Exhibit
10.4


 


FORM OF
WARRANT


 




	
  No. W-
  2003 -   

  	
      Shares

  






 


This certifies that, for value received,
                                                   
or its registered assigns (the “holder”),
upon due exercise of this warrant (this “Warrant”),
is entitled to purchase from DepoMed, Inc., a California corporation (the “Company”), at any time on or after July 21,
2003 (the “Initial Exercise Date”),
and before the close of business on April 21, 2008, or if not a business day in
San Francisco, California and New York, New York (a “Business Day”), the next following Business Day (the “Expiration Date”), all or any part of
                  
fully paid and nonassessable Shares (the “Warrant
Shares”) of the Common Stock, no par value, of the Company (“Common Stock”), at a purchase price of
$2.16 per share (the “Purchase Price”).  Both the Purchase Price and the number of
Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
as provided below.


 


The holder hereof and all subsequent holders of this
Warrant shall be entitled to all rights and benefits provided to the holder or
holders hereof pursuant to the terms of this Warrant.


 


SECTION 1.  Exercise of Warrant.


 


(a)           The
holder of this Warrant may, at any time on or after the Initial Exercise Date
and on or before the Expiration Date, exercise this Warrant in whole at any
time or in part from time to time (but not for less than 1,000 Warrant Shares
or Warrant Securities, unless this Warrant is then exercisable for fewer than
1,000 Warrant Shares or Warrant Securities and is exercised in full) for the
purchase of the Warrant Shares or other securities which such holder is then
entitled to purchase hereunder (“Warrant
Securities”) at the Purchase Price per Warrant Share or other
Warrant Security then in effect.  To
exercise this Warrant, the holder must deliver to the Company at the address
specified in Section 6(i) below (i) a completed written notice of such
holder’s election to exercise this Warrant in the form attached hereto (a “Notice of Exercise”), (ii) payment of the
Purchase Price then in effect multiplied by the number of Warrant Shares or
Warrant Securities being purchased, payable in the form of a certified or bank
cashier’s check or wire transfer, (unless exercise is pursuant to a Cashless
Exercise as described in subsection (b) below), and (iii) this
Warrant; provided, however, that if such Warrant Shares or
Warrant Securities have not then been registered under the Securities Act or
applicable state securities laws, the Company may require that such holder
furnish to the Company a written statement that such holder is purchasing such
Warrant Shares or Warrant Securities for such holder’s own account for
investment and not with a view to the distribution thereof, that none of such
shares will be offered or sold in violation of the provisions of the Securities
Act and applicable state securities laws and as to such other customary matters
relating to the holder as the Company may reasonably request and as are
required under applicable law for the issuance of such Warrant Shares or
Warrant Securities without registration under the Securities Act and applicable
state securities laws. Upon receipt of such items, the Company shall, as
promptly as practicable but no later than three (3) business days thereafter,
execute or cause to be executed and deliver to such holder a certificate or
certificates representing the aggregate number of Warrant Shares (or, if
applicable, Warrant Securities) specified in the Notice of Exercise.


 

















 


No fractional Warrant Shares or Warrant Securities
will be issued upon the exercise of this Warrant.  Instead, the Company shall pay cash for any fraction of a share
which otherwise would be issuable upon exercise in an amount equal to the same
fraction multiplied by the Current Market Price (as defined below) per Warrant
Share or Warrant Security, as the case may be, on the day of exercise.  If this Warrant is exercised only in part,
the Company shall deliver to the holder a new Warrant evidencing the rights of
such holder to purchase the remaining Warrant Shares called for by this Warrant
at the same time the Company delivers the certificate or certificates for the
Warrant Shares or Warrant Securities being issued.  The new Warrant shall in all other respects be identical with
this Warrant, or, at the request of such holder, appropriate notation of the
partial exercise of the Warrant may be made on this Warrant and the same
returned to such holder. The Company shall pay all expenses, taxes and other
charges payable in connection with the preparation, execution and delivery of
certificates for Warrant Shares or Warrant Securities under this Section,
except that, if the holder requests that the certificates be registered in a
name or names other than the name of the holder, the holder must pay the
Company an amount sufficient to pay all stock transfer taxes payable upon the
execution and delivery of such share certificates in such other name(s).  The holder must pay such amount for taxes at
the time of delivering the Notice of Exercise.


