<PAGE>   1

                                                                     EXHIBIT 4.3


         THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE
         SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
         AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN
         AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION REQUIREMENTS OF THE ACT.



June 29, 2000                                                       $ 25,000,000

                                GERON CORPORATION
                   SERIES D ZERO-COUPON CONVERTIBLE DEBENTURES

         Geron Corporation, a Delaware corporation (the "Issuer"), for value
received hereby promises to pay to RGC International Investors, LDC or its
registered assigns the principal sum of Twenty Five Million Dollars
($25,000,000), together with all accrued but unpaid interest thereon, on June
29, 2003 in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts at
the last address of the Holder (as defined herein) last appearing on the
Register (as defined herein).

         This Security is one of a duly authorized issue of Series D zero-coupon
convertible debentures of the Issuer (the "Security") referred to in the
Securities Purchase Agreement (the "Purchase Agreement") dated as of June 29,
2000 by and between the Issuer and the Purchaser (as defined in the Purchase
Agreement). The Securities are subject to the terms and conditions of the
Purchase Agreement, a copy of which is on file at and may be obtained from the
Issuer at its principal office at the address set forth in Section 4.5 hereof.
The Issuer agrees to issue from time to time replacement Securities in the form
hereof to facilitate any transfers and assignments. In addition, after delivery
of an indemnity in form and substance satisfactory to the Issuer, the Issuer
also agrees to issue replacement Securities for securities which have been lost,
stolen, mutilated or destroyed.

         The Issuer shall keep at its principal office a register (the
"Register") in which shall be entered the names and addresses of the registered
holders of the Securities and particulars of the respective Securities held by
them and of all transfers of such Securities. References to the "Holder" or
"Holders" shall mean the Person listed in the Register as the payee of any
Security unless the payee shall have presented such Security to the Issuer for
transfer and the transferee shall have been entered in the Register as a
subsequent holder, in which case the term shall mean such subsequent holder. The
ownership of the Securities shall be proven by the Register. For the purpose of
paying interest and principal on the Securities, the Issuer shall been titled to
rely on the names and addresses in the Register and notwithstanding anything to
the contrary contained in this Security, no Event of Default shall occur under
Section 3.1 if payment of principal is made in accordance with the names and
addresses and particulars contained in the Register.

<PAGE>   2

         No provision of this Security shall alter or impair the obligations of
the Issuer, which are absolute and unconditional, to pay the principal of and
accrued interest on this Security at the place, times, rate, and in the
currency, herein prescribed.

         The principal of this Security shall bear interest at the rate (the
"Interest Rate") of zero percent (0%) per annum, except in the case of an Event
of Default (as defined in Article III hereof), in which case the Interest Rate
of this Security shall thereafter be seven percent (7%) per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such Event of Default to the date such default has been
cured or waived and overdue principal, if any, has been paid or duly provided
for. Such interest will be computed on the basis of a 365-day year (or 366 days
in the case of a leap year). Interest on any overdue principal shall be payable
on demand. Payment of the principal of and any such interest on this Security
will be at the offices of the Holder of this Security.

         Interest will be computed on the basis of a fraction, the denominator
of which is 365 (or 366 for any leap year)and the numerator of which is the
actual number of days elapsed from the date such interest becomes due and
payable.

         The applicable Interest Rate shall be effective both before and after
any judgment may be rendered in a court of competent jurisdiction, provided,
however, that if the applicable Interest Rate is deemed to be in excess of the
amount permitted to be charged by the Issuer under applicable laws, the Holder
shall be entitled to collect an Interest Rate only at the highest rate permitted
by law, and any interest collected by the Holder in excess of such lawful amount
shall be deemed a payment in reduction of the Principal Amount then outstanding
under this Security and shall be so applied.

         The payment obligations evidenced by this Security shall rank senior to
all other Debt of the Issuer in existence as of the date of issuance of this
Security except that it shall rank pari passu to the Series C Two Percent (2%)
Convertible Debentures issued September 30, 1999. The Issuer shall not hereafter
and while this Security is outstanding issue directly or indirectly any Debt for
Money Borrowed which is senior to the indebtedness evidenced by this Security.

                                    ARTICLE I

                                   DEFINITIONS

         1.1 CERTAIN TERMS DEFINED. The following terms (except as otherwise
expressly provided or unless the context otherwise clearly requires) for all
purposes of this Security shall have the respective meanings specified below.
All accounting terms used herein and not expressly defined shall have the
meanings given to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" shall mean
such accounting principles which are generally accepted as of the date hereof.
The terms defined in this Section 1.1 include the plural as well as the
singular.

                  "Acceleration Notice" shall have the meaning set forth in
Section 3.1.


                                       2
<PAGE>   3

                  "Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition,"control" when
used with respect to any Person means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling"and "controlled" have meanings correlative
to the foregoing.

                  "Average Price" on any date means (x) the sum of the Per Share
Market Value for the ten (10) Trading Days immediately preceding such date minus
(y) the highest and lowest Per Share Market Values during the ten (10) Trading
Days immediately preceding such date, divided by (z) eight.

                  "Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act hereunder.

                  "Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized by
law to close.

                  "Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock whether now outstanding or issued after the original
Issue Date, including, without limitation, all Common Stock and all Preferred
stock.

                  "Change of Control" means the occurrence of one or more of the
following events: the occurrence of any of (i) an acquisition after the date
hereof by an individual or legal entity or "group" (as described in Rule
13d-5(b)(1) promulgated under the Exchange Act), other than the Buyers or any of
their Affiliates, of in excess of 50% of the voting securities of the Issuer,
(ii) a replacement of more than one-half of the members of the Issuer's Board of
Directors which is not approved by those individuals who are members of the
Board of Directors on the date hereof in one or a series of related
transactions, (iii) the merger of the Issuer with or into another entity,
consolidation or sale of all or substantially all of the assets of the Issuer in
one or a series of related transactions or (iv) the execution by the Issuer of
an agreement to which the Issuer is a party or by which it is bound, providing
for any of the events set forth in (i), (ii) or (iii).

                  "Common Stock" means the common stock, par value $.001 per
share, of the Issuer.

                  "Closing Date" shall have the meaning set forth in the
Purchase Agreement.

                  "Conversion Price" shall have the meaning set forth in Section
4.2.

                  "Debt" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or bankers'
acceptance or other similar instruments (or reimbursement obligations with
respect thereto), (iv) all obligations of such Person to pay the deferred
purchase price of property or services, (v) all obligations of such Person as
lessee undercapitalized leases, (vi) all Debt of others secured


                                       3
<PAGE>   4

by a Lien on any asset of such Person, whether or not such Debt is assumed by
such Person, provided that for purposes of determining the amount of any Debt of
the type described in this clause, if recourse with respect to such Debt is
limited to such asset, the amount of such Debt shall be limited to the fair
market value of such asset, (vii) all Debt of others guaranteed by such Person,
and (viii) all redeemable stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends.

                  "Debt for Money Borrowed" of any Person means at any date,
without duplication, Debt of the type referred to in clauses (i) and (ii) of the
definition of "Debt" set forth herein.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "GAAP" or "generally accepted accounting principles" means
generally accepted accounting principles in the United States, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession.

                  "Holder", "Holder of Securities", "Securityholder" or other
similar terms means the registered holder of any Security.

                  "Incurrence" means the incurrence, creation, assumption or in
any other manner becoming liable with respect to, or the extension of the
maturity of or becoming responsible for the payment of, any Debt. "Incur" shall
have a comparable meaning.

                  "Issuer" shall have the meaning set forth in the first
paragraph hereof.

                  "Issuer Conversion Notice" shall have the meaning set forth in
Section 4.8.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Security, the Issuer shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.

