CAPRICOR, INC.


 


2012 RESTATED EQUITY INCENTIVE PLAN


 


STOCK OPTION AGREEMENT


 


Unless otherwise defined
herein, the terms defined in the 2012 Restated Equity Incentive Plan of Capricor, Inc. (the “Plan”) shall have
the same defined meanings in this Stock Option Agreement (the “Agreement”).


 


		I.	NOTICE OF STOCK OPTION GRANT



 


Name:_______________________(“Participant”)


 


The undersigned Participant
has been granted an Option to purchase Common Stock of the Company (“Shares”), subject to the terms and conditions
of the Plan and this Agreement, as follows:


 





	Grant Date:	[_____________________]
	 	 
	Vesting Commencement Date:	[_____________________]
	 	 
	Exercise Price per Share:	[_____________________]
	 	 
	Total No. of Option Shares Granted:        	[_____________________]
	 	 
	Total Exercise Price:	[_____________________]
	 	 
	Type of Option:	[ISO/NSO]
	 	 
	Term/Expiration Date	10th Anniversary of the Grant Date
	 	 
	Exercise Schedule:	Early Exercise Permitted







 


Vesting Schedule:


 


This Option shall be exercisable, in whole or in part,
according to the following vesting schedule:


 


[Vesting]


 


At the sole election of the Board of Directors
of the Company, the vesting of the Option Shares may be accelerated upon a Corporate Transaction.


 






    	 



    	 



    

 








		II.	AGREEMENT



 


1.Grant
of Option. Capricor, Inc. (the “Company”) hereby grants to the Participant named in the Notice of
Stock Option Grant in Part I of this Agreement (the “Grant Notice”), an option (the
“Option”) to purchase the number of Shares set forth in the Grant Notice, at the exercise price per Share
set forth in the Grant Notice (the “Exercise Price”), and subject to the terms and conditions of the Plan,
which is incorporated herein by reference. Subject to Section 17(c) of the Plan, in the event of a conflict between the terms
and conditions of the Plan and this Agreement, the terms and conditions of the Plan shall prevail.


 


If designated in
the Grant Notice as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section
422(d), this Option shall be treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason this
Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a NSO granted under the Plan. In no event shall the Administrator, the Company or any
Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other
person) due to the failure of the Option to qualify for any reason as an ISO.


 


2. Exercise of Option.


 


(a) Right to Exercise.
Except as otherwise provided in this Agreement, this Option shall be exercisable during its term and prior to the Option Expiration
Date stated in the Grant Notice in accordance with the Vesting Schedule set forth therein and with the applicable provisions of
the Plan and this Agreement. No fractional shares of Common Stock shall be issued upon conversion of this Option, nor shall the
Company be required to pay cash in lieu of fractional interests, it being the intent of the parties that all fractional shares
shall be eliminated and that all issuances of Common Stock shall be rounded up to the nearest whole share.


 


(b) Continuous Relationship
with the Company Required. Except as otherwise provided in this Section 2, and Section 6(f) of the Plan, this Option may not
be exercised unless the Participant, at the time he or she exercises this Option, is, and has been at all times since the Grant
Date, a Service Provider to the Company (as defined in the Plan).


 


(c) Termination Period.


 


(i) If Participant
ceases to be a Service Provider for any reason, then, except as provided in Paragraph (ii) below, the right to exercise this Option
shall terminate ninety (90) days after such cessation of services, but in no event after the Option Expiration Date applicable
to such Option; provided that this Option shall be exercisable only to the extent that the Participant was entitled to exercise
this Option on the date of such cessation (an “Eligible Participant”).


 


(ii) If the Participant
dies or experiences a Disability prior to the Option Expiration Date while he or she is an Eligible Participant, or if the Participant
dies within three (3) months after the Participant ceases to be an Eligible Participant, this Option shall be exercisable, within
the period of one (1) year following the date of death or Disability of the Participant (whether or not such exercise occurs before
the applicable Expiration Date), by the Participant or by the person to whom this Option is transferred by will or the laws of
descent and distribution, provided that this Option shall be exercisable only to the extent that this Option was exercisable
by the Participant on the date of his or her death or Disability. Except as otherwise indicated by the context, the term “Participant”,
as used in this Agreement, shall be deemed to include the estate of the Participant or any person who acquires the right to exercise
this Option by bequest or inheritance or otherwise by reason of the death of the Participant.


