Document:

Exhibit
10.4

      

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A
FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT.

       

      MANHATTAN
PHARMACEUTICALS, INC.

      

      FORM OF
WARRANT

      

       Dated:
October 28, 2009

      

      Manhattan
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received, ________________ or its Permitted Transferees (as
hereinafter defined) (the “Holder”), is entitled to
purchase from the Company up to a total of _________ shares of common stock,
$0.001 par value per share (the “Common Stock”), of the Company
(each such share, a “Warrant
Share” and all such shares issuable under the warrants, the “Warrant Shares”) at an
exercise price of $0.11 (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time
and from the date hereof and through October 28, 2014 (the “Expiration Date”), and subject
to the following terms and conditions.  This Warrant (“Warrant”) is issued pursuant
to that certain Placement Agent Letter, dated as of the date hereof, by and
between the Company and the Holder (the “Placement Agent
Letter”).

       

      1.           Definitions.  In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Subscription Agreement, dated as of the date hereof (the “Subscription Agreement”),
between the Company and Linden Growth Partners Master Fund (the “Investor”).

       

      2.           Registration of
Warrant.  The Company shall register this Warrant, upon records
to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder hereof from time to time.  The Company may
deem and treat the registered Holder of this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

       

      3.           Registration of
Transfers.  The Company shall register the transfer and/or
assignment of any portion of this Warrant (a “Permitted Transferee”) in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Company’s transfer agent or to
the Company at its address specified herein.  Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the Permitted
Transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring
Holder.  The acceptance of the New Warrant by the Permitted Transferee
thereof shall be deemed the acceptance by such Permitted Transferee of all of
the rights and obligations of a holder of a Warrant.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      4.           Exercise and Duration of
Warrants.

       

      (a)           This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after the date hereof to and including the Expiration
Date.  At 5:00 P.M., New York City time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value and this Warrant shall be terminated and no longer be
outstanding.

       

      (b)           The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares as to which this Warrant is being exercised
(which may take the form of a “Cashless Exercise” if so indicated in the
Exercise Notice pursuant to Section 10 below),
and the date such items are delivered to the Company (as determined in
accordance with the notice provisions hereof) is an “Exercise Date.”

       

      (c)           Exercise
Disputes.  In the case of any dispute with respect to the
number of shares to be issued upon exercise of this Warrant, the Company shall
promptly issue such number of shares of Common Stock that is not disputed and
shall submit the disputed determinations or arithmetic calculations to the
Holder via fax (or, it the Holder has not provided the Company with a fax
number, by overnight courier) within five (5) Business Days of receipt of the
Holder’s election to purchase Warrant Shares.  If the Holder and the
Company are unable to agree as to the determination of the Exercise Price within
five (5) Business Days of such disputed determination or arithmetic calculation
being submitted to the Holder, then the Company shall in accordance with this
Section, submit via facsimile the disputed determination to its independent
auditor.  The Company shall cause its independent auditor to perform
the determinations or calculations and notify the Company and the Holder of the
results promptly, in writing and in sufficient detail to give the Holder and the
Company a clear understanding of the issue.  The determination by the
Company’s independent auditor shall be binding upon all parties absent manifest
error.  The Company shall then on the next Business Day instruct its
transfer agent to issue certificate(s) representing the appropriate number of
Warrant Shares of Common Stock in accordance with the independent auditor’s
determination and this Section.  The prevailing party shall be
entitled to reimbursement of all fees and expenses of such determination and
calculation.

      
        
           

        

        
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      5.           Delivery of Warrant
Shares.

       

      (a)           Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
five (5) Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate for the Warrant Shares
to which the Holder is entitled upon such exercise, free of restrictive legends
unless a registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder is not then effective and
the Warrant Shares are not freely transferable pursuant to Rule 144 under the
Securities Act.  To the extent the Warrant Shares may be issued free
of restrictive legends as set forth above, upon request of the Holder, the
Company shall use its best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established
clearing corporation performing similar functions.  For the purposes
hereof, the term “Trading
Day” means (a) any day
on which the Common Stock is listed or quoted and traded on its primary trading
market and/or quotation system, as the case may be, (b) if the Common Stock
is not then listed or quoted and traded on any trading market, then a day on
which trading occurs on the Nasdaq Global Market (or any successor thereto), or
(c) if trading ceases to occur on the Nasdaq Global Market (or any
successor thereto), any Business Day.