                  "Mandatory Prepayment Amount" for any Security means the
greater of (i) the sum of (x) 115% of the principal amount of the Security to be
prepaid plus all accrued and unpaid interest thereon and (y) all other amounts,
costs, interest, expenses and liquidated damages due in respect of such
principal amount and (ii) the sum of (x) at the option of the Holder, either (I)
the principal amount of the Security to be repaid, plus all accrued and unpaid
interest thereon, divided by the Conversion Price on the date the Mandatory
Prepayment Amount is demanded or otherwise due, multiplied by the Average Price
on the date the Mandatory Prepayment Amount is demanded or otherwise due or (II)
the principal amount of the Security to be prepaid, plus all accrued and unpaid
interest thereon, divided by the Conversion Price on the Trading Day immediately
prior to the date the Mandatory Prepayment Amount is paid in full, multiplied by
the Average Price on the Trading


                                       4
<PAGE>   5

Day immediately prior to the date the Mandatory Prepayment Amount is paid in
full, and (y) all other amounts, costs, interest, expenses and liquidated
damages due in respect of such principal amount.

                  "Nasdaq" means the Nasdaq National Market.

                  "Original Issue Date" of any Security (or portion thereof)
means the earlier of (i) the date of such Security and (ii) the date of any
Security (or portion thereof) for which such security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.

                  "Per Share Market Value" means (i) on any particular date the
closing bid price per share of the Common Stock on such date on Nasdaq or any
Subsequent Market on which the Common Stock is then listed or if there is no
such price on such date, then the closing bid price on such exchange or
quotation system on the date nearest preceding such date or (ii) if the Common
Stock is not listed then on Nasdaq or any Subsequent Market, the closing bid
price for a share of Common Stock in the over-the-counter market, as reported by
the National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (iii) if the Common Stock is not then publicly traded the fair
market value of a share of Common Stock as determined by an appraiser selected
in good faith by the holder of this Security; provided, however, that the
Issuer, after receipt of the determination by such appraiser, shall have the
right to select an additional appraiser, in which case, the fair market value
shall be equal to the average of the determinations by each such appraiser; and
provided, further that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other similar
transactions during such period.

                  "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

                  "Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated)
of such Person's preferred or preference stock whether now outstanding or issued
after the date of this Security, and includes, without limitation, all classes
and series of preferred or preference stock.

                  "Principal", wherever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and premium, if
any."

                  "Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person under
generally accepted accounting principles.

                  "Purchase Price" means, with respect to any Security, the
purchase price paid to the Issuer upon issuance of such Security.

                  "Purchaser" shall have the meaning ascribed thereto in the
Purchase Agreement.


                                       5
<PAGE>   6

                  "Registration Rights Agreement" means that Registration Rights
Agreement dated as of June 29, 2000 by and between the Issuer and the Initial
Investor (as defined in the Registration Rights Agreement).

                  "Security" or "Securities" shall have the meaning set forth in
the second paragraph hereof.

                  "Stated Maturity Date" means June 29, 2003.

                  "Stock Plan" means any stock or compensation plan pursuant to
which Common Stock may be issued to any employee, officer, director or
consultant of the Issuer which is either (a) approved by the stockholders of the
Issuer or (b) approved by the compensation committee of the Issuer's Board of
Directors for legitimate compensation purposes which provides for the purchase
of the Common Stock at a purchase price of no less than 85% of the market price
of the Common Stock on the date of issuance of such option, warrant or security.

                  "Subsidiary" means any corporation or other organization,
whether incorporated or unincorporated, in which the Issuer owns, directly or
indirectly, any equity or other ownership interest and which would be deemed to
be a "significant subsidiary" (as such term is defined in Rule 1-02(w) of
Regulation S-X promulgated under the Securities Act of 1933, as amended (the
"Securities Act")).

                  "Subsequent Market" means the New York Stock Exchange,
American Stock Exchange or Nasdaq SmallCap Market.

                  "Trading Day" means (a) a day on which the Common Stock is
traded on Nasdaq or on such Subsequent Market on which the Common Stock is then
listed or quoted or (b) if the Common Stock is not listed on Nasdaq or a
Subsequent Market, a day on which the Common Stock is traded in the
over-the-counter Market, as reported by the OTC Bulletin Board, or (c) if the
Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock
is quoted in the over-the-countermarket as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding its
functions or reporting prices) provided, however that in any event that the
Common Stock is not listed or quoted as set forth in (a), (b), or (c) hereof,
then a Trading Day shall mean any Business Day.

                  "Warrants" has the meaning set forth in the Purchase
Agreement.

                  "Wholly-Owned Subsidiary" means with respect to any Person a
Subsidiary the voting stock of which is more than 90% owned by such Person.


                                       6
<PAGE>   7

                                   ARTICLE II

                             PAYMENT; THE SECURITIES

         2.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants and agrees
that it will duly and punctually pay or cause to be paid the principal and
interest (to the extent enforceable under applicable law), with respect to each
of the Securities at the place or places, at the respective times and in the
manner provided in the Securities.

         2.2 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN SECURITIES. In case
any temporary or definitive Security shall become mutilated, defaced or be
apparently destroyed, lost or stolen, the Issuer shall execute and deliver a new
Security, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security. In every case the applicant
for a substitute Security shall furnish to the Issuer such security or indemnity
as it may require to indemnify and defend and to save it harmless and, in every
case of destruction, loss or theft evidence to the Issuer's satisfaction of the
apparent destruction, loss or theft of such Security and of the ownership
thereof.

                  Upon the issuance of any substitute Security, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Security which has matured or is about to mature, or has
been called for redemption in full, or is being surrendered for conversion in
full shall become mutilated or defaced or be apparently destroyed, lost or
stolen, the Issuer may, instead of issuing a substitute Security, with the
holder's consent, pay or authorize the payment or conversion of the same
(without surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the Issuer such
security or indemnity as it may require to save it harmless from all risks,
however remote, and, in every case of apparent destruction, loss or theft, the
applicant shall also furnish to the Issuer evidence to the Issuer's satisfaction
of the apparent destruction, loss or theft of such Security and of the ownership
thereof.

                  Every substitute Security issued pursuant to the provisions of
this Section by virtue of the fact that any Security is apparently destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Issuer, whether or not the apparently destroyed, lost or stolen Security shall
be at any time enforceable by anyone and shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set forth in) this
Security equally and proportionately with any and all other Securities duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, defaced, or apparently destroyed, lost or stolen
Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

         2.3 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All Securities
surrendered for payment, redemption, registration of transfer or exchange shall
be delivered to the Issuer for cancellation and no Securities shall be issued in
lieu thereof except as expressly permitted by any


                                       7
<PAGE>   8

of the provisions of this Security. If the Issuer shall acquire any of the
Securities, such acquisition alone shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
such indebtedness is satisfied.