 






    	 



    	 



    

 


(d) Method of Exercise.
This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise
Notice”) or in a manner and pursuant to such procedures as the Company or any appointed Administrator of the Plan may
determine, which shall state the election by Participant to exercise the Option, the number of Shares with respect to which the
Option is being exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice
shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding.
This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by
the aggregate Exercise Price, together with any applicable tax withholding. No Shares shall be issued pursuant to the exercise
of an Option unless such issuance and such exercise comply with Applicable Laws. Assuming such compliance, for income tax purposes,
the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares.


 


(e) Exercise Prior
To Vesting. If permitted by the Grant Notice (i.e., the “Exercise Schedule” indicates “Early Exercise
Permitted”) and subject to the provisions of this Agreement and the Plan, Participant may elect at any time that is
both (i) during a period while he or she is an Eligible Participant and (ii) prior to the Option Expiration Date, to exercise
all or part of the Option, including the unvested portion of the Option; provided, however, that:


 


(i) a partial exercise
of the Option shall be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested
shares of Common Stock;


 


(ii) any shares of
Common Stock so purchased from installments that have not vested as of the date of exercise shall be subject to a repurchase right
in favor of the Company; and


 


(iii) the repurchase
price for unvested shares of Common Stock shall be the lower of (y) the Fair Market Value (as defined below) of the shares of Common
Stock on the date of repurchase or (z) their original purchase price. However, if and to the extent that the Company elects to
exercise its repurchase right, the Company shall not exercise its repurchase right until at least six (6) months (or such longer
or shorter period of time necessary to avoid classification of the Award as a liability for financial accounting purposes) have
elapsed following delivery of shares of Common Stock subject to the Option.





 







    	 



    	 



    

 


3. Method of Payment. Payment of
the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Participant:


 


 (a) cash;




 


 (b) check;




 


(c) consideration received by the Company
under a formal cashless exercise program adopted by the Company in connection with the Plan;


 


(d) surrender of other
Shares already owned by the Participant which (i) shall be valued at its Fair Market Value on the date of exercise, and (ii) must
be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion
of the Administrator, shall not result in any adverse accounting consequences to the Company; or


 


(e) any combination of
the aforementioned methods or by any other means deemed acceptable by the Board of Directors.


 


For purposes of Section
2 and this Section 3, the term “Fair Market Value” shall mean the value of a share of Common Stock, determined
as follows: if on the Grant Date or other determination date the Common Stock is listed on an established national or regional
stock exchange, is admitted to quotation on The Nasdaq Stock Market, Inc. or is publicly traded on an established securities market,
the Fair Market Value of a share of Common Stock shall be the closing price of the Common Stock in such exchange or in such market
(if there is more than one such exchange or market the Board shall determine the appropriate exchange or market) on the Grant Date
or such other determination date (or if there is no such reported closing price, the Fair Market Value shall be the mean between
the highest bid and lowest asked prices or between the high and low sale prices on such trading day) or, if no sale of Common Stock
is reported for such trading day, on the next preceding day on which any sale shall have been reported. If the Common Stock is
not listed on such an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the value of the Common
Stock as determined by the Board in good faith.


 


4. Listing, Qualification,
Etc. This Option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the
listing, registration or qualification of the Shares subject hereto upon or with any securities exchange or regulatory body, or
that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in
connection with, the issuance or purchase of Shares hereunder, this Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been
effected or obtained on terms acceptable to the Board of Directors (or an opinion of counsel has been obtained that such registration,
qualification, consent, or approval is not necessary). Nothing herein shall be deemed to require the Company to apply for, effect
or obtain such listing, registration, qualification, or disclosure, or to satisfy such other condition.


 







    	 



    	 



    

 


5.Participant’s
Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended, at the time
this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion
of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit
B.


 


6.Lock-Up Period.
Participant hereby agrees that Participant shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities)
of the Company held by Participant (other than those included in the registration) for a period specified by the representative
of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and eighty (180) days following
the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be
requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution
of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in
FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).


 


Participant agrees
to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent
with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative
of the underwriters of Common Stock (or other securities) of the Company, Participant shall provide, within ten (10) days of such
request, such information as may be required by the Company or such representative in connection with the completion of any public
offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations
described in this Section 6 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction
on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect
to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred and
eighty (180) day (or other) period. Participant agrees that any transferee of the Option or shares acquired pursuant to the Option
shall be bound by this Section 6.


 


7.Restrictions
on Exercise. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable Law.


 


 8. Non-Transferability of Option. 




 


(a) Unless
determined otherwise by the Administrator, this Option may not be sold, pledged, assigned, hypothecated, or otherwise
transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes this Option transferable, this Option may
only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the
Securities Act of 1933, as amended (the “Securities Act”). The terms of the Plan and this Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns of Participant.


