Exhibit 10.1

EXECUTION VERSION

THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
REGISTRATION, QUALIFICATION OR EXEMPTION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

CONVERTIBLE PROMISSORY NOTE AND NOTE PURCHASE AGREEMENT

 

Principal Amount: $5,000,000.00   Effective Date: As of October 26, 2012

 

  1. Terms.

1.1 Agreement of the Parties. The parties hereby enter into this Convertible
Promissory Note and Note Purchase Agreement (“Agreement”) for the purpose of
evidencing their agreement with respect to the matters set forth herein.
Pursuant to this Agreement, BioMarin Pharmaceutical, Inc., a Delaware
corporation (“BioMarin”) is lending $5,000,000 to Catalyst Pharmaceutical
Partners, Inc., a Delaware corporation (the “Company”) on the Effective Date,
which amount is being evidenced by this Agreement. Further, BioMarin has agreed,
unless an Event of Default has occurred prior to the Conversion Date, to the
automatic conversion of the Principal Amount (defined below) into shares of the
Company’s authorized but unissued common stock (the “Common Stock”) on the
Conversion Date (defined below), all in the manner set forth herein. Finally,
this Agreement is being entered into simultaneously with that certain License
Agreement, of even date herewith, between the parties, which relates to the
future product development and licensing of the pharmaceutical product
“Firdapse”. Together, this Agreement and the License Agreement reflect the
complete agreement of the parties.

1.2 The Note. For value received, the Company, hereby promises to pay to
BioMarin, the principal amount of FIVE MILLION AND NO/100 ($5,000,000) DOLLARS
(“Principal Amount”) without interest, on or before March 31, 2013 (“Maturity
Date”), as more particularly set forth in Article II of this Agreement.

1.3 Maturity. On the Maturity Date, the Principal Amount shall automatically
convert into shares of the Company’s authorized but unissued common stock, par
value $0.001 per share (the “Common Stock”) in the manner set forth in
Section 2.1 below. Unless an Event of Default has occurred prior to the
Conversion Date, the Principal Amount shall never be payable in cash.

1.4 No Prepayment. The Principal Amount may not be prepaid, in whole or in part,
at any time by the Company except in accordance with the provisions of
Section 9.2.

 

  2. Conversion.

2.1 Automatic Conversion. The Principal Amount shall automatically be converted
into a number of shares of Common Stock (the “Conversion Shares”) determined by
dividing the Principal Amount then outstanding (the “Conversion Amount”) by the
Conversion Price (as defined in Section 2.2 below) on the earlier of: (a) thirty
(30) days after announcement by the

 

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EXECUTION VERSION

 

Company of the top-line data from the Company’s Phase II(b) clinical trial
evaluating the use of CPP-109 (the Company’s formulation of vigabatrin, a GABA
aminotransferase inhibitor) for the treatment of cocaine addiction (currently
expected during the first half of November 2012), or (b) March 31, 2013. The
date on which the Conversion Amount shall automatically convert into the
Conversion Shares shall be referred to as the “Conversion Date.”

2.2 “Conversion Price” shall mean the “dollar weighted average price” of the
Common Stock for the fifteen (15) business day period prior to the Conversion
Date, multiplied by 0.9, provided, however, that the Conversion Price shall not
be less than $0.75 per share or more than $2.50 per share. For purposes of this
Section 2.2, the term “dollar weighted average price of the Common Stock” means
the “dollar volume-weighted average price” for the Common Stock on the NASDAQ
Capital Market (the “Principal Market”) during the period beginning at 9:30:01
a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
time (or such other time as the Principal Market publicly announces is the
official close of trading), over the applicable fifteen (15) business day
period, as reported by Bloomberg through its “Volume at Price” function or, if
the foregoing does not apply, the “dollar volume-weighted average price” of the
Common Stock in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York time (or
such other time as the Principal Market publicly announces is the official open
of trading), and ending at 4:00:00 p.m., New York time (or such other time as
the Principal Market publicly announces is the official close of trading), over
the applicable fifteen (15) business day period, as reported by Bloomberg, or,
if no “dollar volume-weighted average price” is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security, over the
applicable fifteen (15) business day period, as reported in the “pink sheets” by
OTC Markets LLC. If the “dollar weighted average price” of the Common Stock
cannot be calculated for such security on such date on any of the foregoing
bases, the “dollar weighted average price” shall be the fair market value of the
Common Stock as mutually determined by the Company and BioMarin. If the Company
at any time on or after the Effective Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Conversion Price in
effect immediately prior to such subdivision shall be proportionately reduced.
If the Company at any time on or after the Effective Date combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.

