<PAGE>


                                                                    EXHIBIT 10.1


                             SUBSCRIPTION AGREEMENT

                                  DEPOMED, INC.


                                    50 UNITS
                                $100,000 PER UNIT

To:  DepoMed, Inc.

     This Subscription Agreement (this "Subscription Agreement" or the
"Agreement") is made between DepoMed, Inc., a California corporation, (the
"Company"), and the undersigned prospective purchaser who is subscribing hereby
for units (the "Units"). The Company desires to offer and sell (the "Offering")
50 Units (the "Offering Amount"), with each Unit having a purchase price of
$100,000 per Unit (the "Offering Price") and consisting of (i) a number of
shares of the Company's Common Stock, no par value (the "Common Stock") (rounded
to the nearest whole share, with one-half (0.5) of one share, or greater
fraction thereof, being rounded upward), determined by dividing one hundred
thousand dollars ($100,000) by $3.50 (the "Closing Price"), (ii) a Class A
warrant (the "Class A Warrants") to purchase a number of shares of Common Stock
(the "Class A Warrant Shares") equal to twelve and one half percent (12 1/2%) of
the number of shares of Common Stock included in such Unit, such warrants to be
exercisable, in whole or in part, at any time prior to the fourth anniversary of
the date of issuance at an exercise price per share (the "Class A Warrant
Exercise Price") equal to $5.50, and (iii) a Class B warrant (the "Class B
Warrants" and together with the Class A Warrants, the "Warrants") to purchase a
number of shares of Common Stock (the "Class B Warrant Shares" and together with
the Class A Warrant Shares, the "Warrant Shares") equal to twelve and one half
percent (12 1/2%) of the number of shares of Common Stock included in such Unit,
such warrants to be exercisable, in whole or in part, at any time prior to the
fourth anniversary of the date of issuance at an exercise price per share (the
"Class B Warrant Exercise Price") equal to $5.50. The Common Stock, the Warrants
and the Warrant Shares are sometimes herein collectively referred to as the
"Securities"). The Company may hold a closing at any time after subscriptions
for at least 50 Units (the "Minimum Offering Amount") have been received.




<PAGE>



     The undersigned agrees and represents as follows:

A.   SUBSCRIPTION

     (1)  The undersigned hereby irrevocably subscribes for and agrees to
purchase the number of Units indicated on the signature page hereto at a
purchase price of $100,000 per Unit. Fractions of a Unit may be purchased, but
the minimum subscription is one Unit unless the Company in its sole discretion,
elects to accept subscriptions for less than one Unit. The undersigned shall
deliver the Purchase Price (the "Purchase Price") for such Units as set forth
herein within 7 days of the date of this Agreement by check payable to "DepoMed,
Inc." or by wire transfer of the full amount of the purchase price of the Units
for which the undersigned is subscribing (the "Payment") to counsel to the
Company as set forth in Paragraph (2) below. The undersigned hereby acknowledges
that the actual number of Units which the undersigned will receive will be equal
to the amount of the undersigned's subscription divided by the Purchase Price
for the Units as set forth herein.

     (2)  The undersigned understands that all payments of the subscription
amount provided in Paragraph (1) above shall be delivered to Heller Ehrman White
& McAuliffe LLP ("HEWM") at 525 University Avenue, Palo Alto, California 94301,
Attn: Michael Scimeca, and, thereafter, such payment will be deposited as soon
as practicable for the undersigned's benefit in a non-interest bearing escrow
account. The payment will be returned promptly, without interest, if the
undersigned's subscription is rejected as a result of the Company not receiving
the Minimum Offering Amount. The Company expects to hold a closing of the
Offering (the "First Closing") at any time after subscriptions for the Minimum
Offering Amount have been accepted. Subsequent closings may be held no later
than 7 days after the First Closing (each, a "Subsequent Closing") without
regard to the aggregate amount of subscriptions for Units received by the
Company. Upon receipt by the Company of the requisite payment for all Units to
be purchased by the subscribers whose subscriptions are accepted (each, a
"Purchaser" and, collectively, the "Purchasers") at the First Closing or any
Subsequent Closing, the Units so purchased will be issued in the name of each
Purchaser, and the name of such Purchaser will be registered on the books of the
Company as the record owner of such Units. The Company will issue to each
Purchaser stock certificates representing the shares of Common Stock and the
Warrants contained in the Units purchased. The Shares may not be transferred
prior to the First Closing.

     (3)  The undersigned hereby agrees to be bound hereby upon the (i)
execution and delivery to the Company, in care of HEWM, of the signature page to
this Subscription Agreement, and (ii) acceptance at the First Closing or any
Subsequent Closing by the Company of the undersigned's subscription (the
"Subscription").

     (4)  The undersigned agrees that the Company may, in its sole and absolute
discretion, reduce the undersigned's subscription to any amount of Units that in
the



                                       2
<PAGE>



aggregate does not exceed the amount of Units hereby applied for without any
prior notice to or further consent by the undersigned.