 


The Company represents, warrants, covenants and agrees
that (a) it shall at all times prior to the exercise of this Warrant
reserve and keep available for issuance sufficient shares of Common Stock or
Warrant Securities, as the case may be, for issuance upon the exercise hereof,
and (b) all such Warrant Shares or Warrant Securities issuable upon any
exercise of this Warrant in accordance herewith shall be validly authorized and
issued, fully paid and nonassessable upon such issuance.


 


This Warrant shall not entitle the holder hereof to
any of the rights of a shareholder of the Company by virtue of such holder’s
ownership hereof prior to exercise in the manner herein provided.


 


(b)           Notwithstanding
anything in subsection (a) to the contrary, the holder of this Warrant
may elect to exercise this Warrant in whole at any time or in part from time to
time (but not for less than 1,000 Warrant Shares or Warrant Securities, unless
the Warrant is then exercisable for fewer than 1,000 Warrant Shares or Warrant
Securities and is exercised in full), on or after the Initial Exercise Date and
on or before the Expiration Date, by the surrender of this Warrant to the
Company at the address set forth in subsection 6(i) hereof together with
a completed cashless exercise form in the form attached (a “Cashless Exercise”).   The Company’s acceptance of this Warrant
and the cashless exercise form shall be deemed a waiver by the Company, and the
satisfaction and payment in full, of the holder’s obligation to pay the Purchase
Price for the Warrant Shares or Warrant Securities being purchased.  In the event of a Cashless Exercise, the
Holder shall receive the number of Warrant Shares or Warrant Securities subject
to such Cashless Exercise multiplied by a fraction, the numerator of which
shall be the difference between the then Current Market Price per share of the
Common Stock (or Warrant Securities) and the Purchase Price per the applicable
security, and the denominator of which shall be the then Current Market Price
per share of the Common Stock (or such Warrant Securities). For purposes
hereof, the “Current Market Price”
shall be the last sale price of the Common Stock (or Warrant Securities) on the
last trading day prior to the date of exercise or, in case no such reported
sales take place on such day, the average of the last reported bid and asked


 

















 


prices of the Common Stock (or Warrant Securities) on such day, in
either case as reported by the American Stock Exchange (“AMEX”), or another similar organization or
quotation system on which such securities are then listed or quoted, or if the
Common Stock (or Warrant Securities) are not reported on AMEX or another
similar organization or quotation system, the high per share bid price for the
Common Stock (or Warrant Securities) in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, or if not so
available, the fair market value of the Common Stock (or Warrant Securities) as
determined in good faith by the Board of Directors, subject to the right of the
holder to contest and appoint an appraiser to make such determination.  The costs and expenses of such appraisal
shall be borne equally by the Company and the holder(s) contesting the Company’s
determination.


 


SECTION 2.  Transfer, Division and Combination.


 


The Company shall maintain a register for the
registration of, and registration of transfers of, the Warrants at its
principal executive office listed in Section 6(i). The register also
shall include the name and address of each holder of one or more Warrants, each
transfer thereof and the name and address of each transferee of one or more
Warrants.  Prior to due presentment for
registration of transfer, the person in whose name any Warrants are then
registered shall be deemed and treated as the owner and holder thereof for all
purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary. The Company shall give a complete and correct copy
of the names and addresses of all registered holders of Warrants to any holder
of a Warrant without charge promptly upon request therefore.


 


Subject to the provisions of Section 3, upon
surrender of any Warrant to the Company at its office specified in Section
6(i) for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Warrant or his duly authorized attorney and accompanied by the address for
notices of each transferee of such Warrant or part thereof), the Company shall
execute and deliver, at the Company’s expense, one or more new Warrants (as
requested by the holder thereof) in exchange therefor, exercisable for an
aggregate number of Warrant Shares equal to the number of shares for which the
surrendered Warrant is exercisable and issued to such person or persons as such
holder may request, which Warrant or Warrants shall in all other respects be
identical to this Warrant.


