Exhibit 10.37

REGISTRATION RIGHTS AGREEMENT
 
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of March 2,
2010, by and among (i) Manhattan Pharmaceuticals, Inc., a Delaware corporation
(the “Company”), (ii) each person listed on Exhibit A attached hereto, as may be
amended from time to time (each an “Investor” and, collectively, the
“Investors”), (iii) National Securities Corporation, a Washington corporation
(the “Placement Agent”) and (iv) each person or entity that subsequently becomes
a party to this Agreement pursuant to, and in accordance with, the provisions of
Section 13 hereof (each an “Investor Permitted Transferee” and, collectively,
the “Investor Permitted Transferees”).
 
WHEREAS, the Company has agreed to issue and sell to the Investors (the
“Offering”), and the Investors have agreed to purchase from the Company, an
aggregate of up to 160 units (each a “Unit” and, collectively, the “Units”) for
an aggregate purchase price of $4,000,000 (the “Offering Amount”), subject to an
overallotment option to purchase up to an additional 40 Units ($1,000,000) (the
“Overallotment Amount”), priced at $25,000 per Unit, with each Unit consisting
of (i) 357,143 shares (each a “Unit Share” and, collectively, the “Unit Shares”)
of the Company’s common stock, $0.001 par value per share (the “Common Stock”),
and (ii) 535,714 warrants (each a “Warrant” and, collectively, the “Warrants”),
each of which will entitle the holder to purchase one additional share of Common
Stock (each a “Warrant Share” and collectively, the “Warrant Shares”) as
provided in the applicable subscription agreement between the Company and each
of the Investors (the “Subscription Agreement”); and

WHEREAS, the Company has agreed to provide certain registration rights with
respect to the resale of the Unit Shares, all on the terms and conditions
provided herein; and
 
WHEREAS, the terms of the Subscription Agreement provide that it shall be a
condition precedent to the closing of the transactions thereunder, for the
Company and the Investors to execute and deliver this Agreement.
 
NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein, the parties hereto hereby agree as follows:
 
1.   DEFINITIONS. The following terms shall have the meanings provided therefore
below or elsewhere in this Agreement as described below:
 
“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

“Closing” shall have the meaning ascribed to such term in the Subscription
Agreement.

 

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“Effectiveness Date” means, (i) with respect to the Initial Registration
Statement, as soon as practicable, but if the Initial Registration Statement is
not subject to a SEC review no later than ninety (90) calendar days after the
Filing Date, and if the Initial Registration Statement is subject to a SEC
review no later than one hundred twenty (120) calendar days after the Filing
Date, and (ii) with respect to any additional Registration Statements which may
be required to be filed hereunder pursuant to Section 3(d) or otherwise, not
later than ninety (90) calendar days following the date on which the additional
Registration Statement is required to be filed hereunder if it is not subject to
a SEC review or if the additional Registration Statement is subject to a SEC
review one hundred twenty (120) calendar days after the date such Registration
Statement is required to be filed hereunder.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
all of the rules and regulations promulgated thereunder.

“Filing Date” shall mean, with respect to the Initial Registration Statement,
within sixty (60) calendar days after the Final Closing, provided, however, that
if the Filing Date falls on a Saturday, Sunday or other day, that the SEC is
closed for business the Filing Date shall be extended to the next Business Day.

“Final Closing” shall mean the meaning ascribed to such term in the Confidential
Private Placement Memorandum.

“First Closing” shall have the meaning ascribed to such term in the Subscription
Agreement.

“Holder” or “Holders” shall mean the holder or holders, as the case may be, from
time to time of Registrable Securities.

“Initial Nordic Registration Statement” shall mean the registration statement
filed by the Company with the SEC (File No. 333-150580), as amended or
supplemented from time to time.

 “Initial Registration Statement” shall mean the initial Registration Statement
filed pursuant to this Agreement.

“Investor Permitted Transferees” as defined in the Preamble.

“Investors” shall mean, collectively, the Investors and the Investor Permitted
Transferees; provided, however, that the term “Investors” shall not include any
of the Investors or any of the Investor Permitted Transferees that do not own or
hold any Registrable Securities.

“Nordic Registrable Securities” shall mean any securities held by Nordic which
the Company is required to register pursuant to the Registration Rights
Agreement dated February 25, 2008 by and among the Company and Nordic Biotech
Venture Fund II K/S (“Nordic”).

“Nordic Registration Statement” shall mean any registration statement filed
pursuant to the Registration Rights Agreement, dated February 25, 2008, by and
among the Company and Nordic Biotech Venture Fund II K/S, as amended from time
to time, including the Initial Nordic Registration Statement.

 
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“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or agency or subdivision thereof) or other entity of
any kind.

“Placement Agent” as defined in the Preamble.

“Registrable Securities” shall mean the Unit Shares.
 