 






    	 



    	 



    

 


(b) Further, until the
Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Administrator determines
that it is, will, or may no longer be relying upon the exemption from registration under the Exchange Act as set forth in Rule
12h-1(f) promulgated under the Exchange Act, this Option, or prior to exercise, the Shares subject to this Option, may not be
pledged, hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any
“put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b)
of the Exchange Act, respectively), other than to (i) persons who are “family members” (as defined in Rule 701(c)(3)
of the Securities Act) through gifts or domestic relations orders, a trust in which the Participant or any of such persons have
the entire beneficial interest, or any other entity in which the Participant or any of such persons own the entire voting interests,
or (ii) to an executor or guardian of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing
sentence, the Administrator, in its sole discretion, may determine to permit transfers to the Company or in connection with a
Corporate Transaction or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).


 


9.Term of Option.
This Option may be exercised only within the term set out in the Grant Notice, and may be exercised during such term only in accordance
with the Plan and the terms of this Option.


 


 10. Tax Obligations. 




 


(a) Tax Withholding.
Participant agrees to make appropriate arrangements with the Company for the satisfaction of all federal, state, local, foreign
or other tax withholding requirements applicable to the Option exercise. Participant acknowledges and agrees that the Company
may refuse to honor the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of
exercise.


 


(b) Notice of Disqualifying
Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes
of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Grant Date, or
(ii) the date one (1) year after the date of exercise, Participant shall immediately notify the Company in writing of such disposition.
Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized
by Participant.


 


(c) Code Section
409A. Under Code Section 409A, an Option that vests after December 31, 2004 (or that vested on or prior to such date but which
was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the


 


Internal Revenue Service (the “IRS”)
to be less than the Fair Market Value of a Share on the date of grant (a “discount option”) may be considered “deferred
compensation.” An Option that is a “discount option” may result in (i) income recognition by Participant prior
to the exercise of the Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest
charges. The “discount option” may also result in additional state income, penalty and interest tax to the Participant.
Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price
of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later examination. Participant agrees
that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value
of a Share on the date of grant, Participant shall be solely responsible for Participant’s costs related to such a determination.


 






    	 



    	 



    

 


 


(d) Corporate Transaction.
Notwithstanding anything in Section 9(c) of the Plan to the contrary, if a payment under this Agreement is subject to Code Section
409A and if the “Corporate Transaction” definition contained in the Plan does not comply with the definition of “change
of control” for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated
under this Section will be delayed until the earliest time that such payment would be permissible under Code Section 409A without
triggering any penalties applicable under Code Section 409A.


 


11. Rights as Stockholder.
Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to
the Common Stock subject to an Award, notwithstanding the exercise of the Option. The Shares shall be issued to Participant as
soon as practicable after the Option is exercised in accordance with this Agreement. No adjustment shall be made for a dividend
or other right for which the record date is prior to the date of issuance except as provided in the Plan.


 


12.Entire Agreement;
Governing Law. The Plan is incorporated herein by reference. The Plan and this Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of
the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s
interest except by means of a writing signed by the Company and Participant. This Agreement is governed by the internal substantive
laws but not the choice of law rules of Delaware.


 


13.No Guarantee
of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF
IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, ELECTED OR APPOINTED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF ANY CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY
(OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER
AT ANY TIME, WITH OR WITHOUT CAUSE.


 






    	 



    	 



    







 


Participant acknowledges
receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Option in their entirety,
has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the
Option. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator
upon any questions arising under the Plan or this Option. Participant further agrees to notify the Company upon any change in the
residence address indicated below.


 





	PARTICIPANT	 	CAPRICOR,
    INC. 
	 	 	 	 
	 	 	 	 
		 	By:  	                    
	Signature	 		 
	 	 	 
	 	 	 
	Print
    Name 	 	Print
    Name 
	 	 	 	 
	 	 	 
	Residence
    Address	 	Title
    
	 	 	 	 
	 	 	 	 
	City,
    State, Zip Code 	 	 	 
	 	 	 	 
	 	 	 	 
	Email
    Address	 	 	 




 







    	 



    	 



    

 


EXHIBIT A


 


2012 RESTATED EQUITY INCENTIVE PLAN STOCK OPTION
AGREEMENT


 


EXERCISE NOTICE


 


 


Capricor, Inc.


8840 Wilshire Blvd., 3rd Floor


Beverly Hills, CA 90211


 


Attention: Chief Executive Officer


 


1. Exercise of Option.
Effective as of today, ________________, 20___, the undersigned (“Participant”) hereby elects to exercise Participant’s
option (the “Option”) to purchase ________________ shares of the Common Stock (the “Shares”)
of Capricor, Inc. (the “Company”) under and pursuant to the 2012 Restated Equity Incentive Plan (the “Plan”)
and the Stock Option Agreement dated ______________, 20___ (the “Agreement”).