3. Company’s Representations and Warranties. The Company hereby represents and
warrants to BioMarin that all of the following statements are true and complete
as of the Effective Date of this Agreement and will be true and complete as of
the Conversion Date as though made on the Conversion Date:

3.1 Organization and Validity. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware. The Company has no ownership interest in any other entity. The
Company has the corporate power and authority to own its properties and conduct
its business as currently being carried on, and is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction in which it owns
or leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would have or is
reasonably likely to result in a material adverse effect upon the business,
prospects, properties, operations, condition (financial or otherwise) or results
of operations of the Company or in its ability to perform its obligations under
this Agreement (“Material Adverse Effect”).

 

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EXECUTION VERSION

 

3.2 Power and Authority. The Company has the power and authority to enter into
this Agreement and to perform and to discharge its obligations hereunder and
thereunder. This Agreement has been duly authorized, executed and delivered by
the Company, and constitutes a valid, legal and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.

3.3 No Conflict. The Company’s execution, delivery and performance of this
Agreement will not (a) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any law, rule, judgment,
regulation or decree to which the Company is subject, or by which any property
or asset of the Company is bound or affected (“Applicable Law”), (b) conflict
with, result in any violation or breach of or loss of a benefit under, or give
rise to the creation or imposition of any lien, encumbrance, security interest,
claim or charge upon any property or assets of the Company pursuant to, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any written, oral, implied or other agreement, contract,
understanding, arrangement, instrument, note, guaranty, indemnity,
representation, warranty, deed, assignment, power of attorney, certificate,
purchase order, work order, insurance policy, benefit plan, commitment,
covenant, assurance or undertaking of any nature: (i) to which the Company is a
party; (ii) by which the Company or any of its assets is or may become bound or
under which the Company has, or may become subject to, any obligation; or
(iii) under which the Company has or may acquire any right or interest
(collectively, “Contracts”), or (c) result in a breach or violation of any of
the terms and provisions of, or constitute a default under, the Company’s
charter or bylaws.

3.4 SEC Documents. (a) The Company has timely filed or furnished all reports,
schedules, forms, statements and other documents with the Securities and
Exchange Commission (the “SEC”) required to be filed or furnished by the Company
(the “SEC Documents”). As of their respective dates of filing, (i) the SEC
Documents complied as to form, and all reports schedules, forms, statements and
other documents required to be filed with the SEC after the date hereof will
comply as to form, in all material respects with the requirements of the
Securities Act of 1933, as amended (the “Securities Act”), or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, and
the rules and regulations of the SEC promulgated thereunder applicable thereto,
and (ii) except to the extent amended or superseded by a subsequent filing with
the SEC, none of the SEC Documents contained (and none of the reports schedules,
forms, statements and other documents required to be filed with the SEC after
the date hereof will contain) any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

3.5 Consents and Approvals. All material consents, approvals, orders,
authorizations and filings required on the part of the Company in connection
with the execution, delivery or performance of this Agreement, including
delivery of the Conversion Shares, have been obtained or made.

 

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3.6 Capitalization. All of the issued and outstanding shares of capital stock of
the Company are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with federal and state securities
laws, and conform to the description thereof in the Company’s most recent SEC
Documents. As of October 12, 2012, there were 34,741,520 shares of Common Stock
issued and outstanding and no shares of preferred stock, par value $0.001 per
share, of the Company issued and outstanding and 11,465,572 shares of Common
Stock were issuable upon the exercise of all options, warrants and convertible
securities outstanding as of such date at a weighted average exercise price of
$1.18 per share. The exercise price of each option issued under the Company’s
stock option or other employee benefit plans has been no less than the fair
market value of a share of common stock as determined on the date of grant of
such option. All grants of options were validly issued and properly approved by
the board of directors of the Company (or a duly authorized committee thereof)
in material compliance with all Applicable Laws and regulations and recorded in
the Company’s financial statements in accordance with GAAP and no such grants
involved “back dating,” “forward dating” or similar practice with respect to the
effective date of grant. Except for the issuance of options or restricted stock
in the ordinary course of business and the issuance of shares and warrants in
the Company’s August 2012 registered direct offering, all as more particularly
disclosed in the SEC Documents, since June 30, 2012, the Company has not entered
into or granted any convertible or exchangeable securities, options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from
the Company any shares of the capital stock of the Company or any other equity
participations in the Company. The Conversion Shares to be issued hereunder have
been reserved out of the Company’s authorized and unissued Common Stock, solely
for the purpose of effecting the Conversion, by all necessary corporate action,
have been duly authorized and, upon Conversion in accordance with the terms of
this Agreement, will be validly issued, fully paid and non-assessable and free
of any preemptive or similar rights, and will conform to the description thereof
contained in the SEC Documents.