“Registration Statement” means any one or more registration statements filed
(and/or required to be filed pursuant hereto) with the SEC by the Company on
Form S-3, or in the event the Company is not eligible to use Form S-3, on Form
S-1, for the purpose of registering the Registrable Securities, including (in
each case) the prospectus, amendments and supplements to such registration
statement or prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.  The term
“Registration Statement” shall include, but not be limited to, the Initial
Registration Statement and shall not include any Nordic Registration Statement.
 
“Rule 144” shall mean Rule 144 promulgated by the SEC pursuant to the Securities
Act and any successor or substitute rule, law or provision.
 
“Rule 172” means Rule 172 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same purpose and effect as
such Rule.

“Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same purpose and effect as
such Rule.
 
“Rule 424” means Rule 424 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same purpose and effect as
such Rule.
 
“SEC” shall mean the United States Securities and Exchange Commission.
 
“SEC Guidance” means (i) any publicly-available written guidance, or rule of
general applicability of the SEC staff, or (ii) oral or written comments,
requirements or requests of the SEC staff to the Company in connection with the
review of a Registration Statement.
 
“Securities Act” shall mean the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.
 
“Trading Day” means (a) if the Common Stock is listed or quoted on the
NASDAQ  Market, then any day during which securities are generally eligible for
trading on the NASDAQ Market, or (b) if the Common Stock is not then listed or
quoted and traded on the NASDAQ Market, then any Business Day.

 
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“Unit Shares” as defined in the preamble.

“Warrant Shares” as defined in the preamble. 
 
2.   EFFECTIVENESS; This Agreement shall become effective and legally binding
only if the First Closing occurs.

3.   MANDATORY REGISTRATION.

(a)   The Company shall be required to file an Initial Registration Statement on
or prior to the Filing Date registering the Registrable Securities for resale by
the Holders as selling stockholders thereunder.  On or prior to the Filing Date,
the Company shall prepare and file with the SEC an Initial Registration
Statement for the purpose of registering under the Securities Act the resale of
all, or such portion as permitted by SEC Guidance (and the Company shall make a
commercially reasonable effort to advocate with the SEC for the registration of
all or the maximum number of the Registrable Securities as permitted by SEC
Guidance) of the Registrable Securities by, and for the account of, the Holders
as selling stockholders thereunder, that are not then registered on an effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415.  No other securities shall be included in the Initial Registration
Statement that is filed except for the Registrable Securities and the Nordic
Registrable Securities. Each Registration Statement (including the Initial
Registration Statement) shall contain the “Plan of Distribution” included in the
Investor Questionnaire, in substantially the form of which was provided to
Investors with the Subscription Agreement (except if otherwise required pursuant
to written comments received from the SEC upon a review of such Registration
Statement). The Company shall cause a Registration Statement to be declared
effective by the SEC under the Securities Act as promptly as practicable after
the filing thereof, but in any event on or prior to the applicable Effectiveness
Date.
 
(b)   The Company shall be required to keep a Registration Statement effective
until such date that is the earlier of (the “Effectiveness Period”) (i) the date
as of which all of the Holders as selling stockholders thereunder may sell all
of the Registrable Securities registered for resale thereon without restriction
pursuant to Rule 144 or (ii) the date when all of the Registrable Securities
registered thereunder shall have been sold (such date is referred to herein as
the “Mandatory Registration Termination Date”). Thereafter, the Company shall be
entitled to withdraw such Registration Statement and the Holders shall have no
further right to offer or sell any of the Registrable Securities registered for
resale thereon pursuant to the respective Registration Statement (or any
prospectus relating thereto).
  

 
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(c)   Notwithstanding any other provision of this Agreement, if any SEC Guidance
sets forth a limitation on the number of Registrable Securities to be registered
in the Initial Registration Statement (and the Company has made a commercially
reasonable effort to advocate with the SEC for the registration of all or a
greater number of Registrable Securities), the number of Registrable Securities
to be registered on such Registration Statement will be reduced on a pro rata
basis among the Investors and Nordic based on the total number of unregistered
Unit Shares and Nordic Registrable Securities held by the Investors and Nordic,
respectively, on a fully diluted basis.  The Company shall file a new
registration statement as soon as reasonably practicable covering the resale by
the Holders and Nordic of not less than the number of such Registrable
Securities and Nordic Registrable Securities, respectively, that are not
registered in the Initial Registration Statement.  The Company shall not be
liable for liquidated damages under Section 5(a) as to any Registrable
Securities which are not permitted by the SEC to be included in a Registration
Statement due solely to SEC Guidance from time to time.  In such case, any
liquidated damages payable under Section 5(a) shall be calculated to apply only
the percentage of Registrable Securities which are permitted in accordance with
SEC Guidance to be included in such Registration Statement.