       

      (b)           This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares.  Upon surrender of this
Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.

       

      (c)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant
Shares.  Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant  as required
pursuant to the terms hereof.

       

      6.           Charges, Taxes and
Expenses.  Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, withholding tax, transfer agent fee or
other incidental tax or expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder.  The Holder shall
be responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

       

      7.           Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable bond or indemnity, if requested.  Applicants for a New
Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Company may prescribe.

      
        
           

        

        
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      8.           Reservation of Warrant
Shares.  The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (after giving effect
to the adjustments and restrictions of Section 9, if any). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.  The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which
the Common Stock may be listed.

       

      9.           Certain
Adjustments.  The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

       

      (a)           Stock Dividends and
Splits.  If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

       

      (b)           Additional Issuances of
Equity Securities.  If the Company, at any time while this
Warrant is outstanding, shall
issue or sell any Equity Securities (as defined below)
at an effective price per share less than the then effective Exercise
Price (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”), as
adjusted hereunder (if the holder of the Equity Securities so issued shall at
any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which is issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share which is less than the  then effective Exercise Price, such
issuance shall be deemed to have occurred for less than the then effective
Exercise Price on such date of the Dilutive Issuance), then, the Exercise Price
shall be reduced and only reduced to equal the Base Share
Price.  Notwithstanding the foregoing, no adjustments shall be made,
paid or issued under this Section 9(b) in
respect of Exempt Issuances (as defined below).  The Company shall
notify the Holder in writing as promptly as reasonably possible following the
issuance of any Equity Securities subject to this section, indicating therein
the applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms (such notice the “Dilutive Issuance
Notice”).  For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 9(b), upon
the occurrence of any Dilutive Issuance while this Warrant is outstanding, after
the date of such Dilutive Issuance the Holder is entitled to the Base Share
Price regardless of whether the Holder accurately refers to the Base Share Price
in the Exercise Notice.

       

      
        
           

        

        
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      For
purposes of this Section 9(b), the
following definitions shall apply:

       

      “Common Stock Equivalents”
means any securities of the Company or its subsidiaries which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common
Stock.

       

      “Equity Securities” means
(i) Common Stock and (ii) Common Stock Equivalents.

      

      “Exempt Issuance” means (i) any
Equity Securities issued or issuable pursuant to options, warrants or other
rights issued or issuable to employees, officers or directors of, or consultants
or advisors to the Company or any subsidiary, pursuant to equity incentive plans
or other employee benefit arrangements; (ii) any Equity Securities issued or
issuable pursuant to any rights or agreements, options, warrants or convertible
securities outstanding as of the issuance date of this Warrant; (iii) any Equity
Securities issued or issuable for consideration other than cash pursuant to a
merger, consolidation, strategic alliance, acquisition or similar business
combination; (iv) any Equity Securities issued or issuable in connection with
any stock split, stock dividend, distribution or recapitalization by the
Company; (v) any Equity Securities issued or issuable pursuant to any equipment
loan or leasing arrangement, real property leasing arrangement, or debt
financing from a bank or similar financial or lending institution; (vi) any
Equity Securities issued or issuable to the Investor or its affiliates in
connection with the Subscription Agreement; and (v) any Equity Securities issued
to the Holder or its affiliates pursuant to the Placement Agent
Letter.

      
        
           

        

        
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      (c)           Fundamental
Transactions.  If at any time during the term of this Warrant
the Company proposes to engage in a “Fundamental Transaction” (as hereinafter
defined) then, and in any one or more of such cases, the Company will give to
the Holder at least 10 days’ prior written notice of the date on which the books
of the Company will close or a record will be taken for determining rights to
vote with respect to such Fundamental Transaction.  Such notice will
describe the nature of the Fundamental Transaction, the date on which the
holders of the Common Shares will be entitled thereto, and such notice will also
specify the date on which the holders of the Common Shares will be entitled to
exchange the Common Shares for securities or other property deliverable upon the
consummation of the Fundamental Transaction.  A “Fundamental Transaction” is
any (i) merger or consolidation of the Company with or into (whether or not the
Company is the surviving corporation) another Person, (ii) any sale, assignment,
transfer, conveyance or other disposition by the Company of all or substantially
all of its assets in one or a series of related transactions; provided, however, that for
avoidance of doubt, the granting of a lien on all or substantially all of the
Company’s assets as collateral shall not be deemed a Fundamental Transaction
hereunder, (iii) purchase, tender or exchange offer by the Company (or to which
the Company is a party) that will be for more than 50% of the outstanding shares
of Common Stock (not including any shares of Common Stock held by the Person or
Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer, (iv) business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) requiring shareholder approval with another Person
whereby such other Person acquires more than the 50% of the outstanding shares
of Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock purchase agreement or other
business combination), or (v) reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by
Section 9(a)
above).