 


Upon receipt of evidence reasonably satisfactory to
the Company of the ownership of and the loss, theft, destruction or mutilation
of any Warrant, and (a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Warrant is,
or is a nominee for, an original holder, such person’s own unsecured agreement
of indemnity shall be deemed by the Company to be satisfactory), or (b) in the
case of mutilation, upon surrender and cancellation thereof, the Company at its
own expense shall execute and deliver to the registered holder, in lieu
thereof, a new Warrant identical in all respects to such lost, stolen,
destroyed or mutilated Warrant.


 


SECTION 3.  Compliance with Securities Act; Restrictions on Transfer and
Sale.


 


(a)           Each
certificate for Warrant Shares (or Warrant Securities) initially issued upon
the exercise of this Warrant and each certificate for Warrant Shares (or
Warrant Securities)


 

















 


issued to permitted transferees of any such certificate, in each case,
if issued prior to the effectiveness of the Registration Statement (as defined
in the Securities Purchase Agreement between the Company and the original
holder hereof relating to the purchase and issuance of certain shares of Common
Stock and this Warrant (the “Purchase Agreement”)) shall be stamped or otherwise
imprinted with legend in substantially the following form, unless otherwise
permitted by this Section 3:


 


“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT
BE SOLD OR OTHERWISE DISPOSED OF UNLESS PURSUANT TO A REGISTERED OFFERING OR BY
TRANSFER EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS.”


 


(b)           The
holder understands that any Warrant Shares (or Warrant Securities) which may be
acquired upon exercise of this Warrant shall be entitled to certain
registration rights provided for in the Purchase Agreement.


 


SECTION 4.  Adjustment of Purchase Price.


 


(a)           The
Purchase Price and the number of Warrant Shares and the number or type or
amount of any Warrant Securities and property for which this Warrant may be
exercisable (or which may be issued to the holder upon exercise) shall be subject
to adjustment from time to time effective upon each occurrence of any of the
following events.


 


(i)            If
the Company shall declare or pay any dividend with respect to its Common Stock
payable in shares of Common Stock, subdivide the outstanding Common Stock into
a greater number of shares of Common Stock, or reduce the number of shares of
Common Stock outstanding (whether by stock split, reverse stock split,
reclassification or otherwise than by repurchase of its Common Stock, a “Stock Split”), the Purchase Price and
number of Warrant Shares or Warrant Securities issuable upon exercise of this
Warrant shall be appropriately adjusted so that the holder hereof shall receive
upon exercise of this Warrant, for the same aggregate consideration provided
herein, the same number of shares of Common Stock or other securities (plus
cash in lieu of fractional securities) as the holder would have received as a
result of such Stock Split had such holder exercised this Warrant in full
immediately prior to such Stock Split.


 


(ii)           If
the Company shall merge or consolidate with or into one or more corporations,
limited liability companies or partnerships and the Company is the sole
surviving entity, or the Company shall adopt a plan of recapitalization or
reorganization in which the Common Stock (or Warrant Securities then issuable
upon exercise hereof) is exchanged for or changed into another class of stock
or other security or cash or property, the holder of this Warrant shall, for
the same aggregate consideration provided herein, be entitled to receive upon
exercise of this Warrant, in lieu of the number of shares of Common Stock or
Warrant Securities as to which this Warrant otherwise would be exercisable, the
number of shares of Common


 

















 


Stock or other securities (plus cash in lieu of fractional shares) or
cash or property to which such holder would have been entitled pursuant to the
terms of the agreement or plan of merger, consolidation, recapitalization or
reorganization had such holder exercised this Warrant in full immediately prior
to such merger, consolidation, recapitalization or reorganization.


