective
upon mutual agreement, or if the parties cannot agree, upon the decision of
arbitrators pursuant to Section 14.4 (which decision will be in accordance with
above parameters of this clause (c)).

        5.3  In the case of COMPOSITE PRODUCTS prior to the calculation of
royalty due thereon NET SALES shall be multiplied by a fraction whose numerator
is the cost of active ingredients within PATENT RIGHTS and whose denominator is
the cost of all active ingredients within such COMPOSITE PRODUCT. The resulting
number shall represent the NET SALES price basis for calculation of royalties
due on COMPOSITE PRODUCTS.

        5.4  After five (5) years from the effective date of this Agreement,
only 50% of any royalty or share of sublicense shall be due for manufacture, use
or sale of LICENSED PRODUCTS for consumption in a national jurisdiction of
LICENSED TERRITORY where such manufacture, use and sale could have been
conducted in such national jurisdiction without infringing a valid issued patent
within PATENT RIGHTS in such national jurisdiction.

        5.5  Only one royalty shall be payable on each unit of LICENSED PRODUCT
SOLD calculated at the applicable rate specified in this Agreement irrespective
of the number of patents within PATENT RIGHTS whose claims would be infringed
but for this License Agreement.

        5.6  During the term of this Agreement and for one (1) year thereafter
GERON shall keep complete and accurate records of its and (as reported to it)
its sublicensee's NET SALES of LICENSED PRODUCTS and COMPOSITE PRODUCTS under
the license granted in this agreement in sufficient detail to enable the
royalties payable hereunder to be determined. GERON shall permit an independent
certified public accountant (hired by CSHL and reasonably acceptable to GERON),
at CSHL's expense, to periodically (but no more than once per year) examine its
books, ledgers, and records during regular business hours for the purpose of
and to the extent necessary to verify any report required under this Agreement;
provided such accountant is bound in confidence and may not disclose any such
information except to CSHL as necessary to show underpayment. In the event that
the amounts due to CSHL have been underpaid, GERON shall pay the cost of such
examination, the due amount, and accrued interest thereon at the prevailing
prime rate for commercial loans.

        5.7  Within forty-five (45) days after March 31, June 30, September 30
and December 31, GERON shall deliver to CSHL at the address listed in paragraph
14.2 a true and accurate report, giving such particulars of the business
conducted by GERON during the preceding calendar quarter under this Agreement
as are pertinent to an account for payments hereunder. Such report shall
include at least (a) the quantities of LICENSED PRODUCTS that it has SOLD; (b)
the total SALES; (c) the calculation of royalties thereon; and (d) the total
royalties so computed and due CSHL. Simultaneously with the delivery of each
such report, GERON shall pay to CSHL the amount, if any, due for the period of
such report. If no payments are due, it shall be so reported. GERON shall
impose on sublicensees, mutatis mutandis, similar reporting and payment
obligations and shall provide to CSHL similar reports from sublicensees as they
relate to CSHL's entitlements under paragraph 5.1(b) to the extent received
during such quarter or thereafter up


* Certain information on this page has been omitted and filed separately with 
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
                                       5.


<PAGE>   17
until fifteen (15) business days prior to the due date for the report on
GERON'S SALES. Simultaneously with its report on such sublicensee activity.
GERON shall pay to CSHL amounts due under paragraph 5.1(b).

        5.8     Upon the request of CSHL but not more often than once per
calendar year, GERON shall deliver to CSHL a report as to GERON'S efforts and
accomplishments during the preceding year in commercializing LICENSED SUBJECT
MATTER.

        5.9     All amounts payable hereunder by GERON shall be payable in
United States funds. Checks shall be made payable to Cold Spring Harbor
Laboratory and mailed to:

                Cold Spring Harbor Laboratory
                1 Bungtown Road
                Cold Spring Harbor, NY 11724
                Attn: John Maroney
                Assistant Administrative Director

        5.10    Notwithstanding anything else in this Agreement, if a LICENSED
PRODUCT infringes any patent covered by a license to GERON from the OTHER
INSTITUTION, the total amount of royalties due to CSHL and OTHER INSTITUTION in
the aggregate shall be the amount calculated as provided above and GERON shall
be entitled to withhold payment of such royalties until CSHL and the OTHER
INSTITUTION have agreed on how the royalty will be allocated between them and
have jointly informed GERON thereof.

                            VI. TERM AND TERMINATION

        6.1     The term of this Agreement shall extend from the EFFECTIVE DATE
set forth hereinabove to the end of term of the last to expire of the patents,
that have been or may be issued within the PATENT RIGHTS. Upon expiration,
GERON will be entitled to fully exploit PATENT RIGHTS and TECHNOLOGY RIGHTS
without restriction or payment of royalties.

        6.2     This Agreement will earlier terminate:

                (a)     automatically if GERON shall enter liquidating
bankruptcy and/or if the business of GERON shall be placed in the hands of a
receiver, assignee, or trustee, whether by voluntary act of GERON or otherwise;
provided that if it is involuntary, termination shall not take place unless the
act is not reversed within ninety (90) days.

                (b)     upon ninety (90) days written notice if GERON shall be
materially in breach or default of any obligation under this License Agreement;
provided however, GERON may avoid such termination if before the end of such
period GERON notifies CSHL that such breach has been cured and states the
manner of such cure.

                (c)     upon the mutual written agreement of the parties.

                (d)     upon thirty (30) days written notice given by GERON
with or without cause.

        6.3     Upon any termination of this Agreement, nothing herein shall be
construed to release any party from any liability for any obligation incurred
through the effective date of termination (e.g., confidentiality, payment of
then accrued royalties and reimbursement of patent expenses incurred prior to
such date) or for any breach of this Agreement prior to the effective date of
such termination. GERON may, after the effective date of such termination, sell
all LICENSED PRODUCT and COMPOSITE PRODUCT and


                                       6.



<PAGE>   18
parts therefor that it has on hand at the date of termination, provided that
it pays earned royalty thereon as provided in this Agreement.

                       VII. INFRINGEMENT BY THIRD PARTIES

        7.1     GERON shall have the first right to enforce or have enforced at
no expense to CSHL any PATENT RIGHTS to the extent exclusively licensed
hereunder against infringement by third parties and shall be entitled to retain
recovery from such enforcement. Upon GERON'S undertaking to pay all
expenditures reasonably incurred by CSHL, CSHL shall reasonably cooperate in
any such enforcement and, as necessary, join as a party therein. GERON shall be
entitled to apply up to 50% of any royalty payment otherwise due under this
Agreement to payment of up to 50% of the cost and expenses (including
attorneys' fees) of enforcement activity. After first deducting its costs and
expenses incurred in respect of enforcement (to the extent not otherwise
awarded by settlement or a court), if the recovery is sufficient. GERON will
deduct and pay to CSHL the royalties withheld under the immediately preceding
sentence and then GERON shall pay CSHL royalty (calculated per Section 5.1(b)
on the balance of any monetary recovery to the extent such monetary recovery is
held to be a reasonable royalty or damages in lieu thereof. In the event that
GERON does not file suit against or commence settlement negotiations with a
substantial infringer of CSHL'S PATENT RIGHTS within six (6) months or receipt
of a written demand from CSHL that GERON bring suit, then the parties will
consult with one another in an effort to determine whether a reasonably prudent
licensee would institute litigation to enforce the patent in question in light
of all relevant business and economic factors (including, but not limited to,
the projected cost of such litigation, the likelihood of success on the merits,
the probable amount of any damage award, the prospects for satisfaction of any
judgment against the alleged infringer, the possibility of counterclaims
against GERON and CSHL, the diversion of GERON'S human and economic resources,
the impact of any possible adverse outcome on GERON and the effect any
publicity might have on GERON'S and CSHL's respective reputations and
goodwill). If the parties cannot agree, the determination will be made by a
mutually and reasonably acceptable third party consultant. If after such
process, it is determined that a suit should be filed and GERON does not file
suit or commence settlement negotiations forthwith against the substantial
infringer, then CSHL shall have the right to enforce any patent licensed
hereunder on behalf of itself and GERON (CSHL retaining all recoveries from
such enforcement).