                                   ARTICLE III

                                    DEFAULTS

         3.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER OF
DEFAULT. In case one or more of the following events ("Events of Default")
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:

                  (a) default in the payment of all or any part of the principal
of or interest on any of the Securities as and when the same shall become due
and payable either at maturity, upon any redemption, by declaration or
otherwise; or

                  (b) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the Issuer
contained in this Security or the Purchase Agreement or the Registration Rights
Agreement for a period of five (5) Business Days after the date on which any
officer of the Issuer shall have obtained actual knowledge of such failure or
after written notice thereof has been given to the Issuer by the holders of at
least a majority in aggregate principal amount of the Securities then
outstanding; or

                  (c) there shall have occurred with respect to any issue or
issues of Debt of the Issuer and/or one or more Subsidiaries having an
outstanding principal amount of $1,000,000 or more in the aggregate for all such
issues of all such Persons, whether such Debt now exists or shall hereafter be
created, an event of default which has caused the holder thereof to declare such
debt to be due and payable prior to its stated maturity and such Debt has not
been discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration; or

                  (d) a judgment or order (not covered by insurance) for the
payment of money shall be rendered against the Issuer or any Subsidiary of the
Issuer in excess of $500,000 in the aggregate for all such judgments or orders
against all such Persons (treating any deductibles, self insurance or retention
as not so covered) that shall not be discharged, and all such judgments and
orders remain outstanding and there shall be any period of 30 consecutive days
following entry of the judgment or order in excess of $500,000 or the judgment
or order which causes the aggregate amount described above to exceed $500,000
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

                  (e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer or any of its subsidiaries
in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Issuer
or any of its Subsidiaries or for any substantial part of the property of the
Issuer or any of its Subsidiaries or


                                       8
<PAGE>   9

ordering the winding up or liquidation of the affairs of the Issuer or any of
its Subsidiaries, and such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days; or

                  (f) the Issuer or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Issuer or any of its Subsidiaries or for any
substantial part of the property of the Issuer or any of its Subsidiaries, or
the Issuer or any of its Subsidiaries shall make any general assignment for the
benefit of creditors; or

                  (g) any representation, warranty, certification or statement
made by the Issuer in the Purchase Agreement or in any certificate, financial
statement or other document delivered pursuant to the Purchase Agreement shall
prove to have been incorrect in any material respect when made; or

                  (h) the Common Stock shall be delisted from Nasdaq or shall be
suspended from trading on Nasdaq without resuming trading and/or being relisted
thereon or on a Subsequent Market or having such suspension lifted, as the case
may be, within three Business Days; or

                  (i) (X) a Registration Statement for the Registrable
Securities (as defined in the Registration Rights Agreement) shall not have been
declared effective by the Securities and Exchange Commission (the "SEC") on or
prior to the 180th day after the Closing Date (as defined in the Purchase
Agreement), or (Y) the Issuer fails to obtain the effectiveness of any
additional Registration Statement (required to be filed pursuant to Section 3(b)
of the Registration Rights Agreement) within ninety (90) days after the
Registration Trigger Date (as defined in the Registration Rights Agreement), or
(Z) any such Registration Statement, after its initial effectiveness and during
the Registration Period (as defined in the Registration Rights Agreement),
lapses in effect or sales of all of the Registrable Securities (as defined in
the Registration Rights Agreement, the "Registrable Securities") otherwise
cannot be made thereunder (whether by reason of the Issuer's failure to amend or
supplement the prospectus included therein in accordance with the Registration
Rights Agreement, the Issuer's failure to file and obtain effectiveness with the
SEC of an additional Registration Statement required to be filed pursuant to
Section 3(b) of the Registration Rights Agreement or otherwise) for more than
thirty (30) consecutive days or more than sixty (60) days in any twelve (12)
month period after such Registration Statement becomes effective, excluding for
purposes of clause (Z) above only, days during the Allowed Delay period (as
defined in the Registration Rights Agreement) and excluding for purposes of
clauses (X) and (Y) above only, a delay caused by Purchaser's failure to comply
with Sections 3(h) and 4(a) of the Registration Rights Agreement; or

                  (j) a Change of Control shall occur;

then, in each and every such case (other than an Event of Default specified in
Section 3.1(e) or 3.1(f)hereof), unless the principal shall have already become
due and payable, by notice in writing to the Issuer (the "Acceleration Notice"),
a Holder may declare the entire principal amount of the Securities and any
interest accrued thereon to be due and payable immediately, and upon any such


                                       9
<PAGE>   10

declaration the same shall become immediately due and payable. If an Event of
Default specified in Section 3.1(e) or 3.1(f) occurs, the principal of and any
accrued interest on the Securities shall become and be immediately due and
payable without any declaration or other act on the part of any Holder. In the
event that the Issuer shall not have promptly, but in any event within five (5)
Business Days of receipt of an Acceleration Notice, paid the Holder the amount
specified herein as due and payable in respect of such Event of Default, the
Conversion Price shall automatically be adjusted to equal the average Per Share
Market Value of the Common Stock during the preceding thirty (30) consecutive
Trading Days; provided, that the Per Share Market Value is lower than the
Conversion Price.

                  The aggregate amount payable upon an Event of Default
described in Section 3.1(a), (e), (f) and (i) shall be equal to the sum of (I)
the Mandatory Prepayment Amount plus (II) the Mandatory Prepayment Amount for
the principal amount of the Securities (the "Converted Debentures") that would
then be held by such Holder had the principal amount of Securities converted
into Debenture Shares (as defined in the Purchase Agreement) that are then held
by the Holder not been so converted; provided, that the Holder shall not be
entitled to a Mandatory Prepayment Amount with respect to Converted Debentures
if both the following have occurred: (i) prior to the occurrence of an Event of
Default, the Debenture Shares into which the Converted Debentures were converted
had been held by the Holder for more than thirty (30) days (which period shall
be extended at the time of occurrence of the Event of Default for the number of
Trading Days during such 30-day period that an Allowed Delay (as defined in the
Registration Rights Agreement) is in effect) and (ii) prior to the occurrence of
the Event of Default and after receipt by the Holder of the Debenture Shares
that are held by the holder at the time of the occurrence of the Event of
Default, the Registration Statement with respect to such Conversion Shares had
been continuously effective for thirty (30) Trading Days.

                  The aggregate principal amount payable on each Event of
Default other than as described in Section 3.1(a), (e),(f) and (i) shall be
equal to the sum of (I) the Mandatory Prepayment Amount plus (II) the Mandatory
Prepayment Amount for the Converted Debentures that would then be held by such
Holder had the principal amount of Securities converted into Debenture Shares
that are then held by the Holder not been so converted; provided, that the
holder shall not be entitled to a Mandatory Prepayment Amount with respect to
Converted Debentures if prior to the occurrence of an Event of Default, the
Debenture Shares into which the Converted Debentures were converted had been
held by the Holder for more than three Trading Days (which period shall be
extended at the time of occurrence of the Event of Default for the number of
Trading Days during such 3-day period that an Allowed Delay is in effect).

                  For purposes of this Section 3.1, principal amount of the
Securities are outstanding until such date as the holder shall have received
Debenture Shares upon a conversion (or attempted conversion) thereof. Interest
shall accrue on the prepayment amount hereunder from the day after such amount
is due (being the date of an Event of Default) through the date of payment in
full thereof at the rate of seven percent (7%) per annum, accruing daily from
the date of conversion until such amount, plus any interest thereon, if any, is
paid in full. Payment of the Mandatory Prepayment Amount pursuant to this
Section 3.1 shall be in addition to any other amounts that may be due to the
Holder pursuant to this Security. Within five (5) Business Days of receipt by
the Holder of payments of amounts due to the Holder, (i) the Holder shall return
the Securities to the Issuer and


                                       10
<PAGE>   11

(ii) in the event the Mandatory Prepayment Amount relates to the Converted
Debentures, the Holder shall return the Debenture Shares into which such
Converted Debentures were converted. In the event of the occurrence of an Event
of Default, the Holder need not provide and the Issuer hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Any demand for payment may be rescinded and annulled by the
Holder at any time prior to payment hereunder. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent
thereon.

                  Upon delivery of any Acceleration Notice to the Issuer, the
Issuer shall provide a copy of such notice to the other Holders, if any. Failure
to deliver such notice shall not affect the validity of the notice delivered by
the Holders in accordance with the provisions referred to above.

         3.2 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER OF
DEFAULT. No right or remedy herein conferred upon or reserved to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

                  No delay or omission of the Holders to exercise any right or
power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power or shall be construed to be a waiver of any
such Event of Default or an acquiescence therein; and every power and remedy
given by the Securities or by law may be exercised from time to time, and as
often as shall be deemed expedient, by the Holders.