B.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The undersigned hereby represents and warrants to, and agrees with, the Company
as follows:

     (1)  The undersigned has been furnished with and has carefully read the
Company's annual report on Form 10-K for the year ended December 31, 1999 (the
"1999 Form 10-K"), the Company's quarterly report on Form 10-Q for the quarter
ended June 30, 2000 (the "Q2 2000 Form 10-Q") and the Company's proxy statement
for its 2000 annual meeting of stockholders (the "2000 Proxy Statement" and
together with the 1999 Form 10-K and Q2 2000 Form 10-Q, the "SEC Reports") and
this Agreement (collectively referred to herein as the "Offering Documents"),
and is familiar with and understands the terms of the Offering. The undersigned
has carefully considered and has, to the extent the undersigned believes such
discussion necessary, discussed with the undersigned's professional legal, tax,
accounting and financial advisors the suitability of an investment in the Units
for the undersigned's particular tax and financial situation and has determined
that the Units being subscribed for by the undersigned are a suitable investment
for the undersigned.

     (2)  The undersigned acknowledges that (i) the undersigned has had the
right to request copies of any documents, records, and books pertaining to this
investment and (ii) any such documents, records and books which the undersigned
requested have been made available for inspection by the undersigned, the
undersigned's attorney, accountant or advisor(s).

     (3)  The undersigned and/or the undersigned's advisor(s) has/have had a
reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the Offering and all such
questions have been answered to the full satisfaction of the undersigned.

     (4)  The undersigned is not subscribing for 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 or meeting.

     (5)  If the undersigned is a natural person, the undersigned has reached
the age of majority in the state in which the undersigned resides, has adequate
means of providing for the undersigned's current financial needs and
contingencies, is able to bear the substantial economic risks of an investment
in the Units for an indefinite period of time, has no need for liquidity in such
investment and, at the present time, could afford a complete loss of such
investment.



                                       3
<PAGE>


     (6)  The undersigned or the undersigned's purchaser representative, as the
case may be, has had such knowledge and experience in financial, tax and
business matters so as to enable the undersigned to utilize the information made
available to the undersigned in connection with the Offering to evaluate the
merits and risks of an investment in the Units and to make an informed
investment decision with respect thereto.

     (7)  The undersigned will not sell or otherwise transfer the Units without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), or applicable state securities laws or an exemption therefrom. None of
the Securities contained in the Units have been registered under the Securities
Act or under the securities laws of any state. The undersigned represents that
the undersigned is purchasing the Units for the undersigned's own account, for
investment and not with a view toward resale or distribution. The undersigned
has not offered or sold the Units being acquired nor does the undersigned have
any present intention of selling, distributing or otherwise disposing of such
Units 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 undersigned is aware that
there is currently no market for the Units. The undersigned is aware that an
exemption from the registration requirements of the Securities Act pursuant to
Rule 144 promulgated thereunder is not presently available; and the Company has
no obligation to register the Securities contained in the Units subscribed for
hereunder, except as provided in Paragraph D hereof, or to make available an
exemption from the registration requirements pursuant to such Rule 144 or any
successor rule for resale of the Units.

     (8)  The undersigned recognizes that an investment in the Units involves
substantial risks, including loss of the entire amount of such investment.
Further, the undersigned has carefully read and considered the Company's
financial statements in the Q2 2000 Form 10-Q, "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources" in the Q2 2000 Form 10-Q and "Item 1. Business" in the 1999 Form
10-K, and has taken full cognizance of and understands all of the risks related
to the purchase of the Units.

     (9)  The undersigned acknowledges that the certificate representing the
Securities contained in the Units shall be stamped or otherwise imprinted with a
legend substantially in the following form: "The Securities represented hereby
have not been registered under the Securities Act of 1933, as amended, or any
state securities laws and neither the Securities nor any interest therein may be
offered, sold, transferred, pledged or otherwise disposed of except pursuant to
an effective registration under such act or an exemption therefrom, which, in
the opinion of counsel for the holder, which counsel and opinion are reasonably
satisfactory to counsel for this corporation, is available."

     (10) If this Subscription Agreement is executed and delivered on behalf of
a partnership, corporation, trust or estate: (i) such partnership, corporation,
trust or estate has the full legal right and power and all authority and
approval required (a) to execute



                                       4
<PAGE>


and deliver, or authorize execution and delivery of, this Subscription Agreement
and all other instruments executed and delivered by or on behalf of such
partnership, corporation, trust or estate 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 or estate is binding
upon such partnership, corporation, trust or estate; and (iii) such partnership,
corporation or trust has not been formed for the specific purpose of acquiring
such Units, unless each beneficial owner of such entity is qualified as an
accredited investor within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act and has submitted information
substantiating such individual qualification.

     (11) If the undersigned is a retirement plan or is investing on behalf of a
retirement plan, the undersigned acknowledges that an investment in the Units
poses additional risks including the inability to use losses generated by an
investment in the Units to offset taxable income.