                                VIII. ASSIGNMENT

        This Agreement may be assigned by GERON (i) only in connection with an
acquisition of GERON (by whatever means) or the sale or merger of substantially
all of its related business to or with another, or (ii) otherwise only with the
consent of CSHL not to be unreasonably withheld. CSHL may assign its right to
receive payments hereunder but not otherwise assign this Agreement.

          
                               IX. PATENT MARKING

        To the extent reasonable and practical regarding products, GERON agrees
to mark permanently and legibly all products and documentation manufactured and
sold by it under this Agreement with such patent notice as is required under
Title 35, United States Code.


        X. INDEMNIFICATION; INFRINGEMENT SUIT CREDIT; PRODUCT LIABILITY

        10.1    Subject to Section 10.2, GERON shall hold harmless and
indemnify CSHL and its officers, employees and agents from and against any
claims demands, or causes of action whatsoever, including without limitation
those arising on account of any injury or death of persons or damage to property


                                       7.

<PAGE>   19
caused by or arising out of, or resulting from, the exercise or practice of the
license granted hereunder by GERON or its officers, employees, agents or
representatives.

     10.2 CSHL shall promptly notify GERON in writing of any claim or suit or
threat thereof brought against CSHL in respect of which indemnification may be
sought and, to the extent allowed by law, shall reasonably cooperate with GERON
in defending or settling any such claim or suit. No settlement of any claim,
suit or threat thereof received by CSHL and for which CSHL will seek
indemnification, shall be made without the prior written approval of GERON. CSHL
will permit GERON to defend CSHL against any such claim, suit or threat thereof
and GERON shall have sole control over the defense, subject to CSHL'S right to
select its own counsel to review the matter for CSHL at CSHL'S sole cost and
expense.

     10.3 If infringement is alleged against GERON or any person or entity
entitled to indemnity under Section 10.1 above, and if such claims concern
LICENSED SUBJECT MATTER, GERON may suspend [ * ] of each royalty payment due
CSHL under Section 5 from SALES of LICENSED PRODUCTS in any national
jurisdiction in which suit is brought, and pay such amounts into an escrow
account established by GERON until such situation is resolved. Should a patent
with PATENT RIGHTS under which such royalties are payable be held invalid, the
accrued royalties shall be retained by GERON to offset up to [ * ] of litigation
expenses; and, should litigation or settlement result in the requirement that
GERON pay royalties or other monies to a third party, the Parties hereunder
agree in good faith to renegotiate the royalties due CSHL with the goal of
reducing the royalty paid accordingly. In the event the validity of a Patent
within PATENT RIGHTS is upheld, the accrued royalties shall be paid to CSHL. Any
damages or attorneys' fees awarded or received in settlement of such suit shall
be retained by GERON in satisfaction of its litigation expenses.

     10.4 Commencing not later than the date of first commercial sales of a
LICENSED PRODUCT, GERON shall use commercially reasonable efforts to obtain and
carry in full force and effect at a commercially reasonable price product
liability insurance against any claims, judgments, liabilities and expenses for
which it is obligated to indemnify CSHL under Section 10.1 above, in such
amounts and with such deductibles and other limits as are determined reasonably
necessary by mutual agreement of the parties acting in good faith, in light of
the availability of such insurance and the custom at the customary time for
similarly situated companies engaged in similar business.

                     XI. USE OF CSHL'S OR COMPONENT'S NAME

     GERON shall not, unless as required by any law or governmental regulation,
use the name of CSHL without express written consent.

                    XII. CONFIDENTIAL INFORMATION; KNOW-HOW

     12.1 The parties may wish, from time to time, in connection with
performance under this Agreement, to disclose confidential information
(including KNOW-HOW) to each other. Subject to the rights of GERON under this
Agreement, each party agrees not to use (other than for purposes contemplated by
this Agreement) and will use reasonable efforts to prevent the disclosure to
third parties of any of the other party's confidential information that is
identified as confidential at the time of disclosure and is provided in tangible
form marked confidential (or is reduced to such form within 30 days) for a
period of three (3) years from receipt thereof, provided that the recipient
party's obligation hereunder shall not apply to information that the recipient
party can show:

         (a) is not disclosed in writing or reduced to writing and so marked
with an appropriate confidentiality legend within thirty (30) days of
disclosure;


* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.


                                       8.


<PAGE>   20
                (b) is already in the recipient party's possession at the time
of disclosure thereof;

                (c) is or later becomes part of the public domain through no
fault of the recipient party;

                (d) is received from a third party having no obligations of
confidentiality to the disclosing party, provided that the recipient party
complies with any restrictions imposed by the third party;

                (e) is independently developed by the recipient party;

                (f) is required by law or regulation to be disclosed
(including, without limitation, in connection with FDA filings), provided that
the recipient party uses reasonable efforts to restrict disclosure and to
obtain confidential treatment; or

                (g) is made available by the disclosing party to a third party
without similar restrictions.

        12.2  The foregoing shall not affect or limit GERON'S right to fully
exercise the licenses granted under this Agreement and GERON and its
sublicensees shall be fully entitled to use KNOW-HOW in support thereof.

                          XIII. PATENT AND INVENTIONS

        Subject to the following terms, GERON shall reimburse CSHL for all
reasonable expenses incurred by CSHL in the future in searching, preparing,
filing, prosecuting and maintaining patent applications and patents relating to
PATENT RIGHTS. If after consultation with CSHL, GERON determines that a patent
application should be filed for LICENSED SUBJECT MATTER, CSHL will prepare and
file appropriate patent applications, and GERON will reimburse the cost of
searching, preparing, filing, prosecuting and maintaining same and any resulting
patent. CSHL will use patent counsel selected by GERON and GERON will supervise
such patent counsel in respect of searching, preparation, filing, prosecution
and maintenance of patent applications and patents subject to reimbursement by
GERON, and will promptly provide to GERON a copy of any applications on which
GERON has paid the costs of filing, as well as copies of any documents received
or filed during the prosecution thereof. GERON may give notice to CSHL of its
election to forego or cease participation in searching, preparing, filing,
prosecution or maintenance of any such patent application or patent, whereupon
GERON shall be freed of its reimbursement obligation in respect of future
activities regarding such application or patent and the application or patent
involved shall thereafter form no part of PATENT RIGHTS; provided that GERON may
reinstate it as part of PATENT RIGHTS by paying [ * ] the costs it failed to
reimburse upon CSHL's written consent. Reimbursements due CSHL hereunder shall
be paid by GERON within thirty (30) days of its receipt of a bill from CSHL.

                                  XIV. GENERAL

        14.1  This Agreement and those certain agreements between the parties
entitled "Agreement in respect of Option" and "Sponsored Research Agreement"
constitute the entire and only agreements between the parties relating to
LICENSED SUBJECT MATTER and all other prior negotiations, representations,
understandings and agreements are superseded hereby. No agreements altering or
supplementing the terms hereof may be made except by means of a written
document signed by the duly authorized representatives of the parties.

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.


                                       9.


<PAGE>   21
        14.2    Any notice required by this License Agreement shall be given by
prepaid, first class, certified mail, return receipt requested, effective upon
receipt, addressed in the case of CSHL to:

                COLD SPRING HARBOR LABORATORY
                1 Bungtown Road
                Cold Spring Harbor, NY 11724
                Attn: John Maroney
                Assistant Administrative Director

or in the case of GERON to:

                GERON CORPORATION
                21375 Cabot Blvd.
                Hayward, CA 94545
                Attention: Vice President, Finance and Administration

or such other address as may be given from time to time under the terms of this
notice provision.

        14.3    Each party shall comply with all applicable federal, state and
local laws and regulations in connection with its activities pursuant to this 
Agreement.

        14.4    This Agreement shall be governed by and construed in accordance
with, and any controversy or claim arising out of or relating to this
Agreement, shall be resolved in accordance with, the laws of the State of
California, without regard to the conflicts of laws provisions thereof. If any
dispute arises under this Agreement, the parties will first attempt in good
faith to amicably resolve the issue between themselves. Any dispute that cannot
be so resolved will be submitted to arbitration pursuant to the rules of the
American Arbitration Association. Such arbitration will take place in Chicago,
Illinois. The ruling of the arbitrators will be final and binding on the parties
and will be enforceable by any court of competent jurisdiction.