                                   ARTICLE IV

                              EXCHANGE; CONVERSION

         4.1 RIGHT OF SECURITYHOLDERS TO EXCHANGE SECURITIES. Subject to and
upon compliance with the provisions of this Section, this Security is
exchangeable for an equal principal amount of debentures of different authorized
denominations, as requested by the holder surrendering the same. No service
charge will be made for such registration of transfer or exchange.

         4.2 RIGHT OF SECURITYHOLDERS TO CONVERT SECURITIES INTO COMMON STOCK.
Subject to and upon compliance with the provisions of this Section, the
principal amount of this Security, or any portion thereof, together with accrued
but unpaid interest thereon, may, at any time and at or before the close of
business on June 29, 2003, be converted into duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock at $29.95 per share (the
"Conversion Price"), or, in case an adjustment in the Conversion Price and the
securities or other property issuable upon conversion has taken place pursuant
to Article III or IV hereof, then at the applicable Conversion Price, as
adjusted, and in such securities or other property as so adjusted, upon
surrender to the Issuer at any time prior to 8:00 p.m., New York City time, on
any Business Day at the Issuer's offices, of


                                       11
<PAGE>   12

a written notice of election to convert as provided in the form attached hereto
as Exhibit A (a "Conversion Notice").

         4.3 SURRENDER OF SECURITY UPON CONVERSION. Notwithstanding anything to
the contrary set forth herein, upon conversion of this Security in accordance
with the terms thereof, the Holder of this Security shall not be required to
physically surrender the Security to the Issuer unless the entire unpaid
principal amount of the Security is so converted. The Holder and the Issuer
shall maintain records showing the principal amount so converted and the dates
of such conversions or shall use such other method, reasonably satisfactory to
the Holder and the Issuer, so as not to require physical surrender of the
Security upon each such conversion. In the event of any dispute or discrepancy,
such records of the Issuer shall be controlling and determinative in the absence
of manifest error. Notwithstanding the foregoing, if any portion of the Security
is converted as aforesaid, the Holder may not transfer the Security unless the
Holder first physically surrenders the Security to the Issuer, whereupon the
Issuer will forthwith issue and deliver upon the order of the Holder a new
Security of like tenor, registered as the Holder (upon payment by the Holder of
any applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of the Security. The Holder and any assignee,
by acceptance of the Security, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of a Security,
the unpaid and unconverted principal amount of such Security represented by such
Security may be less than the amount stated on the face thereof.

         4.4 ADJUSTMENT FOR DIVIDENDS. No payment or adjustment will be made for
dividends on any Common Stock except as provided herein. On conversion of a
Security, that portion of interest accrued and unpaid interest attributable to
the period from the Original Issuance Date to the Conversion Date with respect
to the converted Security shall not be canceled, extinguished or forfeited, but
rather shall be deemed to be paid in full to the Holder thereof through delivery
of the Common Stock, in exchange for the Security being converted pursuant to
the provisions hereof. If the Holder converts more than one Security at the same
time, the number of shares of Common Stock issuable upon the conversion shall be
based on the total principal amount of the Securities converted.

         4.5 ISSUANCE OF SHARES UPON CONVERSION.

                  (a) As promptly as practicable after the delivery of a
Conversion Notice, as herein provided, but in any event within three Trading
Days of the date of such Conversion Notice (so long as the Conversion Notice was
sent and confirmed via facsimile to the Issuer prior to 8:00 p.m., New York City
time, on the date specified therein as the conversion date), the Issuer shall
deliver or cause to be delivered at its said office or agency to or upon the
written order of the holder of the Security or Securities so converted a
certificate or certificates representing the number of duly authorized, validly
issued, fully-paid and non-assessable shares of Common Stock, into which such
Security or Securities may be converted in accordance with the provisions of
this Article IV. The Conversion Notice shall state that the holder irrevocably
elects to convert such Security or Securities, or, if less than the entire
principal amount thereof is to be converted, the portion thereof to be
converted. Such notice shall also state the name or names (with address and
social security or other taxpayer identification number) in which said
certificate or certificates are to be issued. Such conversion shall be deemed to
have been made on the date specified in the Conversion Notice as the


                                       12
<PAGE>   13

date of conversion, the rights of the holder of such Security or Securities as a
Holder shall cease at such time, the person or persons entitled to receive the
shares of Common Stock upon conversion of such Security or Securities shall be
treated for all purposes as having become the record holder or holders of such
shares of Common Stock at such time and such conversion shall be at the
Conversion Price in effect at such time. In the case of any Security which is
converted in part only, upon such conversion, the Issuer shall execute and
deliver to the holder thereof, as requested by such holder, a new Security or
securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of such Security.

                  (b) In lieu of delivering physical certificates representing
the Common Stock issuable upon conversion of this Security, provided the
Issuer's transfer agent is participating in the Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon request of the Holder
and its compliance with the provisions contained in this Section 4.5, the Issuer
shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by crediting
the account of Holder's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system (to the extent not inconsistent with any
provisions of the Purchase Agreement).

         4.6 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price in effect at
any time shall be subject to adjustment from time to time upon the occurrence of
an Event of Default as set forth in Article III and upon the happening of
certain events, as follows:

                  (a) Common Stock Dividends; Common Stock Splits; Reverse
Common Stock Splits. If the Issuer, at any time while this Security is
outstanding, (a) shall pay a stock dividend on its Common Stock, (b) subdivide
outstanding shares of Common Stock into a larger number of shares, (c) combine
outstanding shares of Common Stock into a smaller number of shares, or (d) issue
by reclassification of shares of Common Stock any shares of capital stock of the
Issuer, the Conversion Price shall be multiplied by a fraction the numerator of
which shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding before such event and the denominator of which shall be the
number of shares of Common Stock outstanding after such event. Any adjustment
made pursuant to this paragraph 4.6(a) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.

                  (b) Rights; Warrants. If the Issuer, during the period
commencing on the Closing Date through and including the date which is 12 months
from the Closing Date, shall issue rights or warrants to all of the holders of
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than $26.95, the Conversion Price shall be multiplied
by a fraction, the denominator of which shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase, and the numerator of which shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
on the date of issuance of such rights or warrants plus the number of shares
which the aggregate offering price of the total number of shares so offered
would purchase at $26.95 per share. Such adjustment shall be made whenever such
rights or warrants are issued, and shall become


                                       13
<PAGE>   14

effective immediately after the record date for the determination of
shareholders entitled to receive such rights or warrants. However, upon the
expiration of any right or warrant to purchase Common Stock the issuance of
which resulted in an adjustment in the Conversion Price pursuant to this
paragraph (b), if any such right or warrant shall expire and all or any portion
thereof shall not have been exercised, the Conversion Price shall immediately
upon such expiration be re-computed and effective immediately upon such
expiration be increased to the price which it would have been (but reflecting
any other adjustments in the Conversion Price made pursuant to the provisions of
section (g) after the issuance of such rights or warrants) had the adjustment of
the Conversion Price made upon the issuance of such rights or warrants been made
on the basis of offering for subscription or purchase only that number of shares
of Common Stock (if any) actually purchased upon the exercise of such rights or
warrants actually exercised; provided, however, that if (X) (1) the Registration
Statement (as defined in the Registration Rights Agreement) is then in effect
and has been in effect and sales of all of the Registrable Securities can be
made thereunder for at least twenty (20) Trading Days prior to a Trigger Date
(as defined below); (2) the Issuer has, at all times prior to the Trigger Date,
a sufficient number of authorized shares of Common Stock reserved for issuance
upon full conversion of all of the Securities issued pursuant to the Purchase
Agreement; and (3) no Event of Default shall have occurred and be continuing on
the Trigger Date or at any time during the twenty (20) Trading Days prior to a
Trigger Date; and (Y) the Per Share Market Value is greater than 150% of the
Conversion Price in effect on the Closing Date for any five (5) consecutive
Trading Days prior to the 180th day following the Closing Date (the last day of
such five (5) consecutive Trading Day period being referred to herein as the
"Trigger Date"), then this provision shall expire automatically on the 180th day
following the Closing Date.

