SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of June 15,
2009, among DARA BioSciences, Inc., a Delaware corporation (the "Company"), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a "Purchaser" and collectively the "Purchasers").

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act") and Rule 506 of Regulation D promulgated thereunder, the
Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, that aggregate
number of Units (as hereinafter defined) set forth on such Purchaser's signature
page to this Agreement (which aggregate amount of Units for all Purchasers
together (the "Total Units") shall not have an aggregate purchase price
exceeding $5,000,000 (the "Purchase Price Cap"). Each "Unit" shall consist of
(i) one Share of Common Stock, and (ii) one Warrant (in each case, as defined
below);

WHEREAS, subject to the terms and conditions set forth in this Agreement, up to
an aggregate number of 6,016,682 Units, as determined in the discretion of the
Company (the "Initial Units"), will be issued and sold to the Purchasers on the
First Closing Date (as defined below) at a price per Unit equal to the average
of the closing sales price on the Nasdaq Capital Market (trading symbol "DARA")
for one share of Common Stock for the period of twenty (20) Trading Days (as
defined below) ending on the last Trading Day prior to the date Purchaser
executes this Agreement and deposits the full Aggregate Purchase Price (as
defined below) into the Escrow Account (as defined below) (the "Purchase
Price"); and

WHEREAS, subject to the terms and conditions set forth in this Agreement, an
amount up to the difference between Total Units and the aggregate number of
Initial Units sold on the First Closing Date (the "Remaining Units") may be
issued and sold to the Purchasers on the Second Closing Date (as defined below)
at a price per Unit equal to the Purchase Price.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser,
severally and not jointly, agree as follows:

ARTICLE I.
DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings
indicated in this Section 1.1:

"Affiliate" means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144 under the
Securities Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such Purchaser.

"Aggregate Purchase Price" means, as to each Purchaser, the aggregate amount to
be paid by such Purchaser for Units purchased hereunder as specified below such
Purchaser's name on the signature page of this Agreement and next to the heading
"Aggregate Purchase Price", in United States Dollars and in immediately
available funds.

"Business Day" means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

"Closing" means either the First Closing or the Second Closing.

"Closing Date" means either the First Closing Date or the Second Closing Date.

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the common stock of the Company, par value $.01 per share.

"Common Stock Equivalents" means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

"Company's Counsel" means K&L Gates, LLP, having an office at 4350 Lassiter at
North Hills Avenue, Suite 300, Raleigh, North Carolina 27609.

"Co-Placement Agents" means Gilford Securities Incorporated and Waveland Capital
Partners LLC.

"Discussion Time", with respect to each Purchaser, means the period commencing
from the time that such Purchaser first received a term sheet (written or oral)
from the Company or any other Person setting forth the material terms of the
transactions contemplated hereunder until the date hereof.

"Escrow Account" has the meaning ascribed to such term in Section 2.1(c).

"Escrow Agent" means Wachovia Bank, N.A.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

"First Closing" has the meaning ascribed to such term in Section 2.1(a).

"First Closing Date" has the meaning ascribed to such term in Section 2.1(a).

"Initial Units" has the meaning ascribed to such term in the recitals to this
Agreement.

"Intellectual Property" has the meaning ascribed to such term in Section 3.1(k).

"Liens" means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

"Material Adverse Effect" has the meaning ascribed to such term in
Section 3.1(a).

"Nasdaq Stockholder Approval Requirement" has the meaning ascribed to such term
in Section 4.9.

"Person" means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

"Purchase Price" has the meaning ascribed to such term in the recitals to this
Agreement.

"Purchase Price Cap" has the meaning ascribed to such term in the recitals to
this Agreement.

"Purchaser Party" has the meaning ascribed to such term in Section 4.6.

"Remaining Units" has the meaning ascribed to such term in the recitals to this
Agreement.

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

"SEC Reports" has the meaning ascribed to such term in Section 3.1.

"Second Closing" has the meaning ascribed to such term in Section 2.1(b).

"Second Closing Date" has the meaning ascribed to such term in Section 2.1(b).

"Securities" means the Shares, the Warrants and the Warrant Shares.

"Securities Act" has the meaning ascribed to such term in the recitals to this
Agreement.

"Shares" means shares of the Company's Common Stock.

"Short Sales" means all "short sales" as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

"Stockholder Approval Condition" has the meaning ascribed to such term in
Section 2.4(c).

"Stockholder Approval Termination Date" has the meaning ascribed to such term in
Section 4.12.

"Subsidiary" has the meaning ascribed to such term in Section 3.1(a).

"Total Units" has the meaning ascribed to such term in the recitals to this
Agreement.

"Trading Day" means a day on which the Common Stock is traded on a Trading
Market.

"Trading Market" means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq
Capital Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board.

"Transaction Agreements" means this Agreement, the Warrants and any other
agreements executed in connection with the transactions contemplated hereunder.

"Unit" has the meaning ascribed to such term in the recitals to this Agreement.

"VWAP" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted for trading as reported by Bloomberg L.P.
(based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time); (b) if the Common Stock is not then quoted for trading on a
Trading Market and if prices for the Common Stock are then reported in the "Pink
Sheets" published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (c) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchaser and reasonably acceptable to
the Company.

"Warrants" means collectively the Common Stock purchase warrants, in the form of
Exhibit A attached hereto and delivered to the Purchasers at a Closing in
accordance with Article II hereof, which Warrants shall be exercisable beginning
on the date that is 12 months after the date hereof and have a term of exercise
equal to 5 years.

"Warrant Exercise Price" has the meaning ascribed to such term in Section
2.2(a)(ii).

"Warrant Shares" means the shares of Common Stock issuable upon exercise of the
Warrants.

ARTICLE II.
PURCHASE AND SALE

2.1 Purchase and Sale of Units. Subject to the terms and conditions of this
Agreement, each Purchaser, severally and not jointly, agrees to purchase, and
the Company agrees to sell and issue to each of the Purchasers, such number of
Units set forth on such Purchaser's signature page to this Agreement. Subject to
the terms and conditions of this Agreement, such purchases and sales shall take
place at the First Closing and/or the Second Closing (if applicable) in the
order of the dates on which Purchasers deliver to the Company their executed
signature pages to this Agreement and deposit funds in the Escrow Account
pursuant to Section 2.1(c); provided, however, if one or more signature pages
are received by the Company and related Escrow Account fundings occur on the
same date, and if the sale of the Units represented thereby would result in the
total number of Initial Units, along with any shares or warrants issued
contemporaneously therewith, such as placement agent warrants, required to be
counted together therewith for purposes of the Nasdaq Approval Requirement prior
to the sale thereof, then the Company shall allocate such Units between Initial
Units (to be purchased and sold at the First Closing subject to the terms and
conditions of this Agreement) and Remaining Units (to be purchased and sold at
the Second Closing subject to the terms and conditions of this Agreement) in its
sole discretion. By their signatures to this Agreement, the Purchasers expressly
acknowledge and agree that there is no minimum number of Units required to be
sold at any Closing under this Agreement. No investment should be made in the
Company pursuant to this Agreement based on any assumption or expectation by any
Purchaser that any minimum number of Units will be sold hereunder.
Notwithstanding any other provision of this Agreement, in no event shall the
Company sell or issue, or be required to sell or issue, pursuant to this
Agreement any Units that would cause the Company to sell or issue Units in
excess of the Purchase Price Cap.