     (12) The information contained in the Questionnaire delivered by the
undersigned in connection with this Agreement (the "Questionnaire") is complete
and accurate in all respects. The undersigned shall indemnify and hold harmless
the Company and each officer, director or control person of any such entity, who
is or may be a party or is or may be threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of or arising from any
actual or alleged misrepresentation or misstatement of facts or omission to
represent or state facts made or alleged to have been made by the undersigned to
the Company or omitted or alleged to have been omitted by the undersigned,
concerning the undersigned or the undersigned's authority to invest or financial
position in connection with the Offering, including, without limitation, any
such misrepresentation, misstatement of omission contained in the Subscription
Agreement or any other document submitted by the undersigned, against losses,
liabilities and expenses for which the Company or any officer, director or
control person of any such entity has not otherwise been reimbursed (including
attorney's fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by the Company or such officer, director or control person
in connection with such action, suit or proceeding.

C.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the undersigned that:

     (1)  ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California and has full corporate power and authority to conduct
its business as currently conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
in which the character of the property owned or leased or the nature of the
business transacted by it makes



                                       5
<PAGE>



qualification necessary except where the failure to be so qualified would not
have a material adverse effect on the business, properties, financial condition
or results or operations of the Company).

     (2)  CAPITALIZATION. The authorized capital stock of the Company consists
of 25,000,000 shares of Common Stock, no par value, of which there were
7,189,363 shares issued and outstanding as of September 30, 2000, 5,000,000
shares of Preferred Stock, no par value, of which, 25,000 are designated as
Series A Convertible Exchangeable Preferred Stock and 12,015 shares were issued
and outstanding as of September 30, 2000 and 4,975,000 shares of undesignated
preferred stock, none of which shares were issued and outstanding. The issued
Series A Convertible Exchangeable Preferred Stock is currently convertible into
1,001,250 shares of Common Stock. All outstanding shares of Common Stock and
Series A Convertible Exchangeable Preferred Stock are duly authorized, validly
issued, fully paid and non-assessable, free of any liens or encumbrances and are
not subject to preemptive rights. As of September 30, 2000, the Company had
reserved 2,400,000 shares of Common Stock for issuance to employees, directors
and consultants pursuant to the Company's 1995 Stock Option Plan, of which
1,781,538 shares of Common Stock are subject to outstanding, unexercised
options. As of September 30, 2000, the Company has 1,479,979 shares of Common
Stock subject to outstanding warrants, of which 1,396,641 shares are subject to
warrants issued under the Company's 1997 initial public offering. As of
September 30, 2000, the Company has reserved 99,367 shares of Common Stock
subject to conversion of outstanding principal plus interest under a convertible
promissory note issued in favor of Elan International Services, Ltd. In
addition, as of September 30, 2000, the Company has reserved 49,000 shares of
Common Stock subject to conversion of dividends accrued on the Series A
Convertible Exchangeable Preferred Stock. Other than as set forth above or as
contemplated in this Agreement, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which the Company is a
party or by which either the Company is bound or obligating the Company to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the capital stock of the Company or
obligating the Company to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement.

     (3)  ISSUANCE. The Units, the Common Stock included in the Units, the
Warrants and the Warrant Shares, have been duly and validly authorized and, when
issued and paid for pursuant to this Agreement, or, in the case of the Warrant
Shares, pursuant to the terms of the Warrants, will be validly issued, fully
paid and nonassessable.

     (4)  AUTHORIZATION; ENFORCEABILITY. The Company has all corporate right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of this



                                       6
<PAGE>


Agreement by the Company, the authorization, sale, issuance and delivery of the
Units contemplated herein and the performance of the Company's obligations
hereunder has been taken. This Agreement has been duly executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency and the relief
of debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies, and to limitations of public policy. The issuance and
sale of the Units contemplated hereby will not give rise to any preemptive
rights or rights of first refusal on behalf of any person, with the exception of
a preemptive right granted to Elan International Services, Ltd., a wholly owned
subsidiary of Elan Corporation, plc, to maintain its pro rata interest in the
Company, which preemptive right has been waived.

     (5)  NO CONFLICT; GOVERNMENTAL AND OTHER CONSENTS.

          (a)  The execution and delivery by the Company of this Agreement and
the consummation of the transactions contemplated hereby will not result in the
violation of any law, statute, rule, regulation, order, writ, injunction,
judgment or decree of any court or governmental authority to or by which the
Company is bound, or of any provision of the Certificate of Incorporation or
Bylaws of the Company, and will not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute (with due notice
or lapse of time or both) a default under, any lease, loan agreement, mortgage,
security agreement, trust indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which any of its properties
or assets is subject, nor result in the creation or imposition of any lien upon
any of the properties or assets of the Company.

          (b)  No consent, approval, authorization or other order of any
governmental authority or other third-party is required to be obtained by the
Company in connection with the authorization, execution and delivery of this
Agreement or with the authorization, issue and sale of the Units, except such
filings as may be required to be made with the Commission, the American Stock
Exchange ("AMEX") and with any state or foreign blue sky or securities
regulatory authority.