                  (c) Subscription Rights. If the Issuer, during the period
commencing on the Closing Date through and including the date which is 12 months
from the Closing Date, shall distribute to all of the holders of Common Stock
evidences of its indebtedness or assets or rights or warrants to subscribe for
or purchase any security (excluding those referred to in paragraphs 6(a) and (b)
above), then in each such case the Conversion Price at which this Security shall
thereafter be exercisable shall be determined by multiplying the Conversion
Price in effect immediately prior to the record date fixed for determination of
shareholders entitled to receive such distribution by a fraction the denominator
of which shall be the Per Share Market Value of Common Stock determined as of
the record date mentioned above, and the numerator of which shall be such Per
Share Market Value of the Common Stock on such record date less the then fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common Stock
as determined by the Board of Directors in good faith; provided, however, that
in the event of a distribution exceeding ten percent (10%) of the net assets of
the Issuer, such fair market value shall be determined by a nationally
recognized or major regional investment banking firm or firm of independent
certified public accountants of recognized standing (an "Appraiser) selected in
good faith by the Holder of the Security; and provided, further, that the
Issuer, after receipt of the determination by such Appraiser shall have the
right to select an additional Appraiser meeting the same qualifications, in good
faith, in which case the fair market value shall be equal to the average of the
determinations by each such Appraiser. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above; provided, however, that if (X) (1) the Registration
Statement (as defined in the Registration Rights Agreement) is then in effect
and has been in effect and sales of all of the Registrable Securities can be
made thereunder for at least twenty (20) Trading Days prior


                                       14
<PAGE>   15

to a Trigger Date; (2) the Issuer has, at all times prior to the Trigger Date, a
sufficient number of authorized shares of Common Stock reserved for issuance
upon full conversion of all of the Securities issued pursuant to the Purchase
Agreement; and (3) no Event of Default shall have occurred and be continuing on
the Trigger Date or at any time during the twenty (20) Trading Days prior to a
Trigger Date; and (Y) the Per Share Market Value is greater than 150% of the
Conversion Price in effect on the Closing Date for any five (5) consecutive
Trading Days prior to the 180th day following the Closing Date, then this
provision shall expire automatically on the 180th day following the Closing
Date.

                  (d) Rounding. All calculations under this section 4.6 shall be
made to the nearest cent or the nearest l/l00th of a share, as the case maybe.

                  (e) Notice of Adjustment. Whenever the Conversion Price is
adjusted pursuant to paragraphs 4.6(a), (b), (c) or (g), the Issuer shall
promptly mail to the holder of this Security, a notice setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

                  (f) Reclassification, Etc. If:

                             A.  the Issuer shall declare a dividend (or any
                                 other distribution) on its Common Stock; or

                             B.  the Issuer shall declare a special nonrecurring
                                 cash dividend on or a redemption of its Common
                                 Stock; or

                             C.  the Issuer shall authorize the granting to all
                                 the holders of the Common Stock rights or
                                 warrants to subscribe for or purchase any
                                 shares of capital stock of any class or of any
                                 rights; or

                             D.  the approval of any shareholders of the Issuer
                                 shall be required in connection with any
                                 reclassification of the Common Stock of the
                                 Issuer, any consolidation or merger to which
                                 the Issuer is a party, any sale or transfer of
                                 all or substantially all of the assets of the
                                 Issuer, of any compulsory share exchange
                                 whereby the Common Stock is converted into
                                 other securities, cash or property; or

                             E.  the Issuer shall authorize the voluntary or
                                 involuntary dissolution, liquidation or winding
                                 up of the affairs of the Issuer;

then the Issuer shall cause to be filed at each office or agency maintained for
the purpose of conversion of this Security, and shall cause to be mailed to the
holder of this Security, at least 30


                                       15
<PAGE>   16

calendar days prior to the applicable record or effective date hereinafter
specified, a notice (provided such notice shall not include any material
non-public information) stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange;
provided, however, that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice.

                  (g) Adjustment to Conversion Price. In order to prevent
dilution of the rights granted under this Security, during the period commencing
on the Closing Date through and including the date which is 12 months from the
Closing Date, the Conversion Price will be subject to adjustment from time to
time as provided in this Section 4.6(g); provided, however, that if (X) (1) the
Registration Statement (as defined in the Registration Rights Agreement) is then
in effect and has been in effect and sales of all of the Registrable Securities
can be made thereunder for at least twenty (20) Trading Days prior to a Trigger
Date; (2) the Issuer has, at all times prior to the Trigger Date, a sufficient
number of authorized shares of Common Stock reserved for issuance upon full
conversion of all of the Securities issued pursuant to the Purchase Agreement;
and (3) no Event of Default shall have occurred and be continuing on the Trigger
Date or at any time during the twenty (20) Trading Days prior to a Trigger Date;
and (Y) the Per Share Market Value is greater than 150% of the Conversion Price
in effect on the Closing Date for any five (5) consecutive Trading Days prior to
the 180th day following the Closing Date, then this provision shall expire
automatically on the 180th day following the Closing Date:

                             (i) Adjustment of Conversion Price upon Issuance of
                                 Common Stock. If, during the period commencing
                                 on the Closing Date through and including the
                                 date which is 12 months from the Closing Date,
                                 the Issuer issues or sells, or is deemed to
                                 have issued or sold, any shares of Common Stock
                                 (other than the Debenture Shares and the
                                 Warrant Shares (each as defined in the Purchase
                                 Agreement) or shares of Common Stock deemed to
                                 have been issued by the Issuer in connection
                                 with a Stock Plan, shares of Common Stock
                                 issuable upon the exercise of any options or
                                 warrants outstanding on the date hereof or upon
                                 conversion of convertible securities
                                 outstanding on the date hereof, in each case as
                                 listed in Schedule 2.1(c) of the Purchase
                                 Agreement, shares of Common Stock issued or
                                 deemed to have been issued in a Strategic
                                 Venture (as defined below), or shares of Common
                                 Stock issued or deemed to have been issued as
                                 consideration for an acquisition by the Issuer
                                 of a division, assets or business (or stock
                                 constituting any portion thereof) from another
                                 person) for a consideration per share less than
                                 $26.95, then


                                       16
<PAGE>   17

                                 immediately after such issue or sale, the
                                 Conversion Price then in effect shall be
                                 reduced to an amount equal to the consideration
                                 per share of Common Stock in such issuance or
                                 sale. A "Strategic Venture" shall mean a
                                 venture between the Issuer and a pharmaceutical
                                 or biotechnology company or an Affiliate
                                 thereof, the primary purpose of which is not to
                                 raise capital in the form of equity (including
                                 without limitation through the issuance of
                                 warrants, convertible securities, phantom stock
                                 rights, stock appreciation rights or other
                                 rights with equity features) and pursuant to
                                 which the Issuer contributes to or issues
                                 securities of the Issuer valued at less than
                                 50% of the entire contribution of the Issuer.
                                 If the Holder and the Issuer cannot agree on
                                 the value of the components of such
                                 contribution, the last two sentences of
                                 subsection (E)(I) entitled "Calculation of
                                 Consideration" shall apply.