        14.5    Failure of CSHL or GERON to enforce a right under this
agreement shall not act as a waiver of that right or the ability to assert that
right relative to the particular situation involved.

        14.6    Headings included herein are for convenience only and shall not
be used to construe this Agreement.

        14.7    If any provision of this Agreement shall be found by a court to
be void, invalid or unenforceable, the same shall be reformed to comply with
applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of the remainder of this Agreement.

        IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this AGREEMENT.

COLD SPRING HARBOR LABORATORY           GERON CORPORATION




By    /s/ Cold Spring Harbor Laboratory    By    /s/ Geron Corporation
      ---------------------------------          ------------------------------
Name                                       Name
      ---------------------------------          ------------------------------
Title                                      Title
      ---------------------------------          ------------------------------


                                      10.



<PAGE>   22
                                                                  APPENDIX II 

                                                       RIGHT OF FIRST REFUSAL

                           RESTRICTED STOCK AGREEMENT

        This Agreement is made as of this ____ day of September, 1992, by and
between Geron Corporation, a Delaware corporation ("Corporation") and _______
_____________________________________________ (the "Purchaser").

   I.   PURCHASE OF SHARES

        1.1  Purchase. Purchaser hereby purchases and the Corporation hereby
sells to Purchaser ________ shares of Common Stock of the Corporation
("Purchased Shares") at a purchase price of $0.10 per share (the "Purchase
Price").

        1.2  Payment. The consideration for the Purchased Shares shall be the
execution of that certain __________________________________ Agreement dated 
___________________.

    II.  SECURITIES LAW COMPLIANCE

        2.1  Exemption from Registration. The Purchased Shares have not been
registered under the Securities Act of 1933, as amended (the "1933 Act") and
are being issued to Purchaser in reliance upon the exemption from such
registration provided by Section 4(2) of the 1933 Act.

        2.2  Restricted Securities.

        (a)  Purchaser hereby confirms that Purchaser has been informed that
the Purchased Shares are restricted securities under the 1933 Act and may not
be resold or transferred unless the Purchased Shares are first registered under
the Federal securities laws or unless an exemption from such registration is
available. Accordingly, Purchaser hereby acknowledges that Purchaser is
prepared to hold the Purchased Shares for an indefinite period and that
Purchaser is aware that Rule 144 of the Securities and Exchange Commission
issued under the 1933 Act is not presently available to exempt the sale of the
Purchased Shares from the registration requirements of the 1933 Act.

        (b)  Purchaser understands that the Purchased Shares are restricted
securities within the meaning of Rule 144 promulgated under the 1933 Act; that
the exemption from registration under Rule 144 will not be available in any
event for at least two years from the date of purchase and payment of the
Purchased Shares (and that payment by a note is not deemed payment unless it is
secured by assets other than the Purchased Shares, and even then will not be
available unless (i) a public trading market then exists for the Common
Purchased Shares of the Corporation, (ii) adequate


<PAGE>   23
information concerning the Corporation is then available to the public, and
(iii) other terms and conditions of Rule 144 are complied with; and that any
sale of the Purchased Shares may be made only in limited amounts in accordance
with such terms and conditions.

        2.3  Disposition of Shares. Purchaser hereby agrees that Purchaser
shall make no disposition of the Purchased Shares (other than a permitted
transfer under paragraph 3.1) unless and until:

        (a) Purchaser shall have notified the Corporation of the proposed
disposition and provided a written summary of the terms and conditions of the
proposed disposition;

        (b) Purchaser shall have complied with all requirements of this
Agreement applicable to the disposition of the Purchased Shares;

        (c) Purchaser shall have provided the Corporation with written
assurances, in form and substance satisfactory to the Corporation, that (i) the
proposed disposition does not require registration of the Purchased Shares
under the 1933 Act or (ii) all appropriate action necessary for compliance with
the registration requirements of the 1933 Act or of any exemption from
registration available under the 1933 Act (including Rule 144) has been taken;
and

        (d) Purchaser shall have provided the Corporation with written
assurances, in form and substance satisfactory to the Corporation, that the
proposed disposition will not result in the contravention of any transfer
restrictions applicable to the Purchased Shares pursuant to the provisions of
the Commissioner Rules identified in paragraph 2.5.

        The Corporation shall not be required (i) to transfer on its books any
Purchased Shares which have been sold or transferred in violation of the
provisions of this Article II or (ii) to treat as the owner of the Purchased
Shares, or otherwise to accord voting or dividend rights to, any transferee to
whom the Purchased Shares have been transferred in contravention of this 
Agreement.

        2.4  Restrictive Legend. In order to reflect the restrictions on
disposition of the Purchased Shares, the stock certificates for the Purchased
Shares will be endorsed with restrictive legend:

               (i) "The shares represented by this certificate have not been
        registered under the Securities Act of 1933. The shares have been
        acquired for investment and may not be sold or offered for sale in the
        absence of (a) an effective registration statement for the shares under
        such Act, (b) a

<PAGE>   24
        'no action' letter of the Securities and Exchange Commission with
        respect to such sale or offer, or (c) satisfactory assurances to the
        Corporation that registration under such Act is not required with
        respect to such sale or offer."

                2.5  Stockholder Rights. Until such time as the Corporation
actually exercises its repurchase rights under this Agreement, Purchaser (or
any successor in interest) shall have all the rights of a stockholder
(including voting and dividend rights) with respect to the Purchased Shares,
subject, however, to the transfer restrictions of Article III.

III.  TRANSFER RESTRICTIONS

        3.1  Restriction on Transfer. Purchaser shall not transfer, assign,
encumber or otherwise dispose of any of the Purchased Shares in contravention
of the Corporation's First Refusal Right under Article IV. Such restrictions on
transfer, however, shall not be applicable to a transfer of the Purchased
Shares made to an affiliated entity of Purchaser, provided and only if
Purchaser obtains the Corporation's consent to any such transfer.

        3.2  Transferee Obligations. Each person or entity (other than the
Corporation) to whom the Purchased Shares are transferred by means of one of
the permitted transfers specified in paragraph 3.1 must, as a condition
precedent to the validity of such transfer, acknowledge in writing to the
Corporation that such person is bound by the provisions of this Agreement and
that the transferred shares are subject to (i) the Corporation's First Refusal
Right granted hereunder, and (ii) the market stand-off provisions of paragraph
4.8, to the same extent such shares would be so subject if retained by the
Purchaser.

        3.3  Definition of Owner. For purposes of Article IV of this Agreement,
the term "Owner" shall include the Purchaser and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a permitted
transfer from the Purchaser in accordance with paragraph 3.1.

IV.   RIGHT OF FIRST REFUSAL

        4.1  Grant. The Corporation is hereby granted the right of first
refusal ("First Refusal Right"), exercisable in connection with any proposed
sale or other transfer of the Purchased Shares. For purposes of this Article
IV, the term "transfer" shall include any assignment, pledge, encumbrance or
other disposition for value of the Purchased Shares intended to be made by the
Owner, but shall not include any of the permitted transfers under paragraph 3.1.

                                       3.


<PAGE>   25
        4.2  Notice of Intended Disposition.  In the event the Owner desires to
accept a bona fide third-party offer for any or all of the Purchased Shares
(the shares subject to such offer to be hereinafter called, solely for
the purposes of this Article IV, the "Target Shares"), Owner shall promptly (i)
deliver to the Secretary of the Corporation written notice (the "Disposition
Notice") of the offer and the basic terms and conditions thereof, including the
proposed purchase price, and (ii) provide satisfactory proof that the
disposition of the Target Shares to the third-party offeror would not be in
contravention of the provisions set forth in Articles II and IV of this
Agreement.

