SECURED PROMISSORY
NOTE
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$500,000.00
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Raleigh, North
Carolina
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January 30, 2009
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FOR VALUE RECEIVED , the undersigned, DARA
BIOSCIENCES, INC. , a corporation organized and existing under
the laws of the State of Delaware (hereinafter referred to as "
Maker "), promises to pay to the order of SURGIVISION,
INC. , a corporation organized and existing under the laws of
the State of Delaware (hereinafter referred to as " Lender
"), the principal sum of Five Hundred Thousand and 00/100 Dollars
($500,000.00), together with interest from the date hereof until
the Maturity Date (as defined below), upon the unpaid principal
balance, at the rate of eight percent (8%) per annum. This Secured
Promissory Note is the " Note " referenced in the Stock
Purchase and Loan Agreement dated as of January 30, 2009, between
Maker and Lender (the " Transaction Agreement ") and which
is secured pursuant to the Stock Pledge Agreement dated as of
January 30, 2009, between Maker, as obligor, and Lender, as lender
(the " Pledge Agreement .") Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto
in the Transaction Agreement.
Said principal and interest are payable in a single installment
on July 30, 2010 (the " Maturity Date "), at which time the
entire outstanding principal balance, together with all accrued but
unpaid interest, shall be immediately due and payable. Any payment
shall be applied first to the payment of interest upon the balance
of unpaid principal, and any amount remaining after payment of said
interest shall be applied in reduction of said unpaid
principal.
Both principal and interest shall be payable in lawful money of
the United States of America, which shall be legal tender in
payment of all debts and dues, public and private, at the time of
payment. Payment shall be made by wire transfer to the account
designated by the holder hereof, or at such other place as the
holder hereof may designate in writing. Maker shall include with
any wire payment a reference line indicating that the payment is
from Maker, with a brief description of the purpose of the
funds.
To the extent the holder hereof receives payment of any amount
under this Note, whether by way of payment by the Maker, set-off or
otherwise, which payment is subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid
to a trustee, receiver or any other party under any bankruptcy law,
other law or equitable cause, in whole or in part, then, to the
extent of such payment received, this Note or the part hereof
intended to be satisfied thereby shall be revived and continue in
full force and effect, together with all collateral security
therefor , as if such payment had not been received by the
holder.
Each of the following shall constitute an event of default under
this Note (each, an " Event of Default "):
(a) The failure by
Maker to pay any principal or interest when due hereunder;
(b) The failure by
Maker to perform, comply with or observe any agreement, covenant or
obligation under (i) Section 10.1 (insofar as it requires the
preservation of the corporate existence of Maker), Section 10.5,
Section 10.6 or Section 10.8 of the Transaction Agreement, or (ii)
subsection (d), (e), (f) or (g) of Section 5 of the Pledge
Agreement;
(c) The failure by
Maker to perform, comply with or observe any agreement, covenant or
obligation under any provision of this Note, the Transaction
Agreement or the Pledge Agreement (other than those provisions
referred to in clauses (a) and (b) immediately preceding), and such
failure shall not have been remedied within ten (10) days after an
officer of Maker becomes aware of such failure;
(d) Any representation
or warranty or certification made or furnished by the Maker under
this Note, the Transaction Agreement or the Pledge Agreement shall
prove to have been false or incorrect in any material respect when
made (or deemed made);
(e) Any breach or
default (or other event or condition) shall occur under any
agreement, indenture or instrument relating to any other
indebtedness of Maker