(d)   If during the Effectiveness Period, subject to Section 3(a) and Section
3(c), the Company becomes aware that the number of Registrable Securities at any
time exceeds the number of Registrable Securities then registered for resale in
a Registration Statement, then the Company shall file as soon as reasonably
practicable an additional Registration Statement covering the resale by the
Holders of not less than the number of such Registrable Securities that are not
then registered.

(e)           Notwithstanding any other provision of this Agreement, if during
the Effectiveness Period any of the Registrable Securities become eligible for
resale without restriction pursuant to Rule 144 (the “Rule 144 Eligible
Securities”) then the number of Registrable Securities outstanding at any one
time shall be reduced by the number of Rule 144 Eligible Securities and the
Company may at its option file an amendment to any Registration Statement to
reduce the number of Registrable Securities accordingly.  The Company
acknowledges that the Company’s obligation to file its periodic disclosure
documents for the twelve (12) month period preceding the date of sale is a
“restriction” as that term is used in the first sentence of this Section 3(e).

4.   PIGGYBACK REGISTRATION.
 
(a)   If, at any time, commencing on the date of the First Closing, the Company
proposes to prepare and file with the SEC a registration statement under the
Securities Act other than a Nordic Registration Statement, the Company will give
written notice to each Holder and the Placement Agent of its intention to do so
by certified mail and shall include all of the Registrable Securities in such
registration statement; provided, however, that in connection with any offering
involving an underwriting of shares of Common Stock, the Company shall not be
required to include the Registrable Securities of any Holder in such
registration statement unless they accept the terms of the underwriting as
agreed upon between the Company and its underwriters, and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company.  In the event that the
underwriters determine that less than all of the Registrable Securities required
to be registered can be included in such offering, then the Registrable
Securities that are included shall be apportioned, among the Investors on a pro
rata basis based on the total number of unregistered Unit Shares held by such
Investors and requested to be included in the Registration Statement on a fully
diluted basis.  The Company shall use its best efforts to effect the
registration under the Securities Act of the Registrable Securities at the
Company’s sole cost and expense and at no cost or expense to the Holders (other
than any commission, discounts or counsel fees payable by the Holders, as
further provided in Section 7 hereof).

 
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(b)   Notwithstanding the preceding provisions of this Section 4, the Company
shall have the right any time after it shall have given written notice pursuant
to this Section 4 (irrespective of whether any written request for inclusion of
such securities shall have already been made) to elect not to file any proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.

(c)   The Company shall use its commercially reasonable efforts to cause the
registration statement filed pursuant to this Section 4 to become effective as
promptly as possible under the circumstances at the time prevailing and, if any
stop order shall be issued by the SEC in connection therewith, to use its
reasonable efforts to obtain the removal of such order.

(d)           To the extent any Registrable Securities of the Holders are
included in such registration statement, the Company shall notify each Holder by
facsimile or e-mail as promptly as practicable, and in any event, within two (2)
Trading Days, after such registration statement is declared effective and shall
simultaneously provide the Holders with a copy of any related prospectus to be
used in connection with the sale or other disposition of the Registrable
Securities covered thereby.

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5.   PENALTIES/SUSPENSION OF A REGISTRATION STATEMENT.

