[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 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.


 



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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.


 


(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.


 



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(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.


 



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(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 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.


 



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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 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:


 



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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.


 


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.


 



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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.


 


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:


 


 


 



    	 



    	 



    

 


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


 


SCHEDULE A


 


WARRANTHOLDERS


 


	Holder	 	No. of Total
 Warrant Shares	 	 	No. of 2013
 Warrant Shares	 	 	No. of 2014
 Warrant Shares	 
	Henry McKinnell	 	 	1,000,000	 	 	 	500,000	 	 	 	500,000	 
	Alfred Osborne	 	 	500,000	 	 	 	250,000	 	 	 	250,000