EXHIBIT 10.4 STOCK OPTION AGREEMENTS/PATRICK J. MC



 





Exhibit 10.4




NON-QUALIFIED STOCK OPTION AGREEMENT




          THIS
AGREEMENT, entered into on July 1, 2002 (the “Grant
Date”), is made by and between Catalyst Pharmaceutical Partners, Inc., a Florida corporation
(“Catalyst”) and Patrick J. McEnany, an employee of Catalyst, hereinafter referred to as
“Optionee”:




          WHEREAS, Catalyst is desirous of increasing the incentive of the Optionee whose contributions
are important to the continued success of Catalyst.




          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, Catalyst hereby grants the
Optionee the Non-qualified Stock Option provided for herein, upon the following terms and
conditions:




ARTICLE I




DEFINITIONS




          Whenever the following terms are used in this Agreement, they shall have the meaning specified
below unless the context clearly indicates to the contrary. The masculine pronoun shall include
the feminine and neuter, and the singular the plural, where the context so indicates.




Section 1.1 Board




          “Board” shall mean the Board of Directors of Catalyst.




Section 1.2 Cause




          “Cause” shall mean (i) failure or refusal of the Optionee to perform the duties and
responsibilities that Catalyst requires to be performed by him, (ii) gross negligence or willful
misconduct by the Optionee in the performance of his duties, (iii) commission by the Optionee of an
act of dishonesty affecting Catalyst, or the commission of an act constituting common law fraud or
a felony, or (iv) the Optionee’s commission of an act (other than the good faith exercise of his
business judgment in the exercise of his responsibilities) resulting in material damages to
Catalyst; provided, however, that if the Optionee and Catalyst have entered into an employment
agreement which defines “cause” for purposes of such agreement, “cause” shall be defined in
accordance with such agreement. The Committee, in its sole and absolute discretion, shall
determine whether a termination of employment is for Cause.




Section 1.3 Common Stock




          “Common Stock” shall mean the common stock of Catalyst, par value $.01 per share.






 









 








Section 1.4 Code




          “Code” shall mean the Internal Revenue Code of 1986, as amended.




Section 1.5 Committee




          “Committee” shall mean the Compensation Committee of the Board, or another committee of the
Board, to administer the grant of Options.




Section 1.6 Director




          “Director” shall mean a member of the Board.




Section 1.7 Exchange Act




          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.




Section 1.8 Fair Market Value




          “Fair Market Value” of a share of Common Stock as of a given date shall be (a) the closing
price of a share of Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such principal exchange), on
the trading day previous to such date, or if shares of Common Stock were not traded on the trading
day previous to such date, then on the next preceding date on which a trade occurred; (b) if Common
Stock is not traded on an exchange but is quoted on The Nasdaq National Market, The Nasdaq SmallCap
Market or a successor quotation system, the last sales price for the Common Stock on the trading
day previous to such date as reported by The Nasdaq National Market, The Nasdaq SmallCap Market or
such successor quotation system; or (c) if Common Stock is not publicly traded on an exchange and
not quoted on The Nasdaq National Market, The Nasdaq SmallCap Market or a successor quotation
system, the fair market value of a share of Common Stock as established by the Committee acting in
good faith.




Section 1.9 Grant Date




          “Grant Date” shall mean November 1, 2002.




Section 1.10 Option




          “Option” shall mean the non-qualified stock option to purchase Common Stock of Catalyst
granted under this Agreement.




Section 1.11 Rule 16b-3




          “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be
amended from time to time.






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Section 1.12 Securities Act




          “Securities Act” shall mean the Securities Act of 1933, as amended.




Section 1.13 Stock Option Administrator




          “Stock Option Administrator” shall mean the officer designated, from time to time, by the
Committee to serve as the Stock Option Administrator and any agents of the Stock Option
Administrator.




Section 1.14 Termination of Employment




          “Termination of Employment” shall mean the time when the employee-employer relationship
between the Optionee and Catalyst is terminated for any reason, with or without Cause, including,
but not by way of limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous reemployment or continuing
employment of the Optionee by Catalyst, (ii) at the discretion of the Committee, terminations which
result in a temporary severance of the employee-employer relationship, and (iii) at the discretion
of the Committee, terminations which are followed by the simultaneous establishment of a consulting
relationship by Catalyst with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for Cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment. Notwithstanding any other provision of this Agreement,
Catalyst has an absolute and unrestricted right to terminate the Optionee’s employment at any time
for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise
in writing.




ARTICLE II




GRANT OF OPTION




Section 2.1 Grant of Option




          In consideration of the Optionee’s agreement to remain in the employ of Catalyst and for other
good and valuable consideration, on the date hereof Catalyst irrevocably grants to the Optionee the
option to purchase any part or all of an aggregate of 250,000 shares of its Common Stock upon the
terms and conditions set forth in this Agreement.




