Exhibit 10.33

 

[FORM OF WARRANT]

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SUCH ACT.

 

Date of Issuance:

Void after:

 

 

February 29, 2012

December 31, 2014

 

EMMAUS LIFE SCIENCES, INC.

 

WARRANT TO PURCHASE SHARES OF

COMMON STOCK

 

FOR VALUE RECEIVED,                    (“Holder”), is entitled to purchase,
subject to the provisions of this Warrant (“Warrant”), from Emmaus Life
Sciences, Inc., a Delaware corporation (“Company”),                    shares
(the “Warrant Shares”) of the Company’s Common Stock, par value $0.001 per share
(“Common Stock”), at a price per share equal to $1.00 (the “Exercise Price”) in
the amounts and during the exercise periods specified herein. The Exercise Price
and the number of Warrant Shares purchasable upon exercise of this Warrant shall
be subject to adjustment from time to time as described herein

 

1.                                      Amounts and Exercise Periods.

 

(a)         Holder may exercise this Warrant, in whole or in part, as to
               Warrant Shares from January 1, 2013 to December 31, 2013 (the
“2013 Warrant Shares”). In no event may this Warrant with respect to the 2013
Warrant Shares be exercised after the date in this Section 1(a).

 

(b)         Holder may exercise this Warrant, in whole or in part, as to the
remaining                    Warrant Shares from January 1, 2014 to December 31,
2014 (the “2014 Warrant Shares”). In no event may this Warrant with respect to
the 2014 Warrant Shares be exercised after the date in this Section 1(b).

 

2.                                      Method of Exercise.

 

(a)         Subject to compliance with the terms and conditions of this Warrant
and applicable securities laws, this Warrant may be exercised, from time to time
in accordance with Section 1 hereof by the delivery (including, without
limitation, delivery by facsimile) of the form of Notice of Exercise attached
hereto as Exhibit A (the “Notice of Exercise”), duly executed by the Holder, at
the principal office of the Company, and as soon as practicable after such date,
surrendering:

 

(i)                                     this Warrant at the principal office of
the Company, and

 

(ii)                                  payment, (i) in cash (by check) or by wire
transfer, (ii) by cancellation by the Holder of indebtedness of the Company to
the Holder; or (iii) by a combination of (i) and (ii), of an amount equal to the
product obtained by multiplying the number of shares of Common Stock being
purchased upon such exercise by the then effective Exercise Price (the “Exercise
Amount”):

 

(b)         Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant is
surrendered to the Company as provided above. The person or persons entitled to
receive the Warrant Shares issuable upon exercise of this Warrant shall be
treated for all

 

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purposes as the holder of record of such Warrant Shares as of the close of
business on the date the Holder is deemed to have exercised this Warrant.

 

(c)          As soon as practicable after the exercise of this Warrant, the
Company at its expense will cause to be issued in the name of, and delivered to,
the Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct:

 

(i)                                     a certificate or certificates for the
number of Warrant Shares to which such Holder shall be entitled, and

 

(ii)                                  in case such exercise is in part only, a
new warrant or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
equal to the number of such Warrant Shares described in this Warrant minus the
number of such Warrant Shares purchased by the Holder upon all exercises made in
accordance with this Section 2.

 

3.                                      Representations and Warranties of the
Company.

 

In connection with the transactions provided for herein, the Company hereby
represents and warrants to the Holder that:

 

(a)         Organization, Good Standing, and Qualification. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted. The Company is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse effect on its
business or properties.

 

(b)         Authorization. Except as may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors’ rights, all corporate action has been taken on the
part of the Company, its officers and directors necessary for the authorization,
execution and delivery of this Warrant. The Company has taken all corporate
action required to make all the obligations of the Company reflected in the
provisions of this Warrant the valid and enforceable obligations they purport to
be. The issuance of this Warrant will not be subject to preemptive rights of any
stockholders of the Company. The Company has authorized sufficient shares of
Common Stock to allow for the exercise of this Warrant.

 

4.                                      Representations and Warranties of the
Holder.

 

In connection with the transactions provided for herein, the Holder hereby
represents and warrants to the Company that:

 

(a)         Authorization. Holder represents that it has full power and
authority to enter into this Warrant. This Warrant constitutes the Holder’s
valid and legally binding obligation, enforceable in accordance with its terms,
except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, or similar laws relating to or affecting the enforcement of
creditors’ rights and (ii) laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

 

(b)         Purchase Entirely for Own Account. The Holder acknowledges that this
Warrant is entered into by the Holder in reliance upon such Holder’s
representation to the Company that the Warrant and the Warrant Shares
(collectively, the “Securities”) will be acquired for investment for the
Holder’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Holder has no present
intention of selling, granting any participation in or otherwise distributing
the same. By acknowledging this Warrant, the Holder further represents that the
Holder does not have any contract, undertaking, agreement, or arrangement with
any person to sell, transfer or grant participations to such person or to any
third person, with respect to the Securities.

