Form of Warrant



 Exhibit 10.2 
 THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT AND SUCH OTHER APPLICABLE LAWS. 
  

			
	 WARRANT NO. 2009-[            ]
	  	 NUMBER OF SHARES: [            ]

	 DATE OF ISSUANCE: February 18, 2009
	  	 (subject to adjustment hereunder)


 WARRANT TO PURCHASE SHARES 
 OF COMMON STOCK OF 
 CADENCE PHARMACEUTICALS, INC. 
 This Warrant is issued to [            ], or its registered assigns (including any
successors or assigns, the “Purchaser”), pursuant to that certain Securities Purchase Agreement, dated as of February 13, 2009, between Cadence Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), the Purchaser and certain other purchasers thereunder (the “Purchase Agreement”) and is subject to the terms and conditions of the Purchase Agreement. 
 1. EXERCISE OF WARRANT. 
 (a)
Method of Exercise. Subject to the terms and conditions herein set forth, upon surrender of this Warrant at the principal office of the Company and upon payment of the Warrant Price (as defined below) by wire transfer to the Company or
cashier’s check drawn on a United States bank made payable to the order of the Company, or upon exercise of the right to credit the Warrant Price against the fair market value of the Warrant Shares (as defined below) at the time of exercise
(the “Net Exercise Right”) pursuant to Section 1(b), the Purchaser is entitled to purchase from the Company, at any time after the date hereof and on or before 5:00 p.m. New York City time on February 18, 2014 (the
“Expiration Date”) (subject to earlier termination of this Warrant as set forth herein), up to «No of Shares» shares (as adjusted from time to time pursuant to the provisions of this Warrant) of Common Stock (as
defined below) of the Company (the “Warrant Shares”), at a purchase price of $7.84 per share (the “Warrant Price”). 







 (b) Net Exercise Right. If the Company shall receive written notice from the
Purchaser at the time of exercise of this Warrant that the holder elects to exercise the Net Exercise Right, the Company shall deliver to such holder (without payment by the Purchaser of any exercise price in cash) that number of fully paid and
nonassessable shares of Common Stock, par value $0.0001 per share, of the Company (“Common Stock”) equal to the quotient obtained by dividing (i) the value of this Warrant (or the specified portion thereof) on the date of exercise,
which value shall be determined by subtracting (A) the aggregate Warrant Price of the Warrant Shares (or the specified portion thereof) immediately prior to the exercise of this Warrant from (B) the Aggregate Fair Market Value (as defined
below) of the Warrant Shares (or the specified portion thereof) issuable upon exercise of this Warrant (or specified portion thereof) on the date of exercise by (ii) the Fair Market Value (as defined below) of one share of Common Stock on the
date of exercise. The “Fair Market Value” of a share of Common Stock shall mean (x) the last reported sale price and, if there are no sales, the last reported bid price, of the Common Stock on the business day prior to the date of
exercise on the NASDAQ Global Market as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holder if Bloomberg Financial Markets is not then
reporting sales prices of the Common Stock) (collectively, “Bloomberg”) or (y) or if the foregoing does not apply, the last sales price of the Common Stock in the over-the-counter market on the pink sheets or bulletin board for such
security as reported by Bloomberg, and, if there are no sales, the last reported bid price of the Common Stock as reported by Bloomberg or, if fair market value cannot be calculated as of such date on either of the foregoing bases, the price
determined in good faith by the Company’s Board of Directors. The “Aggregate Fair Market Value” of the Warrant Shares shall be determined by multiplying the number of Warrant Shares by the Fair Market Value of one Warrant Share.

 (c) [TO BE INCLUDED IN WARRANTS FOR ALL PURCHASERS OTHER THAN DOMAIN: Limitation on Exercise. The
number of Warrant Shares that may be acquired by the holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such exercise (or other issuance), the total number of
shares of Common Stock then beneficially owned by such holder and its affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the holder’s for purposes of Section 13(d) of the Exchange Act, does
not exceed 19.99% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of a Notice of Exercise hereunder will constitute a representation by the holder that it has evaluated the limitation set forth in this
Section and determined that issuance of the full number of Warrant Shares requested in such Notice of Exercise is permitted under this Section. The Company’s obligation to issue shares of Common Stock in excess of the limitation referred
to in this Section shall be suspended (and, except as provided below, shall not terminate or expire notwithstanding any contrary provisions hereof) until such time, if any, as such shares of Common Stock may be issued in compliance with such
limitation; provided, that, if, as of 5:00 P.M., New York City time, on the Expiration Date, the Company has not received written notice that the shares of Common Stock may be issued in compliance with such limitation, the Company’s obligation
to issue such shares shall terminate. This provision shall not restrict the number of shares of Common Stock which a holder may receive or beneficially own in order to determine the amount of securities or other consideration that such holder
may receive in the event of a Reorganization or Merger as contemplated in Section 2(a) of this Warrant, provided, that any such Merger does not result in the Company as the entity in which the holder holds shares of Common Stock, or
warrants to purchase shares of Common Stock. This restriction may not be waived.] 
  