Section 2.2 Purchase Price




          The purchase price of the shares of Common Stock covered by the Option shall be $1.00 per
share without commission or other charge.






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Section 2.3 Consideration to Catalyst




          In consideration of the granting of this Option by Catalyst, the Optionee agrees to render
faithful and efficient services to Catalyst, with such duties and responsibilities as Catalyst
shall from time to time prescribe. Nothing in this Agreement shall confer upon the Optionee any
right to continue in the employ of Catalyst, or as a director of Catalyst, or shall interfere with
or restrict in any way the rights of Catalyst, which are hereby expressly reserved, to discharge
the Optionee at any time for any reason whatsoever, with or without Cause.




ARTICLE III




PERIOD OF EXERCISABILITY




Section 3.1 Commencement of Exercisability




          (a) Subject to subsection (b) and Sections 3.3 and 3.4, the Option shall become exercisable in
cumulative installments as follows:





          (i) The first installment shall consist of one-third of the shares of Common Stock
covered by the Option and shall become exercisable on the six month anniversary of the Grant
Date.




          (ii) The second installment shall consist of one-third of the shares of Common Stock
covered by the Option and shall become exercisable on the eighteen month anniversary of the
Grant Date.




          (iii) The third installment shall consist of one-third of the shares of Common Stock
covered by the Option and shall become exercisable on the twenty-four month anniversary of
the Grant Date.



          (b) Except as provided in Section 3.4(b) below, no portion of the Option which is
unexercisable at Termination of Employment shall thereafter become exercisable.




Section 3.2 Duration of Exercisability




          The installments provided for in Section 3.1 are cumulative. Each such installment which
becomes exercisable pursuant to Section 3.1 shall remain exercisable until it becomes unexercisable
under Section 3.3.




Section 3.3 Expiration of Option




          The Option may not be exercised to any extent by anyone after the first to occur of the
following events:




          (a) The expiration of ten (10) years from the date the Option was granted; or




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          (b) The expiration of ninety (90) days from the date of the Optionee’s Termination of
Employment, unless such Termination of Employment results from his death, his disability (within
the meaning of Section 22(e)(3) of the Code) or his being discharged for Cause; or




          (c) The date specified in Section 3.3(a) above in the event that the Optionee’s Termination of
Employment results from his death; or




          (d) The expiration of one (1) year from the date of the Optionee’s Termination of Employment
in the event such Termination of Employment results from his disability (within the meaning of
Section 22(e)(3) of the Code); or




          (e) The date of Optionee’s Termination of Employment, as applicable, in the event that the
Termination of Employment results from his being discharged for Cause.




Section 3.4 Acceleration of Exercisability 




          In the event of the Optionee’s Termination of Employment due to the Optionee’s death,
notwithstanding any vesting schedule provided for hereunder, this Option shall become immediately
vested and, to the extent applicable, exercisable for such period of time specified in Section
3.3(a).




ARTICLE IV




EXERCISE OF OPTION




Section 4.1 Persons Eligible to Exercise




          During the lifetime of the Optionee, only the Optionee, or any person to whom the Option may
be transferred pursuant to Section 6.2 below, may exercise the Option or any portion thereof.
After the death of the Optionee, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the deceased Optionee’s will or under the then applicable
laws of descent and distribution.




Section 4.2 Partial Exercise




          Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be
exercised in whole or in part at any time prior to the time when the Option or portion thereof
becomes unexercisable under Section 3.3; provided, however, that each partial
exercise shall be for not less than one hundred (100) shares of Common Stock (or the minimum
installment set forth in Section 3.1, if a smaller number of shares of Common Stock) and shall be
for whole shares only.






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Section 4.3 Manner of Exercise




          The Option, or any exercisable portion thereof, may be exercised solely by delivery to the
Stock Option Administrator or an agent of the Stock Option Administrator, as designated by the
Committee from time to time, of all of the following prior to the time when the Option or such
portion becomes unexercisable under Section 3.3:




          (a) A written notice complying with the applicable rules established by the Committee stating
that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or
other person then entitled to exercise the Option or such portion; and





     (b)      (i) payment in cash or in cash equivalents equal to the product of the per share
exercise price times the number of shares of Common Stock with respect to which the option
or portion is being exercised (the “Aggregate Exercise Price”);




          (ii) to the extent permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, through the tender to Catalyst of shares of Common Stock,
which shares shall be valued, for purposes of determining the extent to which the Exercise
Price has been paid thereby, at their Fair Market Value on the date of exercise;