 


2.Delivery
of Payment. Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Agreement,
and any and all withholding taxes due in connection with the exercise of the Option.


 


3.Representations
of Participant. Participant acknowledges that Participant has received, read and understood the Plan and the Agreement and
agrees to abide by and be bound by their terms and conditions.


 


4.Rights as
Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option. The Shares shall be issued to
Participant as soon as practicable after the Option is exercised in accordance with the Agreement. No adjustment shall be made
for a dividend or other right for which the record date is prior to the date of issuance except as provided in the Plan.


 


5.Tax Consultation.
Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or disposition
of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection
with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.


 


 6. Restrictive Legends and Stop-Transfer Orders. 




 


(a) Legends. Participant understands
and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed
upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company
or by state or federal securities laws:


 






    	 



    	 



    

 


THESECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.


 


THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER
OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH
MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES
OF THESE SHARES.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE
DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF
SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.


 


(b) Stop-Transfer
Notices. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may
issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its
own securities, it may make appropriate notations to the same effect in its own records.


 


(c) Refusal to Transfer.
The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.


 


(d) Joinder in Existing
Shareholder Agreements. As a condition to the issuance of any stock upon exercise, Participant shall enter into a supplement
to any then existing Company shareholder agreements that the Company may then require.


 







    	 



    	 



    

 


7.Successors
and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this
Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators, successors
and assigns.


 


8.Interpretation.
Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith
to the Administrator, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator
shall be final and binding on all parties.


 


9.Governing
Law; Severability. This Exercise Notice is governed by the internal substantive laws, but not the choice of law rules, of
Delaware. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Exercise Notice shall continue in full force and effect.


 


10.Entire
Agreement. The Plan and Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the Agreement and
the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter
hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to
the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing
signed by the Company and Participant.


  


 








	Submitted by:	 	Accepted by:
	 	 	 
	PARTICIPANT	 	CAPRICOR, INC. 
	 	 	 	 
	 	 	 	 
	 	 	By:  	                    
	Signature	 	 	 
	 	 	 
	 	 	 
	Print Name 	 	Print Name 
	 	 	 	 
	 	 	 
	Address	 	Title 
	 	 	 	 
	 	 	 
	City, State, Zip Code 	 	Date Received 
	 	 	 	 
	Email Address	 	 	 
	 	 	 	 
	 	 	 	 





 












    	 



    	 



    

 


EXHIBIT B


 


INVESTMENT REPRESENTATION STATEMENT


  


	PARTICIPANT NAME    	:		 
	 	 	 	 
	COMPANY NAME	:	CAPRICOR, INC.	 
	 	 	 	 
	TYPE OF SECURITY	:	COMMON STOCK	 
	 	 	 	 
	AMOUNT OF SHARES	:		 


 


In connection with the purchase of the
above-listed Securities, the undersigned Participant represents to the Company the following:


 


(a)Participant
is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities. Participant is acquiring these Securities for investment
for Participant’s own account only and not with a view to, or for resale in connection with, any “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).


 


(b)Participant
acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among
other things, the bona fide nature of Participant’s investment intent as expressed herein. In this connection, Participant
understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable
if Participant’s representation was predicated solely upon a present intention to hold these Securities for the minimum
capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price
of the Securities, or for a period of one (1) year or any other fixed period in the future. Participant further understands that
the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. Participant further acknowledges and understands that the Company is under no obligation to register
the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required
under applicable state securities laws.


 


(c)Participant
is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under
Rule 701 may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case
of affiliates (1) the availability of certain public information about the Company, (2) the amount of Securities being sold during
any three (3) month period not exceeding specified limitations, (3) the resale being made in an unsolicited “broker’s
transaction”, transactions directly with a “market maker” or “riskless principal transactions” (as
those terms are defined under the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable.


 


In the event that the
Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information about
the Company; (ii) the resale to occur more than a specified period after the purchase and full payment (within the meaning of
Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the satisfaction of the conditions
set forth in sections (2), (3) and (4) of the paragraph immediately above.


 


(d) Participant further
understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding
the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own
risk. Participant understands that no assurances can be given that any such other registration exemption shall be available in
such event.


 





	 	PARTICIPANT
	 	 
	 	 
	 	Signature
	 	 
	 	 
	 	Print Name 
	 	 
	 	 
	 	Date