(a) First Closing. The first closing of the purchase and sale of the Initial
Units (the "First Closing") shall be held at the offices of the Company's
Counsel, on June 15, 2009 at 11:00 a.m., New York time, or at such other time
(on or prior to June 30, 2009) and place designated by the Company and the
Co-Placement Agents (the "First Closing Date").

(b) Second Closing. If applicable, a closing of the purchase and sale of the
Remaining Units (the "Second Closing") may be held at the offices of the
Company's Counsel, which Second Closing would be held no later than three
Trading Days following the satisfaction of the Stockholder Approval Condition
(as hereinafter defined) (the "Second Closing Date").

(c) Payments. Immediately upon a Purchaser's execution of this Agreement, such
Purchaser shall deposit the full Aggregate Purchase Price, as set forth on such
Purchaser's signature page to this Agreement, into an account established by the
Company with the Escrow Agent and designated in writing to such Purchaser by the
Company (the "Escrow Account"). Such deposit shall be made in United States
dollars and in immediately available funds by wire transfer. Upon written
instruction by (i) the Company and (ii) the Co-Placement Agents to the Escrow
Agent, the Escrow Agent shall release funds from the Escrow Account to the
Company at the First Closing and, if applicable, at the Second Closing. Such
funds shall be paid by the Escrow Agent to the Company in United States dollars
and in immediately available funds by wire transfer to an account established by
the Company and designated in writing to the Escrow Agent by the Company. If any
funds remain in the Escrow Account at 6:00 p.m. New York time on the Stockholder
Approval Termination Date, the Escrow Agent shall, on the next Trading Day,
return those funds, without interest, to those Purchasers whose payment(s)
hereunder have not been used to purchase Units.

2.2 First Closing Deliveries.

(a) At the First Closing, the Company shall deliver or cause to be delivered to
Purchasers, and/or the Co-Placement Agents on behalf of the Purchasers, the
following:

(i) a stock certificate for the number of Shares included in the Initial Units
purchased by such Purchaser at the First Closing, in the name of such Purchaser
and bearing a restrictive legend under the Securities Act as described in
Section 3.2(j) below (such stock certificate may be delivered within three
Trading Days of the First Closing Date; and

(ii) a Warrant registered in the name of such Purchaser to purchase up to a
number of Shares equal to 100% of such Purchaser's Initial Units actually
purchased hereunder at the First Closing, with an exercise price per Share equal
to the consolidated closing bid price on the Nasdaq Capital Market (trading
symbol "DARA") for one share of Common Stock for the trading day prior to the
First Closing Date (the "Warrant Exercise Price"), subject to adjustment therein
(such Warrant certificate may be delivered within three Trading Days of the
First Closing Date).

(b) At the First Closing, the aggregate Purchase Price for the Initial Units
purchased at the First Closing shall be delivered to the Company from the Escrow
Account in accordance with Section 2.1(c).

2.3 Second Closing Deliveries.

(a) At the Second Closing (if applicable), the Company shall deliver or cause to
be delivered to the Co-Placement Agents on behalf of the Purchasers the
following:

(i) a stock certificate for the number of Shares included in the Remaining Units
purchased by such Purchaser at the Second Closing, in the name of such Purchaser
and bearing a restrictive legend under the Securities Act as described in
Section 3.2(j) (such Warrant certificate may be delivered within three Trading
Days of the Second Closing Date; and

(ii) a Warrant registered in the name of such Purchaser to purchase up to a
number of Shares equal to 100% of such Purchaser's Remaining Units actually
purchased hereunder at the Second Closing, with an exercise price per Share
equal to the Warrant Exercise Price, subject to adjustment therein (such Warrant
certificate may be delivered within three Trading Days of the Second Closing
Date).

(b) At the Second Closing (if applicable), the aggregate Purchase Price for the
Remaining Units purchased at the Second Closing shall be delivered to the
Company from the Escrow Account in accordance with Section 2.1(c).

2.4 Closing Conditions.

(a) Conditions Precedent to the Obligations of the Purchasers at the Closings.
The obligation of each Purchaser to acquire the Initial Units at the First
Closing and the Remaining Units at the Second Closing (if applicable) is subject
to the satisfaction or waiver by such Purchaser, at or before the First Closing
or Second Closing, as applicable, of each of the following conditions:

(i) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as
of the date when made and as of the First Closing Date or the Second Closing
Date, as applicable, as though made on and as of such date; provided, however,
that those representations and warranties qualified by materiality shall be true
and correct in all respects as of the date when made and as of the First Closing
Date or the Second Closing Date, as applicable, as though made on and as of such
date.

(ii) Performance. The Company shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Agreements to be performed, satisfied or complied with by it at
or prior to the First Closing or the Second Closing, as applicable.

(iii) Absence of Litigation. No action, suit or proceeding by or before any
court or any governmental body or authority, against the Company or pertaining
to the transactions contemplated by this Agreement or their consummation, shall
have been instituted, or to the Company's knowledge, threatened, on or before
the First Closing Date or the Second Closing Date, as applicable, which action,
suit or proceeding would reasonably be expected to have a Material Adverse
Effect.

(b) Conditions Precedent to the Obligations of the Company at the Closings. The
obligation of the Company to sell the Initial Units to a Purchaser at the First
Closing and the Remaining Units at the Second Closing (if applicable) is subject
to the satisfaction or waiver by the Company, at or before the First Closing or
the Second Closing, as applicable, of each of the following conditions:

(i) Representations and Warranties. The representations and warranties of such
Purchaser contained herein shall be true and correct in all material respects as
of the date when made and as of the First Closing Date or the Second Closing
Date, as applicable, as though made on and as of such date; provided, however,
that those representations and warranties qualified by materiality shall be true
and correct in all respects as of the date when made and as of the First Closing
Date or the Second Closing Date, as applicable, as though made on and as of such
date.

(ii) Performance. Such Purchaser shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Agreements to be performed, satisfied or complied with by such
Purchaser at or prior to the First Closing or the Second Closing, as applicable.

(iii) Company Acceptance. The Company shall have accepted such Purchaser's
commitment to purchase Units as set forth on such Purchaser's signature page, as
evidenced by the countersignature of a Company officer on such signature page
where indicated.