       

      (d)           The
Company will not by reorganization, transfer of assets, consolidation, merger,
dissolution, or otherwise, avoid or seek to avoid observance or performance of
any of the terms of this Section 9, but will at
all times in good faith assist in the carrying out and performance of all
provisions of this Section 9 in order to
protect the rights of the Holder against impairment.

       

      (e)           Number of Warrant
Shares.  Simultaneously with any adjustment to the Exercise
Price pursuant to paragraph (a) or (b) of this Section, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or
decreased proportionately, as applicable, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased, as
applicable, number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment.

       

      (f)           Calculations.  All
calculations under this Section 9 shall be made
to the nearest cent or the nearest share, as applicable.  The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

       

      (g)           Notice of
Adjustments.  Upon the occurrence of each adjustment pursuant
to this Section
9, the Company at
its expense will promptly compute such adjustment in accordance with the terms
of this Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or type
of Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based.  Upon
written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s Transfer Agent.

      
        
           

        

        
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      (h)           Notice of Corporate
Events.  If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction, at least ten calendar days prior to
the applicable record or effective date on which a Person would need to hold
Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order
to insure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.

       

      10.           Payment of Exercise
Price.  The Holder shall pay the Exercise Price in immediately
available funds (a “Cash
Exercise”); or the Holder may satisfy its obligation to pay the Exercise
Price through a “Cashless
Exercise,” in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

       

      
        
          	 
      	
                  X =
      Y [(A-B)/A]

                
	
                  where:

                	 
      
	 
      	
                  X =
      the number of Warrant Shares to be issued to the
Holder.

                
	 
      	 
      
	 
      	
                  Y =
      the number of Warrant Shares with respect to which this Warrant is being
      exercised (prior to cashless exercise).

                
	 
      	 
      
	 
      	
                  A =
      the average of the Closing Prices for the five (5) Trading Days
      immediately prior to (but not including) the Exercise
  Date.

                
	 
      	 
      
	 
      	
                  B =
      the Exercise Price.

                

        

      

       

      For purposes of this Section
10, “Closing
Prices” for any
date, shall mean the closing price per share of the Common Stock for such date
(or the nearest preceding date) on the primary trading market on which the
Common Stock is then listed or quoted.

       

      For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued to the Holder (provided the
Securities and Exchange Commission continues to take the position that such
treatment is proper at the time of such exercise).

       

      
        
           

        

        
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      11.           Limitation on
Exercise.  Notwithstanding anything to the contrary contained
herein, the number of shares of Common Stock that may be acquired by the Holder
upon any exercise of this Warrant (or otherwise in respect hereof) shall be
limited to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not
exceed 4.999% (the “Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  For such purposes, “beneficial ownership” shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.  The Company’s obligation to
issue shares of Common Stock in excess of the limitation referred to in this
Section shall be suspended (and shall not terminate or expire notwithstanding
any contrary provisions hereof) until such time, if any, as such shares of
Common Stock may be issued in compliance with such limitation, but in no event
later than the Expiration Date.  By written notice to the Company, the
Holder may waive the provisions of this Section or increase or decrease the
Maximum Percentage to any other percentage specified in such notice, but any
such waiver or increase will not be effective until the 61st day after such
notice is delivered to the Company.

       

      12.           Fractional
Shares.  The Company shall not be required to issue or cause to
be issued fractional Warrant Shares on the exercise of this
Warrant.  In lieu of any fractional shares which would, otherwise be
issuable, subject to Section 11, the
Company shall pay the Holder entitled to such fractional Warrant Share a sum in
cash equal to such fraction (calculated to the nearest 1/100th of a
Warrant Share) multiplied by the then effective Exercise Price.