 


(iii)          If
the Company is merged or consolidated with or into one or more corporations,
limited liability companies or partnerships under circumstances in which the
Company is not the sole surviving corporation, or if the Company sells or
otherwise disposes of all or substantially all its assets, (in each case,
whether in one transaction or a series of related transactions) and in
connection with any such merger, consolidation, sale or other disposition the
holders of Common Stock (or Warrant Securities for which this Warrant is then
exercisable) receive cash, stock or other securities convertible into equity of
the surviving or acquiring corporations or entities, or other securities or
property, then in each case after the effective date of such merger,
consolidation or sale, as the case may be, the holder of this Warrant shall,
for the same aggregate consideration provided herein, be entitled to receive
upon exercise of this Warrant, in lieu of the shares of Common Stock (or
Warrant Securities) as to which this Warrant otherwise would be exercisable,
shares of such stock or other securities (plus cash in lieu of fractional
shares), cash or property as the holder of this Warrant would have received
pursuant to the terms of the merger, consolidation, sale or other disposition
had such holder exercised this Warrant in full immediately prior to such
merger, consolidation, sale or other disposition.  In the event of any consolidation, merger, sale or other
disposition as described in this Section 4(a)(iii), provision shall
be made in connection therewith for the surviving or acquiring entity to assume
all obligations and duties of the Company hereunder or to issue substitute warrants
in lieu of this Warrant with all such changes and adjustments in the number or
kind of shares of stock or securities or property thereafter subject to this
Warrant or in the Purchase Price as shall be required in connection with this Section 4(a)(iii).


 


(iv)          If
the Company proposes to liquidate and dissolve (other than in connection with a
sale described in Section 4(a)(iii) for which appropriate
adjustment is made as provided therein), the Company shall give notice thereof
as provided in Section 5(b) hereof and shall permit the holder of this
Warrant to elect to exercise any unexercised portion hereof at any time within
the 10 day period following delivery of such notice and thereby participate as
a stockholder of the Company in connection with such liquidation or
dissolution.


 


(b)           Whenever
any adjustment is made as provided in any provision of this Section 4:


 


(i)            the
Company shall compute the adjustments in accordance with this Section 4
and shall prepare a certificate signed by an executive officer of the Company
setting forth the adjusted number of shares or other securities or property and
Purchase Price, as applicable, and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall forthwith be filed
with the Company or its designee; and


 


(ii)           a
notice setting forth the adjusted number of shares or other securities or
property and the Purchase Price, as applicable, shall forthwith be prepared and
delivered by the Company to the holder of record of each Warrant as promptly as
practicable.


 

















 


(c)           If
at any time, as a result of any adjustment made pursuant to this Section 4,
the holder of this Warrant shall become entitled, upon exercise hereof, to
receive any Warrant Shares other than shares of Common Stock or to receive any
Warrant Securities, the number of such other shares or securities so receivable
upon exercise of this Warrant shall be subject to adjustment from time to time
in a manner, on terms and with a result as nearly equivalent as practicable to the
provisions contained in this Section 4 with respect to the Common Stock.


 


SECTION 5.  Special Agreements of the Company.


 


(a)           The
Company hereby covenants and agrees that it will reserve and set apart and have
at all times available for issuance a sufficient number of shares of authorized
but unissued Common Stock (and, if applicable, Warrant Securities) from time to
time deliverable upon the exercise of the Warrants or any other rights or
privileges provided for herein sufficient to enable the Company at all times to
fulfill all its obligations thereunder; and if at any time the number of
authorized but unissued shares of Common Stock (or Warrant Securities) shall
not be sufficient to effect the exercise of this Warrant at the Purchase Price
then in effect, the Company will take such corporate and other action as may,
in the reasonable opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock (and, if applicable, Warrant
Securities) to such number of securities as shall be sufficient for such
purposes.