(c) Additional Conditions to the Second Closing. The obligations of each
Purchaser to accept delivery of, and the Company's obligation to sell and issue,
the Remaining Units are subject to the Company's receipt and effectiveness of
stockholder approval for the issuance of the Remaining Units as, and to the
extent, required pursuant to the rules and regulations of the Nasdaq Stock
Market, the Commission or otherwise (the "Stockholder Approval Condition"). If
and to the extent applicable, following the satisfaction of the foregoing
condition, the Company will issue to the Purchasers the Remaining Units and
shall instruct the Escrow Agent to remit, and the Escrow Agent shall remit,
payment of the aggregate Purchase Price for the Remaining Units to the Company
pursuant to Section 2.1(c).

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1 Representations, Warranties and Covenants of the Company. Except as
otherwise described in the Company's Annual Report on Form 10-K for the year
ended December 31, 2008, any Company Quarterly Report on Form 10-Q filed since
the filing date of such Annual Report, or any of the Company's Current Reports
on Form 8-K filed since the filing date of such Annual Report (all collectively,
the "SEC Reports"), the Company hereby represents and warrants to, and covenants
with, each Purchaser as of the date hereof and as of each Closing Date, as
follows:

(a) Organization. The Company is duly incorporated and validly existing in good
standing under the laws of the State of Delaware. The Company has full power and
authority to own, operate and occupy its properties and to conduct its business
as currently conducted and is registered or qualified to do business and in good
standing in each jurisdiction in which it owns property or transacts business
and where the failure to be so qualified would have a material adverse effect
upon: (i) the Company and its Subsidiaries as a whole, (ii) the business,
financial condition, properties, operations or assets of the Company and its
Subsidiaries as a whole, or (iii) the Company's ability to perform its
obligations under the Transaction Agreements in all material respects (each, a
"Material Adverse Effect"). No proceeding has been instituted, or to the
Company's knowledge, threatened, in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification. Except as set forth in the SEC Reports, the Company does not
currently own, directly or indirectly, a majority of the stock or other equity
interests in any entity (each, a "Subsidiary"). Except for matters which are not
reasonably likely to have a Material Adverse Effect, each Subsidiary of the
Company has been duly incorporated, formed, or organized, and is validly
existing, in good standing under the laws of the jurisdiction of its
incorporation, formation, or organization, with full power and authority to own
its properties and conduct its business as currently conducted. Except for
matters which are not reasonably likely to have a Material Adverse Effect, all
of the issued and outstanding capital stock of each Subsidiary of the Company
has been duly authorized and validly issued and is fully paid and non-assessable
and, except as disclosed in the SEC Reports, is owned of record by the Company,
or a Subsidiary of the Company.

(b) Due Authorization. The Company has all requisite power and authority to
execute, deliver and perform its obligations under the Transaction Agreements.
The execution and delivery of the Transaction Agreements, and the consummation
by the Company of the transactions contemplated thereby, have been duly
authorized by all necessary corporate action. The Transaction Agreements that
require execution by the Company have been validly executed and delivered by the
Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except to the
extent (i) rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws; (ii) such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and (iii) such enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

(c) No Conflict or Default. The execution and delivery of the Transaction
Agreements, the issuance and sale of the Securities to be sold by the Company
under the Transaction Agreements, the fulfillment of the terms of the
Transaction Agreements and the consummation of the transactions contemplated
thereby will not: (A) result in a conflict with or constitute a violation of, or
default (with the passage of time or otherwise) under, (i) any bond, debenture,
note, loan agreement or other evidence of indebtedness, or any indenture, lease,
mortgage, deed of trust or any other agreement or instrument to which the
Company is a party or by which it is bound or to which any of the property or
assets of the Company is subject, (ii) any stockholders agreement, voting
agreement or similar agreement concerning the voting rights of stockholders,
(iii) the Certificate of Incorporation, bylaws or other organizational documents
of the Company, as amended, or (iv) with respect to the issuance and sale of the
Securities, assuming the accuracy of the representations and warranties and the
performance and satisfaction of the covenants and agreements, of the Purchasers
pursuant to the Transaction Agreements, any law, rule, ordinance, statute,
regulation, or existing order of any court or governmental agency, or other
authority binding upon the Company or the Company's respective properties; or
(B) result in the creation or imposition of any Lien upon any of the material
assets of the Company or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any material bond, debenture,
note, loan agreement or other evidence of indebtedness, or any material
indenture, lease, mortgage, deed of trust or any other agreement or instrument
to which the Company is a party or by which it is bound or to which any of the
property or assets of the Company is subject. No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, or other governmental body is
required for the execution and delivery of the Transaction Agreements by the
Company and the valid issuance or sale of the Securities by the Company pursuant
to the Transaction Agreements, other than such as have been made or obtained,
and except for any filings required to be made under federal or state securities
laws.

(d) Capitalization. The authorized capital stock of the Company consists of
75,000,000 shares of Common Stock, par value $0.01 per share, and 1,000,000
shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock"). At
December 31, 2008, there were 30,113,829 shares of Common Stock issued and
30,101,328 shares of Common Stock outstanding. There were no shares of Preferred
Stock issued and outstanding as of December 31, 2008. As of December 31, 2008,
no shares of the Company's Common Stock were reserved for issuance, except (a)
up to 2,228,213 shares of Common Stock reserved for issuance pursuant to
outstanding stock options, (b) up to 4,041,408 shares of Common Stock reserved
for future issuance pursuant to the Company's employee and director incentive
stock plans (excluding shares reflected in clause (a) above) and (c) up to
4,277,511 shares of Common Stock reserved for issuance pursuant to outstanding
warrants. All outstanding stock options have been appropriately issued, dated
and authorized under the Company's employee and director incentive stock plans.
Since December 31, 2008, the Company has not issued any shares of Common Stock
or any securities convertible into or exercisable for any shares of its Common
Stock, other than pursuant to its employee and director incentive stock plans
and upon the exercise of outstanding stock options. There are not any
outstanding preemptive rights or rights of first refusal that would provide for
the issuance or sale of any Common Stock of the Company to any Person as a
result of the transactions contemplated by this Agreement.

(e) Issuance of the Securities. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Agreements,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Agreements. The Warrant Shares, when issued in accordance
with the terms of the Warrants, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Agreements. The Company
has reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable pursuant to this Agreement and the Warrants.

(f) Legal Proceedings. There is no legal, administrative, regulatory or
governmental proceeding pending, or to the knowledge of the Company, threatened,
to which the Company or any Subsidiary is a party or of which the business or
property of the Company is subject, that is reasonably likely to have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries are subject to
any injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other government body that is reasonably likely to have
a Material Adverse Effect.