       

      13.           Notices.  Any
and all notices or other communications or deliveries hereunder (including
without limitation any Exercise Notice) shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified on the signature page of the Placement Agent Letter prior to 5:00 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified on the signature page of the Placement Agent
Letter on a day that is not a Trading Day or later than 5:00 p.m. (New York City
time) on any Trading Day, (iii) the Trading Day following the date of mailing if
sent by nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.  The
address for such notices or communications shall be as set forth on the
signature page of the Placement Agent Letter.

       

      14.           Warrant
Agent.  The Company shall serve as warrant agent under this
Warrant.  Upon thirty (30) days’ notice to the Holder, the Company may
appoint a new warrant agent.  Any corporation and/or other entity into
which the Company or any new warrant agent may be merged or any corporation
resulting from any consolidation to which the Company or any new warrant agent
shall be a party shall be a successor warrant agent under this Warrant without
any further act.  Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.

       

      
        
           

        

        
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      15.           Piggyback Registration
Rights.  If at any time the Company shall determine to file
with the Securities and Exchange Commission a registration statement (“Registration
Statement”) relating to an offering for its own account or the account of
others under the Securities Act of 1933 Act, as amended (other than on Form S-4
or Form S-8 or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other bona fide, employee
benefit plans), the Company shall send to the Holder of this Warrant, written
notice of such determination and, if within thirty (30) days after the effective
date of such notice, such Holder shall so request in writing, the Company shall
include in such Registration Statement all or any part of the shares such Holder
requests to be registered which are issuable upon exercise of this Warrant
(“Registration
Shares”), except that if, in connection with any underwritten public
offering for the account of the Company the managing underwriter(s) thereof
shall impose a limitation on the number of shares of Common Stock which may be
included in the Registration Statement because, in such underwriter(s)’
judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company shall be obligated to include
in such Registration Statement only such limited portion of the Registration
Shares with respect to which such Holder has requested inclusion hereunder as
the underwriter shall permit and shall be subject to any senior registration
rights existing on the date hereof. Any exclusion of Registration Shares shall
be made pro rata among the Holder and its registered assigns, if any, seeking to
include shares in proportion to the number of equity securities sought to be
included by such Holder and its registered assigns.  Notwithstanding
the foregoing, this Section 15 shall not
apply to 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.

       

      16.           Miscellaneous.

       

      (a)           Subject
to the restrictions on transfer set forth on the first page hereof, this Warrant
may be transferred or assigned by the Holder to a Permitted Transferee pursuant
to Section 3 provided, that, among other things, the Permitted Transferee
covenants to be bound by the terms hereof.  This Warrant may not be
assigned by the Company, except to a successor in the event of a Fundamental
Transaction.  This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and
assigns.  Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder
any legal or equitable right, remedy or cause of action under this
Warrant.

       

      (b)           The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, seek to call or redeem this
Warrant or avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against
dilution or other impairment.  Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any Warrant Shares
above the amount payable therefor on such exercise, (ii) will take all such
action as may be reasonably necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares, free
from all taxes, liens, security interests, encumbrances, preemptive or similar
rights and charges of stockholders (other than those imposed by the Holder), on
the exercise of the Warrant, and (iii) will not close its stockholder books or
records in any manner which interferes with the timely exercise of this
Warrant.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      (c)           Remedies; Specific
Performance.  The Company acknowledges and agrees that there
would be no adequate remedy at law to the Holder of this Warrant in the event of
any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant and accordingly, the Company
agrees that, in addition to any other remedy to which the Holder may be entitled
at law or in equity, the Holder shall be entitled to seek to compel specific
performance of the obligations of the Company under this Warrant, without the
posting of any bond, in accordance with the terms and conditions of this Warrant
in any court of the United States or any State thereof having jurisdiction, and
if any action should be brought in equity to enforce any of the provisions of
this Warrant, the Company shall not raise the defense that there is an adequate
remedy at law.  Except as otherwise provided by law, a delay or
omission by the Holder hereof in exercising any right or remedy accruing upon
any such breach shall not impair the right or remedy or constitute a waiver of
or acquiescence in any such breach.  No remedy shall be exclusive of
any other remedy.  All available remedies shall be
cumulative.