(a)   If: (i) the Initial Registration Statement and any other Registration
Statement other than a Nordic Registration Statement is not filed on or prior to
the Filing Date, or (ii) the Company fails to file with the SEC a request for
acceleration in accordance with Rule 461 promulgated under the Securities Act,
within five (5) Trading Days of the date that the Company is notified (orally or
in writing, whichever is earlier) by the SEC that the Initial Registration
Statement or any other Registration Statement will not be “reviewed” or not be
subject to further review and the Company has obtained any required clearance
from the Financial Industry Regulatory Authority, Inc. (“FINRA”), or (iii) prior
to the Effectiveness Date of the Initial Registration Statement or any other
Registration Statement, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the SEC in respect of such
Initial Registration Statement or any other Registration Statement within ten
(10) Business Days after the receipt of comments by or notice from the SEC that
such amendment is required in order for such Initial Registration Statement or
any other Registration Statement to be declared effective, or (iv) subject to
the tolling provisions contained herein, as to, in the aggregate among all
Investors on a pro rata basis based on the amount of Registrable Securities held
by each of them, respectively, the lesser of (A) all of the Registrable
Securities and (B) the maximum number of Registrable Securities permitted by SEC
Guidance (collectively, the “Initial Shares”), a Registration Statement
registering for resale all of the Initial Shares is not declared effective by
the SEC by the Effectiveness Date, or (v) after the Effectiveness Date of the
Initial Registration Statement or any other Registration Statement, subject to
the tolling provisions contained herein, such Initial Registration Statement or
other Registration Statement ceases for any reason to remain continuously
effective as to all Registrable Securities included in such Initial Registration
Statement or other Registration Statement, as applicable, or the Investors are
otherwise not permitted to utilize the Prospectus therein to resell such
Registrable Securities, for more than ten (10) consecutive Business Days or more
than an aggregate of twenty (20) Business Days during any twelve (12) month
period (which need not be consecutive Business Days), provided, however, that no
such payments shall be required in connection with a Suspension Period (as
hereinafter defined) (any such failure or breach being referred to as an
“Event,” and for purposes of clause (i), (iv) or (v) the date on which such
Event occurs, or for purposes of clause (ii) the date on which such five (5)
Trading Day period is exceeded, or for purposes of clause (iii) the date which
such ten (10) Business Day period is exceeded, or for purposes of clause (v) the
date on which such ten (10) or twenty (20) Business Day period, as applicable,
is exceeded being referred to as “Event Date”), then, in addition to any other
rights the Investors may have hereunder or under applicable law, on each such
Event Date and on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall, subject to Section 3(c), pay to each Investor
on a monthly basis within three (3) Business Days of the end of the month an
amount in cash, as partial liquidated damages and not as a penalty, equal to
one  (1.0%) percent of the aggregate purchase price paid by such Investor
pursuant to the Subscription Agreement for any Registrable Securities then held
by such Investor (as applicable under clause (iv)) that are not then eligible
for resale pursuant to the Initial Registration Statement or other Registration
Statement. The parties agree that the maximum aggregate liquidated damages
payable to an Investor under this Agreement shall be ten (10%) percent of the
aggregate amount paid by such Investor for its respective Registrable Securities
pursuant to the Subscription Agreement. If the Company fails to pay any partial
liquidated damages pursuant to this Section 5(a) in full within ten (10)
calendar days after the date payable, the Company will be required to pay such
liquidation damages in cash only and shall pay interest thereon at a rate of
eighteen (18%) percent per annum (or such lesser maximum amount that is required
to be paid by applicable law) to the Investor, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full; provided, however, that if the tenth calendar day
after the date payable is not a Business Day then the payment shall be due on
the next Business Day. The partial liquidated damages pursuant to the terms
hereof shall apply on a daily pro-rata basis for any portion of a month prior to
the cure of an Event.
 
(b)   The Company shall notify the Placement Agent by facsimile or e-mail as
promptly as practicable, and in any event, within one (1) Trading Day, after a
Registration Statement is declared effective and shall simultaneously provide
the Placement Agent with an electronic copy of any related prospectus to be used
in connection with the sale or other disposition of the Registrable Securities
covered thereby.  The Placement Agent shall notify each Holder as promptly as
practicable, and in any event, within one (1) Trading Day, after receipt of such
notice and shall simultaneously provide each Holder with an electronic copy of
any such related prospectus to be used in connection with the sale or other
disposition of the Registrable Securities covered thereby.   Failure to notify
the Holders in accordance with this Section 5(b) shall be deemed an Event under
Section 5(a).

 
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(c)           No Investor shall be entitled to a payment pursuant to this
Section 5 if effectiveness of a Registration Statement has been delayed or a
prospectus has been unavailable as a result of (i) a failure by such Investor to
promptly provide on request by the Company the information required under the
Subscription Agreement or this Agreement or requested by the SEC as a condition
to effectiveness of a Registration Statement; (ii) the provision of inaccurate
or incomplete information by such Investor; or (iii) a statement or
determination of the SEC that any provision of the rights of the Investor under
this Agreement are contrary to the provisions of the Securities Act.
 
 6.   OBLIGATIONS OF THE COMPANY. In the event the Company files a Registration
Statement with the SEC in connection with Section 3 or Section 4 hereof that
covers the Registrable Securities and uses its commercially reasonable efforts
to cause a Registration Statement to become effective, the Company shall, as
expeditiously as reasonably possible:
 
(a)   Prepare and file with the SEC such amendments and supplements to a
Registration Statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by a Registration
Statement;
 
(b)   Furnish to the selling Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents (including, without limitation,
prospectus amendments and supplements as are prepared by the Company in
accordance with Section 6(a) above) as the selling Holders may reasonably
request in order to facilitate the disposition of such selling Holders’
Registrable Securities;
 
(c)   Use commercially reasonable efforts to comply with all applicable rules
and regulations of the SEC under the Securities Act and the Exchange Act,
including, without limitation, Rule 172 under the Securities Act, file any final
prospectus, including any supplement or amendment thereof, with the SEC pursuant
to Rule 424 under the Securities Act, promptly inform the Holders in writing if,
at any time during a period of effectiveness, the Company does not satisfy the
conditions specified in Rule 172 and, as a result thereof, the Holders are
required to deliver a prospectus in connection with any disposition of
Registrable Securities; notify the selling Holders of the happening of any event
as a result of which the prospectus included in or relating to a Registration
Statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading; and, thereafter,
subject to Section 12 hereof, the Company will promptly prepare (and, when
completed, give notice and provide a copy thereof to each selling Holder) a
supplement or amendment to such prospectus so that such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading; provided, however, that
upon such notification by the Company (which shall be a Suspension pursuant to
Section 12), the selling Holders will not offer or sell Registrable Securities
until the Company has notified the selling Holders that it has prepared a
supplement or amendment to such prospectus and filed it with the SEC or, if the
Company does not then meet the conditions for the use of Rule 172, delivered
copies of such supplement or amendment to the selling Holders (it being
understood and agreed by the Company that the foregoing proviso shall in no way
diminish or otherwise impair the Company’s obligation to promptly prepare a
prospectus amendment or supplement as above provided in this Section 6(c) and
deliver copies of same as above provided in Section 6(b) hereof); and