3.7 No Litigation. Except as described in the SEC Documents, there is no suit,
claim, action, proceeding, hearing, notice of violation, investigation,
arbitration or demand letter pending or, to the knowledge of the Company,
threatened against or affecting the Company or its assets or properties. The
Company is not subject to any material notice, court decision, agency guideline,
order, writ, injunction, award, judgment or decree of any Federal, state, local
or foreign government, any court of competent jurisdiction or any
administrative, regulatory (including any stock exchange) or other governmental
agency, commission or authority (each, a “Governmental Authority”).

3.8 Financial Statements; Controls.

(a) The audited financial statements and the unaudited quarterly financial
statements (including, in each case, the notes thereto) of the Company included
in the SEC Documents when filed complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, have
been prepared in all material respects in accordance with accounting principles
generally accepted in the United States (“GAAP”) (except, in the case of
unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other
rules and regulations of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the financial position of the Company as of the
dates thereof and the results of its operations, cash flow and stockholders’
equity for the periods then ended (subject, in the case of unaudited quarterly
statements, to customary year-end adjustments). Except for those liabilities and
obligations (a) specifically reserved against or provided for in the balance
sheet of the Company as of June 30, 2012 (or the notes thereto) included in the
SEC Documents, (b) incurred in the ordinary course of business consistent with
past practice since June 30, 2012, which, individually or in the aggregate,

 

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have not had and would not reasonably be expected to have a Material Adverse
Effect, (c) disclosed in the SEC Documents filed subsequent to June 30, 2012, or
(d) incurred under this Agreement or in connection with the transactions
contemplated hereby, the Company has not incurred any liabilities or obligations
of any nature, whether or not accrued, absolute, determined, determinable, fixed
or contingent and whether or not required to be recorded or reflected on a
balance sheet under GAAP (each, a “Liability”).

(b) The Company has established and maintains disclosure controls and procedures
(as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and
procedures are designed to ensure that information required to be disclosed in
the Company’s periodic reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported within the required time periods.
Such disclosure controls and procedures are effective in timely alerting the
Company’s principal executive officer and principal financial officer to
material information required to be included in the Company’s periodic reports
required under the Exchange Act.

(c) The Company has established and maintains a system of internal control over
financial reporting (as defined in Rule 13a-15 under the Exchange Act). Such
internal controls are designed to provide reasonable assurance regarding the
reliability of the Company’s financial reporting and the preparation of Company
financial statements for external purposes in accordance with GAAP. The Company
has disclosed, based on its most recent evaluation of internal controls prior to
the date of this Agreement, to the Company’s auditors and audit committee
(i) any significant deficiencies and material weaknesses in the design or
operation of internal controls which are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in internal controls.
The chief executive officer and chief financial officer of the Company have made
all certifications required by, and would be able to make such certifications as
of the date hereof as if required to be made as of the date hereof pursuant to,
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and any related rules and
regulations promulgated by the SEC and the statements contained in any such
certifications are complete and correct, and the Company is otherwise in
compliance with all applicable effective provisions of the Sarbanes-Oxley Act of
2002.

3.9 Absence of Certain Changes or Events. Since June 30, 2012, the Company has
conducted its businesses in all material respects in the ordinary course of
business consistent with past practice. Since June 30, 2012, there has not been
any Material Adverse Effect. There has not been any action taken by the Company
from June 30, 2012 through the date hereof that, if taken during the period
beginning on the Effective Date and ending on the Conversion Date, would
constitute a breach of Section 8.2.

3.10 Permits. The Company holds, and is in compliance with, all franchises,
grants, authorizations, licenses, permits, easements, consents, certificates and
orders (“Permits”) of any Governmental Authority (including without limitation,
those administered by the Food and Drug Administration of the U.S. Department of
Health and Human Services (the “FDA”) and those Governmental Authorities
performing functions similar to those performed by the FDA) required for the
conduct of its business, and all such Permits are in full force and effect in
each case, except where the failure to hold or comply with any of them would not
be material.

 

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3.11 Compliance with Contracts. The Company is not in violation of its
certificate of incorporation or bylaws. Each material Contract that is or would
be required to be disclosed by the Company pursuant to Item 601(b)(10) of
Regulation S K of the SEC is valid and is in full force and effect and
constitutes the legal, valid and binding obligation of the Company, in each case
in accordance with its respective terms and, to the knowledge of the Company,
constitutes the legal, valid and binding obligation of the other parties thereto
in accordance with its respective terms, and is enforceable in accordance with
its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The Company is
not in material breach of or default under any such material Contract, and, to
Company’s knowledge, no other party is in a material breach of or default under
any such material Contract.

3.12 Properties. The Company has good and marketable title to all property
(whether real or personal) described in the SEC Documents as being owned by it
that are material to the business of the Company, in each case free and clear of
all liens, claims, security interests, other encumbrances or defects, except
those that are not reasonably likely to result in a Material Adverse Effect. The
property held under lease by the Company is held by it under valid, subsisting
and enforceable leases with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct of the
business of the Company.