 

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(c)          Disclosure of Information. The Holder acknowledges that it has
received all the information it considers necessary or appropriate for deciding
whether to acquire the Securities. The Holder further represents that it has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Securities.

 

(d)         Investment Experience. The Holder is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Securities. If other than an
individual, the Holder also represents it has not been organized solely for the
purpose of acquiring the Securities.

 

(e)          Accredited Investor. The Holder is an “accredited investor” within
the meaning of Rule 501 of Regulation D, as presently in effect, as promulgated
by the Securities and Exchange Commission (the “SEC”) under the Securities Act
of 1933, as amended (the “Act”).

 

(f)           Restricted Securities. The Holder understands that the Securities
are characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Act, only in
certain limited circumstances. In this connection, Holder represents that it is
familiar with Rule 144, as presently in effect, as promulgated by the SEC under
the Act (“Rule 144”), and understands the resale limitations imposed thereby and
by the Act.

 

(g)          Further Limitations on Disposition. The Holder, by acceptance
hereof, agrees that, absent an effective registration statement filed with the
SEC under the Act covering the disposition or sale of this Warrant or the
Warrant Shares issued or issuable upon exercise hereof, as the case may be, and
registration or qualification under applicable state securities laws, such
Holder will not sell, transfer, pledge, or hypothecate any or all of this
Warrant or such Warrant Shares, as the case may be, unless either (i) the
Company has received an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such registration is not
required in connection with such disposition or (ii) the sale of such Securities
is made pursuant to SEC Rule 144.

 

(h)         Legends. It is understood that the Securities may bear the following
or a similar legend:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.”

 

5.                                      Valid Issuance; Taxes.

 

All Warrant Shares issued upon the exercise of this Warrant shall be validly
issued, fully paid and nonassessable, and the Company shall pay all taxes and
other governmental charges that may be imposed in respect of the issue or
delivery thereof. The Company shall not be required to pay any tax or other
charge imposed in connection with any transfer involved in the issuance of any
certificate for Warrant Shares in any name other than that of the Holder of this
Warrant, and in such case the Company shall not be required to issue or deliver
any stock certificate or security until such tax or other charge has been paid,
or it has been established to the Company’s reasonable satisfaction that no tax
or other charge is due.

 

6.                                      Adjustment of Exercise Price and Number
and Kind of Warrant Shares.

 

The number and kind of Warrant Shares purchasable upon exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time as
follows:

 

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(a)         Subdivisions, Combinations and Other Issuances. If the Company shall
at any time after the issuance but prior to the expiration of this Warrant
subdivide its Common Stock, by split-up or otherwise, or combine its Common
Stock, or issue additional shares of its Common Stock as a dividend with respect
to any shares of its Common Stock, the Exercise Price shall be proportionally
decreased and the number of Warrant Shares issuable on the exercise of this
Warrant shall be proportionately increased in the case of a subdivision or stock
dividend. The Exercise Price shall be proportionally increased and the number of
Warrant Shares issuable on the exercise of this Warrant shall be proportionately
decreased in the case of a combination. Any adjustment under this
Section 5(a) shall become effective at the close of business on the date the
subdivision or combination becomes effective, or as of the record date of such
dividend, or in the event that no record date is fixed, upon the making of such
dividend.

 

(b)         Reclassification, Reorganization and Consolidation. In case of any
reclassification, capital reorganization or change in the capital stock of the
Company (other than as a result of a subdivision, combination or stock dividend
provided for in Section 5(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities or property receivable in connection with such
reclassification, reorganization or change by a holder of the same number and
type of securities as were purchasable as Warrant Shares by the Holder
immediately prior to such reclassification, reorganization or change. In any
such case appropriate provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities or property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the per-share Exercise Price payable hereunder, provided the aggregate Exercise
Price shall remain the same.

 

(c)          Notice of Adjustment. When any adjustment is required to be made in
the number or kind of Warrant Shares purchasable upon exercise of the Warrant,
or in the Exercise Price, the Company shall promptly notify the Holder of such
event and of the new Exercise Price and number of Warrant Shares or other
securities or property thereafter purchasable upon exercise of this Warrant.