        4.3  Exercise of Right.  The Corporation (or its assignees) shall, for
a period of twenty-five (25) days following receipt of the Disposition Notice,
have the right to repurchase any or all of the Target Shares specified in the
Disposition Notice upon substantially the same terms and conditions specified
therein. Such right shall be exercisable by written notice (the "Exercise
Notice") delivered to Owner prior to the expiration of the twenty-five (25) day
exercise period. If such right is exercised with respect to all the Target
Shares specified in the Disposition Notice, then the Corporation (or its
assignees) shall effect the repurchase of the Target Shares, including payment
of the purchase price, not more than five (5) business days after the delivery
of the Exercise Notice; and at such time Owner shall deliver to the Corporation
the certificates representing the Target Shares to be repurchased, each
certificate to be properly endorsed for transfer. The Target Shares so
purchased shall thereupon be cancelled and cease to be issued and outstanding
shares of the Corporation's Common Stock.

        Should the purchase price specified in the Disposition Notice be
payable in property other than cash or evidences of indebtedness, the
Corporation (or its assignees) shall have the right to pay the purchase price
in the form of cash equal in amount to the value of such property. If the Owner
and the Corporation (or its assignees) cannot agree on such cash value within
ten (10) days after the Corporation's receipt of the Disposition Notice, the
valuation shall be made by an appraiser of recognized standing selected by the
Owner and the Corporation (or its assignees) or, if they cannot agree on an
appraiser with twenty (20) days after the Corporation's receipt of the
Disposition Notice, each shall select an appraiser of recognized standing, whose
appraisal shall be determinative of such value. The cost of such appraisal
shall be shared equally by the Owner and the Corporation. The closing shall
then be held on the later of (i) the fifth business day following delivery of
the Exercise Notice or (ii) the fifth business day after such cash valuation
shall have been made.



                                       4.



<PAGE>   26
        4.4 Non-Exercise of Right. In the event the Exercise Notice is not
given to Owner within twenty-five (25) days following the date of the
Corporation's receipt of the Disposition Notice, Owner shall have a period of
thirty (30) days thereafter in which to sell or otherwise dispose of the Target
Shares upon terms and conditions (including the purchase price) no more
favorable to the third party purchaser than those specified in the Disposition
Notice; provided, however, that any such sale or disposition must not be
effected in contravention of the provisions of Article II of this Agreement.
The third-party purchaser shall acquire the Target Shares free and clear of all
there terms and provisions of this Agreement (including the Corporation's First
Refusal Right hereunder) but the acquired shares shall remain subject to the
market stand-off provisions of paragraph 4.8. In the event Owner does not sell
or otherwise dispose of the Target Shares within the specified thirty (30) day
period, the Corporation's First Refusal Right shall continue to be applicable
to any subsequent disposition of the Target Shares by Owner until such right
lapses in accordance with paragraph 4.7.

        4.5 Partial Exercise of Right. In the event the Corporation (or its
assignees) makes a timely exercise of the First Refusal Right with respect to a
portion, but not all, of the Target Shares specified in the Disposition Notice,
Owner shall have the option, exercisable by written notice to the Corporation
delivered within thirty (30) days after the date of the Disposition Notice, to
effect the sale of the Target Shares pursuant to one of the following
alternatives: 

            (i) sale or other disposition of all the Target Shares to a
      third-party purchaser in compliance with the requirements of paragraph
      4.4, as if the Corporation did not exercise the First Refusal Right
      hereunder; or 

           (ii) sale to the Corporation (or its assignees) of the portion of the
      Target Shares which the Corporation  (or its assignees) has elected to
      purchase, such sale to be effected in substantial conformity with the
      provisions of paragraph 4.3.

        Failure of Owner to deliver timely notification to the Corporation
under this paragraph 4.5 shall be deemed to be an election by Owner to sell the
Target Shares pursuant to alternative (i) above.

        4.6 Recapitalization/Corporate Transaction.

        (a) In the event of any stock dividend, stock split, recapitalization
or other transaction affecting the Corporation's outstanding Common Stock as a
class effected without receipt of consideration, then any new, substituted or
additional securities


                                       5.

<PAGE>   27
or other property which is by reason of such transaction distributed with
respect to the Purchased Shares shall be immediately subject to the
Corporation's First Refusal Right hereunder, but only to the extent the
Purchased Shares are at the time covered by such right.

        (b) In the event of any of the following transactions (a "Corporate 
Transaction"):

                (i) a merger or acquisition in which the Corporation is not the
        surviving entity, except for a transaction the principal purpose of
        which is to change the State in which the Corporation is incorporated,


               (ii) the sale, transfer or other disposition of all or
        substantially all of the assets of the Corporation or

              (iii) any reverse merger in which the Company is the surviving
        entity but in which fifty percent (50%) or more of the Company's
        outstanding voting stock is transferred to holders different from those
        who held the stock immediately prior to such merger,

then the Corporation's First Refusal Right shall, to the extent the lapse
provisions of Section 4.7 are not otherwise applicable, remain in full force
and effect and shall apply to the new capital stock or other property received
in exchange for the Purchased Shares in consummation of the Corporate
Transaction, but only to the extent the Purchased Shares are at the time
covered by such right.

        4.7  Lapse. the First Refusal Right under this Article IV shall lapse
and cease to have effect upon the earliest to occur of (i) the first date on
which shares of the Corporation's Common stock are held of record by more than
five hundred (500) persons or (ii) a determination is made by the Corporation's
Board of Directors that a public market exists for the outstanding shares of
the Corporation's Common stock. However, the market stand-off provisions of
paragraph 4.8 shall continue to remain in full force and effect following the
lapse of the First Refusal Right hereunder.

        4.8  Market Stand-Off.

        (a) In connection with any underwritten public offering by the
Corporation of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, including the Corporation's initial public
offering, Owner shall not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or transfer
for value or otherwise agree to engage in any of the foregoing


                                       6.

<PAGE>   28
transactions with respect to any Purchased Shares without the prior written
consent of the Corporation or its underwriters. Such limitations shall be in
effect for such period of time from and after the effective date of such
registration statement as may be requested by the Corporation or such
underwriters; provided, however, that in no event shall such period exceed one
hundred-eighty (180) days. The limitations of this paragraph 4.8 shall remain
in effect for the two-year period immediately following the effective date of
the Corporation's initial public offering and shall thereafter terminate and
cease to have any force or effect.

        (b) Owner shall be subject to the market stand-off provisions of this
paragraph 4.8 provided and only if the officers and directors of the
Corporation are also subject to similar arrangements.

        (c) In the event of any stock dividend, stock split, recapitalization
or other change affecting the Corporation's outstanding Common Stock effected
without receipt of consideration, then any new, substituted or additional
securities distributed with respect to the Purchased Shares shall be
immediately subject to the provisions of this paragraph 4.8, to the same
extent the Purchased Shares are at such time covered by such provisions.

        (d) In order to enforce the limitations of this paragraph 4.8, the
Corporation may impose stop-transfer instructions with respect to the Purchased
Shares until the end of the applicable stand-off period.

    V.  GENERAL PROVISIONS.

        5.1 Assignment. The Corporation may assign its First Refusal Right under
Article IV to any person or entity selected by the Corporation's Board of
Directors, including (without limitation) one or more shareholders of the
Corporation.

        5.2 Definitions. For purposes of this Agreement, the following
provisions shall be applicable in determining the parent and subsidiary
corporations of the Corporation:

          (i)  Any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation shall be considered to be a parent
corporation of the Corporation, provided each such corporation in the unbroken
chain (other than the Corporation) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

          (ii) Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the

                                        7.


<PAGE>   29
     Corporation shall be considered to be a subsidiary of the Corporation,
     provided each such corporation (other than the last corporation) in the
     unbroken chain owns, at the time of the determination, stock possessing
     fifty percent (50%) or more of the total combined voting power of all
     classes of stock in one of the other corporations in such chain.

         5.3 Notices. Any notice required in connection with (i) the First
Refusal Right or (ii) the disposition of any Purchased Shares covered thereby
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit in the United States mail, registered or certified, postage
prepaid and addressed to the party entitled to such notice at the address
indicated below such party's signature line on this Agreement or at such other
address as such party may designate by ten (10) days advance written notice
under this paragraph 5.3 to all other parties to this Agreement.

         5.4 No Waiver. The failure of the Corporation (or its assignees) in any
instance to exercise the First Refusal Right granted under Article IV, shall not
constitute a waiver of any other rights of first refusal that may subsequently
arise under the provisions of this Agreement or any other agreement between the
Corporation and Purchaser. No waiver of any breech or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.