3.13 Intellectual Property. The Company owns or possesses the valid right to use
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, copyright
registrations, licenses, trade secret rights, inventions, software, databases,
formulae, know how, and similar rights (including trade secrets and other
unpatented and/or unpatentable proprietary confidential information, systems, or
procedures) (collectively, “Intellectual Property”) necessary for the conduct of
the business of the Company as currently carried on and as described in the SEC
Documents. To the knowledge of the Company, no action or use by the Company will
involve or give rise to any infringement of, or license or similar fees for, or
any misappropriation of any Intellectual Property Rights of others. Except as
disclosed in the SEC Documents, the Company has not received any material
challenge, which is to its knowledge still pending, by any other person or
entity Person to the rights of the Company with respect to any Intellectual
Property owned or used by the Company. Except as set forth in the SEC Documents,
all licenses for the use of the Intellectual Property described in the SEC
Documents are valid, binding upon, and enforceable by or against the parties
thereto in accordance to their respective terms. The Company has complied in all
material respects with, and is not in material breach of, nor to its knowledge
has it received any asserted or threatened claim of material breach of, any
Intellectual Property license, and the Company has no knowledge of any material
breach or anticipated breach by any other person or entity of any such
Intellectual Property license. Except as described in the SEC Documents, no
material claim has been made against the Company alleging the infringement by
the Company of any Intellectual Property of any other person or entity. The
Company has taken all commercially reasonable steps with respect to the material
Intellectual Property currently used in its business to protect, maintain and
safeguard its Intellectual Property, including the execution of appropriate
nondisclosure and confidentiality agreements. The consummation of the
transactions contemplated by this Agreement will not result in the loss or
impairment of or payment of any additional amounts with respect to, nor require
the consent of any other Person in respect of, the Company’s right to own, use,
or hold for use any of the Intellectual Property Rights as owned, used or held
for use in the conduct of the business as currently conducted. The Company has
taken all commercially reasonable actions with respect to the material
Intellectual Property currently used in its business to obtain ownership of all
works of authorship and inventions made by its employees, consultants and
contractors during the time they were employed by or under contract with the
Company.

 

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3.14 Compliance with Laws. The Company has materially complied with, is not in
material violation of and has not received any notice of violation relating to
any law, rule or regulation relating to the conduct of its business, or the
ownership or operation of its property and assets, including, without
limitation, (A) the Currency and Foreign Transactions Reporting Act of 1970, as
amended, or any money laundering laws, rules or regulations, (B) any laws, rules
or regulations related to health, safety or the environment, including those
relating to the regulation of hazardous substances, (C) the Sarbanes-Oxley Act
and the rules and regulations of the Commission thereunder, (D) the Foreign
Corrupt Practices Act of 1977 and the rules and regulations thereunder, and
(E) the Employment Retirement Income Security Act of 1974 and the rules and
regulations thereunder.

3.15 Product Development. The clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company were and, if still
pending, are being conducted in accordance with all Applicable Laws (including,
without limitation, those administered by the FDA or by any Governmental
Authority performing functions similar to those performed by the FDA). The
descriptions of the results of such studies and tests that are described or
referred to in the SEC Documents are accurate and complete in all material
respects and fairly present the published data derived from such studies and
tests, and the Company has no knowledge of other studies or tests the results of
which are materially inconsistent with or otherwise call into question the
results described or referred to in the SEC Documents. The Company has not
received any notices or other correspondence from the FDA or any other
Governmental Authority performing functions similar to those performed by the
FDA with respect to any ongoing clinical or pre-clinical studies or tests
requiring the termination or suspension of such studies or tests. Except to the
extent disclosed in the SEC Documents, as of the date of this Agreement the
Company is not aware of any studies, tests or trials, the results of which the
Company believes would have an adverse effect on the development of the
Company’s product candidates. For the avoidance of doubt, the Company makes no
representation or warranty that the results of any studies, tests or preclinical
or clinical trials conducted by or on behalf of the Company will be sufficient
to obtain governmental approval from the FDA or any foreign, state or local
governmental body exercising comparable authority.

3.16 Filings. Except as would not be reasonably expected to result in a Material
Adverse Effect, the Company has not failed to file with the applicable
regulatory authorities (excluding the FDA or any Governmental Authority
performing functions similar to those performed by the FDA) any filing,
declaration, listing, registration, report or submission that is required to be
so filed. The Company has not failed to file with the FDA or any Governmental
Authority performing functions similar to those performed by the FDA, any
filing, declaration, listing, registration, report or submission that is
required to be so filed. All such filings were in material compliance with
Applicable Laws when filed and no deficiencies have been asserted by any
applicable Governmental Authority (including, without limitation, the FDA or any
Governmental Authority performing functions similar to those performed by the
FDA) with respect to any such filings, declarations, listings, registrations,
reports or submissions.