     (6)  LITIGATION. The Company knows of no pending or threatened legal or
governmental proceedings against the Company which could materially adversely
affect the business, property, financial condition, results of operations or
prospects of the Company.

     (7)  ACCURACY OF REPORTS. All material reports, including the SEC Reports,
required to be filed by the Company within the two years prior to the date of
this Agreement under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), have been duly filed with the Commission, complied at the time
of filing in all material respects with the requirements of their respective
forms and, except to the extent



                                       7
<PAGE>


updated or superseded by any subsequently filed report, to the best of the
Company's knowledge, were complete and correct in all material respects as of
the dates at which the information was furnished, and contained (as of such
dates) no untrue statements of a material fact nor omitted to state any material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.

     (8)  FINANCIAL INFORMATION. The Company's financial statements that appear
in the SEC Reports have been prepared in all material respects in accordance
with United States generally accepted accounting principles (except that the
financial statements that are not audited do not have notes thereto) applied on
a consistent basis throughout the periods indicated and with each other and that
such financial statements fairly present, in all material respects, the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein.

     (9)  ABSENCE OF CERTAIN CHANGES. Since the date of the Company's financial
statements in the Q2 2000 Form 10-Q, there has not been any material adverse
effect on the assets, liabilities, condition (financial or otherwise) or results
of operations of the Company or any occurrence, circumstance or combination
thereof that reasonably could be expected to result in such material adverse
effect.

     (10) INVESTMENT COMPANY. The Company is not an "investment company" within
the meaning of such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder.

     (11) BROKERS. Except for the payment of fees to The Trout Group LLC
("Trout") as described herein, the Company has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the Offering hereby. In
exchange for their services in introducing potential investors to the Company
Trout shall receive a fee comprised of (i) 3.0% of the gross proceeds received
from the investors introduced to the Company by Trout and (ii) warrants to
purchase shares of the Company's Common Stock equal to 3.0% of the total number
of shares of Common Stock purchased by investors introduced by Trout. The
warrants issued pursuant to this paragraph will be both Class A Warrants and
Class B Warrants with a cashless exercise option and will be issued to Trout in
the same proportion as they are issued to the undersigned, with their total
being equal to 3.0% of the total number of shares of Common Stock purchased by
investors introduced by Trout.

     (12) INDEMNIFICATION. The Company shall indemnify and hold harmless the
undersigned purchaser, and each officer, director or control person of such
entity (each, an "Indemnified Party"), from any and all, liability and expense
(including, without limitation, reasonable fees and disbursements of counsel as
incurred in connection with any action, suit or proceeding) incurred or suffered
by any Indemnified Party arising out



                                       8
<PAGE>


of any misrepresentation or breach of warranty, covenant or agreement made or to
be performed by the Company pursuant to this Agreement or the Warrants.

D.   UNDERSTANDINGS

The undersigned understands, acknowledges and agrees with the Company as
follows:

     (1)  The Company may terminate this Offering at any time in its sole
discretion. The execution of this Agreement by the undersigned or solicitation
of the investment contemplated hereby shall create no obligation of the Company
to accept any subscription or complete the Offering in the event that the
Company does not receive the Minimum Offering Amount.

     (2)  Except as set forth in Section D(1) above, the undersigned hereby
acknowledges and agrees that the subscription hereunder is irrevocable by the
undersigned, that, except as required by law, the undersigned is not entitled to
cancel, terminate or revoke this Agreement or any agreements of the undersigned
hereunder and that this Agreement and such other agreements shall survive the
death or disability of the undersigned and shall be binding upon and inure to
the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and permitted assigns; provided, however, that
the Company has received commitment and funds for the Minimum Offering Amount.
If the undersigned is more than one person, the obligations of the undersigned
hereunder shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and be binding upon each such person and his/her heirs, executors,
administrators, successors, legal representatives and permitted assigns.

     (3)  No federal or state agency has made any finding or determination as to
the accuracy or adequacy of the Offering Documents or as to the fairness of the
terms of this offering for investment nor any recommendation or endorsement of
the Units.

     (4)  The Offering is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D thereunder, which is in part dependent upon the
truth, completeness and accuracy of the statements made by the undersigned
herein and in the Questionnaire.

     (5)  There is no public or other market for the Units and no such public or
other market may ever develop. There can be no assurance that the undersigned
will be able to sell or dispose of the Units. It is understood that in order not
to jeopardize the Offering's exempt status under Section 4(2) of the Securities
Act and Regulation D, any transferee may, at a minimum, be required to fulfill
the investor suitability requirements thereunder.