         5.5 Cancellation of Shares. If the Corporation (or its assignees) shall
make available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, than from and after such time,
the person from whom such shares are to be repurchased shall no longer have any
rights as a holder of such shares (other than the right to receive payment of
such consideration in accordance with this Agreement), and such share shall be
deemed purchased in accordance with the applicable provisions hereof and the
Corporation (or its assignees) shall be deemed the owner and holder of such
shares, whether or not the certificates therefor have been delivered as required
by this Agreement.

         5.6 Legend. All certificates representing the Purchased Shares shall be
endorsed with the following legend:

         "THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD,
         ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT
         IN CONFORMITY WITH THE TERMS OF A WRITTEN AGREEMENT, DATED ___________,
         1992, BETWEEN THE CORPORATION AND THE REGISTERED


                                       8.


<PAGE>   30
                HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE
                SHARES). SUCH AGREEMENT GRANTS CERTAIN RIGHTS OF FIRST REFUSAL
                TO THE CORPORATION (OR ITS ASSIGNEES) UPON THE SALE, ASSIGNMENT,
                TRANSFER, ENCUMBRANCE OR OTHER DISPOSITION OF THE CORPORATION'S
                SHARES. THE CORPORATION WILL UPON WRITTEN REQUEST FURNISH A COPY
                OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."

        VI.     MISCELLANEOUS PROVISIONS.

                6.1  Purchaser Undertaking.  Purchaser hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may in its judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on either
Purchaser or the Purchased Shares pursuant to the express provisions of this 
Agreement.

                6.2  Agreement is Entire Contract.  This Agreement constitutes
the entire contract between the parties hereto with regard to the subject 
matter hereof.

                6.3  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State.

                6.4  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.



                                       9.


<PAGE>   31

        6.5  Successors and Assigns.  The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and Purchaser and Purchaser's legal representatives,
heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this Agreement and
have agreed in writing to join herein and be bound by the terms and conditions
hereof.

        IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.

                                       GERON CORPORATION


                                       By _____________________________________

                             Address:  21375 Cabot Boulevard
                                       Hayward, CA 94545

                                       [INSTITUTION]


                                       By _____________________________________
                                       Its ____________________________________

                             Address:  ________________________________________
                                       ________________________________________



                                      10.




<PAGE>   1
                                                                  Exhibit 10.7


                            PATENT LICENSE AGREEMENT



                  THIS AGREEMENT is made by and between the BOARD OF REGENTS
(BOARD) OF THE UNIVERSITY OF TEXAS SYSTEM (SYSTEM), an agency of the State of
Texas, whose address is 201 West Seventh Street, Austin, Texas 78701 and GERON
CORPORATION (LICENSEE), a Delaware corporation having a principal place of
business located at 21375 Cabot Boulevard, Hayward, California, 94545.

                                   WITNESSETH

                  WHEREAS, BOARD owns or in the future may own certain PATENT
RIGHTS and TECHNOLOGY RIGHTS relating to the LICENSED SUBJECT MATTER, which were
developed at The University of Texas Southwestern Medical Center at Dallas (UT
SOUTHWESTERN), whose address is 5323 Harry Hines Boulevard, Dallas, Texas 75235,
a component institution of SYSTEM;

                  WHEREAS, BOARD desires to have the LICENSED SUBJECT MATTER
developed and used for the benefit of LICENSEE, the inventor(s), BOARD, and the
public as outlined in the Intellectual Property Policy promulgated by the BOARD
(Schedule A hereto); and

                  WHEREAS, LICENSEE wishes to obtain a license from BOARD to
practice LICENSED SUBJECT MATTER;

                  NOW, THEREFORE, in consideration of the mutual covenants and
premises herein contained, the parties hereto agree as follows:

                                  I.  EFFECTIVE
 DATE

                  This Agreement shall be effective on September 8, 1992.

<PAGE>   2
                                  II.  DEFINITIONS
                  As used in this Agreement, the following terms shall have the
meanings indicated:

                  2.1 LICENSED SUBJECT MATTER shall mean inventions and
discoveries that are covered by PATENT RIGHTS, all of which shall be within the
LICENSED FIELD. In the event that BOARD believes that certain TECHNOLOGY RIGHTS
contribute substantial value to any LICENSED PRODUCT, the BOARD may propose to
LICENSEE at anytime prior to the first SALE of such LICENSED PRODUCT, that such
TECHNOLOGY RIGHTS be included within the definition of LICENSED SUBJECT MATTER.
Upon receipt of such notice, the parties agree to consider in good faith whether
or not the inclusion of such rights is appropriate under the circumstances. If
the parties cannot agree within ninety (90) days after the date that BOARD
notifies LICENSEE as provided above, either party may submit the issue to a
mutually agreeable third party for prompt resolution.

                  2.2 PATENT RIGHTS shall mean BOARD's rights in information or
discoveries covered by the following patent applications which relate to
LICENSED FIELD, whether domestic or foreign, and all divisions, continuations,
CONTINUATIONS-IN-PART (as hereinafter defined), reissues, reexaminations or
extensions thereof:

                      (a) U.S. Patent Application 07/882,438, which corresponds
to UT SOUTHWESTERN file UTSD: 91804KLC, entitled "Telomerase Activity Modulation
and Telomere Diagnosis", which

                                       2.

<PAGE>   3
names Michael D. West, Ph.D., Jerry Shay, Ph.D., and Woodring Wright, M.D., 
Ph.D., as joint inventors;

                      (b) The claims of continuation-in-part applications which
result in whole or in part from research conducted at UT SOUTHWESTERN by or
under the direction of Michael D. West, Ph.D., Jerry Shay, Ph.D., and/or
Woodring Wright, M.D., Ph.D., within the LICENSED FIELD between December 1, 1989
and EFFECTIVE DATE of this Agreement, inclusive (CONTINUATION-IN-PART); and

                      (c) The claims of patent applications which result in
whole or in part from research conducted at UT SOUTHWESTERN by or under the
direction of Michael D. West, Ph.D., Jerry Shay, Ph.D., and/or Woodring Wright,
M.D., Ph.D., within the LICENSED FIELD between December 1, 1989 and EFFECTIVE
DATE of this Agreement, inclusive.

                  2.3 TECHNOLOGY RIGHTS shall mean BOARD'S rights in any
KNOW-HOW. KNOW-HOW shall mean all technical information, know-how, process,
procedure, composition, device, method, formula, protocol, technique, software,
design, drawing or data relating to LICENSED SUBJECT MATTER or LICENSED FIELD
which is not disclosed in a patent within the PATENT RIGHTS, but which is
necessary or useful for practicing LICENSED SUBJECT MATTER in the LICENSED
FIELD.
                  2.4 LICENSED FIELD shall mean product applications relating to
cell senescence, cell immortalization, cellular or molecular bases of aging or
age related degenerative diseases, and shall include, without limitation,
telomeres and telomerase. The LICENSED FIELD also includes any process, machine,
manufacture,

                                       3.

<PAGE>   4
composition of matter (including methods of production or use thereof) or other
invention or know-how related to any of the foregoing or to the diagnosis,
prevention, treatment or manipulation of any of the foregoing.

                  2.5 LICENSED TERRITORY shall mean the world.

                  2.6 LICENSED PRODUCT shall mean any product SOLD by LICENSEE,
SUBSIDIARY or sublicensee of LICENSEE comprising LICENSED SUBJECT MATTER
pursuant to this Agreement, including COMPOSITE PRODUCTS.

                  2.7 COMPOSITE PRODUCTS shall mean any product SOLD by
LICENSEE, SUBSIDIARY or sublicensee of LICENSEE with active ingredients
comprising both LICENSED SUBJECT MATTER and active ingredients other than
LICENSED SUBJECT MATTER.

                  2.8 SALE or SOLD shall mean the transfer or disposition of a
LICENSED PRODUCT for value to a party other than LICENSEE or a SUBSIDIARY.

                  2.9 SUBSIDIARY shall mean any business entity more than 50%
owned by LICENSEE, any business entity which owns more than 50% of LICENSEE, or
any business entity that is more than 50% owned by a business entity that owns
more than 50% of LICENSEE.

