Exhibit
10.4


LEASE EXTENSION AGREEMENT


Building #5

1330 O’Brien Drive

Menlo Park, California 94025


THIS LEASE EXTENSION
AGREEMENT (this “Agreement”) is made and entered into on June 23, 2006 by and
between MENLO BUSINESS PARK, LLC, a California limited liability company
(“Lessor”), and DEPOMED, INC., a California corporation (“Lessee”).


RECITALS


A.            Lessor and Lessee entered into a
Lease dated April 30, 2003 (the “Lease”) of the premises referred to as
Building #5 located at 1330 O’Brien Drive, Menlo Park, California 94025, more
particularly described on Exhibit “A” attached to the Lease and incorporated by
reference herein (the “Premises”).  The
Premises contain approximately 25,366 rentable square feet of space.


B.            The expiration date of the initial
term of the Lease is April 30, 2008. 
Lessor and Lessee wish to extend the expiration date of the initial term
of the Lease, subject to the terms and conditions set forth herein.


AGREEMENT


NOW THEREFORE, in
consideration of the mutual covenants contained herein, the parties agree as
follows:


1.             Defined Terms.  Terms defined in the Lease and used in this
Agreement shall have the meaning ascribed to them in the Lease.


2.             Extension of Initial Term.


(a)           The initial term of the Lease is hereby extended for a
period of fourteen (14) calendar months commencing on May 1, 2008 and ending on
June 30, 2009 (the “Extension Term”). 
The Extension Term shall be upon all of the same terms and conditions of
the Lease, except that the Monthly Base Rent payable by Lessee to Lessor during
the Extension Term shall be as set forth in Paragraph 3 hereof.


(b)           The option to extend provided for in Paragraph 3 of the
Lease shall be for one period of sixty (60) calendar months immediately
following the expiration of 









 



the Extension Term and shall
otherwise be upon the same terms and conditions as set forth in Paragraph 3 of
the Lease.


3.             Monthly Base Rent.  Lessee shall pay to Lessor Monthly Base Rent
during the Extension Term, in monthly installments in advance on a triple net
basis in lawful money of the United States, as follows:


(a)           Commencing on May 1, 2008 and continuing through April 30,
2009, the sum of Fifty Thousand Seven Hundred Thirty-two Dollars ($50,732.00)
per month ($2.00/square foot/NNN).


(b)           Commencing on May 1, 2009 (the “Rental Adjustment Date”),
the Monthly Base Rent shall be adjusted to reflect any increases in the cost of
living.  The adjustment shall be
calculated upon the basis of the United States Department of Labor, Bureau of
Labor Statistics Consumer Price Index, all items,  for all Urban Consumers - San
Francisco-Oakland-San Jose (1982-84=100), hereafter referred to as the “Index.”  The Index for said subgroup published most
recently as of the end of the calendar month immediately preceding the month in
which the commencement date of the Extension Term occurs shall be considered
the “base Index.”


(c)           The
Monthly Base Rent shall be adjusted as of the Rental Adjustment Date to an
amount equal to the product obtained by multiplying Fifty Thousand Seven Hundred Thirty-two
Dollars ($50,732.00)
(the Monthly Base Rent for the Premises commencing on May 1, 2008 referred to
in Paragraph 3(a) above), by a fraction, the numerator of which is the Index
most recently published as of the end of the calendar  month immediately preceding the Rental
Adjustment Date and the denominator of which is the base Index; provided that
in no event shall the Monthly Base Rent be increased on the Rental Adjustment
Date to an amount less than three percent (3%) per annum or more than six
percent (6%) per annum of the Monthly Base Rent immediately payable before the
Rental Adjustment Date.  The Monthly Base
Rent as so adjusted shall continue through June 30, 2009, the expiration date
of the Extension Term.


(d)           When
the new Monthly Base Rent is determined for the Rental Adjustment Date, Lessor
shall give Lessee written notice of the amount of the new Monthly Base Rent and
how the new Monthly Base Rent figure was computed in accordance with
subparagraphs 3(b) and 3(c) above. 
Lessee shall pay to Lessor retroactively any unpaid increase in Monthly
Base Rent due from and after the Rental Adjustment Date.  If the Index does not exist on the Rental
Adjustment Date in the same format as referred to in subparagraph 3(b) above,
Lessor shall substitute in lieu thereof an index reasonably comparable to the
Index referred to above which is acceptable to Lessee and which is then
published by the Bureau of Labor Statistics, or successor or similar 



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governmental agency, or if no
governmental agency then publishes an index, Lessor shall substitute therefor
any index commonly accepted which is published by a reputable private
organization.