     (6)  The undersigned acknowledges that the information contained in this
Agreement is confidential and non-public and agrees that all such information
shall be



                                       9
<PAGE>


kept in confidence by the undersigned and neither used for the undersigned's
personal benefit (other than in connection with this subscription) nor disclosed
to any third party for any reason; provided, however, that this confidentiality
obligation shall not apply to any such information that (i) is part of the
public knowledge or literature and readily accessible at the date hereof, (ii)
becomes part of the public knowledge or literature and readily accessible by
publication (except as a result of a breach of this provision) or (iii) is
received from third parties (except third parties who disclose such information
in violation of any confidentiality agreements or obligations, including,
without limitation, any Subscription Agreement entered into with the Company).

     (7)  The undersigned acknowledges that the foregoing restrictions on the
undersigned's use and disclosure of any such confidential, non-public
information contained in the above-described documents restricts the undersigned
from trading in the Company's securities to the extent such trading is based on
such confidential, non-public information.

     (8)  The representations, warranties and agreements of the undersigned
contained herein and in any other writing delivered in connection with the
transactions contemplated hereby shall be true and correct in all respects on
and as of the sale of the Units as if made on and as of such date and shall
survive the execution and delivery of this agreement and the purchase of the
Units.

     (9)  Insofar as indemnification for liabilities under the Securities Act
may be permitted to directors, officers or controlling persons of the Company,
the Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is therefore unenforceable to such extent.

     (10) IN MAKING AN INVESTMENT DECISION PURCHASERS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THE UNITS OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THE OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

     (11) THE SECURITIES OFFERED HEREBY MAY NOT BE TRANSFERRED, RESOLD OR
OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. PURCHASERS SHOULD BE AWARE THAT THEY WILL BE



                                       10
<PAGE>


REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.

E.   REGISTRATION RIGHTS

     (1)  REGISTRATION OF SECURITIES. Within sixty days from the Closing Date,
the Company shall use its reasonable best efforts to prepare for filing with the
Commission, and cause to be filed, a "shelf" registration statement (the "Shelf
Registration") pursuant to Rule 415 under the Securities Act providing for the
sale by the Purchasers of the shares of Common Stock and the Warrant Shares
included in the Units (the "Registrable Securities"). The Company shall use its
reasonable best efforts to cause the registration statement to be declared
effective as soon as practicable after it has been filed with the Commission.
The Company agrees to use its reasonable best efforts to keep such Shelf
Registration continuously effective for a period ending on the earliest of (a)
the fifth anniversary of the effective date of such Shelf Registration, (b) the
date on which all such Registrable Securities have been sold thereunder, (c)
such time as all of the Registrable Securities may be sold within a given
three-month period pursuant to Rule 144 under the Securities Act, or (d) the
date upon which all such Registrable Securities are freely transferable without
restriction under the Securities Act. For the purpose of this Agreement,
"reasonable best efforts" shall mean the best efforts of the Company consistent
with sound and reasonable business practices and judgment.

     (2)  PAYMENTS BY THE COMPANY.

          (a)  If the Registration Statement covering the Registrable Securities
is not filed in appropriate form with the SEC within sixty (60) days after the
Closing Date (the "Required Filing Date") and declared effective within one
hundred twenty (120) days within the Closing Date (the "Required Effective
Date"), the Company will make payment to the undersigned in such amounts and at
such times as shall be determined pursuant to this Section E(2).

          (b)  The amount (the "Periodic Amount") to be paid by the Company to
the undersigned shall be determined as of each Computation Date (as defined
below) and such amount shall be equal to (A) one-half of one percent (0.5%) of
the Purchase Price paid by the undersigned for all Units then purchased and
outstanding pursuant to this Agreement for the period from the date following
the Required Effective Date to the first relevant Computation Date and (B) 1
percent (1%) to each Computation Date thereafter. By way of illustration and not
in limitation of the foregoing, if the Registration Statement is not effective
until one hundred sixty (160) days after the Closing Date, the Periodic Amount
will aggregate one and one-half percent (1.5%) of the Purchase Price of the
Units (0.5% for days 120-150 plus 1% for days 150-160).

          (c)  Each Periodic Amount will be payable by the Company in cash or
other immediately available funds to the undersigned upon demand of the
undersigned.



                                       11
<PAGE>


          (d)  The parties acknowledge that the damages which may be incurred by
the Investor if the Registration Statement has not been effective by the
Required Effective Date may be difficult to ascertain. Therefore, the parties
agree that the Periodic Amount represents a reasonable estimate on the part of
the parties, as of the date of this Agreement, of the amount of such damages and
that the payment by Company of the Periodic Amount shall be deemed in complete
and total satisfaction of all claims of undersigned against Company for failure
of Company to comply with Section E(2)(a) above.

          (e)  Notwithstanding the foregoing, the amounts payable by the Company
pursuant to this provision shall not be payable to the extent any delay in the
effectiveness of the Registration Statement occurs because of an act of, or a
failure to act or to act timely by the undersigned or the undersigned's counsel,
or in the event all of the Registrable Securities may be sold pursuant to Rule
144 or another available exemption under the Act.