                             For purposes of determining the adjusted Conversion
         Price under this Section 4.6(g), the following shall be applicable:

                             A.  Issuance of Options. If, during the period
                                 commencing on the Closing Date through and
                                 including the date which is 12 months from the
                                 Closing Date, the Issuer in any manner grants
                                 any rights or options to subscribe for or to
                                 purchase Common Stock or any stock or other
                                 securities convertible into or exchangeable for
                                 Common Stock (other than the Debenture Shares
                                 or Warrant Shares or shares of Common Stock
                                 deemed to have been issued by the Issuer in
                                 connection with a Stock Plan, shares of Common
                                 Stock issuable upon the exercise of any options
                                 or warrants outstanding on the date hereof or
                                 upon conversion of convertible securities
                                 outstanding on the date hereof, in each case as
                                 listed in Schedule 2.1(c) of the Purchase
                                 Agreement, shares of Common Stock issued or
                                 deemed to have been issued as consideration for
                                 an acquisition by the Issuer of a division,
                                 assets or business (or stock constituting any
                                 portion thereof) from another person or shares
                                 of Common Stock issued or deemed to have been
                                 issued in a Strategic Venture) (such rights or
                                 options being herein called "Options" and such
                                 convertible or exchangeable stock or securities
                                 being herein called "Convertible Securities")
                                 and the price per share for which Common Stock
                                 is issuable upon the exercise of such Options
                                 or upon conversion or exchange of such
                                 Convertible Securities is less than $26.95 then
                                 the Conversion Price shall be adjusted to equal
                                 the price per share for which Common Stock is
                                 issuable upon the exercise of such Options or
                                 upon the conversion or exchange of such
                                 Convertible Securities. No adjustment of the
                                 Conversion Price shall be made upon the actual
                                 issuance of such Common Stock or of such
                                 Convertible Securities upon the exercise of
                                 such Options or upon the actual

                                       17
<PAGE>   18

                                 issuance of such Common Stock upon conversion
                                 or exchange of such Convertible Securities.

                             B.  Issuance of Convertible Securities. If, during
                                 the period commencing on the Closing Date
                                 through and including the date which is 12
                                 months from the Closing Date, the Issuer in any
                                 manner issues or sells any Convertible
                                 Securities and the price per share for which
                                 Common Stock is issuable upon such conversion
                                 or exchange (other than the Debenture Shares or
                                 Warrant Shares or shares of Common Stock deemed
                                 to have been issued by the Issuer in connection
                                 with a Stock Plan, shares of Common Stock
                                 issuable upon the exercise of any options or
                                 warrants outstanding on the date hereof or upon
                                 conversion of convertible securities
                                 outstanding on the date hereof, in each case as
                                 listed in Schedule 2.1(c) of the Purchase
                                 Agreement, shares of Common Stock issued or
                                 deemed to have been issued as consideration for
                                 an acquisition by the Issuer of a division,
                                 assets or business (or stock constituting any
                                 portion thereof) from another person or shares
                                 of Common Stock issued or deemed to have been
                                 issued in a Strategic Venture) is less than
                                 $26.95, then the Conversion Price shall be
                                 adjusted to equal the price per share for which
                                 Common Stock is issuable upon the conversion or
                                 exchange of such Convertible Securities.

                             C.  Change in Option Price or Rate of Conversion.
                                 If there is a change during the period
                                 commencing on the Closing Date through and
                                 including the date which is 12 months from the
                                 Closing Date in (i) the purchase price provided
                                 for in any Options, (ii) the additional
                                 consideration, if any, payable upon the issue,
                                 conversion or exchange of any Convertible
                                 Securities or (iii) the rate at which any
                                 Convertible Securities are convertible into or
                                 exchangeable for Common Stock, then the
                                 Conversion Price in effect at the time of such
                                 change shall be readjusted to the Conversion
                                 Price which would have been in effect at such
                                 time had such Options or Convertible Securities
                                 still outstanding provided for such changed
                                 purchase price, additional consideration or
                                 changed conversion rate, as the case may be, at
                                 the time initially granted, issued or sold;
                                 provided that no adjustment shall be made if
                                 such adjustment would result in an increase of
                                 the Conversion Price then in effect.

                             D.  Certain Definitions. For purposes of
                                 determining the adjusted Conversion Price under
                                 this Section 4.6(g)(i), "Common Stock Deemed
                                 Outstanding" means, at any given time, the
                                 number of shares of Common Stock issued and
                                 outstanding at such time, plus the number of
                                 shares of Common Stock deemed to be outstanding
                                 pursuant to Sections 4.6(g)(i)(A) and
                                 4.6(g)(i)(B) hereof regardless


                                       18
<PAGE>   19

                                 of whether the Options or Convertible
                                 Securities are actually exercisable at such
                                 time, but excluding any shares of Common
                                 Stock issuable upon conversion of the
                                 Securities or exercise of the Warrants.

                             E.  Effect on Exercise Price of Certain Events. For
                                 purposes of determining the adjusted Conversion
                                 Price under this Section 4.6(g)(i), the
                                 following shall be applicable:

                                 (I) Calculation of Consideration Received. If
any Common Stock, Options or Convertible Securities are issued or sold or deemed
to have been issued or sold for cash, the consideration received therefor will
be deemed to be the net amount received by the Issuer therefor. In case any
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Issuer will be the fair value of such consideration, except
where such consideration consists of securities, in which case the amount of
consideration received by the Issuer will be the arithmetic average of the Per
Share Market Values of such security for the five (5) consecutive Trading Days
immediately preceding the date of receipt. In case any Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Issuer is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined jointly by the Issuer and the holders of a majority of the
Underlying Shares of the Securities then outstanding. If such parties are unable
to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the "Valuation Event"), the fair value of such
consideration will be determined within forty-eight (48) hours of the tenth
(10th) day following the Valuation Event by an Appraiser selected by the Issuer.
The determination of such Appraiser shall be binding upon all parties absent
manifest error.

                                 (II) Integrated Transactions. In case any
Option is issued in connection with the issue or sale of other securities of the
Issuer, together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for an aggregate consideration of $.001.

                                 (III) Treasury Shares. The number of shares of
Common Stock outstanding at any given time does not include shares owned or held
by or for the account of the Issuer, and the disposition of any shares so owned
or held will be considered an issue or sale of Common Stock.

                                 (IV) Record Date. If the Issuer takes a record
of the holders of Common Stock for the purpose of entitling them (1) to receive
a dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (2) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon


                                       19
<PAGE>   20

the declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.

                             (ii) Certain events. If any event occurs of the
                                 type contemplated by the provisions of Section
                                 4.6(g)(i) (subject to the exceptions stated
                                 therein) but not expressly provided for by such
                                 provisions (including, without limitation, the
                                 granting of stock appreciation rights, phantom
                                 stock rights or other rights with equity
                                 features other than pursuant to a Stock Plan),
                                 then the Issuer's Board of Directors will make
                                 an appropriate adjustment in the Conversion
                                 Price so as to protect the rights of the
                                 Holder, or assigns, of this Security; provided,
                                 however, that no such adjustment will increase
                                 the Conversion Price as otherwise determined
                                 pursuant to this Section 4.6(g).

         In no event shall any provision in this Section 4.6 cause the
Conversion Price to be greater than the Conversion Price on the date of issuance
of this Security.