(g) SEC Reports. The SEC Reports, including copies of all the exhibits included
or referenced therein, as of their respective dates (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such amendment or superseding filing): (i) have been prepared and filed in
compliance in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder; and (ii) did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

(h) No Violations. The Company is not in violation of its Certificate of
Incorporation or bylaws, as amended. To the knowledge of the Company, it is not
in violation of any law, rule, ordinance, statute, regulation or order of any
court or governmental agency, arbitration panel or authority applicable to the
Company, which violation, individually or in the aggregate, is reasonably likely
to have a Material Adverse Effect. The Company is not in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in the performance of any bond, debenture, note or any
other evidence of indebtedness or any indenture, mortgage, deed of trust or any
other material agreement or instrument to which the Company is a party or by
which the Company is bound, which such default is reasonably likely to have a
Material Adverse Effect.

(i) Governmental Permits, Etc. The Company and each of its Subsidiaries have all
necessary franchises, licenses, certificates and other authorizations from any
foreign, federal, state or local government or governmental agency, department
or body that are currently necessary for the operation of the business of the
Company and its Subsidiaries as currently conducted, except where the failure to
currently possess such franchises, licenses, certificates and other
authorizations is not reasonably likely to have a Material Adverse Effect.

(j) Good and Marketable Title to Property. The Company and its Subsidiaries have
good and marketable title to, or a valid, subsisting and enforceable interest
in, all real properties and all other properties and assets owned or leased by
them that are material to the operation of the Company's business.

(k) Intellectual Property. Except for matters which are not reasonably likely to
have a Material Adverse Effect, (i) the Company or a Subsidiary has ownership
of, or a license or other legal right to use, all patents, copyrights, trade
secrets, trademarks, trade names, customer lists, designs, manufacturing or
other processes, computer software, systems, data compilation, research results
or other proprietary rights used in the business of the Company (collectively,
"Intellectual Property") and (ii) the Company or a Subsidiary owns and has the
right to use the same, free and clear of any claim or conflict with the rights
of others (subject to the provisions of any applicable license agreement). To
the Company's knowledge, its use of its Intellectual Property does not infringe
the intellectual property rights of any third party which could reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate.

(l) Financial Statements. The financial statements of the Company and the
related notes contained in the SEC Reports present fairly and accurately in all
material respects the financial position of the Company on a consolidated basis
as of the dates therein indicated, and the consolidated results of its
operations, cash flows and the changes in stockholders' equity for the periods
therein specified, subject, in the case of unaudited financial statements for
interim periods, to normal year-end audit adjustments. Such financial statements
(including the related notes) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis at the times and
throughout the periods therein specified, except that unaudited financial
statements may not contain all footnotes required by generally accepted
accounting principles. The Company has no off-balance sheet arrangements. The
Company's internal accounting controls and procedures are sufficient to cause
the Company and each Subsidiary to prepare financial statements that comply in
all material respects with generally accepted accounting principles and the
rules and regulations of the Commission on a consistent basis during the periods
involved. Since December 31, 2008, nothing has been brought to the attention of
the Company's management that would result in any reportable condition relating
to the Company's internal accounting procedures, weaknesses or controls that has
not been reported as required by the Commission.

(m) Tax Returns. Except for matters which are not reasonably likely to have a
Material Adverse Effect, the Company and its Subsidiaries have made or filed all
federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which they are subject and have
paid or accrued all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports
and declarations.

(n) No Material Adverse Change. There has not been since December 31, 2008 any
event, circumstance or change that has had or is reasonably likely to have a
Material Adverse Effect.

(o) Contracts. Except for matters which are not reasonably likely to have a
Material Adverse Effect and those contracts that are substantially or fully
performed or expired by their terms, the contracts listed as exhibits to or
described in the SEC Reports that are material to the Company and all amendments
thereto, are in full force and effect on the date hereof, and neither the
Company nor, to the Company's knowledge, any other party to such contracts is in
breach of or default under any of such contracts, which breach or default is
reasonably likely to result in a Material Adverse Effect. The Company maintains
insurance in scope and amount which is reasonable and customary in the
businesses in which the Company and the Subsidiaries are engaged.

(p) Investment Company. The Company is not an "investment company" or an
"affiliated person" of an investment company, within the meaning of the
Investment Company Act of 1940, as amended, and will not be deemed an
"investment company" as a result of the transactions contemplated by this
Agreement.

(q) Certain Fees. Except for the fees payable to the Co-Placement Agents, and
fees payable to Roccus Partners, Inc., no brokerage or finder's fees or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction
Agreements. The Purchasers shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other Persons for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by the Transaction Agreements.

(s) Employees. The Company and each of its Subsidiaries is in compliance in all
material respects with all laws and regulations respecting the employment of its
employees and employment practices, terms and conditions of employment and wages
and hours relating thereto. There are no pending investigations involving the
Company or any of its Subsidiaries by any governmental agency responsible for
the enforcement of such laws and regulations. There is no unfair labor practice
charge or complaint against the Company or any of its Subsidiaries pending
before any governmental agency or body or any strike, picketing, boycott,
dispute, slowdown or stoppage pending, or to the knowledge of the Company,
threatened, against or involving the Company or any of its Subsidiaries or any
predecessor entity. No question concerning representation exists respecting the
employees of the Company or any of its Subsidiaries and no collective bargaining
agreement or modification thereof is currently being negotiated by the Company
or any of its Subsidiaries. No grievance or arbitration proceeding is pending
under any expired or existing collective bargaining agreements of the Company or
any of its Subsidiaries, if any.

3.2 Representations, Warranties and Covenants the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of each Closing Date to the Company, and covenants with the
Company, as follows:

(a) The Purchaser has carefully read the Transaction Agreements and is familiar
with and understands the terms thereof. The Purchaser has also carefully read
and considered the Company SEC Reports, including, without limitation, the
financial statements included therein. The Purchaser fully understands all of
the risks related to the purchase of the Units. The Purchaser understands that
nothing in the SEC Reports, any Transaction Agreement, or any other materials
presented to the Purchaser in connection with the purchase and sale of the Units
constitutes legal, tax or investment advice. The Purchaser has carefully
considered and has discussed with the Purchaser's professional legal, tax,
accounting and financial advisors, to the extent the Purchaser has deemed
necessary, the suitability of an investment in the Units for the Purchaser's
particular tax and financial situation and has determined that the Units being
purchased by the Purchaser are a suitable investment for the Purchaser. The
Purchaser recognizes that an investment in the Units involves substantial risks,
including the possible loss of the entire amount of such investment. The
Purchaser further recognizes that the Company has broad discretion concerning
the use and application of the proceeds from the sale of the Units and exercise
of the Warrants.

(b) The Purchaser acknowledges that (i) the Purchaser has had the opportunity to
request copies of any documents, records, and books pertaining to this
investment and (ii) any such documents, records and books that the Purchaser
requested have been made available for inspection by the Purchaser, the
Purchaser's attorney, accountant or other advisor(s). The Purchaser has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Units.