       

      (d)           Amendments and
Waivers.  The Company may, without the consent of the Holder
(but with prior written notice to the Holder), by supplemental agreement or
otherwise, (i) make any changes or corrections in this Agreement that are
required to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein or (ii)
add to the covenants and agreements of the Company for the benefit of the Holder
(including, without limitation, reduce the Exercise Price or extend the
Expiration Date), or surrender any rights or power reserved to or conferred upon
the Company in this Agreement; provided that, in the case of (i) or (ii), such
changes or corrections shall not adversely affect the interests of Holder in any
material respect.  This Warrant may also be amended or waived with the
consent of the Company and the Holder.  If a new warrant agent is
appointed by the Company, it shall at the request of the Company, and without
need of independent inquiry as to whether such supplemental agreement is
permitted by the terms of this Section 16(d), join
with the Company in the execution and delivery of any such supplemental
agreements, but shall not be required to join in such execution and delivery for
such supplemental agreement to become effective.

       

      (e)           Governing Law; Venue; Waiver
Of Jury Trial. This Warrant shall be governed by and construed
exclusively in accordance with the internal laws of the State of New York
without regard to the conflicts of laws principles thereof. The parties hereto
hereby expressly and irrevocably agree that any suit or proceeding arising
directly and/or indirectly pursuant to, arising out of or under this Warrant,
shall be brought solely and exclusively in a federal or state court located in
the City, County and State of New York. By its execution hereof, the parties
hereby expressly covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto expressly and
irrevocably waive any claim that any such jurisdiction is not a convenient forum
for any such suit or proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or proceeding
(including, but not limited to, any motions made), the party prevailing therein
shall be entitled to payment from the other party hereto of its reasonable
counsel fees and disbursements. The Company and Holder hereby waive all rights
to a trial by jury.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      (f)           Headings  The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

       

      (g)           Partial
Invalidity.  In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above.

       

      
        
          	
                  MANHATTAN
      PHARMACEUTICALS, INC.

                
	 
      	 
      
	
                  By:

                	
                    

                
	
                  Name:

                	
                  Michael
      McGuinness

                
	
                  Title:

                	
                  Chief
      Financial Officer

                

        

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      FORM OF EXERCISE
NOTICE

       

      (To be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)

       

      To:  MANHATTAN
PHARMACEUTICALS, INC.

       

      The
undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by Manhattan
Pharmaceuticals, Inc., a Delaware corporation (the “Company”).  Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.

       

      
        	
                 
      

              	
                (a)

              	
                The
      Warrant is currently exercisable to purchase a total of ______________
      Warrant Shares.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                The
      undersigned Holder hereby exercises its right to purchase
      _________________ Warrant Shares pursuant to the
  Warrant.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                The
      holder shall make payment of the Exercise Price as follows (check
      one):

              

      

       

      _______________
“Cash Exercise” under Section 10

       

      _______________
“Cashless Exercise” under Section 10

       

      
        	
                 
      

              	
                (d)

              	
                If
      the holder is making a Cash Exercise, the holder shall pay the sum of
      $____________ to the Company in accordance with the terms of the
      Warrant.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Pursuant
      to this exercise, the Company shall deliver to the holder ______________
      Warrant Shares in accordance with the terms of the
  Warrant.

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Following
      this exercise, the Warrant shall be exercisable to purchase a total of
      ______________ Warrant Shares.

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Notwithstanding
      anything to the contrary contained herein, this Exercise Notice shall
      constitute a representation by the Holder that, after giving effect to the
      exercise provided for in this Exercise Notice, the Holder (together with
      its affiliates) will not have beneficial ownership (together with the
      beneficial ownership of such Person’s affiliates) of a number of shares of
      Common Stock which exceeds the Maximum Percentage of the total outstanding
      shares of Common Stock as determined pursuant to the provisions of Section 11 of
      the Warrant.

              

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (h)

              	
                The
      Holder represents that, as of the date of
  exercise:

              

      

       

      
        	
                 
      

              	
                i.

              	
                the
      Warrant Shares being purchased pursuant to this Exercise Notice are being
      acquired solely for the Holder’s own account and not as a nominee for any
      other party, for investment, and not with a view toward distribution or
      resale; and

              

      

       

      
        	
                 
      

              	
                ii.

              	
                the
      Holder is an “accredited
      investor” as such term is defined in Rule 501(a)(1) of Regulation D
      promulgated by the Securities and Exchange Commission under the Securities
      Act.