         4.7 NASDAQ LIMITATION. If on any date (the "Determination Date") (a)
the Common Stock is listed for trading on Nasdaq or the Nasdaq Small Cap Market,
(b) the Conversion Price then in effect is such that the sum of (x) the
aggregate number of shares of Common Stock that would then be issuable upon
conversion in full of the then outstanding principal amount of the Securities
and as payment of interest thereon, plus (y) the aggregate number of shares of
Common Stock that have previously been issued upon conversion of the Securities,
plus (z) any shares of Common Stock issued or issuable upon conversion of any
other securities of the Issuer which would be aggregated with the Common Stock
issuable upon conversion of the Securities as required by the applicable rules
and regulations of Nasdaq (or any successor entity), would equal or exceed 20%
of the number of shares of the Common Stock outstanding immediately prior to the
Closing Date (as defined in the Purchase Agreement) (such number of shares as
would not equal or exceed such 20% limit, the "Issuable Maximum"), and (c) the
Issuer shall not have previously obtained the vote of the stockholders of the
Issuer (the "Stockholder Approval"), if any, as may be required by the
applicable rules and regulations of Nasdaq (or any successor entity) to approve
the issuance of shares of Common Stock in excess of the Issuable Maximum in a
private placement whereby shares of Common Stock are deemed to have been issued
at a price that is less than the greater of book value or fair market value of
the Common Stock, then with respect to the aggregate principal amount of the
Securities then held by the Holders for which a conversion in accordance with
the Conversion Price would result in an issuance of shares of Common Stock in
excess of the Issuable Maximum (the "Excess Principal") the Issuer may elect to
prepay cash to the holders in an amount equal to the Mandatory Prepayment
Amount. Any such election by the Issuer must be made in writing to the Holders
within two (2) Trading Days after the Determination Date and the payment of such
Mandatory Prepayment Amount applicable to such prepayment must be made in full
to the Holders with ten (10) Business Days after the date such notice is
delivered. If the Issuer does not deliver timely a notice of its election to
prepay under this Section or shall, if it shall have delivered such a notice,
fail to pay the prepayment amount hereunder within ten (10) Business Days
thereafter, then the Holders of a majority of the aggregate principal amount of
the Securities then outstanding shall


                                       20
<PAGE>   21

have the option by written notice to the Issuer, to declare any such notice
given by the Issuer, if given, to be null and void and require the Issuer to pay
cash to each Holder in an amount equal to the Mandatory Prepayment Amount for
such Holder's portion of the Excess Principal. The payment of the Mandatory
Prepayment Amount to each Holder pursuant to this Section shall be determined on
a pro rata basis upon the principal amount of the Securities held by such Holder
on the determination Date. If the Issuer fails to pay the Mandatory Prepayment
Amount in full pursuant to this Section within five Business Days after the date
payable, the Issuer will pay interest thereon at a rate of seven percent (7%)
per annum to the converting Holder, accruing interest daily from the date of
conversion until such amount, plus all such interest thereon, if any, is paid in
full.

                  In no event shall the Issuer be required to issue shares of
Common Stock upon conversion of the Securities if such issuance would violate
the rules of the Nasdaq Stock Market.

         4.8 CONVERSION AT THE OPTION OF THE ISSUER. On and after the date which
is twelve (12) months following the date on which the Registration Statement is
first declared effective by the Securities and Exchange Commission (subject to
extension by one Trading Day for each Trading Day after the Registration
Statement is first declared effective that sales of all of the Registrable
Securities (as defined in the Registration Rights Agreement) otherwise cannot be
made thereunder (whether by reason of the Issuer's failure to properly
supplement or amend the prospectus included therein in accordance with the terms
of the Registration Rights Agreement, including during any Allowed Delay (as
defined in Section 3(f) of the Registration Rights Agreement)) subject to the
provisions of this paragraph, this Security shall, upon fifteen (15) days' prior
written notice to the Holders, be convertible into shares of Common Stock at the
option of the Issuer, in whole or in part, which option may be exercised at any
time during the five Trading Days following the date on which the Per Share
Market Value of the Common Stock equals or exceeds an amount equal to 150% of
the Conversion Price as of the Original Issuance Date of this Security for a
period of twenty (20) consecutive Trading Days. Any conversion of this Security
pursuant to this Section 4.8 shall be made on a pro rata basis with the
conversion of the Securities held by other Persons. The number of shares of
Common Stock issuable upon a conversion hereunder shall be determined by
dividing the outstanding principal amount of this Security to be converted, plus
all accrued but unpaid interest thereon (to the extent such interest is not
being paid in cash), by the Conversion Price on the Issuer Conversion Date (as
defined herein). Notwithstanding the foregoing, the Issuer shall not be
permitted to deliver requests for the conversion of a Holder's Securities if (a)
both (1) a Registration Statement for the Registrable Securities is not then
effective and has not been effective for a period of at least ninety (90)
consecutive Trading Days prior to such date and (2) such Holder is not permitted
to resell Registrable Securities pursuant to Rule 144(k) under the Act, without
volume restrictions, as evidenced by an opinion letter of counsel to the Issuer
and reasonably acceptable to the Holder and transfer agent for the Common Stock;
(b) there are not sufficient shares of Common Stock authorized and reserved for
issuance upon such conversion; or (c) the Issuer shall have defaulted on its
material covenants and obligations hereunder or under the Purchase Agreement or
Registration Rights Agreement, which default has not been cured in full to the
reasonable satisfaction of the Holder. The Issuer shall exercise its right to
require conversion by delivering to the Holder a form of conversion notice
attached hereto as Exhibit B (the "Issuer Conversion Notice"). Each issuer
Conversion Notice shall specify the principal amount of Securities to be
converted and the date on which such conversion is to be effected, which date
may not be prior to the tenth day after the date such Issuer Conversion


                                       21
<PAGE>   22

Notice is deemed to have been delivered hereunder (the "Issuer Conversion
Date"), as well as the other information set forth on Exhibit B. Subject to the
provisions hereof, each Issuer Conversion Notice, once given, shall be
irrevocable. If the Issuer is requiring conversion of less than all of the
principal amount represented by the Securities tendered by the Holder in
response to an Issuer Conversion Notice, or if a conversion hereunder cannot be
effected in full for any reason, the Issuer shall honor such conversion to the
extent permissible hereunder and pro rata with all other Holders of the
Securities and shall promptly deliver to such Holder a new Security for such
principal amount as has not yet been converted.

         4.9 RESTRICTION ON CONVERSION BY THE HOLDER. Notwithstanding anything
in this Security to the contrary, in no event shall the Holder of this Security
be entitled to convert an amount of Securities in excess of that amount of
Securities upon conversion of which the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned through the
ownership of the unexercised Securities and the unexercised or unconverted
portion of any other securities of the Issuer (including the Warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Securities (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
Holder and its affiliates of more than 9.9% of the outstanding shares of Common
Stock following such conversion. For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13D-G thereunder, except as otherwise
provided in clause (i) hereof. Notwithstanding anything in this Debenture to the
contrary, the restriction on the Holders set forth in this paragraph shall not
be amended without (i) the written consent of the Holders and the Issuer and
(ii) the approval of the holders of a majority of Issuer's Common Stock present,
or represented by proxy, and voting at any meeting called to vote on the
amendment of such restriction.

         4.10 OFFICER'S CERTIFICATE. Whenever the number of shares purchasable
upon conversion shall be adjusted as required by the provisions of Section 4.6,
the Issuer shall forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office and with its stock transfer agent, if any, an
officer's certificate showing the adjusted number of shares determined as herein
provided, setting forth in reasonable detail the facts requiring such adjustment
and the manner of computing such adjustment. Each such officer's certificate
shall be signed by the chairman, president or chief financial officer of the
Issuer and by the secretary or any assistant secretary of the Issuer. Each such
officer's certificate shall be made available at all reasonable times for
inspection by any holder of the Securities and the Issuer shall, forthwith after
each such adjustment, mail a copy, by first class mail, of such certificate to
the each of the Holders.

         4.11 RESERVATION OF SHARES. The Issuer covenants that it will reserve
and keep available out of its authorized shares of Common Stock, free from
preemptive rights, solely for the purpose of issue upon conversion of this
Security and the exercise of the Warrants, such number of shares of Common Stock
equal to 125% of the shares then issuable upon the conversion or exercise of all
the Securities and Warrants into Common Stock. The Issuer covenants that all
shares of the Common Stock issued upon conversion of the Security and exercise
of the Warrants which shall be so issuable shall, when issued, be duly and
validly issued and fully paid and non-assessable.