(c) The Purchaser and the Purchaser's advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from representatives of the
Company or Persons acting on behalf of the Company concerning the Company, the
offering contemplated by the Transaction Agreements and the Securities and all
such questions have been answered to the full satisfaction of the Purchaser.

(d) After examination of the SEC Reports and other information available, the
Purchaser is fully aware of the business, financial condition, risks associated
with investment in the Units and the operating history relating to the Company,
and therefore in subscribing for the purchase of the Units, the Purchaser is not
relying upon any information other than information contained in the SEC Reports
or in the Transaction Agreements. The Purchaser acknowledges that it has
independently evaluated the merits of the transactions contemplated by the
Transaction Agreements, that it has independently determined to enter into the
transactions contemplated thereby, that it is not relying on any advice from or
evaluation by any other Purchaser, and that it is not acting in concert with any
other Purchaser in making its purchase of the Units hereunder. The Purchaser
acknowledges that the Purchaser has not, either individually or collectively
with any other Purchasers, taken any actions that would deem the Purchasers to
be members of a "group" for purposes of Section 13(d) of the Exchange Act with
respect to the Company.

(e) The Purchaser is not purchasing the Units as a result of or subsequent to
any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar, meeting or conference whose attendees have been
invited by any general solicitation or general advertising.

(f) If the Purchaser is a natural Person, the Purchaser has reached the age of
majority in the state in which the Purchaser resides. The Purchaser has adequate
means of providing for the Purchaser's current financial needs and
contingencies, is able to bear the substantial economic risks of an investment
in the Securities for an indefinite period of time, has no need for liquidity in
such investment and can afford a complete loss of such investment.

(g) The Purchaser has sufficient knowledge and experience in financial, tax and
business matters to enable the Purchaser to utilize the information made
available to the Purchaser in connection the transactions contemplated by the
Transaction Agreements, to evaluate the merits and risks of an investment in the
Securities and to make an informed investment decision with respect to an
investment in the Securities on the terms described in the Transaction
Agreements. The Purchaser has independently evaluated the merits and risks of
its decision to purchase the Units, and the Purchaser confirms that it has not
relied on the advice of the Company's or any other Purchaser's business and/or
legal counsel in making such decision.

(h) The Purchaser will not sell or otherwise transfer the Securities without
registration under the Securities Act and applicable state securities laws or an
applicable exemption therefrom. The Purchaser acknowledges that neither the
offer nor sale of the Units or any of the Securities has been registered under
the Securities Act or under the securities laws of any state. The Purchaser
represents and warrants that the Purchaser is acquiring the Securities for the
Purchaser's own account, for investment purposes and not with a view toward
resale or distribution within the meaning of the Securities Act, except pursuant
to sales registered or exempted under the Securities Act. The Purchaser is
acquiring the Securities in the ordinary course of business. The Purchaser has
not offered or sold the Securities being acquired nor does the Purchaser have
any present intention of selling, distributing or otherwise disposing of such
Securities either currently or after the passage of a fixed or determinable
period of time or upon the occurrence or non-occurrence of any predetermined
event or circumstances in violation of the Securities Act. The Purchaser is
aware that (i) the Securities are not currently eligible for sale in reliance
upon Rule 144 promulgated under the Securities Act and (ii) the Company has no
obligation to register the Securities purchased hereunder. By making these
representations herein, the Purchaser is not making any representation or
agreement to hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an available exemption to the
registration requirements of the Securities Act.

(i) The Purchaser understands that: (i) The Securities have not been and are not
being registered under the Securities Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) the Purchaser shall have delivered to the Company an
opinion of counsel, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such registration, or (C)
the Purchaser provides the Company with reasonable assurance that such
Securities can be sold, assigned or transferred pursuant to Rule 144; (ii) any
sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the Person through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the Securities Act) may require compliance with some
other exemption under the Securities Act or the rules and regulations of the SEC
thereunder; and (iii) neither the Company nor any other Person is under any
obligation to register the Securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.

(j) The Purchaser acknowledges and agrees that the Shares, the Warrants, and
upon exercise of the Warrants, the Warrant Shares, shall bear any legend
required by the securities laws of any state and be stamped or otherwise
imprinted with a legend substantially in the following form:

THIS SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (i)
A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD HERETO AND THERETO, OR
(ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR
TRANSFER.

(k) If this Agreement is executed and delivered on behalf of a partnership,
corporation, trust, estate or other entity: (i) such partnership, corporation,
trust, estate or other entity is duly organized and validly existing and has the
full legal right and power and all authority and approval required (a) to
execute and deliver this Agreement and all other instruments executed and
delivered by or on behalf of such partnership, corporation, trust, estate or
other entity in connection with the purchase of its Units, and (b) to purchase
and hold such Units; (ii) the signature of the party signing on behalf of such
partnership, corporation, trust, estate or other entity is binding upon such
partnership, corporation, trust, estate or other entity; and (iii) such
partnership, corporation, trust or other entity has not been formed for the
specific purpose of acquiring such Units.

(l) The information contained in the purchaser questionnaire in the form of
Exhibit B attached hereto delivered by the Purchaser in connection with this
Agreement is complete and accurate in all respects. The Purchaser is an
"accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act on the basis indicated therein and is a resident of the
jurisdiction set forth therein. The Purchaser is not required to be a registered
broker-dealer under Section 15 of the Exchange Act. The Purchaser is an
"accredited investor" as defined in Rule 501(a) of Regulation D under the

(m) The Purchaser acknowledges that the Company will have the authority to issue
shares of Common Stock, in excess of those being issued in connection herewith,
and that the Company may issue additional shares of Common Stock from time to
time. The issuance of additional shares of Common Stock may cause dilution of
the existing shares of Common Stock and a decrease in the market price of such
existing shares.

(n) The Purchaser understands that the Units are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and the Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the Units.

(o) The Purchaser understands that no United States federal or state agency or
any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of the investment in the Units or the Securities nor have such authorities
passed upon or endorsed the merits of the offering of the Units or the
Securities.

(p) This Agreement has been duly and validly authorized, executed and delivered
on behalf of the Purchaser and shall constitute the legal, valid and binding
obligations of such Purchaser enforceable against the Purchaser in accordance
its terms.

(q) The execution, delivery and performance by the Purchaser of this Agreement
and the consummation by the Purchaser of the transactions contemplated hereby
will not (i) result in a violation of the organizational documents of the
Purchaser or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Purchaser is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to the Purchaser,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of the Purchaser to perform its obligations hereunder. Assuming the
accuracy of the representations and warranties, and the performance and
satisfaction of the covenants and agreements, of the Company pursuant to the
Transaction Agreements, no consent, approval, authorization or other order of,
or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body is required for the execution
and delivery of the Transaction Agreement by the Purchaser, other than such as
have been made or obtained, and except for any filings required to be made under
federal or state securities laws.

(r) The Purchaser has not entered into any agreement or arrangement that would
entitle any broker or finder to compensation by the Company in connection with
the sale of the Units to such Purchaser.

(s) The Purchaser has, in connection with its purchase of the Units, complied
with all applicable provisions of the Securities Act, including the rules and
regulations promulgated by the SEC thereunder, and applicable state securities
laws.

(t) Other than the transaction contemplated hereunder, the Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser, executed any purchase or disposition,
including Short Sales, in the securities of the Company during the Discussion
Time. Such Purchaser covenants that neither it nor any Person acting on its
behalf or pursuant to any understanding with it will engage in any transactions
in the securities of the Company (including Short Sales) prior to the time that
the transactions contemplated by this Agreement are publicly disclosed. Other
than to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1 Furnishing of Information. As long as any Purchaser owns any Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act and the rules and
regulations of the Trading Market. As long as any Purchaser owns any Securities,
if the Company is not required to file reports pursuant to the Exchange Act, it
will prepare and furnish to the Purchasers and make publicly available in
accordance with Rule 144(c) such information as is required for the Purchasers
to sell the Securities under Rule 144. The Company further covenants that it
will take such further action as any holder of Securities may reasonably
request, to the extent required from time to time to enable such Person to sell
such Securities without registration under the Securities Act within the
requirements of the exemption provided by Rule 144.

4.2 Securities Laws Disclosure; Publicity. The Company shall, by 9:30 a.m. (New
York City time) on the Trading Day immediately following the First Closing Date,
issue a Current Report on Form 8-K, disclosing the material terms of the
transactions contemplated hereby, and shall attach the Transaction Agreements
thereto. The Company may, contemporaneously with such Form 8-K issue a press
release concerning the transactions contemplated hereby. The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. The Company shall
not need the prior consent of any Purchaser to issue the press release with
respect to the transactions contemplated hereby as set forth above in this
Section 4.2. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (i) as required by federal
securities law in connection with the filing of final Transaction Agreements
(including signature pages thereto) with the Commission and (ii) to the extent
such disclosure is required by law or Trading Market regulations, in which case
the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this subclause (ii).

4.3 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Agreements, the
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that constitutes material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. The Company understands and confirms that each
Purchaser shall be relying on the foregoing representations in effecting
transactions in securities of the Company.

4.4 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Units hereunder for general corporate purposes, including without limitation
working capital.

4.5 Indemnification of Purchasers. Subject to the provisions of this Section
4.5, the Company will indemnify, defend and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
"Purchaser Party") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Agreements or (b) any action instituted against a
Purchaser, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Agreements (unless such action
is based upon a breach of such Purchaser's representations, warranties or
covenants under the Transaction Agreements or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser
which constitutes fraud, gross negligence, willful misconduct or malfeasance).
If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has
been specifically authorized by the Company in writing, (ii) the Company has
failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of such
separate counsel, a material conflict on any material issue between the position
of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company's prior written consent, which shall not be unreasonably
withheld or delayed or (ii) to the extent, but only to the extent, that a loss,
claim, damage or liability is attributable to any Purchaser Party's breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Agreements.

4.6 Reservation of Common Stock. As of the date hereof, the Company has reserved
and the Company shall continue to reserve and keep available at all times, free
of preemptive rights, a sufficient number of shares of Common Stock for the
purpose of enabling the Company to issue Shares pursuant to this Agreement and
Warrant Shares pursuant to any exercise of the Warrants.

4.7 Short Sales and Confidentiality After The Date Hereof. Each Purchaser
severally and not jointly with the other Purchasers covenants that neither it
nor any Affiliate acting on its behalf or pursuant to any understanding with it
will execute any Short Sales during the period commencing at the Discussion Time
and ending at the time that the transactions contemplated by this Agreement are
first publicly announced as described in Section 4.2. Each Purchaser, severally
and not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement, or other information provided by or
on behalf of the Company to such Purchaser, is publicly disclosed by the Company
as described in Section 4.2 or otherwise, such Purchaser will maintain the
confidentiality of all such disclosures (including the existence and terms of
this transaction). Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced as described in
Section 4.2 and any other material nonpublic information disclosed by or on
behalf of the Company to such Purchaser is publicly announced. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such
Purchaser's assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of
such Purchaser's assets, the covenant set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this Agreement.

4.8 Delivery of Securities After Closing. Subject to the receipt of all
necessary information from each Purchaser, the Company shall deliver, or cause
to be delivered, the respective Securities purchased by each Purchaser at a
Closing to such Purchaser within three Trading Days of the applicable Closing
Date.

4.9 Stockholder Approval Event. If the Company agrees to sell and the Purchasers
agree to purchase any Remaining Units hereunder, and if, and to the extent, the
Company determines, in its reasonable discretion, that stockholder approval is
required for the issuance of such Remaining Units pursuant to the rules and
regulations of the Nasdaq Stock Market (the "Nasdaq Stockholder Approval
Requirement"), the Commission or otherwise, the Company shall prepare and file
with the Commission either (i) a proxy statement pursuant to Section 14(a) of
the Exchange Act or (ii) an information statement pursuant to Section 14(c) of
the Exchange Act. In the event of such filing, the Company shall use its
commercially reasonable efforts to satisfy the Stockholder Approval Condition
within seventy-five (75) days of the First Closing Date (such date being the
"Stockholder Approval Termination Date"). The Stockholder Approval Termination
Date may be extended by the Company upon written notice to the Purchasers for up
to an additional thirty (30) days.

ARTICLE V.
MISCELLANEOUS

5.1 Termination. This Agreement may be terminated by any Purchaser, as to such
Purchaser's obligations hereunder with respect to any future Closing only and
without any effect whatsoever on the obligations between the Company and the
other Purchasers or on Units purchased hereunder by such Purchaser at a prior
Closing, by written notice to the other parties, if (i) the First Closing has
not been consummated on or before July 20, 2009, or (ii) the Second Closing (if
applicable) has not been consummated on or before September 30, 2009; provided,
however, that no such termination will affect the right of any party to sue for
any breach by the other party (or parties). Upon such termination, the
terminating Purchaser shall be entitled to receive a full refund of such
Purchaser's Aggregate Purchase Price that has not already been applied to the
purchase of Units hereunder at a Closing hereunder.

5.2 Fees and Expenses. Except as expressly set forth in the Transaction
Agreements to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.

5.3 Entire Agreement. The Transaction Agreements, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

5.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the 2nd Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and Purchaser(s) holding 51% or more of the then outstanding Securities
sold pursuant to this Agreement, or, in the case of a waiver, by the party
against whom enforcement of any such waived provision is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.

5.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger).

5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.5.

5.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Agreements shall be governed
by and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of conflicts of law thereof. The
parties hereby waive all rights to a trial by jury.