          (f)  "Computation Date" means (i) the date which is the earlier of (A)
thirty (30) days after the Required Effective Date or (B) the date after the
Required Effective Date on which the Registration Statement is effective and
(ii) each date which is the earlier of (A) thirty (30) days after the previous
Computation Date or (B) the date after the previous Computation Date on which
the Registration Statement is effective.

          (g)  Notwithstanding the above, the Company shall not be obligated
under any circumstances to pay any Periodic Amount otherwise due under the terms
of this Section E(2) unless and until the shareholders of the Company have
approved such payment at a duly called and convened meeting by the required
minimum vote. The Company agrees that it will use reasonable best efforts to
obtain shareholder approval, if such approval is required, including calling and
conducting such meeting on a timely basis and recommending it to the
shareholders.

     (3)  REGISTRATION PROCEDURES. In connection with the Company's obligations
with respect to the Shelf Registration, the Company shall use its reasonable
best efforts to effect the registration in furtherance of the sale of the
Registrable Securities by the holders thereof in accordance with the intended
method or methods of distribution thereof described in the Shelf Registration.
In connection therewith, the Company shall, as promptly as may be practicable:

          (a)  prepare and file with the Commission a registration statement
with respect to the Registrable Securities on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the disposition of the Registrable Securities in
accordance with the intended method or methods of disposition thereof;




                                       12
<PAGE>

          (b)  Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the applicable period specified in Paragraph (1) above;

          (c)  furnish to each Purchaser who is selling Registrable Securities a
copy of such registration statement, each amendment and supplement thereto (in
each case including all exhibits thereto but excluding all documents
incorporated by reference therein unless specifically so requested by such
Purchaser) and such reasonable number of copies of the prospectus included in
such registration statement (including each preliminary prospectus) as such
Purchaser may reasonably request;

          (d)  use its reasonable best efforts to register or qualify the
Registrable Securities under such other securities laws or blue sky laws of such
jurisdictions as the Purchasers shall reasonably request, and take any and all
such actions as may be reasonably necessary or advisable to enable the
Purchasers to consummate the disposition in such jurisdictions of such
Registrable Securities;

          (e)  notify each Purchaser, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act within the period
that the Company is required to keep the registration statement effective, of
the happening of any event as a result of which the prospectus included in such
registration statement (as then in effect) contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. As promptly as
practicable following any such occurrence, the Company shall prepare and furnish
to each Purchaser a reasonable number of copies of a supplement or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to
subsequent purchasers of the Registrable Securities, such prospectus shall meet
the requirements of the Securities Act and relevant state securities laws,
provided that such obligation on the part of the Company shall be suspended for
such period of time as the Company considers reasonably necessary and in its
best interest due to circumstances then existing (but not more than 30 days in
any 180-day period). Each Purchaser shall furnish to the Company such
information regarding each such Purchaser and its proposed method of
distribution of the Registrable Securities as the Company may from time to time
request and as shall be required by law to effect and maintain the registration
of such Securities under the Securities Act and any state securities laws;

          (f)  advise each Purchaser, promptly after receiving notice thereof,
of any stop order issued or threatened by the Commission and use its reasonable
best efforts to take all actions required to prevent the entry of such stop
order, or to remove it if entered;

          (g)  use its reasonable best efforts to cause all Registrable
Securities included in such registration statement to be listed, by the date of
the first sale of



                                       13
<PAGE>


Registrable Securities pursuant to such registration statement, on each
securities exchange (or AMEX) on which the Common Stock of the Company is then
listed or proposed to be listed; and

          (h)  otherwise use its reasonable best efforts to comply with the
provisions of the Securities Act with respect to the disposition of all of the
Registrable Securities in accordance with the intended methods of disposition by
the Purchasers thereof set forth in such registration statement and to make
generally available to its security holders, as soon as reasonably practicable,
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.

     (4)  EXPENSES. All expenses incident to the Company's performance of or
compliance with the provisions of this Section E (including, without limitation,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, fees and expenses incurred in connection with the
listing of the Registrable Securities to be registered on each securities
exchange (or AMEX) on which similar securities issued by the Company are then
listed, printing expenses, fees and disbursements of separate counsels for each
of the Company and the Purchaser, and fees and disbursements of all independent
certified public accountants and other persons retained by the Company) will be
borne by the Company. Notwithstanding the foregoing, the Purchasers shall pay
any and all underwriting fees, discounts or commissions attributable to the sale
of Registrable Securities.

     (5)  INDEMNIFICATION.