3.17 Insurance. The Company carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in similar
businesses in similar industries.

3.18 Labor. No labor dispute with the employees of the Company exists or to the
knowledge of the Company, are imminent that are reasonably likely to result in a
Material Adverse Effect.

 

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3.19 Solvency. The Company is not as of the date hereof, and after giving effect
to the transactions contemplated hereby, will not be Insolvent (as defined
below). For purposes of this Section 3.19, “Insolvent” means, with respect to
the Company, (i) the present fair saleable value of the Company’s assets is less
than the amount required to pay the Company’s total Liabilities, (ii) the
Company is unable to pay its debts and Liabilities, subordinated, contingent or
otherwise, as such debts and Liabilities become absolute and matured, (iii) the
Company intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts as they mature or (iv) the Company has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.

3.20 Affiliate Transactions. The Company is not a party to any material Contract
with any (i) officer or director of the Company, other than as part of such
person’s employment or service with the Company, (ii) beneficial owner of five
percent (5%) or more of any voting securities of the Company or (iii) any
affiliate of the Company, in each case of the type that would be required to be
reported by the Company pursuant to Item 404 of Regulation S-K promulgated by
the SEC.

3.21 Brokers and Other Advisors. There is no broker, investment banker,
financial advisor or other intermediary that has been retained by or is
authorized to act on behalf of the Company that is entitled to any broker’s,
finder’s, financial advisor’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.

4. BioMarin Representations and Warranties. BioMarin hereby represents and
warrants to Company that all of the following statements are true and complete
as of the Effective Date of this Agreement and that such statements will be true
and complete as of the Conversion Date as though made on the Conversion Date:

4.1 Authority; Enforceability. BioMarin has all requisite power and authority to
execute and deliver this agreement and to carry out its provisions. All actions
on BioMarin’s part required for the lawful execution and delivery of this
Agreement have been taken. Upon its execution and delivery, this Agreement will
constitute a valid and binding obligation of BioMarin, enforceable in accordance
with its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, and (b) as limited by general principles of
equity.

4.2 Purchase Entirely for Own Account. BioMarin is making the investment
contemplated by this Agreement (and is agreeing to the automatic Conversion of
the Conversion Amount into the Conversion Shares) for BioMarin’s own account as
a principal, and not as a nominee or agent, for investment purposes only, and
not with a view to, or for, resale, distribution or fractionalization thereof in
whole or in part and no other Person has a direct or indirect beneficial
interest in the Conversion. Further, BioMarin does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to the
Conversion Shares.

4.3 Restricted Securities.

(a) BioMarin understands that the Conversion Shares have not been and will not
be registered under the Securities Act, and are being sold pursuant to the
exemptions from registration contained in Section 4(2) under the Securities Act
and Regulation D thereunder, which are applicable to transactions by an issuer
not involving any public offering, and that the Company’s reliance on this
exemption is based in part on the representations made by BioMarin herein.

 

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(b) BioMarin understands that the Conversion Shares have not been and will not
be registered under the “Blue Sky” securities laws of any jurisdiction and are
being sold pursuant to exemptions contained in such laws, and that the Company’s
reliance on this exemption is based in part on the representations made by
BioMarin herein.

(c) BioMarin understands and agrees that until the shares of Common Stock
issuable to BioMarin are registered or transferred pursuant to the provisions of
Rule 144 under the Securities Act (“Rule 144”), the certificates representing
such shares, whether upon initial issuance or upon any transfer thereof, shall
bear a legend, prominently stamped or printed thereon, reading substantially as
follows:

THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO REGISTRATION, QUALIFICATION OR EXEMPTION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

4.4 Accredited Investor. BioMarin is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the Act.

4.5 Consequences of Investment and Advisors. BioMarin acknowledges that the
Company does not make any representation or warranty regarding the financial or
tax consequences to BioMarin arising from the Conversion in accordance with this
Agreement or as to the present fair market value of such Common Stock, and that
the Company shall in no event be liable to the BioMarin for any adverse tax or
accounting liability that may arise should the fair market value of the Common
Stock be in excess of or less than the deemed consideration paid therefor.
BioMarin acknowledges that it has sought the advice of its own legal, financial
and/or tax advisors with regard to the financial and/or tax consequences arising
from the transactions contemplated herein.