 
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(d)   Use its best efforts to register and qualify the Registrable Securities
covered by a Registration Statement under such other securities or Blue Sky laws
of such states as shall be reasonably appropriate in the opinion of the Company,
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions, and
provided further that (notwithstanding anything in this Agreement to the
contrary with respect to the bearing of expenses) if any jurisdiction in which
any of such Registrable Securities shall be qualified shall require that
expenses incurred in connection with the qualification therein of any such
Registrable Securities be borne by the selling Holders, then the selling Holders
shall, to the extent required by such jurisdiction, pay their pro rata share of
such qualification expenses.

(e)   Subject to the terms and conditions of this Agreement, including Section 3
and Section 4 hereof, the Company shall use its commercially reasonable efforts
to (i) prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
in the United States, and (ii) if such an order or suspension is issued, obtain
the withdrawal of such order or suspension at the earliest practicable moment
and notify each holder of Registrable Securities of the issuance of such order
and the resolution thereof or its receipt of notice of the initiation or threat
of any proceeding such purpose.
 
(f)   The Company shall (i) comply with all requirements of FINRA with regard to
the issuance of the Registrable Securities and the listing thereof on the OTC
Bulletin Board and such other securities exchange or automated quotation system,
as applicable, and (ii) engage a transfer agent and registrar to maintain the
Company’s stock ledger for all Registrable Securities covered by a Registration
Statement not later than the effective date of a Registration Statement.
 
(g)   The Company will file a Registration Statement and all amendments and
supplements thereto electronically on EDGAR.

7.   OBLIGATIONS OF THE PLACEMENT AGENT AND THE HOLDERS.

(a)           It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement that the selling Holders
shall furnish to the Company a completed Selling Stockholder Questionnaire in
the form attached as Exhibit B hereto (the “Selling Stockholder Questionnaire”)
and such other information regarding them and the securities held by them as the
Company shall reasonably request and as shall be required in order to effect any
registration by the Company pursuant to this Agreement. The Company shall not be
required to include the Registrable Securities of any Holder who fails to
furnish to the Company a fully completed Selling Stockholder Questionnaire at
least three (3) Trading Days prior to the Filing Deadline. Additionally, each
Holder shall promptly notify the Company of any changes in the information
furnished in the Selling Stockholder Questionnaire or otherwise to the Company.

(b)           Each Holder agrees to cooperate with the Company as reasonably
requested by the Company in connection with the filing of any Registration
Statement hereunder, unless such Holder has notified the Company in writing that
such Holder elects to exclude all of its Registrable Securities from such
Registration Statement.

 
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(c)           Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 6(c),
each Holder shall immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement covering such Registrable Securities
until such Holders receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6(c) or receipt of notice that no supplement
or amendment is required.

(d)           Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it or an
exemption therefrom in connection with sale of Registrable Securities pursuant
to any Registration Statement.

(e)           Each Holder and the Placement Agent who are members or affiliated
or associated with members of FINRA will agree, if requested by FINRA, to sign a
lock-up, the form of which shall be satisfactory to FINRA (the “FINRA Lock-Up”),
with respect to the Unit Shares, Warrant and Warrant Shares, in case of the
Holders or, in the case of the Placement Agent, the warrant issued to the
Placement Agent in connection with the transactions contemplated by the
Subscription Agreement (the “Placement Agent Warrants”) and the shares of Common
Stock issuable upon exercise thereof.
 
8.   EXPENSES OF REGISTRATION.

(a)           Except as set forth in Section 6(d), all expenses incurred in
connection with the registration of the Registrable Securities pursuant to this
Agreement (excluding underwriting, brokerage and other selling commissions and
discounts), including without limitation all registration and qualification and
filing fees, printing, fees and disbursements of counsel for the Company shall
be borne by the Company; provided, however, the Holders shall be required to pay
the expenses of counsel and any other advisors for the Holders and any brokerage
or other selling discounts or commissions and any other expenses incurred by the
Holders for their own account.