 

7.                                      Termination of Warrant.

 

(a)         General. Subject to the first paragraph of this Warrant and
Section 1, if the Holder’s service to the Company shall terminate for any
reason, including retirement, other than (i) Cause (as defined below),
(ii) death or (iii) disability, this Warrant, to the extent that it is
exercisable at the time of such termination, shall remain exercisable for the
90 day period following such termination, but in no event shall the Holder be
permitted to purchase any of the 2013 Warrant Shares after December 31, 2013 or
any of the 2014 Warrant Shares after December 31, 2014. This Warrant to the
extent that it remains unexercisable as of the date of such a termination shall
be terminated at the time of such termination.

 

(b)         Death or Disability. In the event that the Holder’s service to the
Company shall terminate on account of the death or disability of the Holder,
Holder (or the Holder’s legal representatives, heirs or legatees) shall be
entitled to purchase those number of Warrant Shares that the Holder was entitled
to purchase upon exercise of this Warrant prior to such termination of the
Holder’s service, for the one year period following such termination, but in no
event shall the Holder (or the Holder’s legal representatives, heirs or
legatees) be permitted to purchase any of the 2013 Warrant Shares after
December 31, 2013 or any of the 2014 Warrant Shares after December 31, 2014. The
portion of this Warrant that remains unexercisable as of the date of a
termination due to death or disability shall be terminated at the time of such
termination.

 

(c)          Cause. If Holder is removed from service as a director of the
Company by action of the Board of Directors or stockholders of the Company for
Cause, this Warrant shall terminate at the commencement of business on the date
of such removal. For purposes of this Warrant “Cause” shall

 

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mean (i) the Holder’s willful and intentional repeated failure or refusal,
continuing after notice that specifically identifies the breach(es) complained
of, to perform substantially his material duties, responsibilities and
obligations (other than a failure resulting from Holder’s incapacity due to
physical or mental illness or other reasons beyond the control of Holder), and
which failure or refusal results in demonstrable direct and material injury to
the Company; (ii) any willful and intentional act or failure to act involving
fraud, misrepresentation, theft, embezzlement, dishonesty or moral turpitude
(collectively, “Fraud”), that results in demonstrable direct and material injury
to the Company; and (iii) conviction of (or a plea of nolo contendere to) an
offense that is a felony in the jurisdiction involved or which is a misdemeanor
in the jurisdiction involved but which involves Fraud. For purposes of
determining whether Cause exists, no act, or failure to act, on the Holder’s
part shall be deemed “willful” or “intentional” unless done, or omitted to be
done, by such Holder in bad faith, and without reasonable belief that his action
or omission was in the best interests of the Company. If, subsequent to the
Holder’s voluntary termination or involuntary termination without Cause, it is
discovered that the Holder’s service to the Company could have been terminated
for Cause, the Company may deem such Holder’s service to the Company to have
been terminated for Cause. The Holder’s termination for Cause shall be effective
as of the date of the occurrence of the event giving rise to Cause, regardless
of when the determination of Cause is made.

 

8.                                      No Fractional Shares or Scrip.

 

No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant, but in lieu of such fractional shares the
Company shall make a cash payment therefor on the basis of the Exercise Price
then in effect.

 

9.                                      No Stockholder Rights.

 

Prior to exercise of this Warrant, the Holder shall not be entitled to any
rights of a stockholder with respect to the Warrant Shares, including (without
limitation) the right to vote such Warrant Shares, receive dividends or other
distributions thereon, exercise preemptive rights or be notified of stockholder
meetings, and, except as otherwise provided in this Warrant, such Holder shall
not be entitled to any stockholder notice or other communication concerning the
business or affairs of the Company.

 

10.                               No Right to Continued Service or Directorship.

 

Nothing contained in this Warrant will confer upon the Holder any right to
become or remain in the service of the Company or any subsidiary, nor limit or
affect in any manner the right of the Company or any subsidiary to terminate the
service of Holder.

 

11.                               Restrictions on Transfer.

 

As provided herein, this Warrant may be transferred only pursuant to a
registration statement filed under the Act, or an exemption from such
registration. Subject to such restrictions, the Company shall transfer this
Warrant from time to time upon the books to be maintained by the Company for
that purpose, upon surrender hereof for transfer, properly endorsed or
accompanied by appropriate instructions for transfer and such other documents as
may be reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect that such transfer is exempt
from the registration requirements of the Act, to establish that such transfer
is being made in accordance with the terms hereof, and a new Warrant shall be
issued to the transferee and the surrendered Warrant shall be canceled by the
Company.