4.6 Information. BioMarin acknowledges that no private placement memorandum or
similar offering documents have been prepared or distributed in connection with
this Agreement, but in lieu thereof BioMarin has had access to the SEC
Documents. BioMarin has relied on the information contained therein and in such
other documents as BioMarin has elected to review, and has not relied upon any
oral representations or been furnished any other offering literature or written
information, except other information (if any) provided by the Company on
BioMarin’s request. BioMarin has been provided with an adequate opportunity to
ask questions of the Company’s management and to review any documents that
BioMarin deems material.

4.7 Brokers and Other Advisors. There is no broker, investment banker, financial
advisor or other intermediary that has been retained by or is authorized to act
on behalf of the BioMarin that is entitled to any broker’s, finder’s, financial
advisor’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
BioMarin.

 

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5. Rule 144 Reporting. With a view to making available to BioMarin the benefits
of certain rules and regulations of the SEC which may permit the sale of the
Conversion Shares to the public without registration, the Company agrees to use
its reasonable best efforts to:

5.1 Make and keep public information available, as those terms are understood
and defined in Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after the Effective Date of this Agreement;

5.2 Use reasonably commercial efforts to file with the SEC, in a timely manner,
all reports and other documents required of the Company under the Exchange Act;
and

5.3 So long as BioMarin owns any Conversion Shares, furnish to BioMarin
forthwith upon request: a written statement by the Company as to its compliance
with the reporting requirements of Rule 144, and of the Exchange Act; a copy of
the most recent annual or quarterly report of the Company; and such other
reports and documents as BioMarin may reasonably request in availing itself of
any rule or regulation of the SEC allowing it to sell any such Conversion Shares
without registration.

6. Rule 144 Compliance. BioMarin agrees that so long as it owns ten percent
(10%) or more of the Company’s outstanding common stock, it will comply with all
requirements under Rule 144 as if it is an affiliate of the Company in
connection with all sales of the Company’s common stock, including without
limitation complying with: (i) the manner of sale provision that is set forth in
section (f) of Rule 144, and (ii) the limitation on the amount of securities
that may be sold in any three month period that is set forth in section (e) of
Rule 144.

7. Status as Debt until Conversion. The Note shall be unsecured, and all amounts
due hereunder shall be treated as unsecured indebtedness of the Company until
the same shall have been actually converted into Conversion Shares. Similarly,
until conversion of the Conversion Amount into Conversion Shares, BioMarin shall
not be treated as a stockholder of the Company with respect to the Conversion
Shares.

8. Obligations of the Company.

8.1 Use of Proceeds. The Company shall use the Principal Amount solely for the
purpose of developing Firdapse. Notwithstanding anything to the contrary set
forth herein, this covenant shall survive the issuance of the Conversion Shares.

8.2 Conduct of Business. During the period beginning on the Effective Date and
ending on the Conversion Date, except as specifically consented in writing by
BioMarin (which consent may not be unreasonably withheld), the Company shall
carry on its business in the ordinary course of business, consistent with past
practice and in material compliance with Applicable Law (including using its
best efforts to maintain compliance with the continuing listing requirements of
the NASDAQ Capital Market). Except as contemplated by this Agreement, during the
period beginning on the Effective Date and ending on the Conversion Date, the
Company shall not, without BioMarin’s written consent (which consent may be
withheld by the BioMarin in its sole discretion):

(a) voluntarily liquidate, dissolve or wind-up its business and affairs;
declare, set aside or pay any dividends on, or make any other distributions
(whether in cash, stock or property) in respect of, any of its capital stock; or
effect any stock split, combination of shares, recapitalization,
reclassification or other change in the capital structure of the Company;

 

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(b) (i) sell or license all or substantially all of the Company’s rights with
respect to, in a single transaction or a series of transactions, assets of the
Company representing twenty-five (25%) or more of the assets of the Company, or
(ii) enter into any merger, consolidation, business combination,
recapitalization, liquidation, dissolution, binding share exchange or similar
transaction involving the Company pursuant to which any Person or group (or the
stockholders of any Person) would own, directly or indirectly, twenty-five
percent (25%) or more of any class of equity securities of the Company or of the
surviving entity in a merger or the resulting direct or indirect parent of the
Company or such surviving entity;

(c) sell in a single transaction or a series of transactions (i) such number of
shares of the Company’s authorized but unissued common stock equal to more than
25% of the outstanding shares of the Company at the date of this Agreement, and
(ii) shares of the Company’s authorized but unssued common stock at a per share
price of less than $1.50 per share; or

(d) authorize any of, or commit or agree to take any of, the foregoing actions.

8.3 Release of Data. The Company shall publicly announce the top-line data from
the Company’s Phase II(b) clinical trial evaluating the use of CPP-109 (the
Company’s formulation of vigabatrin, a GABA aminotransferase inhibitor) for the
treatment of cocaine addiction as soon as reasonably practicable after the
Effective Date.