          (a)  Upon the registration of Registrable Securities pursuant to
Section E(1) of this Agreement, and in consideration of the agreements of the
Purchasers contained herein, the Company shall, and it hereby agrees to,
indemnify and hold harmless, to the extent permitted by law, each of the
Purchasers which holds Registrable Securities, its officers and directors, each
underwriter of such Registrable Securities, if any, and each person who controls
such person (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses (including reasonable attorneys' fees
and expenses) to which such Purchaser, its officers, directors, each
underwriter, or such controlling persons may become subject, insofar as such
losses, claims, damages, liabilities and expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of material fact contained in any such registration statement, any
prospectus or preliminary prospectus contained therein or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Purchaser, each such
underwriter and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; except (i) insofar as the same
arise out of or are based upon an untrue statement or omission or alleged
omission so made based upon information



                                       14
<PAGE>


furnished by such Purchaser, underwriter or controlling person in writing
specifically for use in such registration statement or prospectus or (ii)
insofar the same are caused by such Purchaser's or such underwriter's failure to
deliver a copy of such registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such Purchaser or such
underwriter with a sufficient number of copies of the same; and provided,
however, that the foregoing indemnity and reimbursement obligation shall not be
applicable to the extent that any such loss, claim, damage, liability or action
arises out of or is based on any untrue statement or omission made in: (i) a
preliminary prospectus, which untrue statement or omission is corrected in the
final prospectus and such final prospectus is made available to such Purchaser
in accordance with the requirements of Rule 424 under the Securities Act; or
(ii) any prospectus, which untrue statement or omission is corrected in a
prospectus supplement or amended prospectus and such prospectus supplement or
amended prospectus is made available to such Purchaser prior to the sale of
Registrable Securities which gave rise to such loss, claim, damage, liability or
expense.

          (b)  In connection with any registration statement under which
Registrable Securities are registered under the Securities Act and pursuant to
which a Purchaser offers and sells Registrable Securities, each such Purchaser
shall, and it hereby agrees to, indemnify and hold harmless, to the extent
permitted by law, each of the Company, its officers and directors, and each
person who controls the Company (within the meaning of the Securities Act) and,
if the offering is an underwritten offering, the underwriters, against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees and expenses) to which the Company, its officers and directors,
underwriters, or controlling persons may become subject, insofar as such losses,
claims, damages, liabilities and expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
material fact contained in any such registration statement, any prospectus or
preliminary prospectus contained therein or any amendment or supplement thereto,
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading and
will reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, insofar as (i) the same arise out of or are based upon any
untrue statement or omission or alleged omission so made based upon information
furnished by such Purchaser or controlling person of such Purchaser, in writing
specifically for use in such registration statement or prospectus or (ii) the
same are caused by such Purchaser's failure to deliver a copy of such
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such Purchaser with a sufficient number of
copies of the same and provided, further, that the liability of each Purchaser
under this Paragraph 4(b) shall be limited to the proportion of any such loss,
claim, damage, liability or expense which is equal to the proportion that the
public offering price of Common Stock sold by such Purchaser under such



                                       15
<PAGE>


registration statement bears to the total public offering price of all
securities sold thereunder, but not to exceed the amount of the proceeds
received by such Purchaser from the sale of the Registrable Securities covered
by such registration statement.

          (c)  Any person entitled to indemnification hereunder will (i) give
prompt notice to the indemnifying party of any claim with respect to which it
seeks indemnification (but the failure to give such notice will not affect the
right to indemnification hereunder, unless the indemnifying party is materially
prejudiced by such failure) and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest may exist between such indemnified
and indemnifying parties with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party. If such
defense is not assumed by the indemnifying party or if the indemnifying party is
not permitted to assume such defense then (x) the indemnified party shall select
counsel, which counsel must be reasonably satisfactory to the indemnifying party
and (y) the indemnifying party will not be subject to any liability for any
settlement made without its consent (which consent will not be unreasonably
withheld). No indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation. An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonably judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which case the indemnifying party shall be obligated
to pay the fees and expenses of one additional counsel, who must be reasonably
satisfactory to the indemnifying party.

          (d)  Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Paragraph 4(a) or Paragraph 4(b) are
unavailable or are insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would



                                       16
<PAGE>


not be just and equitable if contribution pursuant to this Paragraph 4(d) were
determined by pro rata allocation (even if the Purchasers or any underwriters or
all of them were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to in this Paragraph 4(d). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

          (e)  The indemnification and contribution obligations and each other
provision set forth in this Paragraph 4 shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company, any
Purchaser, any officer or employee of the Company or such Purchaser, any
underwriter, any officer or employee of such underwriter, or any controlling
person of any of the foregoing and shall survive the transfer and registration
of Registrable Securities by such Purchaser.

     (6)  RULE 144 REPORTING. With a view to making available to Purchasers the
benefits of Rule 144 promulgated by the Commission under the Securities Act, the
Company agrees to use its reasonable best efforts to:

          (a)  make and keep adequate current public information with respect to
the Company available, as those terms are used in Rule 144 under the Securities
Act, at all times after the First Closing and any Subsequent Closings;

          (b)  file with the Commission in a timely manner all reports and other
documents required of the Company under the Exchange Act; and

          (c)  furnish to Purchasers promptly upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
and the Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents of the Company as any
Purchaser may reasonably request in order to permit such Purchaser to avail
itself of any rule or regulation of the Commission allowing such Purchaser to
sell its Registrable Securities without registration.

