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 St
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