(e)           Monthly
Base Rent for any partial month shall be prorated on the basis of the number of
calendar days in such month.


4.             Additional Rent; Operating
Expenses and Taxes.  In addition to
the Monthly Base Rent payable by Lessee pursuant to Paragraph 3 above, Lessee
shall pay to Lessor during the Extension Term, as Additional Rent, Operating
Expenses and Taxes pursuant to Paragraph 5 of the Lease.


5.             Condition of the Premises.  Lessee is currently in possession of the
Premises and is conducting business thereon pursuant to the Lease.  Lessee agrees to accept the Premises in its “as
is” condition at the commencement of the Extension Term, subject to the
performance by Lessor of Lessor’s obligations under Paragraph 14(a) of the
Lease.


6.             Security
Deposit.  Lessor acknowledges that
Lessor has received from Lessee and is currently holding the sum of Thirty-four Thousand Two Hundred
Fifty-nine and Fifty-eight Hundredths
Dollars ($34,259.58) in cash (the “Security Deposit”), as security for Lessee’s
faithful performance of Lessee’s obligations under the Lease.  Lessor shall continue to hold the Security
Deposit during the remainder of the initial term and during the Extension Term
pursuant to Paragraph 7 of the Lease.


7.             Real Estate
Brokers.  Lessor shall pay a leasing commission to Tarlton
Properties, Inc., who has acted as exclusive leasing agent for Lessor in
connection with this Agreement, pursuant to a separate agreement between Lessor
and said broker.  Lessor shall also pay
leasing commissions to NAI BT Commercial and Technology Commercial, Inc., who
have acted as leasing agents for Lessee in connection with this Agreement,
pursuant to an agreement between Lessor and said brokers.  Each party represents and warrants to the
other party that it has not had any dealings with any real estate broker,
finder, or other person with respect to this Agreement other than the above
named brokers.  Each party shall hold
harmless the other party from all damages, expenses, and liabilities resulting
from any claims that may be asserted against the other party by any broker,
finder, or other person with whom the other party has or purportedly has dealt,
other than the above named brokers.


8.             Notices.  Paragraph 24, Notices, of the Lease is
amended to read as follows:



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“24.         Notices.  All notices, statements, demands, requests,
or consents given hereunder by either party to the other shall be in writing
and shall be personally delivered or sent by United States mail, registered or
certified, return receipt requested, postage prepaid, and addressed to the
parties as follows:


	
  Lessor:

  	
  Menlo Business Park, LLC

  
	
   

  	
  c/o Tarlton
  Properties, Inc.

  
	
   

  	
  955 Alma Street

  
	
   

  	
  Palo Alto, California
  94301

  
	
   

  	
   

  
	
   

  	
  Attention: John C.
  Tarlton

  
	
   

  	
  Telephone: (650)
  330-3600

  
	
   

  	
   

  
	
  Lessee:

  	
  DepoMed, Inc.

  
	
   

  	
  1330 O’Brien Drive

  
	
   

  	
  Menlo Park,
  California 94025

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  



 


All
such notices or other communications given hereunder shall be addressed to the
parties to such other address as either party may have furnished to the other
as a place for the service of notice. 
Notices shall be deemed given upon receipt or attempted delivery where
delivery is not accepted.”


9.             Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


10.           Continuing Effect.  The parties acknowledge that the Lease
remains in full force and effect as amended hereby, and with the initial term
extended as provided herein.



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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date set forth above.


	
   

  	
  “Lessor”

  
	
   

  	
   

  
	
   

  	
  MENLO BUSINESS PARK,
  LLC

  
	
   

  	
  a California limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J.O. Oltmans, II

  
	
   

  	
   

  	
  J. O. Oltmans, II, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James R. Swartz

  
	
   

  	
   

  	
  James R. Swartz,
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “Lessee”

  
	
   

  	
   

  
	
   

  	
  DEPOMED, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John F. Hamilton

  
	
   

  	
   

  	
  John F. Hamilton, Vice President and

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew M.
  Gosling

  
	
   

  	
   

  	
  Matthew M. Gosling, Vice President and

  General Counsel

  



 



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