5.10 Survival. The representations and warranties contained herein shall survive
until the 18 month anniversary of the date hereof.

5.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective with respect to each Purchaser when counterparts have
been signed by such Purchaser and the Company and delivered by each to the
other, it being understood that both parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile transmission or by
e-mail delivery of a ".pdf" format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
".pdf" signature page were an original thereof.

5.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

5.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The applicant
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with the
issuance of such replacement Securities.

5.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Agreements. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Agreements and hereby agrees to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

5.15 Independent Nature of Purchasers' Obligations and Rights. The obligations
of each Purchaser under any Transaction Agreement are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or nonperformance of the obligations of any other
Purchaser under any Transaction Agreement. Nothing contained herein or in any
other Transaction Agreement, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Agreements. Each Purchaser shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of this Agreement or out of the other Transaction Agreements, and it shall
not be necessary for any other Purchaser to be joined as an additional party in
any proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Agreements. Company has elected to provide all Purchasers with the same terms
and Transaction Agreements for the convenience of the Company and not because it
was required or requested to do so by the Purchasers.

5.16 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Agreements
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Agreements or any amendments hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

DARA BIOSCIENCES, INC.

 

By:

Name: Richard A. Franco

Title: President

8601 Six Forks Road, Suite 160

Raleigh, NC 27615

Attn: Richard A. Franco

Fax: 919-861-0239

e-mail: rfranco@darabiosciences.com

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

Name of Purchaser:

Signature of Authorized Signatory of Purchaser

:

Name of Authorized Signatory:

Title of Authorized Signatory (if Purchaser is an entity):

Date of Signature and Deposit of Funds in Escrow Account:

Email Address of Purchaser:

Fax Number of Purchaser:

Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as above):

EIN Number:

 

Total Number of Units:
__________________________________________________________

Approval of this Purchaser's Signature Page by Company:
_____________________________

Richard A. Franco

President

EXHIBIT A

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND NEITHER THIS WARRANT, THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF, OR ANY INTEREST HEREIN OR THEREIN MAY BE ACQUIRED UPON
EXERCISE HEREUNDER, OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF UNLESS (i) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE
WITH REGARD HERETO AND THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION
WITH SUCH OFFER, SALE OR TRANSFER.

COMMON STOCK PURCHASE WARRANT

To Purchase Shares of Common Stock of

DARA BIOSCIENCES, INC.

Dated as of [__________], 2009

THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for value
received, the holder (the "Holder"), is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the 12-month anniversary of the date hereof (the "Initial
Exercise Date") and on or prior to the close of business on the five year
anniversary of the Initial Exercise Date (the "Termination Date") but not
thereafter, to subscribe for and purchase from DARA BioSciences, Inc., a
Delaware corporation (the "Company"), up to [____TBD____] shares (the "Warrant
Shares") of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock"). The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).

Section 1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Securities Purchase Agreement
(the "Purchase Agreement"), dated as of June 15, 2009, among the Company and the
purchasers signatory thereto.

Section 2. Exercise.

Exercise of Warrant

. Subject to compliance with applicable securities laws, exercise of the
purchase rights represented by this Warrant may be made, in whole or in part, at
any time or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company of a duly executed facsimile copy of
the Notice of Exercise Form annexed hereto (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder at
the address of such Holder appearing on the books of the Company);
provided
,
however
, within five Trading Days of the date said Notice of Exercise is delivered to
the Company, if this Warrant is exercised in full, the Holder shall have
surrendered this Warrant to the Company and the Company shall have received
payment of the aggregate Exercise Price of the Warrant Shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank.
Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full. Partial exercises of this Warrant resulting in purchases
of a portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased. The Holder and the Company shall maintain records showing the number
of Warrant Shares purchased and the date of such purchases. The Company shall
deliver any objection to any Notice of Exercise Form within two Business Days of
receipt of such notice. In the event of any dispute or discrepancy, the records
of the Company shall be controlling and determinative in the absence of manifest
error. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof.

Exercise Price

. The per share exercise price of the Common Stock under this Warrant shall be $
[_TBD_]
, subject to adjustment hereunder (the "
Exercise Price
").

Cashless Exercise

. If at any time during the term of this Warrant either there is no effective
registration statement registering, or no current prospectus available for, the
issuance of the Warrant Shares by the Holder, then this Warrant may also be
exercised at such time by means of a "cashless exercise" in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the VWAP on the Trading Day immediately preceding the date of such
election;

(B) = the Exercise Price of this Warrant, as adjusted; and

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in
accordance with the terms of this Warrant by means of a cash exercise rather
than a cashless exercise.

Mechanics of Exercise

.

Authorization of Warrant Shares

. The Company covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

Delivery of Certificates Upon Exercise

. Certificates for shares purchased hereunder shall be transmitted to the Holder
by physical delivery to the address specified by the Holder in the Notice of
Exercise within three Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this Warrant (if required) and payment of
the aggregate Exercise Price as set forth above ("
Warrant Share Delivery Date
"). This Warrant shall be deemed to have been exercised on the date the Exercise
Price is received by the Company. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be named therein
shall be deemed to have become a holder of record of such shares for all
purposes, as of the date the Warrant has been exercised by payment to the
Company of the Exercise Price.

Restrictive Legend

. The Holder understands that unless the issuance of the Warrant Shares shall
have been registered or otherwise may be sold pursuant to Rule 144 under the
Securities Act or another exemption from registration under the Securities Act
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, the Warrant Shares shall bear a restrictive
legend in substantially the form described in the Purchase Agreement (and a
stop-transfer order may be placed against transfer of the certificates for such
securities).

Delivery of New Warrants Upon Exercise

. If this Warrant shall have been exercised in part, the Company shall, at the
request of a Holder and upon surrender of this Warrant certificate, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

No Fractional Shares or Scrip

. No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant. As to any fraction of a share which Holder
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.

Section 3. Certain Adjustments.

Stock Dividends and Splits

. If the Company, at any time while this Warrant is outstanding: (A) pays a
stock dividend or otherwise make a distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company pursuant to this Warrant or the
other Warrants), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (D)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted. Any adjustment made
pursuant to this Section 3(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.

Fundamental Transaction

. If, at any time while this Warrant is outstanding, (A) the Company effects any
merger or consolidation of the Company with or into another Person, (B) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (C) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (D) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (each "
Fundamental Transaction
"), then, upon any subsequent exercise of this Warrant, the Holder shall have
the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental
Transaction, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and/or any
other consideration, including cash (the "
Alternate Consideration
"), receivable as a result of such merger, consolidation or disposition of
assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder's right to
exercise such warrant into Alternate Consideration.

Calculations

. All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

Notice to Holders

. Whenever the Exercise Price is adjusted pursuant to this Section 3, the
Company shall promptly mail to each Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

Section 4. Transfer of Warrant.