 

12.                               Governing Law; Consent to Jurisdiction; Waiver
of Jury Trial.

 

This Warrant shall be governed by and construed under the laws of the State of
California as applied to agreements among California residents, made and to be
performed entirely within the State of California, except for provisions that
apply to the regulation of the Company as a Delaware corporation, in which case
Delaware General Corporate Law shall apply. The Company and, by accepting this
Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of
the courts of the State of California located in Los Angeles County and the
United States

 

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District Court for the Central District of California for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby. Service of process in connection with
any such suit, action or proceeding may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices
under this Warrant. The Company and, by accepting this Warrant, the Holder, each
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. The Company and,
by accepting this Warrant, the Holder, each irrevocably waives any objection to
the laying of venue of any such suit, action or proceeding brought in such
courts and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE
COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

13.                               Successors and Assigns.

 

The terms and provisions of this Warrant shall inure to the benefit of, and be
binding upon, the Company and the holders hereof and their respective successors
and assigns.

 

14.                               Titles and Subtitles.

 

The titles and subtitles used in this Warrant are used for convenience only and
are not to be considered in construing or interpreting this Warrant.

 

15.                               Notices.

 

Unless otherwise provided, any notice required or permitted under this Warrant
shall be given in writing and shall be deemed effectively given as hereinafter
described (a) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (b) if given by telex or facsimile, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(c) if given by mail, then such notice shall be deemed given upon the earlier of
(i) receipt of such notice by the recipient or (ii) three days after such notice
is deposited in first class mail, postage prepaid, and (d) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such carrier. All notices shall
be addressed as follows: if to the Holder, at its address as set forth in the
Company’s books and records and, if to the Company, at the address as follows,
or at such other address as the Holder or the Company may designate by ten days’
advance written notice to the other:

 

If to the Company:

Emmaus Life Sciences, Inc.

20725 South Western Avenue, Suite 136

Torrance, CA 90501

Attn: Yasushi Nagasaki, Chief Financial Officer

Fax: (310) 214-0075

 

With a copy to:

K&L Gates LLP

10100 Santa Monica Boulevard Seventh Floor

Los Angeles, CA 90067

Attn: Katherine J. Blair

Fax: (310) 552-5001

 

16.                               Expenses.

 

If any action at law or in equity is necessary to enforce or interpret the terms
of this Warrant, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.

 

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17.                               Entire Agreement; Amendments and Waivers.

 

This Warrant and any other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof. Nonetheless, any term of this Warrant may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Holder; or if
this Warrant has been assigned in part, by the holders or rights to purchase a
majority of the shares originally issuable pursuant to this Warrant.

 

18.                               Severability.

 

If any provision of this Warrant is held to be unenforceable under applicable
law, such provision shall be excluded from this Warrant and the balance of the
Warrant shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date above
written.

 

 

EMMAUS LIFE SCIENCES, INC.

 

 

 

By:

/s/ Yutaka Niihara

 

Name:  Yutaka Niihara, M.D., M.P.H.

 

Title:  President and Chief Executive Officer

 

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EXHIBIT A

 

NOTICE OF EXERCISE

 

EMMAUS LIFE SCIENCES, INC.

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

EMMAUS LIFE SCIENCES, INC.

 

Attention: Chief Financial Officer

 

The undersigned hereby elects to purchase, pursuant to the provisions of the
Warrant, as follows:

 

shares of Common Stock pursuant to the terms of the attached Warrant at
$               per share (the applicable Exercise Price as of the date of this
Notice of Exercise) , and tenders herewith payment in cash of the Exercise Price
of such Warrant Shares in full, together with all applicable transfer taxes, if
any.

 

The undersigned hereby represents and warrants that Representations and
Warranties in Section 3 of the Warrant are true and correct as of the date
hereof.

 

HOLDER:

 

Date:

 

 

By:

 

 

 

 

Name:

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

Name in which shares should be registered:

 

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[INFORMATION FOR PURPOSES OF FILING WITH THE SECURITIES AND EXCHANGE COMMISSION]

 

SCHEDULE A

 

WARRANTHOLDERS

 

Holder

 

No. of Total
Warrant Shares

 

No. of 2013Warrant Shares

 

No. of 2014
Warrant Shares

 

Henry McKinnell

 

1,000,000

 

500,000

 

500,000

 

Alfred Osborne

 

500,000

 

250,000

 

250,000

 

 

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