          (iii) to the extent permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, by delivering a written direction to Catalyst that the Option
be exercised pursuant to a “cashless” exercise/sale procedure (pursuant to which funds to
pay for exercise of the Option are delivered to Catalyst by a broker upon receipt of stock
certificates from Catalyst) or a “cashless” exercise/loan procedure (pursuant to which the
participants would obtain a margin loan from a broker to fund the exercise) through a
licensed broker acceptable to Catalyst whereby the stock certificate or certificates for the
            shares of Common Stock for which the Option is exercised will be delivered to such broker as
the agent for the individual exercising the Option and the broker will deliver to Catalyst
cash (or cash equivalents acceptable to Catalyst) equal to the purchase price for the shares
of Common Stock purchased pursuant to the exercise of the Option plus the amount (if any) of
federal and other taxes that Catalyst may, in its judgment, be required to withhold with
respect to the exercise of the Option;




          (iv) to the extent permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, by the delivery of a promissory note of the participant to
Catalyst on such terms as the Committee shall specify in its sole and absolute discretion;
or




          (v) by a combination of the methods described in clauses (i), (ii), (iii) and (iv).



          (c) A bona fide written representation and agreement, in a form satisfactory to the Committee,
signed by the Optionee or other person then entitled to exercise such Option or portion,
stating that the shares of Common Stock are being acquired for his own account, for investment
and without any present intention of distributing or reselling said shares or any of





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them except as
may be permitted under the Securities Act and then applicable rules and regulations thereunder, and
that the Optionee or other person then entitled to exercise such Option or portion will indemnify
Catalyst against and hold it free and harmless from any loss, damage, expense or liability
resulting to Catalyst if any sale or distribution of the shares of Common Stock by such person is
contrary to the representation and agreement referred to above. The Committee may, in its absolute
discretion, take whatever additional actions it deems appropriate to insure the observance and
performance of such representation and agreement and to effect compliance with the Securities Act
and any other federal or state securities laws or regulations. Without limiting the generality of
the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that
any subsequent transfer of shares of Common Stock acquired on an Option exercise does not violate
the Securities Act, and may issue stop-transfer orders covering such shares. Share certificates
evidencing stock issued on exercise of this Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall, however, not be required
if the shares of Common Stock to be issued pursuant to such exercise have been registered under the
Securities Act, and such registration is then effective in respect of such shares; and




          (d) Full payment to Catalyst (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the Option; and




          (e) In the event the Option or any portion thereof shall be exercised pursuant to Section 4.1
by any person or persons other than the Optionee, appropriate proof of the right of such person or
persons to exercise the Option.




Section 4.4 Conditions to Issuance of Stock Certificates




          The shares of Common Stock deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued shares or issued shares which have then
been reacquired by Catalyst. Such shares of Common Stock shall be fully paid and nonassessable.
Catalyst shall not be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of
the following conditions:




          (a) The admission of such shares of Common Stock to listing on all stock exchanges on which
such class of stock is then listed; and




          (b) The completion of any registration or other qualification of such shares of Common Stock
under any state or federal law or under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which the Committee shall, in its absolute
discretion, deem necessary or advisable; and




          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be necessary or
advisable; and





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          (d) The receipt by Catalyst of full payment for such shares of Common Stock, including payment
of all amounts which, under federal, state or local tax law, Catalyst (or other employer
corporation) is required to withhold upon exercise of the Option; and




          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Committee may from time to time establish for reasons of administrative convenience.




Section 4.5 Rights as Shareholder




          The holder of the Option shall not be, nor have any of the rights or privileges of, a
shareholder of Catalyst in respect of any shares of Common Stock purchasable upon the exercise of
any part of the Option unless and until certificates representing such shares of Common Stock shall
have been issued by Catalyst to such holder.




ARTICLE V




EFFECT OF CHANGES IN CAPITALIZATION




Section 5.1 Recapitalization




          If the outstanding shares of Common Stock of Catalyst are increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities of Catalyst by
reason of any recapitalization, reclassification, reorganization (other than as described in
Section 5.2 below), stock split, reverse split, combination of shares, exchange of shares, stock
dividend or other distribution payable in capital stock of Catalyst, or other increase or decrease
in such shares effected without receipt of consideration by Catalyst, an appropriate and
proportionate adjustment shall be made by the Committee in the number and kind of shares of Common
Stock issuable upon exercise of this Option, and in the purchase price per share of this Option.




Section 5.2 Reorganization or Change in Control




          In the event of a Reorganization (as defined below) of Catalyst or a Change in Control (as
defined below) of Catalyst, this Option shall become immediately vested and, to the extent
applicable, exercisable for such period of time specified in Section 3.3(a). For purposes of this
Agreement a “Reorganization” of an entity shall be deemed to occur if such entity is a party to a
merger, consolidation, reorganization, or other business combination with one or more entities in
which said entity is not the surviving entity, if such entity disposes of substantially all of its
assets, or if such entity is a party to a spin-off, split-off, split-up or similar transaction;
provided, however, that the transaction shall not be a Reorganization if Catalyst, any parent or
any subsidiary is the surviving entity. For purposes of this Agreement, a “Change in Control”
shall be deemed to occur if any person or group of persons shall acquire direct or indirect beneficial
ownership (whether as a result of stock
ownership, revocable or irrevocable proxies or otherwise) of securities of an entity, pursuant to
one or more transactions, such that after consummation and as a result of such transaction, such
person has direct or indirect beneficial





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ownership of 50% or more of the total combined voting
power of the Common Stock. For purposes of this Agreement, a “person” shall mean any person,
corporation, partnership, joint venture or other entity or any group (as such term is defined for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
other than a parent or subsidiary, and “beneficial ownership” shall be determined in accordance
with Rule 13d-3 under the Exchange Act.




Section 5.3 Dissolution or Liquidation




          Upon the dissolution or liquidation of Catalyst, this Option shall terminate. In the event of
any termination of this Option under this Section 5.3, Optionee shall have the right, immediately
prior to the occurrence of such termination and during such reasonable period as the Committee in
its sole discretion shall determine and designate, to exercise this Option in whole or in part,
whether or not this Option was otherwise exercisable at the time such termination occurs and
without regard to any vesting or other limitation on exercise imposed pursuant to Article III
above.




Section 5.4 Adjustments




          Adjustments under this Article V related to stock or securities of Catalyst shall be made by
the Committee, whose determination in that respect shall be final, binding, and conclusive. No
fractional shares of Common Stock or units of other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share or unit.




Section 5.5 No Limitations




          The grant of this Option hereunder shall not affect or limit in any way the right or power of
Catalyst to make adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or
any part of its business or assets.






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ARTICLE VI




OTHER PROVISIONS




Section 6.1 Administration




          All actions taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon the Optionee, Catalyst and all other interested persons. No
member of the Committee shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Option. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement except with respect to matters which under Rule 16b-3 or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be determined in the sole
discretion of the Committee.




Section 6.2 Option Not Transferable




          This Option shall not be assignable or transferable by the Optionee, other than by will or the
laws of descent and distribution; provided, however, that this Option may be transferred or
assigned to (i) family members or entities (including trusts) established for the benefit of the
Optionee or the Optionee’s family members or (ii) any other person, as permitted by applicable
securities law. Any Option assigned or transferred pursuant to this Section 6.2 shall continue to
be subject to the same terms and conditions as were applicable to the Option immediately before the
transfer; provided, however, that any Option transferred for value may not be exercised under any
Registration Statement on Form S-8 and upon exercise of such transferred Option the holder will
only be entitled to receive shares of restricted stock that have not been registered under the
Securities Act of 1933.




Section 6.3 Shares to Be Reserved




          Catalyst shall at all times during the term of the Option reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy the requirements of this
Agreement.




Section 6.4 Notices




          Any notice to be given under the terms of this Agreement to Catalyst shall be addressed to
Catalyst in care of the officer designated as the Stock Option Administrator from time to time, and
any notice to be given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 6.4, either party may hereafter
designate a different address for notices to be given to him. Any notice which is required to be
given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal
representative if such representative has previously informed Catalyst of his status and address by
written notice under this Section 6.4. Any notice shall be deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a
post office or branch post office regularly maintained by the United






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States Postal Service;
provided, however, that any notice to be
given by the Optionee relating to the exercise of the Option or any portion thereof shall be
deemed duly given upon receipt by the Stock Option Administrator or his office.




Section 6.5 Titles




          Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.




Section 6.6 Construction




          This Agreement shall be administered, interpreted and enforced under the internal laws of the
State of Florida without regard to conflicts of laws thereof.




Section 6.7 Conformity to Securities Laws




          The Optionee acknowledges that this Agreement is intended to conform to the extent necessary
with all provisions of the Securities Act and the Exchange Act and any and all regulations and
rules promulgated by the Securities and Exchange Commission thereunder, including, without
limitation, the applicable exemptive conditions of Rule 16b-3. Notwithstanding anything herein to
the contrary, the Option is granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted by applicable law, this Agreement shall
be deemed amended to the extent necessary to conform to such laws, rules and regulations.




Section 6.8 Amendments




          This Agreement may be amended without the consent of the Optionee provided that such amendment
would not impair any rights of the Optionee under this Agreement. No amendment of this Agreement
shall, without the consent of the Optionee, impair any rights of the Optionee under this Agreement.




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          IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.




	 	 	 	 	 
	 	CATALYST PHARMACEUTICAL PARTNERS, INC.

 	 
	 	By:  	/s/ Hubert Huckel
 	 
	 	 	Name:  	Hubert Huckel 	 
	 	 	Title:  	Chairman 	 
	 



	 	 	 	 	 
	 	 	 
	 	/s/ Patrick J. McEnany
 	 
	 	Optionee 	 
	 	 	 
	 




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NON-QUALIFIED STOCK OPTION AGREEMENT




          THIS AGREEMENT, entered into on March 4, 2005 (the “Grant Date”), is made by and between
Catalyst Pharmaceutical Partners, Inc., a Florida corporation (“Catalyst”) and Patrick J. McEnany,
an employee of Catalyst, hereinafter referred to as “Optionee”:




          WHEREAS, Catalyst is desirous of increasing the incentive of the Optionee whose contributions
are important to the continued success of Catalyst.




          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, Catalyst hereby grants the
Optionee the Non-qualified Stock Option provided for herein, upon the following terms and
conditions:




ARTICLE I




DEFINITIONS




          Whenever the following terms are used in this Agreement, they shall have the meaning specified
below unless the context clearly indicates to the contrary. The masculine pronoun shall include
the feminine and neuter, and the singular the plural, where the context so indicates.




Section 1.1 Board




          “Board” shall mean the Board of Directors of Catalyst.




Section 1.2 Cause




          “Cause” shall mean (i) failure or refusal of the Optionee to perform the duties and
responsibilities that Catalyst requires to be performed by him, (ii) gross negligence or willful
misconduct by the Optionee in the performance of his duties, (iii) commission by the Optionee of an
act of dishonesty affecting Catalyst, or the commission of an act constituting common law fraud or
a felony, or (iv) the Optionee’s commission of an act (other than the good faith exercise of his
business judgment in the exercise of his responsibilities) resulting in material damages to
Catalyst; provided, however, that if the Optionee and Catalyst have entered into an employment
agreement which defines “cause” for purposes of such agreement, “cause” shall be defined in
accordance with such agreement. The Committee, in its sole and absolute discretion, shall
determine whether a termination of employment is for Cause.




Section 1.3 Common Stock




          “Common Stock” shall mean the common stock of Catalyst, par value $.01 per share.






 









 








Section 1.4 Code




          “Code” shall mean the Internal Revenue Code of 1986, as amended.




Section 1.5 Committee




          “Committee” shall mean the Compensation Committee of the Board, or another committee of the
Board, to administer the grant of Options.




Section 1.6 Director




          “Director” shall mean a member of the Board.




Section 1.7 Exchange Act




          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.




Section 1.8 Fair Market Value




          “Fair Market Value” of a share of Common Stock as of a given date shall be (a) the closing
price of a share of Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such principal exchange), on
the trading day previous to such date, or if shares of Common Stock were not traded on the trading
day previous to such date, then on the next preceding date on which a trade occurred; (b) if Common
Stock is not traded on an exchange but is quoted on The Nasdaq National Market, The Nasdaq SmallCap
Market or a successor quotation system, the last sales price for the Common Stock on the trading
day previous to such date as reported by The Nasdaq National Market, The Nasdaq SmallCap Market or
such successor quotation system; or (c) if Common Stock is not publicly traded on an exchange and
not quoted on The Nasdaq National Market, The Nasdaq SmallCap Market or a successor quotation
system, the fair market value of a share of Common Stock as established by the Committee acting in
good faith.




Section 1.9 Grant Date




          “Grant Date” shall mean March 4, 2005.




Section 1.10 Option




          “Option” shall mean the non-qualified stock option to purchase Common Stock of Catalyst
granted under this Agreement.




Section 1.11 Rule 16b-3




          “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be
amended from time to time.




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Section 1.12 Securities Act




          “Securities Act” shall mean the Securities Act of 1933, as amended.




Section 1.13 Stock Option Administrator




          “Stock Option Administrator” shall mean the officer designated, from time to time, by the
Committee to serve as the Stock Option Administrator and any agents of the Stock Option
Administrator.




Section 1.14 Termination of Employment




          “Termination of Employment” shall mean the time when the employee-employer relationship
between the Optionee and Catalyst is terminated for any reason, with or without Cause, including,
but not by way of limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous reemployment or continuing
employment of the Optionee by Catalyst, (ii) at the discretion of the Committee, terminations which
result in a temporary severance of the employee-employer relationship, and (iii) at the discretion
of the Committee, terminations which are followed by the simultaneous establishment of a consulting
relationship by Catalyst with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for Cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment. Notwithstanding any other provision of this Agreement,
Catalyst has an absolute and unrestricted right to terminate the Optionee’s employment at any time
for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise
in writing.




ARTICLE II




GRANT OF OPTION




Section 2.1 Grant of Option




          In consideration of the Optionee’s agreement to remain in the employ of Catalyst and for other
good and valuable consideration, on the date hereof Catalyst irrevocably grants to the Optionee the
option to purchase any part or all of an aggregate of 250,000 shares of its Common Stock upon the
terms and conditions set forth in this Agreement.




Section 2.2 Purchase Price




          The purchase price of the shares of Common Stock covered by the Option shall be $1.00 per
share without commission or other charge.






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Section 2.3 Consideration to Catalyst




          In consideration of the granting of this Option by Catalyst, the Optionee agrees to render
faithful and efficient services to Catalyst, with such duties and responsibilities as Catalyst
shall from time to time prescribe. Nothing in this Agreement shall confer upon the Optionee any
right to continue in the employ of Catalyst, or as a director of Catalyst, or shall interfere with
or restrict in any way the rights of Catalyst, which are hereby expressly reserved, to discharge
the Optionee at any time for any reason whatsoever, with or without Cause.




ARTICLE III




PERIOD OF EXERCISABILITY




Section 3.1 Commencement of Exercisability




          The Option shall vest and become exercisable on the Grant Date.




Section 3.2 Duration of Exercisability




          The Option shall remain exercisable until it becomes unexercisable under Section 3.3.




Section 3.3 Expiration of Option




          The Option may not be exercised to any extent by anyone after the first to occur of the
following events:




          (a) The expiration of ten (10) years from the date the Option was granted; or




          (b) The expiration of ninety (90) days from the date of the Optionee’s Termination of
Employment, unless such Termination of Employment results from his death, his disability (within
the meaning of Section 22(e)(3) of the Code) or his being discharged for Cause; or




          (c) The date specified in Section 3.3(a) above in the event that the Optionee’s Termination of
Employment results from his death; or




          (d) The expiration of one (1) year from the date of the Optionee’s Termination of Employment
in the event such Termination of Employment results from his disability (within the meaning of
Section 22(e)(3) of the Code); or




          (e) The date of Optionee’s Termination of Employment, as applicable, in the event that the
Termination of Employment results from his being discharged for Cause.





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Section 3.4 Acceleration of Exercisability 




          In the event of the Optionee’s Termination of Employment due to the Optionee’s death,
notwithstanding any vesting schedule provided for hereunder, this Option shall become immediately
vested and, to the extent applicable, exercisable for such period of time specified in Section
3.3(a).




ARTICLE IV




EXERCISE OF OPTION




Section 4.1 Persons Eligible to Exercise




          During the lifetime of the Optionee, only the Optionee, or any person to whom the Option may
be transferred pursuant to Section 6.2 below, may exercise the Option or any portion thereof.
After the death of the Optionee, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the deceased Optionee’s will or under the then applicable
laws of descent and distribution.




Section 4.2 Partial Exercise




          Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be
exercised in whole or in part at any time prior to the time when the Option or portion thereof
becomes unexercisable under Section 3.3; provided, however, that each partial
exercise shall be for not less than one hundred (100) shares of Common Stock (or the minimum
installment set forth in Section 3.1, if a smaller number of shares of Common Stock) and shall be
for whole shares only.




Section 4.3 Manner of Exercise




          The Option, or any exercisable portion thereof, may be exercised solely by delivery to the
Stock Option Administrator or an agent of the Stock Option Administrator, as designated by the
Committee from time to time, of all of the following prior to the time when the Option or such
portion becomes unexercisable under Section 3.3:




          (a) A written notice complying with the applicable rules established by the Committee stating
that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or
other person then entitled to exercise the Option or such portion; and





     (b)      (i) payment in cash or in cash equivalents equal to the product of the per share
exercise price times the number of shares of Common Stock with respect to which the option
or portion is being exercised (the “Aggregate Exercise Price”);




          (ii) to the extent permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, through the tender to Catalyst of shares of
Common Stock, which shares shall be valued, for purposes of determining the extent to



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which the Exercise Price has been paid thereby, at their Fair Market Value on the date of
exercise;




          (iii) to the extent permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, by delivering a written direction to Catalyst that the Option
be exercised pursuant to a “cashless” exercise/sale procedure (pursuant to which funds to
pay for exercise of the Option are delivered to Catalyst by a broker upon receipt of stock
certificates from Catalyst) or a “cashless” exercise/loan procedure (pursuant to which the
participants would obtain a margin loan from a broker to fund the exercise) through a
licensed broker acceptable to Catalyst whereby the stock certificate or certificates for the
            shares of Common Stock for which the Option is exercised will be delivered to such broker as
the agent for the individual exercising the Option and the broker will deliver to Catalyst
cash (or cash equivalents acceptable to Catalyst) equal to the purchase price for the shares
of Common Stock purchased pursuant to the exercise of the Option plus the amount (if any) of
federal and other taxes that Catalyst may, in its judgment, be required to withhold with
respect to the exercise of the Option;




          (iv) to the extent permitted by applicable law and agreed to by the Committee in its
sole and absolute discretion, by the delivery of a promissory note of the participant to
Catalyst on such terms as the Committee shall specify in its sole and absolute discretion;
or




          (v) by a combination of the methods described in clauses (i), (ii), (iii) and (iv).



          (c) A bona fide written representation and agreement, in a form satisfactory to the Committee,
signed by the Optionee or other person then entitled to exercise such Option or portion, stating
that the shares of Common Stock are being acquired for his own account, for investment and without
any present intention of distributing or reselling said shares or any of them except as may be
permitted under the Securities Act and then applicable rules and regulations thereunder, and that
the Optionee or other person then entitled to exercise such Option or portion will indemnify
Catalyst against and hold it free and harmless from any loss, damage, expense or liability
resulting to Catalyst if any sale or distribution of the shares of Common Stock by such person is
contrary to the representation and agreement referred to above. The Committee may, in its absolute
discretion, take whatever additional actions it deems appropriate to insure the observance and
performance of such representation and agreement and to effect compliance with the Securities Act
and any other federal or state securities laws or regulations. Without limiting the generality of
the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that
any subsequent transfer of shares of Common Stock acquired on an Option exercise does not violate
the Securities Act, and may issue stop-transfer orders covering such shares. Share certificates
evidencing stock issued on exercise of this Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall, however, not be required
if the shares of Common Stock to be issued pursuant to such exercise have
been registered under the Securities Act, and such registration is then effective in respect
of such shares; and






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          (d) Full payment to Catalyst (or other employer corporation) of all amounts which, under
federal, state or local tax law, it is required to withhold upon exercise of the Option; and




          (e) In the event the Option or any portion thereof shall be exercised pursuant to Section 4.1
by any person or persons other than the Optionee, appropriate proof of the right of such person or
persons to exercise the Option.




Section 4.4 Conditions to Issuance of Stock Certificates




          The shares of Common Stock deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued shares or issued shares which have then
been reacquired by Catalyst. Such shares of Common Stock shall be fully paid and nonassessable.
Catalyst shall not be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of
the following conditions:




          (a) The admission of such shares of Common Stock to listing on all stock exchanges on which
such class of stock is then listed; and




          (b) The completion of any registration or other qualification of such shares of Common Stock
under any state or federal law or under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which the Committee shall, in its absolute
discretion, deem necessary or advisable; and




          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be necessary or
advisable; and




          (d) The receipt by Catalyst of full payment for such shares of Common Stock, including payment
of all amounts which, under federal, state or local tax law, Catalyst (or other employer
corporation) is required to withhold upon exercise of the Option; and




          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Committee may from time to time establish for reasons of administrative convenience.




Section 4.5 Rights as Shareholder




          The holder of the Option shall not be, nor have any of the rights or privileges of, a
shareholder of Catalyst in respect of any shares of Common Stock purchasable upon the exercise of
any part of the Option unless and until certificates representing such shares of Common Stock shall
have been issued by Catalyst to such holder.




ARTICLE V




EFFECT OF CHANGES IN CAPITALIZATION




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Section 5.1 Recapitalization




          If the outstanding shares of Common Stock of Catalyst are increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities of Catalyst by
reason of any recapitalization, reclassification, reorganization (other than as described in
Section 5.2 below), stock split, reverse split, combination of shares, exchange of shares, stock
dividend or other distribution payable in capital stock of Catalyst, or other increase or decrease
in such shares effected without receipt of consideration by Catalyst, an appropriate and
proportionate adjustment shall be made by the Committee in the number and kind of shares of Common
Stock issuable upon exercise of this Option, and in the purchase price per share of this Option.




Section 5.2 Reorganization or Change in Control




          In the event of a Reorganization (as defined below) of Catalyst or a Change in Control (as
defined below) of Catalyst, the Committee may in its sole and absolute discretion, provide that
this Option terminates, provided however, that Optionee shall have the right, immediately prior to
the occurrence of such Reorganization or Change in Control and during such reasonable period as the
Committee in its sole discretion shall determine and designate, to exercise any vested portion of
this Option in whole or in part. In the event that the Committee does not terminate this Option
upon a Reorganization of Catalyst then this Option shall upon exercise thereafter entitle the
Optionee to such number of shares of Common Stock or other securities or property to which a holder
of shares of Common Stock would have been entitled to upon such Reorganization. For purposes of
this Agreement a “Reorganization” of an entity shall be deemed to occur if such entity is a party
to a merger, consolidation, reorganization, or other business combination with one or more entities
in which said entity is not the surviving entity, if such entity disposes of substantially all of
its assets, or if such entity is a party to a spin-off, split-off, split-up or similar transaction;
provided, however, that the transaction shall not be a Reorganization if Catalyst, any parent or
any subsidiary is the surviving entity. For purposes of this Agreement, a “Change in Control”
shall be deemed to occur if any person or group of persons shall acquire direct or indirect
beneficial ownership (whether as a result of stock ownership, revocable or irrevocable proxies or
otherwise) of securities of an entity, pursuant to one or more transactions, such that after
consummation and as a result of such transaction, such person has direct or indirect beneficial
ownership of 50% or more of the total combined voting power of the Common Stock. For purposes of
this Agreement, a “person” shall mean any person, corporation, partnership, joint venture or other
entity or any group (as such term is defined for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than a parent or subsidiary, and
“beneficial ownership” shall be determined in accordance with Rule 13d-3 under the Exchange Act.




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Section 5.3 Dissolution or Liquidation




          Upon the dissolution or liquidation of Catalyst, this Option shall terminate. In the event of
any termination of this Option under this Section 5.3, Optionee shall have the right, immediately
prior to the occurrence of such termination and during such reasonable period as the Committee in
its sole discretion shall determine and designate, to exercise this Option in whole or in part,
whether or not this Option was otherwise exercisable at the time such termination occurs and
without regard to any vesting or other limitation on exercise imposed pursuant to Article III
above.




Section 5.4 Adjustments




          Adjustments under this Article V related to stock or securities of Catalyst shall be made by
the Committee, whose determination in that respect shall be final, binding, and conclusive. No
fractional shares of Common Stock or units of other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share or unit.




Section 5.5 No Limitations




          The grant of this Option hereunder shall not affect or limit in any way the right or power of
Catalyst to make adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or
any part of its business or assets.




ARTICLE VI




OTHER PROVISIONS




Section 6.1 Administration




          All actions taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon the Optionee, Catalyst and all other interested persons. No
member of the Committee shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Option. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement except with respect to matters which under Rule 16b-3 or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be determined in the sole
discretion of the Committee.




Section 6.2 Option Not Transferable




          This Option shall not be assignable or transferable by the Optionee, other than by will or the
laws of descent and distribution; provided, however, that this Option may be transferred or
assigned to (i) family members or entities (including trusts) established for the benefit of the
Optionee or the
Optionee’s family members or (ii) any other person, as permitted




9









 







by applicable securities law.
Any Option assigned or transferred pursuant to this Section 6.2 shall continue to be subject to
the same terms and conditions as were applicable to the Option immediately before the transfer;
provided, however, that any Option transferred for value may not be exercised under any
Registration Statement on Form S-8 and upon exercise of such transferred Option the holder will
only be entitled to receive shares of restricted stock that have not been registered under the
Securities Act of 1933.




Section 6.3 Shares to Be Reserved




          Catalyst shall at all times during the term of the Option reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy the requirements of this
Agreement.




Section 6.4 Notices




          Any notice to be given under the terms of this Agreement to Catalyst shall be addressed to
Catalyst in care of the officer designated as the Stock Option Administrator from time to time, and
any notice to be given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 6.4, either party may hereafter
designate a different address for notices to be given to him. Any notice which is required to be
given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal
representative if such representative has previously informed Catalyst of his status and address by
written notice under this Section 6.4. Any notice shall be deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a
post office or branch post office regularly maintained by the United States Postal Service;
provided, however, that any notice to be given by the Optionee relating to the
exercise of the Option or any portion thereof shall be deemed duly given upon receipt by the Stock
Option Administrator or his office.




Section 6.5 Titles




          Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.




Section 6.6 Construction




          This Agreement shall be administered, interpreted and enforced under the internal laws of the
State of Florida without regard to conflicts of laws thereof.




Section 6.7 Conformity to Securities Laws




          The Optionee acknowledges that this Agreement is intended to conform to the extent necessary
with all provisions of the Securities Act and the Exchange Act and any and all regulations and
rules promulgated by the Securities and Exchange Commission thereunder, including, without
limitation, the applicable exemptive conditions of Rule 16b-3. Notwithstanding anything herein to
the contrary, the Option is granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted





10









 







by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.




Section 6.8 Amendments




          This Agreement may be amended without the consent of the Optionee provided that such amendment
would not impair any rights of the Optionee under this Agreement. No amendment of this Agreement
shall, without the consent of the Optionee, impair any rights of the Optionee under this Agreement.




          IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.




	 	 	 	 	 
	 	CATALYST PHARMACEUTICAL PARTNERS, INC.

 	 
	 	By:  	/s/ Patrick J. McEnany
 	 
	 	 	Name:  	Patrick J. McEnany 	 
	 	 	Title:  	President and CEO 	 
	 



	 	 	 	 	 
	 	 	 
	 	/s/ Patrick J. McEnany
 	 
	 	Optionee 	 
	 	 	 
	 



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