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 2. CERTAIN ADJUSTMENTS. 
 (a) Reorganizations or Mergers. If at any time after the date hereof there shall be a capital recapitalization, reclassification,
or other reorganization (other than a combination or subdivision of Warrant Shares otherwise provided for herein) (any of the foregoing, directly or indirectly, in one or more related transactions, being a “Reorganization”),
or (i) a merger or consolidation of the Company with another corporation (other than a merger effected exclusively for the purpose of changing the domicile of the Company), (ii) the sale, assignment, transfer, conveyance or other disposal
of all or substantially all of the properties or assets or all or a majority of the outstanding voting shares of capital stock of the Company, (iii) a purchase, tender or exchange offer accepted by the holders of a majority of the outstanding
voting shares of capital stock of the Company, or (iv) a “person” or “group” (as these terms are used for purposes of Section 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly of a majority of the voting power of the capital stock of the Company (any of the foregoing, directly or indirectly, in one or more related transactions, being a
“Merger”), then, as a part of such Reorganization or Merger, lawful provision shall be made so that the Purchaser shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified in this
Warrant and upon payment of the Warrant Price (unless the Purchaser has elected the Net Exercise Right), the number of shares of stock or other securities or property of the Company or the successor corporation resulting from such Reorganization or
Merger, to which a holder of the Common Stock deliverable upon exercise of this Warrant would have been entitled pursuant to such Reorganization or Merger if this Warrant had been exercised immediately before such Reorganization or Merger. In any
such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in to the provisions of this Warrant with respect to the rights and interests of the Purchaser after the Reorganization or Merger
to the end that the provisions of this Warrant (including adjustment of the Warrant Price then in effect and the number of Warrant Shares) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other
property deliverable after that event upon exercise of this Warrant. The above provisions of this paragraph shall similarly apply to successive Reorganizations and Mergers, if any. The Company shall not enter into any Reorganization or Merger unless
the successor corporation assumes this Warrant in accordance with the provisions of this Section 2. 
 (b) Splits and
Subdivisions; Stock Dividends. In the event the Company should at any time, or from time to time, fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of the holders of
Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of
Common Stock (hereinafter referred to as the “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or Common Stock Equivalents (including the additional
shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such distribution, split or subdivision if no record date is fixed), the per share Warrant Price shall be appropriately decreased and
the number of Warrant Shares shall be appropriately increased in proportion to such increase (or potential increase) of outstanding shares. 
  

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 (c) Combination of Shares. If the number of shares of Common Stock outstanding at
any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, the per share Warrant Price shall be appropriately increased and the number of Warrant Shares shall be appropriately decreased in proportion to
such decrease in outstanding shares. 
 (d) Adjustments for Other Distributions. In the event the Company shall declare
a distribution payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets or options or rights not referred to in Section 2(b), then, in each such case for the purpose of this
Section 2(d), upon exercise of this Warrant the holder hereof shall be entitled to a proportionate share of any such distribution as though such holder was the holder of the number of shares of Common Stock into which this Warrant may be
exercised as of the record date fixed for the determination of the holders of Common Stock entitled to receive such distribution. 
 3. NO
FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction
multiplied by the Fair Market Value of one Warrant Share. 
 4. NO STOCKHOLDER RIGHTS. Until the exercise of this Warrant or any portion of
this Warrant, the Purchaser shall not have nor exercise any rights as a stockholder of the Company (including without limitation the right to notification of stockholder meetings or the right to receive any notice or other communication concerning
the business and affairs of the Company) except as provided in Section 10 below. 
 5. RESERVATION OF STOCK. The Company covenants that
during the period this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares of Common Stock (or other securities, if applicable) to provide for the issuance of Warrant Shares
(or other securities) upon the exercise of this Warrant. The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of this Warrant. 
 6. MECHANICS OF EXERCISE. This Warrant may be exercised
by the holder hereof, in whole or in part, by the surrender of this Warrant and the Notice of Exercise attached hereto as Exhibit A duly completed and executed on behalf of the holder hereof, at the principal office of the Company together
with payment in full of the Warrant Price (unless the Purchaser has elected the Net Exercise Right) then in effect with respect to the number of Warrant Shares as to which the Warrant is being exercised. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of
such shares of record as of the close of business on such date. As promptly as practicable on or after such date, the Company at its 