              

      

       

      
        	
                 
      

              	
                (i)

              	
                If
      the Holder cannot make the representations required in Section
      (f)(ii), above, because it is factually incorrect, it shall be a
      condition to the exercise of the Warrant that the Company receive such
      other representations as the Company considers necessary, acting
      reasonably, to assure the Company that the issuance of securities upon
      exercise of this Warrant shall not violate any United States or other
      applicable securities laws.

              

      

       

      
        
          
            	
                    Dated:
      _____________________, _______

                  	 
      	
                    Name
      of Holder: ____________________________________

                  
	 
      	 
      	
                    (Print)

                  
	 	 	 
	 
      	 
      	
                    By:

                  	
                      

                  
	 
      	 
      	
                    Name:

                  	
                      

                  
	 
      	 
      	
                    Title:

                  	
                      

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

                  

          

        

      

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      FORM OF
ASSIGNMENT

      

      [To be
completed and signed only upon transfer of Warrant]

      

      FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to
purchase  ____________ shares of Common Stock of Manhattan
Pharmaceuticals, Inc. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Manhattan
Pharmaceuticals, Inc. with full power of substitution in the
premises.

       

      The
undersigned transferee agrees to be bound by the covenants of the Warrant Holder
during the term of the Warrant.

       

      The
undersigned transferee agrees represents and warrants that:

       

      
        	
                 
      

              	
                i.

              	
                the
      Warrant Shares being purchased pursuant to this Assignment are being
      acquired solely for the transferee’s own account and not as a nominee for
      any other party, for investment, and not with a view toward distribution
      or resale; and

              

      

      

      
        	
                 
      

              	
                ii.

              	
                the
      undersigned transferee is an “accredited investor” as
      such term is defined in Rule 501(a)(1) of Regulation D promulgated by the
      Securities and Exchange Commission under the Securities
    Act.

              

      

       

      If the
undersigned transferee cannot make the representations required in clause (ii)
above, above, because it is factually incorrect, it shall be a condition to the
transfer of the Warrant that the Company receive such other representations as
the Company considers necessary, acting reasonably, to assure the Company that
the transfer this Warrant shall not violate any United States or other
applicable securities laws.

       

      
        
          
            
              	
                      Dated:                                      ,
      _______

                    	 	 
      
	 
      	 	
                        

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

                    
	 
      	 	 
      
	 
      	 	
                        

                    
	 
      	 	
                      Address
      of Transferee

                    
	 
      	 	 
      
	 
      	 	
                        

                    
	 
      	 	 
      
	 
      	 	
                        

                    
	 
      	 	 
      
	
                      In
      the presence of:

                    	 	
                        

                    
	 
      	 	
                      Signature
      of TransfereeEXHIBIT
4.1

       

      NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE, AND ARE ISSUED IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (ii) IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS.  NOTWITHSTANDING THE FOREGOING,
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

      
      

       

      
        	$50,000	 	
                As of
      [**]

              

      

       

       

      SECURED
CONVERTIBLE PROMISSORY NOTE

       

      FOR VALUE
RECEIVED, the undersigned, UNITED ENERGY CORP., (“Debtor”) hereby promises to
pay to the order of [**] (“Holder”), at [**] (or such
other place as Holder may direct from time to time), in lawful money of the
United States of America and in immediately available funds, the principal
amount of Fifty Thousand Dollars ($50,000) and all accrued interest thereon on
January 29, 2010.  The Debtor may not prepay any portion of this Note
without the consent of the Holder.

       

      1.           Interest.  Interest
shall be computed at the per annum rate of twelve percent (12%); provided, if
any amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) at the per annum rate of
seventeen percent (17%).  All interest payable hereunder shall be
computed on the basis of actual days elapsed and a year of 360
days.

       

      2.           Conversion.

       

      (a)           Conversion
Right.  Subject to the terms hereof and restrictions and
limitations contained herein, Holder shall have the right, at its option, at any
time and from time to time, to convert, in whole or in part, the outstanding
principal amount and the accrued but unpaid interest under this Note into shares
of Common Stock of the Debtor at the conversion price of $.09 (the “Conversion
Price”) per share of Common Stock by delivering to the Debtor a conversion
notice (the “Conversion Notice”).