                  2.10 NET SALES shall mean the gross revenues (whether or not
in cash) received by LICENSEE, SUBSIDIARY or a sublicensee of LICENSEE from the
SALE of LICENSED PRODUCTS less sales, V.A.T. and/or use taxes, duties and
similar governmental assessments actually paid, transportation, packing,
shipping insurance and

                                       4.

<PAGE>   5
amounts actually allowed or credited due to returns (not to exceed the original
billing or invoice amount).

                      III. WARRANTY; SUPERIOR RIGHTS

                  3.1 Except for the rights, if any, of the Government of the
United States, as set forth hereinbelow, BOARD represents and warrants its
belief that it is the owner of the entire right, title and interest in and to
LICENSED SUBJECT MATTER, and that it has the sole right to grant licenses
thereunder, and that it has not knowingly granted licenses thereunder to any
other entity that would restrict rights granted hereunder except as stated
herein. BOARD is not aware that any additional rights or licenses are necessary
for LICENSEE to exercise its license rights.

                  3.2 LICENSEE understands that the LICENSED SUBJECT MATTER may
have been developed under a funding agreement with the Government of the United
States of America and, if so, that the Government may have certain nonexclusive
rights relative thereto for use for government purposes, as well as statutory
"march-in rights." This Agreement is explicitly made subject to such Government
rights. To the extent there is any conflict between any such rights and this
Agreement, such Government rights shall prevail.

                  3.3 BOARD MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF
ANY KIND, EITHER EXPRESSED OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES
WHATSOEVER WITH RESPECT TO THE USE, SALE OF OTHER DISPOSITION BY LICENSEE OR ANY
OTHER PERSONS OF LICENSED PRODUCTS.

                                       5.

<PAGE>   6
                          IV.  LICENSE

                  4.1 BOARD hereby grants to LICENSEE an exclusive license to
manufacture, have manufactured, use, have used, and/or sell or have sold
LICENSED PRODUCTS and to use and have used the PATENT RIGHTS and TECHNOLOGY
RIGHTS within LICENSED TERRITORY and LICENSED FIELD. This grant shall be subject
to the payment by LICENSEE to BOARD of all consideration as provided by this
Agreement, and shall be further subject to non-exclusive rights retained by the
BOARD to:

                      (a) Publish the general scientific findings from research
done by the UT SOUTHWESTERN related to LICENSED SUBJECT MATTER; and

                      (b) Use any information contained in LICENSED SUBJECT
MATTER for research, teaching, and other educationally- related purposes;
provided that none of the foregoing is done for any commercial purpose.

                  4.2 LICENSEE shall have the right to extend the license
granted herein to any SUBSIDIARY provided that such SUBSIDIARY consents to be
bound by this Agreement to the same extent as LICENSEE (provided that the
foregoing does not and is not intended to create redundant or double obligations
regarding royalties, reimbursement, marketing efforts or any other matter).

                  4.3 LICENSEE shall have the right to grant sublicenses
consistent with this Agreement provided that, with respect to BOARD, LICENSEE
shall be responsible for (and entitled to credit for) the operations of its
sublicensees relevant to this Agreement

                                       6.

<PAGE>   7
as if such operations were carried out by LICENSEE provided that matters dealt
with in Section 5 in respect of such sublicenses shall be governed by the terms
of Section 5. LICENSEE further agrees to deliver to BOARD a true and correct
copy of each sublicense granted by LICENSEE, and any modification or termination
thereof, within thirty (30) days after execution, modification or termination;
provided that all such information shall be deemed CONFIDENTIAL INFORMATION (as
hereinafter defined). Upon termination of this Agreement under Section 6.2 any
and all existing sublicenses granted by LICENSEE shall be assigned to BOARD as
their terms permit, or shall terminate (if their terms don't so permit).

                  4.4 BOARD shall have the right at any time after five (5)
years from the date of this Agreement to terminate the exclusivity of the
license granted herein with respect to PATENT RIGHTS and TECHNOLOGY RIGHTS
licensed hereunder, or after eight (8) years from the date of this Agreement to
terminate this Agreement completely, as to those national jurisdictions of the
LICENSED TERRITORY in which LICENSEE has not commercialized or is not actively
attempting to commercialize an invention hereunder if LICENSEE, within ninety
(90) days after written notice from BOARD as to such intended termination of
exclusivity or this Agreement, fails to provide written evidence of present,
attempted or anticipated commercialization in a manner and on a schedule
reasonably commensurate with the scope of LICENSED TERRITORY and LICENSEE'S
resources. Evidence provided by LICENSEE that it has an

                                       7.

<PAGE>   8
ongoing and active or anticipated research, development, manufacturing,
marketing or licensing program as appropriate, directed toward production and
sale of products based on LICENSED SUBJECT MATTER shall be deemed satisfactory
evidence. BOARD agrees that in the discretion of LICENSEE commercialization
efforts may be directed first to industrialized nations of the world commencing
with the United States of America, and only subsequently to other regions as
reasonably and commercially practicable; that particular fields within the
LICENSED FIELD and portions of the LICENSED TERRITORY may in the discretion of
LICENSEE best be commercialized by sublicense; and that LICENSEE may in the
exercise of prudent business judgment elect to defer commercialization efforts
in particular fields or national jurisdictions in LICENSED TERRITORY until the
LICENSED SUBJECT MATTER has undergone substantial and appropriate further
development. In the event of any termination under this Section or Section 7.1,
BOARD agrees to negotiate in good faith with LICENSEE to adjust the terms hereof
to reflect LICENSEE'S diminished rights (including, without limitation, royalty
rates), with relation back to the date of termination; provided, however, that
pending the completion of such negotiation, LICENSEE'S obligations shall be as
provided hereunder for the case of exclusivity; and, as to any termination of
exclusivity, LICENSEE shall have the benefit of any more favorable terms granted
by BOARD to any subsequent non-exclusive licensee of LICENSED SUBJECT MATTER in
those national jurisdictions where exclusivity is terminated.

                                       8.

<PAGE>   9
                           V.  PAYMENTS AND REPORTS

                  5.1 In consideration of the rights granted by BOARD to
LICENSEE under this Agreement and subject in all respects to Section 5.2,
LICENSEE agrees to pay BOARD the following:

                      (a) A license issue fee of [ * ] payable within thirty
                  (30) days of LICENSEE's receipt of a fully executed
                  Agreement from BOARD;

                      (b) License renewal fees payable within thirty (30) days
                  of the anniversary of the EFFECTIVE DATE of this Agreement
                  according to the following schedule:

<TABLE>
<CAPTION>
                     Anniversary                     Amount Due
                     -----------                     ----------

<S>                                                  <C>
Effective
Date: Sept 8, 1992
PYMTS Due by Oct 8, 1993...First                         [ * ]   PD Oct 199
                    1994...Second                        [ * ]
                    1995...Third                         [ * ]
                    1996...Fourth                        [ * ]
                    1997...Fifth                         [ * ]
</TABLE>


                      (c) In addition to the license renewal fees shown in
                  Paragraph 5.1(b), LICENSEE shall pay to BOARD a license
                  renewal fee of [ * ] within thirty (30) days of the earlier to
                  occur of (A) the seventh (7th) anniversary of the EFFECTIVE
                  DATE of this Agreement, or (B) the first SALE of any LICENSED
                  PRODUCT; provided, however, that if the payment set forth in
                  this Paragraph 5.1(c) is due on or after the date that
                  LICENSEE notifies the BOARD in writing that it has offered
                  LICENSED PRODUCT for SALE, then such amount shall be fully
                  creditable against any and all running earned royalties due
                  BOARD under this Agreement;


* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.


                                       9.

<PAGE>   10
                      (d) Minimum annual royalties in the amount of [ * ]
                  commencing on the eighth (8th) anniversary of the EFFECTIVE 
                  DATE of this Agreement and shall extend for the Term of the 
                  Agreement. All minimum annual royalty payments shall be 
                  payable within thirty (30) days following the appropriate 
                  anniversary of the EFFECTIVE DATE of this Agreement. Such 
                  amounts due shall be credited against royalties to become due
                  under Paragraphs 5.1(e), 5.1(f), 5.1(g), 5.1(h) and 5.1(i). 
                  No portion of the minimum annual royalties paid shall be 
                  refundable should no royalties become due under Paragraphs 
                  5.1(e), 5.1(f), 5.1(g), 5.1(h) and 5.1(i).