Transferability

. This Warrant and all rights hereunder are transferable in accordance, and only
in accordance, with applicable securities laws and the Securities Purchase
Agreement, in whole or in part, upon surrender of this Warrant at the principal
office of the Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by a
new holder for the purchase of Warrant Shares without having a new Warrant
issued.

New Warrants

. This Warrant may be divided or combined with other Warrants upon presentation
hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

Warrant Register

. The Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the "
Warrant Register
"), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

Section 5. Miscellaneous.

Title to Warrant

. Prior to the Termination Date and subject to compliance with applicable laws
and Section 4 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.

No Rights as Stockholder Until Exercise

. This Warrant does not entitle the Holder to any voting rights or other rights
as a stockholder of the Company prior to the exercise hereof. Upon the surrender
of this Warrant and the payment of the aggregate Exercise Price (or by means of
a cashless exercise), the Warrant Shares so purchased shall be and be deemed to
be issued to such Holder as the record owner of such shares as of the close of
business on the later of the date of such surrender or payment.

Loss, Theft, Destruction or Mutilation of Warrant

. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

Saturdays, Sundays, Holidays, etc

. If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall be a Saturday, Sunday or a legal
holiday, then such action may be taken or such right may be exercised on the
next succeeding day not a Saturday, Sunday or legal holiday.

Authorized Shares

.

The Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation.

Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

Jurisdiction

. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.

Restrictions

. The Holder acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant will not be registered and will have restrictions upon resale
imposed by state and federal securities laws.

Nonwaiver and Expenses

. No course of dealing or any delay or failure to exercise any right hereunder
on the part of Holder shall operate as a waiver of such right or otherwise
prejudice Holder's rights, powers or remedies, notwithstanding the fact that all
rights hereunder terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto or
in otherwise enforcing any of its rights, powers or remedies hereunder.

Notices

. Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

Limitation of Liability

. No provision hereof, in the absence of any affirmative action by Holder to
exercise this Warrant or purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder
for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

Remedies

. Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.

Successors and Assigns

. Subject to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon
the successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Shares.

Amendment

. This Warrant may be modified or amended or the provisions hereof waived with
the written consent of the Company and the Holder.

Severability

. Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

Headings

. The headings used in this Warrant are for the convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

Dated: _________ __, 2009

DARA BIOSCIENCES, INC.

 

By:

Name: Richard A. Franco

Title: President

NOTICE OF EXERCISE

TO: DARA BioSciences, Inc.

8601 Six Forks Road, Suite 160

Raleigh, North Carolina 27615

(1) The undersigned hereby elects to purchase ______ Warrant Shares of the
Company pursuant to the terms of the attached Warrant, and tenders herewith
payment of the exercise price, together with all applicable transfer taxes, if
any, in accordance with paragraph (2) below.

(2) Payment shall take the form of (check applicable box):

[ ] $__________________ in lawful money of the United States; or

[ ] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:

_____________________________________

The Warrant Shares shall be delivered to the following:

_____________________________________

_____________________________________

_____________________________________

ASSIGNMENT FORM

(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to ____________________________________________ whose address is
____________________________________________________________.

Dated: ____________, ______

Holder's Signature:

Holder's Address:

Signature Guaranteed: ___________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

EXHIBIT B

DARA BioSciences, Inc.

Confidential Purchaser Questionnaire

 

Before any sale of Units can be made to you by DARA BioSciences, Inc., this
Questionnaire must be completed and returned to Richard Franco.

1. IF YOU ARE AN INDIVIDUAL PLEASE FILL IN THE IDENTIFICATION QUESTIONS IN (A)
IF YOU ARE AN ENTITY PLEASE FILL IN THE IDENTIFICATION QUESTIONS IN (B)

A. INDIVIDUAL IDENTIFICATION QUESTIONS

Name 

(Exact name as it should appear on stock certificate)

Residence Address 

Home Telephone Number 

Fax Number 

Date of Birth 

Social Security Number 

B. IDENTIFICATION QUESTIONS FOR ENTITIES

Name 

(Exact name as it will appear on stock certificate)

Address of Principal Place of Business

State (or Country) of Formation or Incorporation

Contact Person

Telephone Number ( )

Type of entity (corporation, partnership, trust, etc.)

Was entity formed for the purpose of this investment?

Yes       No      

2. DESCRIPTION OF INVESTOR

The following information is required to ascertain whether you would be deemed
an "accredited investor" as defined in Rule 501 of Regulation D under the
Securities Act. Please check whether you are any of the following:

a corporation, limited liability company or partnership with total assets in
excess of $5,000,000, not organized for the purpose of this particular
investment

private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940

a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958

an investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act

a trust not organized to make this particular investment, with total assets in
excess of $5,000,000 whose purchase is directed by a sophisticated Person as
described in Rule 506(b)(2)(ii) of the Securities Act of 1933 and who completed
item 4 below of this questionnaire

a bank as defined in Section 3(a)(2) or a savings and loan association or other
institution defined in Section 3(a)(5)(A) of the Securities Act of 1933 acting
in either an individual or fiduciary capacity

an insurance company as defined in Section 2(13) of the Securities Act of 1933

an employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974 (i) whose investment decision is made by
a fiduciary which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or (ii) whose total assets exceed
$5,000,000, or (iii) if a self-directed plan, whose investment decisions are
made solely by a Person who is an accredited investor and who completed Part I
of this questionnaire;

a charitable, religious, educational or other organization described in
Section 501(c)(3) of the Internal Revenue Code, not formed for the purpose of
this investment, with total assets in excess of $5,000,000

a broker or dealer registered under Section 15 of the Securities Exchange Act of
1934

a plan having assets exceeding $5,000,000 established and maintained by a
government agency for its employees

an individual who had individual income from all sources during each of the last
two years in excess of $200,000 or the joint income of you and your spouse (if
married) from all sources during each of such years in excess of $300,000 and
who reasonably excepts that either your own income from all sources during the
current year will exceed $200,000 or the joint income of you and your spouse (if
married) from all sources during the current year will exceed $300,000

an individual whose net worth as of the date you purchase the securities
offered, together with the net worth of your spouse, be in excess of $1,000,000

an entity in which all of the equity owners are accredited investors

3. BUSINESS, INVESTMENT AND EDUCATIONAL EXPERIENCE

Occupation 

Number of Years 

Present Employer 

Position/Title 

Educational Background

Frequency of prior investment (check one in each column):

 

Stocks & Bonds

Venture Capital Investments

Frequently

   

Occasionally

   

Never

   

4. SIGNATURE

The above information is true and correct. The undersigned recognizes that the
Company and its counsel are relying on the truth and accuracy of such
information in reliance on the exemption contained in Subsection 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The
undersigned agrees to notify the Company promptly of any changes in the
foregoing information which may occur prior to the investment.

Executed  at ___________________, on   , 2009

 

 

(Signature)