       

      (b)             Stock
Certificates.  The Debtor shall deliver to Holder or its
designee not later than seven (7) days after delivery of the Conversion Notice,
a certificate or certificates representing the number of shares of Common Stock
being acquired upon the conversion of this Note.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           Conversion Price
Adjustments.  If the Debtor, at any time while the Notes are
outstanding (i) shall pay a stock dividend or otherwise make a distribution or
distributions on any equity securities (including instruments or securities
convertible into or exchangeable for such equity securities) in shares of Common
Stock, (ii) subdivide outstanding Common Stock into a larger number of shares,
or (iii) combine outstanding Common Stock into a smaller number of shares, then
the Conversion Price in effect immediately prior to such event shall be adjusted
to a number equal to such Conversation Price multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
before such event and the denominator of which shall be the number of shares of
Common Stock outstanding after such event.  Any adjustment made
pursuant to this section shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision or combination.  All calculations under this
Section 2(c) shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be.  Whenever any Conversion
Price is adjusted as provided herein, the Debtor shall promptly deliver to
Holder, a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment, provided
that any failure to so provide such notice shall not affect the automatic
adjustment hereunder.

       

      (d)           Reservation and Issuance of
Underlying Securities.  The Debtor covenants that it will at
all times reserve and keep available out of its authorized and unissued Common
Stock solely for the purpose of issuance upon conversion of this Note not less
than such number of shares of Common Stock as shall be issuable (taking into
account the adjustments under Section 2(c)) upon the conversion of this
Note.  The Debtor covenants that all shares of Common Stock that shall
be so issuable shall, upon issue, be duly authorized, validly issued, fully paid
and nonassessable.

       

      (e)           Charges, Taxes and
Expenses.  Issuance of certificates for shares of Common Stock
upon the conversion of this Note shall be made without charge to the holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Debtor, and such certificates shall be issued in the name of Holder or in
such name or names as may be directed by Holder.

       

      3.           Representations and
Warranties.

       

      1.           Organization;
Authority.  Debtor is duly organized and validly existing under
the laws of the jurisdiction of its organization and has all the requisite power
and authority to execute, deliver and perform the transactions contemplated by
this Note.  This Note constitutes the legal, valid and binding
obligations of each of the Debtor and is enforceable against it in accordance
with the terms hereof.

       

      2.           Consents;
Conflicts.  The execution and delivery of this Note by the
Debtor as contemplated hereby will not (i) require any consent authorization or
approval of or filing with any governmental entity or third party  or
(ii) result in any violation of, be in conflict with or constitute a default
under, the charter or by-laws of any of the Debtor, or any law, statute,
regulation, ordinance, judgment, decree or order, or any material contract,
agreement, instrument to which any of the Debtor is a party or by which it is
bound.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      4.           Events of
Default.  The occurrence or existence of any one or more of the
following events are referred to herein individually as an “Event of Default”, and
collectively as “Events of
Default”:

       

      (a)        the
Debtor fail to pay principal plus interest in full upon demand or when otherwise
due;

       

      (b)        any
representation, warranty or statement of fact made by the Debtor in this Note
shall when made or deemed made be false or misleading in any material
respect;

       

      (c)        any
judgment for the payment of money is rendered against a Debtor in excess of
$50,000 in any one case or in excess of $100,000 in the aggregate and shall
remain undischarged or unvacated for a period in excess of thirty (30) days or
execution shall at any time not be effectively stayed, or any judgment other
than for the payment of money, or injunction, attachment, garnishment or
execution is rendered against a Debtor;

       

      (d)        Debtor
dissolves or suspends or discontinues doing business;

       

      (e)        Debtor
makes an assignment for the benefit of creditors, makes or sends notice of a
bulk transfer or calls a meeting of its creditors or principal creditors in
connection with a moratorium or adjustment of the Indebtedness due to
them;

       

      (f)        a
case or proceeding under the bankruptcy laws of the United States of America now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at law or in equity) is filed
against a Debtor or all or any part of its properties and such petition or
application is not dismissed within thirty (30) days after the date of its
filing or such Debtor shall file any answer admitting or not contesting such
petition or application or indicates its consent to, acquiescence in or approval
of, any such action or proceeding or the relief requested is granted
sooner;

       