 


(b)           In
case the Company proposes:


 


(i)            to
pay any dividend upon the Common Stock or make any distribution or offer any
subscription or other rights to the holders of Common Stock;


 


(ii)           to
effect any capital reorganization or reclassification of capital stock of the
Company; or


 


(iii)          to
effect the consolidation, merger, sale of all or substantially all of the
assets, liquidation, dissolution or winding up of the Company,


 


then, in any such event, the Company shall cause notice of any such
intended action to be given to each holder of the Warrants not less than 15 nor
more than 60 days prior to the date on which the transfer books of the Company
shall close or a record be taken for such dividend or distribution, or the date
when such capital reorganization, reclassification, consolidation, merger,
sale, liquidation, dissolution or winding up shall be effected, or the date of
such other event, as the case may be.


 


SECTION 6.  Notices.


 


Any notice or other document required or permitted to
be given or delivered to holders of Warrants and holders of Common Stock (or
Warrant Securities) shall be in writing and sent (a) by fax if the sender on
the same day sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid) or (c) by a recognized overnight delivery
service (with charges prepaid).


 

















 


(i)            if
to the Company, at DepoMed, Inc., 1360 O’Brien Drive, Menlo Park, CA 94025,
Fax: (650) 462-9993 Attention: Chief Financial Officer, or such other address
as the Company from time to time shall specify to the holders of Warrants in
writing; or


 


(ii)           if
to a holder, at its address set forth below, or such other address as the
holder or its registered assigns shall have specified to the Company in
writing.


 


Notices given under this Section 6 shall be
deemed given only when actually received.


 


SECTION 7.  Amendment.


 


This Warrant may not be amended, modified or otherwise
altered in any respect except by the written consent of the registered holder
of this Warrant and the Company.


 


SECTION 8.  Successors and Assigns.


 


This Warrant shall be binding upon and inure to the
benefit of the Company and the holder of this Warrant and their respective
successors and permitted assigns.


 


SECTION 9.  Governing Law.


 


This Warrant shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
conflicts or choice of law principles; provided,
however, that issues involving
the corporate governance of the Company shall be governed by the laws of the
State of California.


 


[signature page follows]


 

















 


IN WITNESS WHEREOF, the Company has caused this
Warrant to be signed in its name by its duly authorized officers and accepted
by the holder of this Warrant this 21st day of April, 2003.


 


	
  Accepted and Agreed:

  	
  DepoMed, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Name: John F. Hamilton

  
	
   

  	
  Title:

  	
   

  	
  Title: Vice President of Finance and 

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Address for Notices:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


NOTICE OF EXERCISE


 


The undersigned,
                          ,
pursuant to the provisions of the foregoing Warrant, hereby elects to subscribe
for and purchase
                      
shares of the Common Stock, no par value, of DepoMed, Inc. covered by said
Warrant (or such number of Warrant Securities currently issuable upon exercise
thereof), and makes payment therefor in full at the price per share provided by
said Warrant.


 


 


	
   

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security No.

  	
   

  
								



 

















 


CASHLESS EXERCISE


 


The undersigned
                       ,
pursuant to the provisions of the foregoing Warrant, hereby elects to exchange
its Warrant for                           shares
of Common Stock, no par value, of DepoMed, Inc. (or such number of Warrant
Securities currently issuable upon exercise thereof) pursuant to the Cashless
Exercise provisions of the Warrant.


 


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security No.

  	
   

  
								



 

















 


ASSIGNMENT


 


FOR VALUE RECEIVED
                        
hereby sells, assigns and transfers unto
                      
(SS#                    )
the foregoing Warrant and all rights evidenced thereby, and does irrevocably
constitute and appoint
                    ,
attorney, to transfer said Warrant on the books of DepoMed, Inc.


 


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
							



 

















 


PARTIAL ASSIGNMENT


 


FOR VALUE RECEIVED
                        
hereby assigns and transfers unto
                       
(SS#                    )
the right to purchase
                    
shares of the Common Stock, no par value, of DepoMed, Inc. covered by the
foregoing Warrant (or such number of Warrant Securities currently issuable upon
exercise thereof), and a proportionate part of said Warrant and the rights
evidenced thereby, and does irrevocably constitute and appoint
                        ,
attorney, to transfer that part of said Warrant on the books of DepoMed, Inc.


 


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
  Address: