THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
APPLICABLE STATE SECURITIES LAWS.  THIS NOTE AND THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR THE
AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE 1933 ACT
AND APPLICABLE STATE SECURITIES LAWS.

ARISTON PHARMACEUTICALS, INC.

Amended and Restated Convertible Promissory Note

$777,777.76
March 1, 2011

Ariston Pharmaceuticals, Inc., a Delaware corporation (the “Company”), for value
received, hereby promises to pay to the order of ICON Clinical Research Limited,
an Irish limited company (the “Holder”) in lawful money of the United States of
America at the address for notices to Holder set forth below, the principal
amount of Seven Hundred Seventy Seven Thousand Seven Hundred Seventy Seven and
76/100 Dollars ($777,777.76), together with interest as set forth below.
 
1.           Principal and Interest.  Unless converted or prepaid as set forth
below, the Company promises to pay (i) a single installment of principal only on
March 31, 2011 in the amount of $100,000.00; plus (ii) a single installment of
$355,855.57 on January 31, 2012, consisting of (A) $63,663.76 of interest on the
unpaid principal amount of this Note from the date hereof through and including
January 31, 2012 at the rate of eight percent (8%) per annum, compounded monthly
and computed on the basis of a 365-day year based upon the actual number of days
elapsed, plus (B) a lump-sum payment of $292,191.81 of principal; plus (iii)
beginning February 29, 2012 and on the last day of each succeeding calendar
month thereafter until paid, (A) interest on the unpaid principal amount of this
Note at the rate of five percent (5%) per annum, not compounded and computed on
the basis of a 365-day year based upon the actual number of days elapsed,
together with (B) installments of principal of $27,777.78, with the final such
installment due and payable on March 31, 2013 (the “Maturity Date”).
 
2.           Prepayment.  Unless earlier converted in accordance with Section 3
below, some or all of the principal and unpaid accrued interest of this Note may
be prepaid without penalty, in whole or in part.  Any prepayment of this Note
will be credited first against accrued interest, then principal.  Upon payment
in full of the amount of all principal and interest payable hereunder, this Note
shall be surrendered to the Company for cancellation.  In the event that the
prepayment does not repay all of the outstanding principal and interest, (i) the
Company shall issue a replacement note to the Holder in respect of the remaining
unpaid principal within 10 days of the relevant prepayment and (ii) repayments
of the principal and interest shall continue in the same amounts as provided for
in Section 1 and in accordance with the terms of this Note until payment in
full.
 
 
 

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3.           Conversion Rights.
 
3.1           Voluntary Conversion by the Holder.  At any time on or prior to
the Maturity Date, if not previously converted pursuant to Section 3.2 below,
some or all unpaid principal amounts plus outstanding interest under this Note
shall, at the sole election of the Holder, be convertible into that number of
fully paid and non-assessable shares of common stock of Manhattan
Pharmaceuticals, Inc. (“MPI”) as listed on Over The Counter Bulletin Board (the
“Manhattan Common Stock ”) equal to five (5) shares of Manhattan Common Stock
for each $1.00 of unpaid principal, interest, and other fees owed on the date of
conversion (the equivalent of conversion at $.20 per share), as adjusted for
stock splits, consolidation, subdivision, stock dividends and other
recapitalizations with respect to such shares of Manhattan Common Stock.  In the
event the foregoing calculations result in a fractional share, then the Holder
shall receive the cash value of any such fractional share on the date of
conversion (based on the then amount market value of such shares).

3.2           Voluntary Conversion by the Company.  At any time on or prior to
the Maturity Date, if not previously converted pursuant to Section 3.1 above and
if MPI’s common stock trades at a price equal to or greater than $.30 per share
for a period of twenty (20) consecutive trading days and also on the date of
conversion pursuant to this Section 3.2, all unpaid amounts of principal,
interest, and other fees under this Note shall, at the sole election of the
Company, be convertible into that number of shares of Manhattan Common Stock
equal to five (5) shares of Manhattan Common Stock for each $1.00 of unpaid
principal owed on the date of conversion (the equivalent of conversion at $.20
per share), as adjusted for stock splits, consolidation, subdivision, stock
dividends and other recapitalizations with respect to such shares of Manhattan
Common Stock provided (i) there is no restriction on the Holder’s ability to
immediately and freely sell all of the shares of Manhattan Common Stock issued
to it on the Over The Counter Bulletin Board at the prevailing market price and
(ii) the Company notifies the Holder of the Company’s intention to convert at
least 2 trading days but not more than 10 trading days prior to the conversion
date .  In the event the foregoing calculations result in a fractional share,
then the Holder shall receive the cash value of any such fractional share on the
date of conversion (based on the then amount market value of such shares).

3.3           Mechanics of Conversion.  Upon conversion of some or all of the
outstanding principal, interest or other fees outstanding under this Note into
shares of the Manhattan Common Stock in accordance with this Section 3, the
applicable amount of principal, interest and other fees to be converted shall be
converted without any further action by the Holder; provided, that the Company
shall not be obligated to cause the issuance of certificates evidencing the
shares of the securities issuable upon such conversion unless the Note is either
delivered to the Company or its transfer agent, or the Holder notifies the
Company or its transfer agent that such Note has been lost, stolen or destroyed
and executes an agreement satisfactory to the Company and MPI (both acting
reasonably and neither shall reject a standard indemnity for this situation) to
indemnify the Company and MPI from any loss incurred by them in connection with
the loss, theft or destruction of such Note.  The Company shall, as soon as
practicable after such delivery and no later than 30 days after such delivery,
or such agreement and indemnification, cause the issuance of and deliver at such
office to such Holder of the Note, a certificate or certificates for the
securities to which the Holder shall be entitled and a check payable to the
Holder in the amount of any cash amounts payable as the result of any fractional
shares.  Such conversion shall be deemed to have been made on the date as
determined by the Company and the Holder, as applicable.  The person or persons
entitled to receive securities issuable upon such conversion shall be treated
for all purposes as the record holder or holders of such securities on such
date.  In the event that after a conversion under Section 3.1, some of the
principal and/or interest under this Note remains outstanding, repayments of the
principal and/or interest shall continue in the same amounts as provided for in
Section 1 and in accordance with the terms of this Note until repaid in full.
 
 
 

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3.4           Obligations of the Company and MPI with Respect to Manhattan
Common Stock.  Until all amounts of principal, interest, and other amounts due
pursuant to this Note have been paid in full, or such amounts have been
converted into shares of Manhattan Common Stock pursuant to this Section 3, MPI
shall reserve that number of shares of Manhattan Common Stock that would be
issued to the Holder upon the conversion of this Note.  MPI hereby aggress to be
bound by the terms and conditions of this Section 3 with respect to the issuance
of Manhattan Common Stock to the Holder.

4.           Attorney’s Fees.  If the indebtedness represented by this Note or
any part thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the hands of attorneys for collection
after default, the Company agrees to pay, in addition to the principal and
interest payable hereunder, reasonable attorneys’ fees and costs incurred by the
Holder.
 
5.           Notices.  Any notice, other communication or payment required or
permitted to be made to the Company shall be in writing and shall be deemed to
have been given to the Company on the next business day after dispatch if sent
by reputable overnight courier addressed to the Company as follows:
 
Ariston Pharmaceuticals, Inc.
c/o Manhattan Pharmaceuticals, Inc.
48 Wall Street
New York, New York 10005

6.           Defaults and Remedies.
 
6.1           Events of Default.  An “Event of Default” shall occur hereunder
if:

(a)           the Company shall default in the payment of the principal or
interest of this Note, when and as the same shall become due and payable, and
such nonpayment continues for a period of five (5) days after the due date;
 
(b)           if the Company shall commence any proceeding in bankruptcy or for
dissolution, liquidation, winding-up, composition or other relief under state or
federal bankruptcy laws or the Company ceasing or threatening to cease to carry
on business;
 
 
 

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(c)           if the Company undergoes a Change of Control (being defined as a
sale of all or substantially all of its assets, or a merger, consolidation, or
other transaction resulting in its stockholders immediately prior to such
transaction holding less than a majority of the shares of voting stock
immediately after such transaction);
 
(d)           if such proceedings are commenced against the Company, or a
receiver or trustee is appointed for the Company or a substantial part of its
property, and such proceeding or appointment is not dismissed or discharged
within ninety (90) days after its commencement; or
 
(e)           the Company breaches or violates any of the terms and conditions
of this Note.
 
6.2           Acceleration.  If an Event of Default occurs under Section 6.1(b)
or (c), then the outstanding principal and interest on this Note shall
automatically become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are expressly waived.  If any other
Event of Default occurs and is continuing, the Holder, by written notice to the
Company, may declare the principal and interest on this Note to be due and
payable immediately.  Upon any such declaration of acceleration, such principal
and interest shall become immediately due and payable and the Holder shall be
entitled to exercise all of its rights and remedies hereunder, whether at law or
in equity.  The failure of the Holder to declare the Note due and payable shall
not be a waiver of its right to do so, and the Holder shall retain the right to
declare the Note due and payable unless it shall execute a written waiver.

7.           No Impairment.  The Company will not, by amendment of its
Certificate of Incorporation or Bylaws or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Note, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holder of this
Note against impairment.  For the avoidance of doubt, the Company and the Holder
understand and agree that the Company’s proposed merger with MPI shall not be a
breach of this Section 7.
 
8.           Waiver of Notice of Presentment.  The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice
of protest and notice of dishonor.  No delay on the part of the Holder in
exercising any right hereunder shall operate as a waiver of such right or any
other right.
 
9.           Nonwaiver.  The failure of the Holder to enforce or exercise any
right or remedy provided in this Note or at law or in equity upon any default or
breach shall not be construed as waiving its rights to enforce or exercise such
or any other right or remedy at any later date.  No exercise of the rights and
powers granted in or held pursuant to this Note by the Holder, and no delays or
omissions in the exercise of such rights and powers shall be held to exhaust the
same or be construed as a waiver thereof, and every such right and power may be
exercised at any time and from time to time.
 
 
 

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10.         Governing Law.  This Note shall be construed in accordance with the
laws of the State of Delaware, without regard to the conflicts of laws
provisions thereof.
 
11.         No Stockholder Rights.  Nothing contained in this Note shall be
construed as conferring upon the Holder or any other person the right to vote or
to consent or to receive notice as a stockholder of the Company provided that
these rights will arise as to MPI on the issue of Manhattan Common Stock to the
Holder.
 
12.         Amendment.  Any term of this Note may be amended or waived with the
written consent of the Company and the Holder.
 
13.         No deductions. The Company shall not make any deductions from or
claim set off against any amounts payable to the Holder pursuant to this Note.
 
14.         Amended and Restated Note.  This Note amends and restates, and
supersedes, that certain Convertible Promissory Note issued March 8, 2010 by the
Company in favor of the Holder (the “Original Note”), which Original Note is
hereby deemed null and void and of no further force or effect. The Original Note
was issued pursuant to that certain Settlement Agreement between the Company and
the Holder, dated as of the date of the Original Note (the “Settlement
Agreement”), and was subject to the terms of the Settlement Agreement.  This
Note is not subject to the Settlement Agreement, which Settlement Agreement has
been fully performed.

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This AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE is issued as of the date
first above written.
 
 

 
ARISTON PHARMACEUTICALS, INC.
                 
By:
            
Name:
Michael McGuinness
   
Title:
Chief Financial Officer
 

ACKNOWLEDGED AND AGREED

FOR PURPOSES OF SECTION 3 HEREOF:

MANHATTAN PHARMACEUTICALS, INC.

By:
      
Name:
Michael McGuinness
 
Title:
Chief Operating and Financial Officer
     

 
 

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