                      (e) A running earned royalty equal to [ * ] of NET SALES 
                  by LICENSEE and any SUBSIDIARY for LICENSED PRODUCTS SOLD for 
                  use as a human therapeutic;

                      (f) A running earned royalty equal to [ * ] of NET SALES
                  by LICENSEE and any SUBSIDIARY for LICENSED PRODUCTS SOLD for 
                  any use not described in Paragraph 5.1(e);

                      (g) In the case of COMPOSITE PRODUCTS, the royalty
                  percentage payable to BOARD under this Agreement shall be
                  equal to [ * ] for human therapeutics and [ * ] for other 
                  applications;


* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.


                                       10.

<PAGE>   11
                      (h) For all sublicensee(s) of LICENSEE, [ * ] of the gross
                  revenues received by LICENSEE from such sublicensee(s) not
                  resulting from NET SALES (as further defined below) and a
                  running earned royalty equal to [ * ] of NET SALES by
                  sublicensee for LICENSED PRODUCTS SOLD for use as a human
                  therapeutic and/or a running earned royalty equal to [ * ] of
                  NET SALES by sublicensee for LICENSED PRODUCTS SOLD for any
                  other uses. In the case of COMPOSITE PRODUCTS sold by
                  sublicensee(s), (i) the percentage of gross revenues received
                  by LICENSEE from such sublicensee(s) not resulting from NET
                  SALES shall be [ * ] and (ii) the royalty percentage payable
                  to BOARD under this Paragraph 5.1(h) be equal to [ * ] for
                  human therapeutics and [ * ] for other applications. Gross
                  revenues received by LICENSEE from sublicensee(s) not
                  resulting from NET SALES shall include, but not be limited to,
                  payments in lieu of or creditable against royalties received
                  by LICENSEE from such sublicensee(s), with the exception of:

                          (1) Revenues received by LICENSEE for performance of
                      research, or for milestone payments for achievement of
                      objectives in research and development;

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.

                                       11.


<PAGE>   12
                          (2) investment in LICENSEE by virtue of stock
                      purchase;

                          (3) payments to LICENSEE conducting clinical testing
                      and/or other activities in connection with obtaining
                      regulatory approval for commercial SALE or use of a
                      LICENSED PRODUCT;

                          (4) all reimbursed expenses of LICENSEE.

                  No amounts shall be paid or payable by LICENSEE to BOARD for
                  any amounts received pursuant to (1), (2), (3) or (4) above.
                  If any payments made to LICENSEE by a sublicensee are entitled
                  to credit against earned royalties due LICENSEE by
                  sublicensee, then LICENSEE shall have the right in turn to
                  credit the same amount with respect to running earned
                  royalties due BOARD from LICENSEE under Paragraph 5.1(e),
                  5.1(f), 5.1(g), 5.1(h) and 5.1(i). LICENSEE agrees to act in
                  good faith in negotiating with a sublicensee so as not to
                  minimize payments to BOARD by using the credit against
                  royalties procedures;

                      (i) To the extent that (i) LICENSEE is obligated to pay
                  BOARD certain royalty percentages on NET SALES of LICENSED
                  PRODUCT pursuant Paragraphs 5.1(e), 5.1(f), 5.1(g) and 5.1(h)
                  and (ii) such LICENSED PRODUCT includes TECHNOLOGY RIGHTS but
                  no PATENT RIGHTS and (iii) such TECHNOLOGY RIGHTS are included
                  within the definition of LICENSED SUBJECT MATTER, then the
                  royalty percentage due pursuant to Paragraph 5.1(e) shall be
                  [ * ]

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.

                                       12.

<PAGE>   13
                  [ * ], the royalty percentage due pursuant to Paragraph 5.1(f)
                  shall be [ * ], the royalty percentages due pursuant to
                  Paragraph 5.1(g) shall be [ * ] for human therapeutics and 
                  [ * ] for other applications, the royalty percentages due for
                  the SALE of LICENSED PRODUCT pursuant to Paragraph 5.1(h)
                  shall be [ * ] for human therapeutics and [ * ] for other
                  applications, and the royalty percentages due for the SALE of
                  COMPOSITE PRODUCTS pursuant to Paragraph 5.1(h) shall be [ * ]
                  for human therapeutics and [ * ] for other applications.

                           (j) In the event that either party believes in good
                  faith that any such amounts due BOARD under Paragraph 5.1(h)
                  or 5.1(i) are inappropriate under the circumstances, the BOARD
                  and LICENSEE shall negotiate in good faith the appropriate
                  amount to be paid. In the event that the parties are unable to
                  agree on the appropriate amount within ninety (90) days after
                  the date either party notifies the other that it believes the
                  amount to be inappropriate or unfair, the parties will submit
                  the issues to a mutually agreeable third party for prompt
                  resolution.







* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.


                                       13.

<PAGE>   14
                  5.2 After seven (7) years from the EFFECTIVE DATE of this
Agreement (ten (10) years in the case where the national jurisdiction is Japan),
any royalties or share of sublicensee payments due for the manufacture, use or
sale of LICENSED PRODUCTS for consumption in a national jurisdiction of LICENSED
TERRITORY where such manufacture, use and sale could have been conducted in such
national jurisdiction without infringing a valid issued patent within PATENT
RIGHTS in such national jurisdiction will be suspended unless and until such a
patent issues at which time all royalties and other payments shall resume and
all royalties and other payments held in suspense shall become due.

                  5.3 Only one royalty shall be payable on each unit of LICENSED
PRODUCT SOLD calculated at the applicable rate specified in this Agreement
between LICENSEE and BOARD irrespective of (i) the number of patents within
PATENT RIGHTS whose claims would be infringed but for this License Agreement or
(ii) the number of license agreements between LICENSEE and BOARD.

                  5.4 During the term of this Agreement and for one (1) year
thereafter LICENSEE shall keep complete and accurate records of its and (as
reported to it) its sublicensee's NET SALES of LICENSED PRODUCTS and COMPOSITE
PRODUCTS under the license granted in this Agreement in sufficient detail to
enable the royalties payable hereunder to be determined. LICENSEE shall permit
an independent certified public accountant (hired by the BOARD and reasonably
acceptable to LICENSEE), at BOARD'S expense, to periodically (but no more than
once per year) examine its books,

                                       14.

<PAGE>   15
ledgers, and records during regular business hours for the purpose of and to the
extent necessary to verify any report required under this Agreement; provided
such accountant is bound in confidence and may not disclose any such information
except to the BOARD as necessary to show underpayment. In the event that the
amounts due to BOARD have been underpaid by more than five percent (5%) of the
amount actually due, LICENSEE shall pay the cost of such examination, the due
amount, and accrued interest thereon at the lesser of the prevailing prime rate
plus two percent (2%) per annum for commercial loans or the maximum amount which
may be charged under applicable law.

                  5.5 Within forty-five (45) days after March 31, June 30,
September 30 and December 31, LICENSEE shall deliver to BOARD at the addresses
listed in paragraph 14.2 a true and accurate report, giving such particulars of
the business conducted by LICENSEE during the preceding calendar quarter under
this Agreement as are pertinent to an account for payments hereunder. Such
report shall include at least (a) the quantities of LICENSED SUBJECT MATTER that
it has SOLD; (b) the total SALES; (c) the calculation of royalties thereon; and
(d) the total royalties so computed and due BOARD. Simultaneously with the
delivery of each such report, LICENSEE shall pay to BOARD the amount, if any,
due for the period of such report. If no payments are due, it shall be so
reported. LICENSEE shall impose on sublicensees, mutatis mutandis, similar
reporting and payment obligations and shall provide to BOARD similar reports
from sublicensees as they relate to BOARD'S entitlements under

                                       15.