                                       22
<PAGE>   23

         4.12 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. The Issuer covenants
that if any shares of Common Stock required to be reserved for purposes of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law, or any national
securities exchange, before such shares may be issued upon conversion, the
Issuer will use its best efforts to cause such shares to be duly registered or
approved, as the case may be.

         4.13 FRACTIONAL SHARES. Upon a conversion hereunder, the Issuer shall
not be required to issue stock certificates representing fractions of shares of
the Common Stock, but may if otherwise permitted, make a cash payment in respect
of any final fraction of a share based on the Per Share Market value at such
time. If the Issuer elects not, or is unable, to make such a cash payment, the
holder shall be entitled to receive, in lieu of the final fraction of a share,
one whole share of Common Stock.

         4.14 PAYMENT OF TAX UPON ISSUE OF TRANSFER. The issuance of
certificates for shares of the Common Stock on conversion of the Securities
shall be made without charge to the Holders thereof for any documentary stamp or
similar taxes that maybe payable in respect of the issue or delivery of such
certificate, provided that the Issuer shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate upon conversion in a name other than that of the holder
of such Securities so converted and the Issuer shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Issuer the amount of such tax or shall
have established to the satisfaction of the Issuer that such tax has been paid.

         4.15 NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if received by
8:00 p.m. EST where such notice is to be received), or the first business day
following such delivery (if delivered on a business day after during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications are (i) if to
the Issuer to Geron Corporation, 230 Constitution Drive, Menlo Park, California
94025 attn: David Greenwood, fax no. (650) 473-7701 with copies to Latham &
Watkins, 135 Commonwealth Drive, Menlo Park, CA 94025, Attn: Alan C. Mendelson,
Esq., fax no. (650) 463-2600 and (ii) if to any Holder to the address set forth
immediately below such Holder's name on the signature pages to the Purchase
Agreement or such other address as may be designated in writing hereafter, in
the same manner, by such Person.


                                       23
<PAGE>   24

                                    ARTICLE V

                                  MISCELLANEOUS

         5.1 MODIFICATION OF SECURITIES. The Securities may be modified without
prior notice to any Holder upon the written consent of the Holders of a majority
in principal amount of the Securities then outstanding. The Holders of a
majority in principal amount of the Securities then outstanding may waive
compliance by the Issuer with any provision of the Securities without prior
notice to any Holder. However, without the consent of each Holder affected, an
amendment, supplement or waiver may not (1) reduce the amount of Securities
whose Holders must consent to an amendment, supplement or waiver, (2) reduce the
principal amount of or extend the fixed maturity of any Security or (3) make any
Security payable in money or property other than as stated in the Securities.

         5.2 MISCELLANEOUS. This Security shall be deemed to be a contract under
the laws of the State of Delaware, and for all purposes shall be construed in
accordance with the laws of said State, except as may otherwise be required by
mandatory provisions of law. The parties hereto, including all guarantors or
endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Security, except as specifically provided herein, and assent
to extensions of the time of payment, or forbearance or other indulgence without
notice. The Holder of this Security by acceptance of this Security agrees to be
bound by the provisions of this Security which are expressly binding on such
Holder.

         5.3 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In determining
whether the holders of the requisite aggregate principal amount of Securities
have concurred in any direction, consent or waiver under this Security,
Securities which are owned by the Issuer or any other obligor on the Securities
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination; provided that any Securities owned by any Purchaser shall be
deemed outstanding for purposes of making such a determination. Securities so
owned which have been pledged in good faith may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Issuer the pledgers right so
to act with respect to such Securities and that the pledgee is not the Issuer or
any other obligor upon the securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities.

         5.4 EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

         5.5 NO RIGHTS AS STOCKHOLDER. This Security shall not entitle the
Holder to any rights as a stockholder of the Issuer, including without
limitation, the right to vote, to receive dividends and other distributions, or
to receive notice of, or to attend, meetings of stockholders or any other
proceedings of the Issuer, unless and to the extent converted into shares of
Common Stock in accordance with the terms hereof.

         5.6 REMEDIES. The Issuer acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, or assigns, by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Issuer acknowledges that the remedy at law for breach of its
obligations hereunder will be inadequate and agrees, in the event of a breach or
threatened breach by the Issuer of any of the provisions hereunder, that the
Holder, or assigns, shall be entitled, in addition to all other available
remedies in law or in equity, to an injunction or


                                       24
<PAGE>   25

injunctions to prevent or cure breaches of the provisions of this Security and
to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.

                  IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed under its corporate seal.



[Seal]                                GERON CORPORATION


                                      By /s/ DAVID L. GREENWOOD
                                         ---------------------------------------
                                         David L. Greenwood
Dated:                                   Senior Vice President, Corporate
                                         Development and Chief Financial Officer
Attest:


/s/ OLIVIA BLOOM
---------------------------------
    Olivia Bloom

                                       25
<PAGE>   26

                                    EXHIBIT A
                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder
      in order to Convert the Series D Zero-Coupon Convertible Debentures)

         Pursuant to the terms of the Series D Zero-Coupon Convertible Debenture
(the "Security"), the undersigned hereby irrevocably elects to convert
$__________ principal amount of the Security into shares of Common Stock of
Geron Corporation, a Delaware corporation (the "Issuer"). Capitalized terms used
herein and not otherwise defined herein have the respective meanings provided in
the Security. If securities are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates. No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any. A
copy of the Security is attached hereto (or evidence of loss, theft or
destruction thereof).

         The undersigned hereby irrevocably elects to convert $___________ in
accrued but unpaid interest on the Security and/or $___________ (in payments
pursuant to Section 2(c) of the Registration Rights Agreement at the Conversion
Price, as adjusted, set forth below.

[ ] The undersigned hereby requests that the Issuer electronically transmit the
Common Stock issuable pursuant to this Notice of Conversion to the account of
the undersigned or its nominee with DTC through its Deposit Withdrawal Agent
Commission system ("DWAC Transfer").

    Name of DTC Prime Broker:___________________________________________________
    Account Number:_____________________________________________________________

[ ] In lieu of receiving shares of Common Stock issuable pursuant to this Notice
    of Conversion by way of a DWAC Transfer, the undersigned hereby requests
    that the Issuer issue a certificate or certificates for the number of shares
    of Common Stock set forth above (which numbers are based on the Holder's
    calculation attached hereto) in the name(s) specified immediately below or,
    if additional space is necessary, on an attachment hereto:

    Name:_________________________________________
    Address:______________________________________


         The undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable to the undersigned upon conversion of
the Security shall be made pursuant to registration of the securities under the
Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption from
registration under the Act.

                           Date of Conversion:__________________________________
                           Applicable Conversion Price:_________________________
                           Number of Shares of Common Stock to be
                           Issued pursuant to:

                           (i)   Conversion of principal amount of the Security:

                           (ii)  Conversion of accrued but unpaid interest on
                                 the Security and/or payments pursuant to
                                 Section 2(c) of the Registration Rights
                                 Agreement:

                           Signature:___________________________________________
                           Name:________________________________________________
                           Address:_____________________________________________
                                   _____________________________________________
                                   _____________________________________________


*If the entire unpaid principal amount of the Security is to be converted, the
Issuer is not required to issue shares of Common Stock until the original
Security (or evidence of loss, theft or destruction thereof) to be converted is
received by the Issuer or its Transfer Agent. The Issuer shall issue and deliver
shares of Common Stock to an overnight courier not later than three (3) Trading
Days following receipt of the original Security to be converted, and interest
shall accrue at the applicable Interest Rate pursuant to the Security for the
number of Trading Days such issuance and delivery is late.


                                       2