     (7)  AMENDMENTS AND WAIVERS. Any provision of this Section E may be amended
or waived if, but only if, in the case of an amendment, such amendment is in
writing and is signed by the Company and the Purchasers who are the holders of a
majority of the Registrable Securities or, in the case of a waiver, such waiver
is in writing and is signed by the party to be charged with having granted such
waiver. No failure or delay by the Company or any Purchaser in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.



                                       17
<PAGE>



F.   COVENANTS OF THE COMPANY

     (1)  The Company hereby agrees that, for so long as the undersigned owns at
least ten percent (10%) of the total number of outstanding shares of Common
Stock of the Company (including shares of Common Stock issuable upon conversion
of the Company's Series A Convertible Exchangeable Preferred Stock, no par
value), the Company shall notify such individual as shall be designated from
time to time by the undersigned of all regular meetings and special meetings,
exclusive of executive sessions, of the Board of Directors of the Company at
least two business days in advance of such meetings, and afford one
representative designated by the undersigned, and acceptable to the Company, the
right and opportunity to attend any such meeting.

     (2)  The Company hereby agrees that, for a period of 120 days after the
Closing Date, it shall not issue or sell any Common Stock of the Company, any
warrants or other rights to acquire Common Stock or any other securities that
are convertible into Common Stock, for a purchase or exercise price less than
the Closing Price, with the exception of securities issued in connection with
strategic alliances, product licensing transactions or pursuant to the Company's
1995 Stock Option Plan.

     (3)  The Company agrees at Closing to pay the reasonable fees and
disbursements of counsel to OrbiMed Advisors LLC, not to exceed $10,000 in the
aggregate.

G.   MISCELLANEOUS

     (1)  All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, singular or plural, as identity of the person
or persons may require.

     (2)  Except as set forth in Section A(4) herein, neither this Agreement nor
any provision hereof shall be waived, modified, changed, discharged, terminated,
revoked or canceled except by an instrument in writing signed by the party
effecting the same against whom any change, discharge or termination is sought.

     (3)  Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or sent by registered mail, return receipt requested, addressed: (i) if to the
Company, to DepoMed, Inc., 1360 O'Brien Drive, Menlo Park, CA 94025, Attention:
the President, or (ii) if to the undersigned, to the address for correspondence
set forth in the Subscription Agreement, or at such other address as may have
been specified by written notice given in accordance with this Paragraph (3).

     (4)  Failure of the Company to exercise any right or remedy under this
Agreement or any other agreement between the Company and the undersigned, or



                                       18
<PAGE>



otherwise, or delay by the Company in exercising such right or remedy, will not
operate as a waiver thereof. No waiver by the Company will be effective unless
and until it is in writing and signed by the Company.

     (5)  This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of California, as such laws
are applied by the California courts to agreements entered into and to be
performed in California by and between residents of California, and shall be
binding upon the undersigned, the undersigned's heirs, estate, legal
representatives, successors and assigns and shall inure to the benefit of the
Company, its successors and assigns. If any provision of this Subscription
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed modified to conform with such statute
or rule of law. Any provision hereof that may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provisions hereof.

     (6)  The parties understand and agree that money damages would not be a
sufficient remedy for any breach of the Agreement by the Company or the
undersigned and that the party against which such breach is committed shall be
entitled to equitable relief, including injunction and specific performance, as
a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach by either party of the Agreement but shall be in
addition to all other remedies available at law or equity to the party against
which such breach is committed.

     (7)  This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only by
writing executed by both parties hereto.

     (8)  Each party hereto has had the opportunity to review this Agreement
with its separate legal counsel.

H.   SIGNATURE

The signature of this Agreement is contained as part of the applicable
subscription package, entitled "Signature Page".



                                       19
<PAGE>




                                  DEPOMED, INC.
                                 SIGNATURE PAGE

The undersigned hereby subscribes for the number of Units as set forth below.

1.   Dated: _____________, 2000


2.   Number of Units subscribed for: _____________

3.   Aggregate purchase price for number of Units subscribed for at $100,000 per
     Unit

     $___________________

<TABLE>


<S>                                    <C>
-------------------------------------   -------------------------------------
Signature of Subscriber                 Taxpayer Identification or Social
(and title, if applicable)              Security Number

-------------------------------------   -------------------------------------
Signature of Joint Purchaser            Taxpayer Identification or Social
(if any)                                Security Number

-------------------------------------   -------------------------------------
Name and Residence Address              Mailing Address
(Post Office Address Not Acceptable)    (if different from Residence Address)

-------------------------------------   -------------------------------------
Name (please print as name will appear  Name (please print)
on certificate)

-------------------------------------   -------------------------------------
Number and Street                       Number and Street

-------------------------------------   -------------------------------------
City   State     Zip Code               City   State       Zip Code


ACCEPTED BY:                                DepoMed, Inc.

Dated:___________________                   By: _______________________

                                            Title: ____________________
</TABLE>