<PAGE>   16
paragraph 5.1 to the extent received during such quarter or thereafter up until
fifteen (15) business days prior to the due date for the report on LICENSEE'S
SALES. Simultaneously with its report on such sublicensee activity, LICENSEE
shall pay to BOARD amounts due under paragraph 5.1; provided, however, that if
sublicensee's report is delayed more than one (1) quarter after the quarter
during which it should have been submitted to LICENSEE and BOARD, LICENSEE shall
pay the amounts due on behalf of sublicensee.

                  5.6 Upon the request of BOARD but not more often than once per
calendar year, LICENSEE shall deliver to BOARD a written report as to LICENSEE'S
efforts and accomplishments during the preceding year in commercializing
LICENSED SUBJECT MATTER in various parts of the LICENSED TERRITORY and its
commercialization plans for the coming year. LICENSEE will provide BOARD with
written notice of impending first SALE of LICENSED PRODUCT at least sixty (60)
days in advance of such first SALE.

                  5.7 All amounts payable hereunder by LICENSEE shall be payable
in United States funds without deductions for taxes, assessments, fees, or
charges of any kind. Checks shall be made payable to The University of Texas
Southwestern Medical Center at Dallas and mailed to: Associate Vice President
for Legal Affairs and Technology Transfer, The University of Texas Southwestern
Medical Center at Dallas, 5323 Harry Hines Blvd., Dallas, Texas 75235-9008.

                                       16.

<PAGE>   17
                          VI.  TERM AND TERMINATION

                  6.1 The Term of this Agreement shall extend from the EFFECTIVE
DATE set forth hereinabove to the full end of the term or terms for which PATENT
RIGHTS have not expired, and, if only TECHNOLOGY RIGHTS are licensed and no
PATENT RIGHTS are applicable, for a term of twenty (20) years. Upon expiration,
LICENSEE will be entitled to fully exploit PATENT RIGHTS and TECHNOLOGY RIGHTS
without restriction or payment of royalties.

                  6.2 This Agreement will earlier terminate:

                      (a) upon thirty (30) days written notice if LICENSEE shall
fail to pay in a timely manner the amounts due under this License Agreement or
that certain Sponsored Research Agreement dated September 8, 1992; provided,
however, LICENSEE may avoid such termination if before the end of such period
the appropriate amounts have been paid; provided, however, further, that in the
event this Agreement terminates as a result of this provision, LICENSEE may
petition BOARD for reinstatement of this Agreement within ninety (90) days after
this thirty (30) day period has elapsed. Reinstatement of this Agreement shall
be at the sole discretion of BOARD which approval shall not be unreasonably
withheld and is contingent upon payment of all past due royalties or other
amounts due BOARD and accrued interest thereon at the lesser of the prevailing
prime rate plus two percent (2%) per annum for commercial loans or the maximum
amount which may be charged under applicable law.

                                       17.

<PAGE>   18
                      (b) upon ninety (90) days written notice if LICENSEE shall
be materially in breach or default of any obligation under this License
Agreement; provided however, LICENSEE may avoid such termination if before the
end of such period such breach has been cured and LICENSEE so notifies the
BOARD.

                      (c) upon the mutual written agreement of the parties.

                      (d) upon sixty (60) days written notice given by LICENSEE
with or without cause.

                  6.3 Upon any termination of this Agreement, nothing herein
shall be construed to release any party from any liability for any obligation
incurred through the effective date of termination (e.g., confidentiality,
payment of then accrued royalties and reimbursement of patent expenses incurred
prior to such date) or for any breach of this Agreement prior to the effective
date of such termination. LICENSEE may, after the effective date of such
termination, sell all LICENSED PRODUCT and COMPOSITE PRODUCT and parts therefor
that it has on hand at the date of termination, provided that it pays earned
royalty thereon as provided in this Agreement.

                          VII.  INFRINGEMENT BY THIRD PARTIES

                  7.1 LICENSEE and BOARD shall each provide the other prompt
written notification of third party alleged infringement of the rights conferred
by this Agreement.

                  7.2 LICENSEE shall have the first right to enforce or have
enforced at no expense to BOARD any PATENT RIGHTS to the

                                       18.

<PAGE>   19
extent exclusively licensed hereunder against infringement by third parties and
shall be entitled to retain recovery from such enforcement. Upon LICENSEE'S
undertaking to pay all expenditures reasonably incurred by BOARD, to the extent
allowed by law, BOARD shall reasonably cooperate in any such enforcement and, as
necessary, join as a party therein. After first deducting its reasonable costs
and expenses incurred in respect of enforcement (to the extent not otherwise
awarded by settlement or a court), LICENSEE shall pay BOARD royalty (calculated
per Section 5.1) on the balance of any monetary recovery to the extent such
monetary recovery is held to be damages or a reasonable royalty in lieu thereof.
In the event that LICENSEE does not file suit against or commence settlement
negotiations with a substantial infringer of BOARD'S PATENT RIGHTS within six
(6) months of receipt of a written demand from BOARD that LICENSEE bring suit,
then the parties will consult with one another in an effort to determine whether
a reasonably prudent licensee would institute litigation to enforce the patent
in question in light of all relevant business and economic factors (including,
but not limited to, the projected cost of such litigation, the likelihood of
success on the merits, the probable amount of any damage award, the prospects
for satisfaction of any judgment against the alleged infringer, the possibility
of counterclaims against LICENSEE and BOARD, the diversion of LICENSEE'S human
and economic resources, the impact of any possible adverse outcome on LICENSEE
and the effect any publicity might have on LICENSEE'S and BOARD'S respective
reputations and goodwill). To

                                       19.

<PAGE>   20
the extent allowed by the laws and constitution of the State of Texas, if the
parties cannot agree, the determination will be made by a mutually and
reasonably acceptable third party consultant. If after such process, it is
determined that a suit should be filed and LICENSEE does not file suit or
commence settlement negotiations forthwith against the substantial infringer,
then BOARD shall have the right to enforce any patent licensed hereunder on
behalf of itself and LICENSEE (BOARD retaining all recoveries from such
enforcement). If the BOARD institutes suit or commences settlement negotiations
and is successful, it may terminate the exclusivity of the license for the
infringed field of use in the national jurisdiction where the suit was brought.

                          VIII.  ASSIGNMENT

                  This Agreement may be assigned by LICENSEE only in connection
with an acquisition of LICENSEE (by whatever means) or the sale or merger of
substantially all of its related business to or with another, or otherwise only
with the consent of BOARD, not to be unreasonably withheld. BOARD may assign its
right to receive payments hereunder but not otherwise assign this Agreement.

                          IX.  PATENT MARKING

                  To the extent reasonable and practical regarding products,
LICENSEE agrees to mark permanently and legibly all products and documentation
manufactured and sold by it under this Agreement with such patent notice as is
required under Title 35, United States Code.

                                       20.

<PAGE>   21
                  X. INDEMNIFICATION; INFRINGEMENT SUIT CREDIT

                  10.1     Subject to Section 10.2, LICENSEE shall hold
harmless and indemnify BOARD, SYSTEM, UNIVERSITY, its Regents, officers,
employees and agents from and against any claims demands, or causes of action
whatsoever, including without limitation those arising on account of any injury
or death of persons or damage to property caused by or arising out of, or
resulting from, the exercise or practice of the license granted hereunder by
LICENSEE or of its officers, employees, agents or representatives.

                  10.2 The BOARD shall promptly notify LICENSEE in writing of
any claim or suit or threat thereof brought against BOARD in respect of which
indemnification may be sought and, subject to the statutory authority of the
Attorney General of the State of Texas, shall reasonably cooperate with LICENSEE
in defending or settling any such claim or suit. To the extent allowed by law,
no settlement of any claim, suit or threat thereof received by BOARD and for
which the BOARD will seek indemnification, shall be made without the prior
written approval of LICENSEE. Subject to the statutory authority of the Attorney
General of the State of Texas, BOARD will permit LICENSEE to defend BOARD
against any such claim, suit or threat thereof and LICENSEE shall have sole
control over the defense, subject to BOARD'S right to select its own counsel to
review the matter for BOARD at BOARD'S sole cost and expense.

                  10.3 If infringement is alleged against LICENSEE or any person
or entity