8.4 Indemnification. The Company shall indemnify, defend and hold BioMarin, its
affiliates, partners, shareholders, directors, officers, employees, agents and
assigns harmless from and against any and all claims, damages, liabilities,
demands, costs and expenses (including, without limitation, reasonable
attorneys’ fees and costs) arising from or in connection with (a) the Company’s
breach of any representation, warranty or covenant set forth in this Agreement,
and (b) any violation (or alleged violation) by the Company of the Securities
Act, any state securities laws or any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with this Agreement.

9. Default.

9.1 Events of Default. The occurrence of any of the following prior to the
Conversion of the Principal Amount into the Conversion Shares constitutes an
“Event of Default” hereunder: (a) Company fails or refuses to promptly effect
the Conversion of the Principal Amount on the Maturity Date and to promptly
deliver the certificates representing the Conversion Shares to BioMarin; (b) the
Company breaches in a material respect a representation or warranty contained in
Section 3, or (c) a receiver or the like is appointed for any part of the
Company’s property or assets, Company makes a general assignment for the benefit
of creditors, or the Company becomes a debtor or alleged debtor in a case under
the U.S. Bankruptcy Code or becomes the subject of any other bankruptcy or
similar proceeding for the general adjustment of its debts, and the same is not
dismissed or discharged within sixty (60) days of filing.

9.2 BioMarin’s Actions Upon Default. Upon the occurrence of any Event of
Default, BioMarin, at its option, may accelerate payment of the outstanding
Principal Amount under this Note, causing the same to become immediately due and
payable, upon written notice to the Company, but without further demand, notice
or other action by BioMarin. In such a case, BioMarin shall have all rights
available to it under applicable law. This Section 9.2 shall not limit
BioMarin’s rights to seek equitable relief pursuant to Section 10.7, including
specific performance, upon an Event of Default.

 

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9.3 Default Interest. Upon an Event of Default, the interest payable on the
Principal Amount shall automatically increase to ten percent (10%) per annum
(with such interest calculated based on a 365-day year and accruing on a daily
basis), or, if lower, the maximum amount of interest permitted by applicable
law.

10. General Provisions.

10.1 Notices. Unless otherwise provided, any notice to BioMarin or Company
hereunder must be in writing and in English and must be (a) delivered by hand or
by overnight courier with tracking capabilities, (b) mailed postage prepaid by
first class, registered, or certified mail, or (c) delivered by facsimile
followed by delivery via either of the methods set forth in Sections 10.1(a) and
(b), to the persons at the addresses indicated below:

 

BIOMARIN

 

                                 BioMarin Pharmaceutical, Inc.

                                 105 Digital Drive

                                 Novato, California 94949

                                 Attn: Chief Executive

                                 Fax: (415) 382-7889

  

with a copy to (which shall not constitute notice):

 

BioMarin Pharmaceutical, Inc.

105 Digital Drive

Novato, California 94949

Attn: General Counsel

Fax: (415) 382-7889

COMPANY

 

  

with a copy to (which shall not constitute notice):

 

                                 Catalyst Pharmaceutical Partners, Inc.

                                 355 Alhambra Circle

                                 Suite 1500

                                 Coral Gables, Florida 33134

                                 Attention: Chief Executive Officer

                                 Fax: (305) 529-0933

  

Philip B. Schwartz, Esq.

Akerman Senterfitt

350 East Las Olas Blvd, Suite 1600

Fort Lauderdale, Florida 33301

Fax: (305) 349-4833

Any such notice shall be deemed given on the date received, except any notice
received after 5:30 p.m. (in the time zone of the receiving party) on a Business
Day or received on a non-Business Day shall be deemed to have been received on
the next Business Day. A Party may add, delete, or change the person or address
to which notices should be sent at any time upon written notice delivered to the
other Parties in accordance with this Section 10.1.

10.2 Successors and Assigns. The rights and obligations of Company and BioMarin
under this Agreement will bind and benefit their respective successors and
assigns. Neither this Agreement nor any rights, interests or obligations
hereunder may be assigned or otherwise transferred by either the Company or
BioMarin, by operation of law or otherwise, in whole or in part, without the
other’s prior written consent. Notwithstanding the foregoing, (a) BioMarin may
transfer the Conversion Shares, except to the extent that such transfer is
otherwise restricted by this Agreement and (b) no consent of the Company is
required for an assignment or transfer by BioMarin, in whole or in part, to
(i) an Affiliate of BioMarin or (ii) a successor-in-interest of BioMarin by
reason of merger or consolidation or sale of all or substantially all of the
assets of BioMarin relating to the subject matter of this Agreement.

 

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10.3 Amendment and Waiver. This Agreement and any provision hereof may be
terminated, amended or waived only in writing by the party against which
enforcement of such termination, amendment or waiver is sought. Delay or failure
to exercise any right may not be construed as waiver of such or any other right,
nor will a waiver of a breach or provision constitute a continuing waiver or a
waiver of any other breach or provision.