(b)           Until such time as all of the Registrable Securities have been
sold pursuant to an effective Registration Statement, the Company shall take
such reasonable action as the Holder may request (including, without limitation,
promptly obtaining any required legal opinions from Company counsel necessary to
effect the sale of the Registrable Securities under Rule 144 and paying the
related fees and expenses of such counsel), all to the extent required from time
to time to enable such Holder to sell the Registrable Securities without
registration under the Securities Act pursuant to the provisions of Rule 144
under the Securities Act (or any successor provision). The Company further
covenants to take such action and to provide such legal opinions within five (5)
Business Days after receipt from such Holder (or its representative) of
documentation reasonably required by the Company counsel to provide such
opinion.

 
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9.   DELAY OF REGISTRATION. The Holders shall not take any action to restrain,
enjoin or otherwise delay any registration as the result of any controversy
which might arise with respect to the interpretation or implementation of this
Agreement.
 
10.   INDEMNIFICATION.
 
(a)   To the extent permitted by law, the Company will indemnify and hold
harmless each selling Holder, and each officer and director of such selling
Holder and each person, if any, who controls such selling Holder, within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which they may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue or alleged untrue statement of any material fact contained in a
Registration Statement, in any preliminary prospectus or final prospectus
relating thereto or in any amendments or supplements to a Registration Statement
or any such preliminary prospectus or final prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading; (ii) any blue sky application or other document executed by the
Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify any or all of the Registrable Securities under the securities laws
thereof (any such application, document or information herein called a “Blue Sky
Application”); (iii) the omission or alleged omission to state in a Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading; (iv) any violation by the Company or its
agents of any rule or regulation promulgated under the Securities Act applicable
to the Company or its agents and relating to action or inaction required of the
Company in connection with such registration of the Registrable Securities; or
(v) any failure to register or qualify the Registrable Securities included in
any such Registration Statement in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on a Holder’s behalf; and will reimburse such
selling Holder, or such officer, director or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 10(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, damage, liability or action to the extent that it arises
out of or is based upon (i) an untrue statement or alleged untrue statement or
omission made in connection with a Registration Statement, any preliminary
prospectus or final prospectus relating thereto or any amendments or supplements
to a Registration Statement or any such preliminary prospectus or final
prospectus, in reliance upon and in conformity with written information
furnished expressly for use in connection with a Registration Statement or any
such preliminary prospectus or final prospectus by the selling Holders or (ii)
at any time when the Company has advised the Holder in writing that the Company
does not meet the conditions for use of Rule 172 and as a result that the Holder
is required to deliver a current prospectus in connection with any disposition
of Registrable Securities, an untrue statement or alleged untrue statement or
omission in a prospectus that is (whether preliminary or final) corrected in any
subsequent amendment or supplement to such prospectus that was delivered to the
selling Holder before the pertinent sale or sales by the selling Holder.

 
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(b)   To the extent permitted by law, each selling Holder will severally and not
jointly indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed a Registration Statement, each person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages or liabilities to which the Company or any such
director, officer, controlling person, may become subject to, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in a
Registration Statement or any preliminary prospectus or final prospectus,
relating thereto or in any amendments or supplements to a Registration Statement
or any such preliminary prospectus or final prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent and only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission (i) was
made in a Registration Statement, in any preliminary prospectus or final
prospectus relating thereto or in any amendments or supplements to a
Registration Statement or any such preliminary prospectus or final prospectus,
in reliance upon and in conformity with written information furnished by the
selling Holder expressly for use in connection with a Registration Statement, or
any preliminary prospectus or final prospectus or (ii) at any time when the
Company has advised the Holder in writing that the Company does not meet the
conditions for use of Rule 172 and as a result that the Holder is required to
deliver a current prospectus in connection with any disposition of Registrable
Securities, was corrected in any subsequent amendment or supplement to such
prospectus that was delivered to the selling Holder before the pertinent sale or
sales by the selling Holder; and such selling Holder will reimburse any legal or
other expenses reasonably incurred by the Company or any such director, officer,
controlling person, or other selling Holder in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the liability of each selling Holder hereunder shall be limited to the net
proceeds received by such selling Holder from the sale of Registrable Securities
giving rise to such liability, and provided further,  that the indemnity
agreement contained in this Section 10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of those selling Holder(s) against
which the request for indemnity is being made (which consent shall not be
unreasonably withheld).

 
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(c)   Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 10, notify the indemnifying party in writing of the commencement thereof
and the indemnifying party shall have the right to participate in and, to the
extent the indemnifying party desires, jointly with any other indemnifying party
similarly noticed, to assume at its expense the defense thereof with counsel
satisfactory to the indemnifying party or indemnifying parties, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 10 (except to the extent that such
omission materially and adversely affects the indemnifying person’s ability to
defend such action). In the event that the indemnifying party assumes any such
defense, the indemnified party may participate in such defense with its own
counsel and at its own expense, provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded, based on an opinion of
counsel reasonably satisfactory to the indemnifying party, that there may be a
conflict of interest between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may
be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election to assume
the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless the indemnified
party shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel and one local counsel, reasonably
satisfactory to such indemnifying party, representing all of the indemnified
parties who are parties to such action in which case the reasonable fees and
expenses of counsel shall be at the expense of the indemnifying party.

(d)   Notwithstanding anything to the contrary herein, the indemnifying party
shall not be entitled to settle any claim, suit or proceeding unless in
connection with such settlement the indemnified party receives an unconditional
release with respect to the subject matter of such claim, suit or proceeding and
such settlement does not contain any admission of fault by the indemnified
party.
 
(e)   If the indemnification provided for in this Section 10 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Holders on the other in connection
with the statements or omissions or other matters which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, in the case of an untrue statement, whether
the untrue statement relates to information supplied by the Company on the one
hand or a Holder on the other and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement. The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this subsection (e) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders’ obligations in this subsection to
contribute are several in proportion to their sales of Registrable Securities to
which such loss relates and not joint. In no event shall the contribution
obligation of a Holder be greater in amount than the dollar amount of the net
proceeds (net of all expenses paid by such Holder in connection with any claim
relating to this Section 10 and the amount of any damages such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

 
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(f)   The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 10, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 10 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in a
Registration Statement as required by the Securities Act and the Exchange Act.
 
 11.   REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Holders the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit the Holders to sell the Registrable Securities to
the public without registration, the Company agrees: (i) to make and keep public
information available as those terms are understood in Rule 144, (ii) to file
with the SEC in a timely manner all reports and other documents required to be
filed by an issuer of securities registered under the Securities Act or the
Exchange Act pursuant to Rule 144, (iii) as long as any Holder owns any
Registrable Securities, to furnish in writing upon such Holder’s request a
written statement by the Company that it has complied with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, and to
furnish to such Holder a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed by the Company as may
be reasonably requested in availing such Holder of any rule or regulation of the
SEC permitting the selling of any such Registrable Securities without
registration and (iv) undertake any additional actions reasonably necessary to
maintain the availability of the use of Rule 144.

 
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12.   SUSPENSION. Notwithstanding anything in this Agreement to the contrary, in
the event (i) of any non-voluntary demand on the Company by the SEC or any other
federal or state governmental authority during the period of effectiveness of a
Registration Statement for amendments or supplements to a Registration Statement
or related prospectus or for additional information; (ii) of the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose; or (iv) of
any event or circumstance which requires to comply with applicable law the
making of any changes in a Registration Statement or related prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then the Company shall
furnish to the selling Holders a certificate signed by the President or Chief
Executive Officer of the Company setting forth in detail the facts relating to
one or more of the above described circumstances, and the right of the selling
Holders to use a Registration Statement (and the prospectus relating thereto)
shall be suspended for a period (the “Suspension Period”) of not more than ten
(10) days after delivery by the Company of the certificate referred to above in
this Section 12. During the Suspension Period, none of the Holders shall offer
or sell any Registrable Securities pursuant to or in reliance upon a
Registration Statement (or the prospectus relating thereto). The Company shall
use its best efforts to terminate any Suspension Period as promptly as
practicable.
 
13.   TRANSFER OF REGISTRATION RIGHTS. A Holder shall have the right and may
transfer or assign, at any time and from time to time, in whole or in part, to
one or more Persons its rights hereunder in connection with the transfer of the
Registrable Securities by such Holder to such person, provided that (a) such
Holder complies with all laws applicable thereto, (b) the Company is furnished
with written notice of the name and address of such transferee or assignee and
the Registrable Securities to which such registration rights are being
transferred, (c) at or before the time the Company received the written notice
contemplated by clause (b) of this sentence the transferee or assignee agrees in
writing (i) that it is an “accredited investor” as that term is defined in Rule
501 of Regulation D, (ii) to be bound by, all of the terms and conditions of,
this Agreement by duly executing and delivering to the Company an Instrument of
Adherence in the form attached as Exhibit C hereto and (iii) agree to deliver
the FINRA Lock-Up if so requested by FINRA.
 
14.   ENTIRE AGREEMENT. This Agreement, the Warrants, the Placement Agency
Agreement, the Subscription Agreement and other documents relating to the
Offering (and all exhibits and supplements to such documents) constitute and
contain the entire agreement and understanding of the parties with respect to
the subject matter hereof, and supersede any and all prior negotiations,
correspondence, agreements or understandings with respect to the subject matter
hereof.
  
15.   MISCELLANEOUS.
 
(a)   This Agreement may not be amended, modified or terminated, and no rights
or provisions may be waived, except with the written consent of the Company and
the holders of a majority of the Registrable Securities issued and outstanding
or issuable upon exercise of the Warrants; provided, that, no consent shall be
required in order to add additional Investors as parties hereto in accordance
with the Offering.

 
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(b)   This Agreement shall be governed by and construed and enforced solely and
exclusively in accordance with the internal laws of the State of New York and
without regard to any conflicts of laws principles thereof, and shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, permitted transferees, successors or assigns. This
Agreement shall also be binding upon and inure to the benefit of any transferee
of any of the Registrable Securities.
 
(c)   Each of the parties hereto irrevocably and expressly submits to the
exclusive and sole jurisdiction of the courts of the State of New York located
in New York County and the United States District Court for the Southern
District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any such court in
any such suit, action or proceeding and to the laying of venue in such court.
Each party hereto irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
 
(d)   Any notices, reports or other correspondence (hereinafter collectively
referred to as “correspondence”) required or permitted to be given hereunder
shall be in writing and shall be sent by postage prepaid first class mail,
courier or telecopy or delivered by hand to the party to whom such
correspondence is required or permitted to be given hereunder, and shall be
deemed sufficient upon receipt when delivered personally or by courier,
overnight delivery service or confirmed facsimile, or three (3) business days
after being deposited in the regular mail as certified or registered mail
(airmail if sent internationally) with postage prepaid, if such notice is
addressed to the party to be notified at such party’s address or facsimile
number as set forth below:
 
(i) All correspondence to the Company shall be addressed as follows:
 
Manhattan Pharmaceuticals, Inc.
48 Wall Street, Suite 1100
New York, New York 10005

 
Attention:
Michael McGuinness

 
 
Chief Operating and Financial Officer

 
Facsimile:
(212) 582-3957

 
with a copy to:
 
Lowenstein Sandler PC
65 Livingston Avenue

 
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Roseland, New Jersey 07068

 
Attention:
Anthony Pergola, Esq.

 
Facsimile:
(973) 597-2300

 
(ii) All correspondence to any Investor shall be sent to such Investor at the
address set forth in the Investor Counterpart Signature Page to the Subscription
Agreement.
 
(iii) Any entity may change the address to which correspondence to it is to be
addressed by written notification as provided for herein.
 
(e)   The parties acknowledge and agree that in the event of any breach of this
Agreement, remedies at law may be inadequate, and each of the parties hereto
shall be entitled to seek specific performance of the obligations of the other
parties hereto and such appropriate injunctive relief as may be granted by a
court of competent jurisdiction.
 
(f)   Should any part or provision of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.
 
(g)   This Agreement may be executed in a number of counterparts, any of which
together shall for all purposes constitute one Agreement, binding on all the
parties hereto notwithstanding that all such parties have not signed the same
counterpart.
 
[Signature Page to Follow]

 
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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date and year first above written.

MANHATTAN PHARMACEUTICALS, INC.
   
By:
/s/ Michael McGuinness
 
Michael McGuinness
 
Chief Financial Officer
   
NATIONAL SECURITIES CORPORATION
   
By:
/s/ Jonathan C. Rich
 
 Jonathan C. Rich
 
 Executive V.P. &
  
 Head of Investment Banking

 
THE INVESTOR’S SIGNATURE TO THE APPLICALBE SUBSCRIPTION AGREEMENT DATED OF EVEN
DATE HEREWITH SHALL CONSTITUTE THE INVESTOR’S SIGNATURE TO THIS REGISTRATION
RIGHTS AGREEMENT.

Signature Page to Registration Rights Agreement

 
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EXHIBIT A
 
INVESTOR LIST

 
A-1

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EXHIBIT B

Selling Stockholder Questionnaire

 

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EXHIBIT C
 
Instrument of Adherence
 
Reference is hereby made to that certain Registration Rights Agreement, dated as
of March 2, 2010, among Manhattan Pharmaceuticals, Inc., a Delaware corporation
(the “Company”), the Investors and the Investor Permitted Transferees, as
amended and in effect from time to time (the “Registration Rights Agreement”).
Capitalized terms used herein without definition shall have the respective
meanings ascribed thereto in the Registration Rights Agreement.
 
The undersigned, in order to become the owner or holder of [___________] shares
of common stock, par value $0.001 per share of the Company (the “Common Stock”),
or a Warrant or Warrants to purchase [_______] Warrant Shares, hereby agrees
that, from and after the date hereof, the undersigned has become a party to the
Registration Rights Agreement in the capacity of an Investor Permitted
Transferee, and is entitled to all of the benefits under, and is subject to all
of the obligations, restrictions and limitations set forth in, the Registration
Rights Agreement that are applicable to Investor Permitted Transferees. This
Instrument of Adherence shall take effect and shall become a part of the
Registration Rights Agreement immediately upon execution.
 
Executed as of the date set forth below under the laws of the State of New York.
 
Signature:
  
 
Name:
 
Title:

Accepted:
[___________________]

By:
  
Name:
Title:

Date:______________, 20__

 
C-1

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