  

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expense shall cause to be issued and delivered to the person or persons entitled to receive the same a certificate or certificates for the number of full
Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share as provided above. The Warrant Shares issuable upon exercise hereof shall, upon their issuance, be validly issued, fully paid and nonassessable, and
free from all preemptive rights, taxes, liens and charges with respect to the issue thereof. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the
remaining number of shares for which this Warrant may then be exercised. 
 7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or
number or type of securities issuable upon exercise of this Warrant is adjusted, as herein provided, the Company shall, at its expense, promptly deliver to the Purchaser a certificate of an officer of the Company setting forth the nature of such
adjustment and showing in detail the facts upon which such adjustment is based. 
 8. REPRESENTATIONS OF PURCHASER. As of the date hereof,
the Purchaser hereby confirms the representations and warranties made by the Purchaser in Section 5 of the Purchase Agreement. 
 9.
COMPLIANCE WITH SECURITIES LAWS. 
 (a) The Purchaser understands that this Warrant and the Warrant Shares are characterized
as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations this Warrant and the
Warrant Shares may be resold without registration under the Securities Act of 1933, as amended (the “Securities Act”) only in certain limited circumstances. In this connection, the Purchaser represents that it is familiar
with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 
 (b) Prior and as a condition to the sale or transfer of the Warrant Shares issuable upon exercise of this Warrant, the Purchaser shall furnish to the Company such certificates, representations, agreements and other
information, including an opinion of counsel, as the Company or the Company’s transfer agent reasonably may require to confirm that such sale or transfer is being made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, unless such Warrant Shares are being sold or transferred pursuant to an effective registration statement. 
 (c) The Purchaser acknowledges that the Company may place a restrictive legend on the Warrant Shares issuable upon exercise of this Warrant in order to comply with applicable securities laws, unless such Warrant
Shares are otherwise freely tradable under Rule 144 of the Securities Act. 
 10. NOTICES OF RECORD DATE. In the event of: 
 (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or 
  

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 (b) any Reorganization or Merger; or 
 (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, 
 then and in each such event the Company will mail or cause to be delivered to the Purchaser (or a permitted transferee in compliance with Section 9 above) a notice
specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such
Reorganization, Merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable upon such Reorganization, Merger, dissolution, liquidation or winding-up. Such notice shall be delivered at least fifteen (15) business days prior to the date therein specified.

 11. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 
 12. NO
IMPAIRMENT. Except to the extent as may be waived by the holder of this Warrant, the Company will not, by amendment of its charter or through a Reorganization, Merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the
rights of the Purchaser against impairment. 
 13. TRADING DAYS. If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall be other than a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day. 
 14. TRANSFERS; EXCHANGES. (a) Subject to compliance with applicable federal and state securities laws and Section 9 hereof, this Warrant may be
transferred by the Purchaser with respect to any or all of the Warrant Shares purchasable hereunder. For a transfer of this Warrant as an entirety by Purchaser, upon surrender of this Warrant to the Company, together with the Notice of Assignment in
the form attached hereto as Exhibit B duly completed and executed on behalf of the Purchaser, the Company shall issue a new Warrant of the same denomination to the assignee. For a transfer of this Warrant with respect to a portion of the
Warrant Shares purchasable hereunder, upon surrender of this Warrant to the Company, together with the Notice of Assignment in the form attached hereto as Exhibit B duly completed and executed on behalf of the Purchaser, the Company shall
issue a new Warrant to the assignee, in such denomination as shall be requested by the Purchaser, and shall issue to the Purchaser a new Warrant covering the number of shares in respect of which this Warrant shall not have been transferred.