10.4 Governing Law. This Agreement shall be governed by the laws of New York,
without regard to its principles of conflicts of law.

10.5 Jurisdiction and Venue. Each of the parties: (a) submits to the
jurisdiction of any court of the United States located in the State of New York
(or, if any such court of the United States located in the State of New York
declines to accept jurisdiction over a particular matter, any state court
located in the State of New York) in any legal suit, action or proceeding
arising out of or relating to this Agreement; (b) agrees that all claims in
respect of the action or proceeding shall be heard or determined in such court;
and (c) agrees not to bring any action or proceeding arising out of or relating
to this Agreement in any other court. Each of the parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety or other security that might be required of any other
party with respect thereto. Any party may make service on any other party by
sending or delivering a copy of the process to the party to be served at the
address and in the manner provided for the giving of notices in Section 10.1.
Each party agrees that a final judgment in any action or proceeding so brought
shall be conclusive and may be enforced by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect the right to
serve process in any other manner permitted by law, statute, rule or regulation.
To the extent provided by any law, statute, rule or regulation, should either
party, after being so served, fail to appear or answer to any summons,
complaint, process or papers so served within the number of days prescribed by
law after the mailing thereof, such party shall be deemed in default and an
order or judgment may be entered by the court against such party as demanded or
prayed for in such summons, complaint, process or papers.

10.6 Waiver of Right to Jury Trial. THE PARTIES TO THIS AGREEMENT WAIVE (TO THE
EXTENT PERMITTED BY APPLICABLE LAW) TRIAL BY JURY IN ANY LITIGATION IN ANY COURT
WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, OR THE
MATTERS COVERED BY THIS AGREEMENT AND HEREBY AGREE THAT THIS SECTION IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THEY WOULD
NOT ENTER INTO THIS AGREEMENT IF THIS SECTION WERE NOT PART OF THIS AGREEMENT.

10.7 Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to seek
specific performance of the terms hereof, in addition to any other remedy at law
or equity without the necessity of demonstrating the inadequacy of monetary
damages.

10.8 Attorneys’ Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party such reasonable fees and
expenses of attorneys and accountants, which shall include all fees, costs and
expenses of appeals.

10.9 Entire Agreement. This Agreement, the License Agreement and their attached
schedules and exhibits constitute the entire agreement between the parties as to
the subject matter hereof and thereof and supersede and merge all prior and
contemporaneous negotiations, representations, agreements, and understandings
regarding the same.

 

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EXECUTION VERSION

 

10.10 Counterparts. This Agreement may be executed in counterparts with the same
effect as if both parties had signed the same document. All such counterparts
shall be deemed an original, shall be construed together, and shall constitute
one and the same instrument. Any such counterpart, to the extent delivered by
means of a fax machine or by .pdf, .tif, .gif, .jpeg or similar attachment to
electronic mail (any such delivery, an “Electronic Delivery”) shall be treated
in all manner and respects as an original executed counterpart and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. No party hereto shall raise the use
of Electronic Delivery to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of
Electronic Delivery as a defense to the formation of a contract, and each such
party forever waives any such defense, except to the extent that such defense
relates to lack of authenticity.

10.11 Interpretation. All headings used herein are used for convenience only and
shall not be used to construe or interpret this Agreement. All references in
this Agreement to sections shall, unless otherwise provided, refer to sections
hereof. If any provision or portion of this Agreement is determined to be
invalid or unenforceable, this Agreement will automatically be amended to
substitute, for the invalid or unenforceable provisions, new enforceable
provisions which most closely approximate the intent and economic effect of the
invalid provisions, and the remaining provisions will, as so amended, continue
in full force and effect. No representation, warranty or disclosure given by
Company in connection with this Agreement or this transaction (including
representations, warranties or disclosures set forth in any related document)
will be affected by any investigation or lack of investigation by BioMarin. This
Agreement shall not be interpreted for or against BioMarin or Company on the
basis of which party’s counsel prepared such documents.

[Signatures on Following Page]

 

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EXECUTION VERSION

 

IN WITNESS WHEREOF, Company and BioMarin have caused this Convertible Promissory
Note and Note Purchase Agreement to be signed in their name, by their duly
authorized representative, as of the date set forth above.

 

CATALYST PHARMACEUTICAL PARTNERS, INC. By:   /s/ Patrick J. McEnany   Name:  
Patrick J. McEnany   Title:   Chairman, President and CEO BIOMARIN
PHARMACEUTICAL, INC. By:   /s/ G. Eric Davis   Name:   G. Eric Davis   Title:  
SVP, General Counsel

 

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