      (g)        a
case or proceeding under the bankruptcy laws of the United States of America now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at a law or equity) is filed by
a Debtor or for all or any part of its property;

       

      5.           Miscellaneous.

       

      1.           Amendments,
Etc.  No amendment, modification, termination or waiver of any
provision of this Note, and no consent to any departure by the Debtor here from,
shall in any event be effective unless the same shall be in writing and signed
by Holder, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

       

      2.           Other
Rights.  No failure to exercise, and no delay in exercising on
the part of Holder of, any right, power or privilege under this Note shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights and remedies of Holder herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      3.           Binding Effect; Successors
and Assigns.  This Note and the terms, covenants and conditions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Debtor shall not have
the right to assign or transfer this Note or its rights or obligations hereunder
or any interest herein without the prior written consent of Holder.

       

      4.           Governing
Law.  This Note shall be a contract made under and governed by,
and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles.  All obligations of the Debtor
and rights of Holder expressed herein shall be in addition to and not in
limitation of those provided by applicable law.

       

      5.           Maximum Interest
Rate.  This Note is subject to the express condition that at no
time shall the Debtor be obligated or required to pay interest on the principal
balance at a rate which would subject Holder to either civil or criminal
liability as a result of being in excess of the maximum rate which the Debtor
are permitted by law to contract or agree to pay.  If by the terms of
this Note the Debtor is at any time required or obligated to pay interest on the
principal balance at a rate in excess of such maximum rate, the rate of interest
under this Note shall be deemed to be immediately reduced to such maximum rate
and interest payable hereunder shall be computed at such maximum rate and the
portion of all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance.

       

      6.           Notices.  All
notices and other communications provided to any party hereto under this Note
shall be in writing (including telex or facsimile) and addressed or delivered to
such party at its address set forth herein:

       

      
        
          	 	
                  If
      to Holder:

                	
                  [**]

                  [**]

                  Telephone
      No.: [**]

                  Telecopy
      No.:   [**]

                   

                
	 	
                  If
      to the Debtor:

                	
                  United
      Energy Corp.

                  600
      Meadowlands Parkway

                  Secaucus,
      New Jersey 07094

                  Attention:  President

                

        

      

      

      or at
such other address as may be designated by such party from time to time in a
notice complying with the terms of this section.  Any notice shall be
deemed given upon receipt.

      

      7.           Severability.  Wherever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law.  Any provision of this
Note that is prohibited by, unenforceable or invalid in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition,
unenforceability or invalidity, without invalidating the remainder of such
provisions of this Note or affecting the validity or enforceability of such
provision in any other jurisdiction.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      8.           Captions.  Section
captions used in this Note are for convenience of reference only and shall not
affect the construction of this Note.

       

      9.           SUBMISSION TO JURISDICTION;
WAIVER OF VENUE.  THE DEBTOR: (A) HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN MANHATTAN,
NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE,
AND THE DEBTOR HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
FEDERAL COURT; AND (B) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING
AGAINST HOLDER OR THE PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
PROPERTY OF HOLDER, ARISING OUT OF OR RELATING TO THIS NOTE, IN ANY COURT OTHER
THAN AS HEREINABOVE SPECIFIED IN THIS PARAGRAPH.  THE DEBTOR HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING
(WHETHER BROUGHT BY THE DEBTOR, HOLDER, OR OTHERWISE) IN ANY COURT HEREINABOVE
SPECIFIED IN THIS PARAGRAPH AS WELL AS ANY RIGHT THEY MAY NOW OR HEREAFTER HAVE
TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT ON THE
GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE.  THE DEBTOR AGREE THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.

       

      10.           WAIVER OF JURY
TRIAL.  THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS NOTE, AND AGREE THAT ANY SUCH
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ENTERING INTO
THIS NOTE.

       

      11.           Debtor’s
obligations under this Note are secured by the assets of the Debtor pursuant to
that certain Security Agreement, dated May 13, 209, as amended on October [__],
2009, by and among Debtor, the Holder and certain other creditors of
Debtor.

       

      [signature
page follows]

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, Debtor has caused this Note to be duly executed by a duly
authorized officer as of the date first above indicated.

       

       

      
        
          
            
              	 	
                      UNITED
      ENERGY CORP.

                       

                       

                    
	 	By:	
                               

                    
	 	 	
                      Name:

                      Title:

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