  

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 (b) This Warrant is exchangeable, without expense, at the option of the Purchaser, upon
presentation and surrender hereof to the Company for other warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. This Warrant may be divided or
combined with other warrants that carry the same rights upon presentation hereof at the principal office of the Company together with a written notice specifying the denominations in which new warrants are to be issued to the Purchaser and signed by
the Purchaser hereof. The term “Warrants” as used herein includes any warrants into which this Warrant may be divided or exchanged. 
 15. MISCELLANEOUS. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without the application of principles of conflicts of laws that would result in any law other than the laws
of the State of New York. All notices, requests, consents and other communications hereunder shall be in writing, shall be sent by confirmed facsimile or electronic mail, or mailed by first-class registered or certified airmail, or nationally
recognized overnight express courier, postage prepaid, and shall be deemed given when so sent in the case of facsimile or electronic mail transmission, or when so received in the case of mail or courier, and addressed as follows: (a) if to the
Company, at 12481 High Bluff Drive, Suite 200, San Diego, California 92130, Attention: President and Chief Executive Officer; Facsimile: (858) 436-8510, Email: tschroeder@cadencepharm.com; with a copy to (which shall not constitute notice) the
Company, at 12481 High Bluff Drive, Suite 200, San Diego, California 92130, Attention: Hazel M. Aker, General Counsel; Facsimile: (858) 436-8510, Email: haker@cadencepharm.com; and a copy to (which shall not constitute notice) Latham &
Watkins LLP, 12636 High Bluff Drive, Suite 400, San Diego, California 92130, Attention: Cheston J. Larson; Facsimile: (858) 523-5450; E-Mail: Cheston.larson@lw.com and (b) if to the Purchaser, at such address or addresses (including copies
to counsel) as may have been furnished by the Purchaser to the Company in writing. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provisions. 
 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective as of the date first set forth
above. 
  

			
	CADENCE PHARMACEUTICALS, INC.
		
	By:	 	/s/ Theodore R. Schroeder
	Name:	 	Theodore R. Schroeder
	Title:	 	President and Chief Executive Officer


 Signature Page to Warrant No. 2009-«Warrant No» 







 EXHIBIT A 
 NOTICE OF INTENT TO EXERCISE 
 (To be signed only upon exercise of Warrant) 
 To: Cadence Pharmaceuticals, Inc. 
 The undersigned, the
Purchaser of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder,             
(            ) shares of Common Stock of Cadence Pharmaceuticals, Inc. and (choose one) 
              herewith makes payment of              Dollars
($            ) thereof 
 or 
              exercises the Net Exercise Right pursuant to Section 1(b) thereof.

 The undersigned requests that the certificates for the shares to be acquired pursuant to such exercise be issued in the name of, and
delivered to  
                                        
                                         
        , whose address is 
   
  
                                        
                     . 
 By its
signature below the undersigned hereby represents and warrants that it is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended, and agrees to be bound by the terms and
conditions of the attached Warrant as of the date hereof, including Section 9 thereof. 
 DATED:                     
  

			
	 (Signature must conform in all
 respects to
name of the Purchaser
 as specified on the face of the
 Warrant)


	
	  
	 «Purchaser»

	Address:	 	 
	
	 
	
	 









 EXHIBIT B 
 NOTICE OF ASSIGNMENT FORM 
 FOR VALUE RECEIVED, «Purchaser» (the “Assignor”)
hereby sells, assigns and transfers all of the rights of the undersigned Assignor under the attached Warrant with respect to the number of shares of common stock of Cadence Pharmaceuticals, Inc. (the “Company”) covered thereby set
forth below, to the following “Assignee” and, in connection with such transfer, represents and warrants to the Company that the transfer is in compliance with Section 9 of the Warrant and applicable federal and state securities
laws: 
  

									
	NAME OF ASSIGNEE	 		 	ADDRESS/FAX NUMBER
				
	Number of
shares:                                        
                                	 		 		 	
					
	Dated:	 	 	 		 	Signature:	 	 
					
		 		 		 	Witness:	 	 

 ASSIGNEE ACKNOWLEDGMENT 
 The undersigned Assignee acknowledges that it has reviewed the attached Warrant and by its signature below it hereby represents and warrants that it is
an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended, and agrees to be bound by the terms and conditions of the Warrant as of the date hereof, including Section 9
thereof. 
  

			
		
	Signature:	 	 



			
		
	By:	 	 
		
	Its:	 	 


  

	
	Address: