Document:

Exhibit
      10.1

     

    SECURED
      PROMISSORY NOTE

     

    
      	
              US$

            	
              New
                York, New York

            
	 	
              September 11,
                2008 (the “Issue Date”)

            

    

    

    FOR
      VALUE
      RECEIVED, MANHATTAN PHARMACEUTICALS, INC., a Delaware corporation with offices
      at 810 Seventh Avenue, 4th Floor, New York, New York 10019 (the “Obligor” or
“Debtor”), hereby promises to pay to the order of [NAME], an individual residing
      at [ADDRESS] (the “Holder” or “Secured Party”), the principal sum of [AMOUNT] in
      lawful money of the United States, together with interest on the unpaid
      principal balance in accordance with the terms set forth herein.

     

    1. Interest
      Rate.
      Interest on the unpaid principal balance hereof shall accrue at the rate of
      ten
      percent (10%) per annum from the Issue Date through but not including the
      Maturity Date (as defined below).

     

    2. Payment
      of Principal and Interest.
      Principal
      and interest shall be paid in cash on March 10, 2008 (the “Maturity Date”)
      unless paid earlier by the Company. This is one of a series of related secured
      promissory notes (in the aggregate principal amount of $70,000.00) (the
      "Notes"). The Company shall pre-pay the principal and interest due under the
      Notes, on a pro-rata basis in accordance with original principal amounts, as
      and
      when the proceeds from the Collateral are received by the Company. Furthermore,
      the Company shall pre-pay the principal and interest due under the Notes, on
      a
      pro-rata basis in accordance with original principal amounts, to the extent
      that
      the Company raises additional debt or equity financing in excess of
      $100,000.

     

    3. Place
      and Manner of Payment.
      All
      payments of principal and interest hereunder shall be made by the Obligor to
      the
      Holder (or the Holder’s designee) at the address of the Holder (or such
      designee) set forth above or such other address as the Holder (or such designee)
      shall designate in writing to Obligor and shall be made, at the Holder’s option,
      either by wiring such funds to an account designated by the Holder or by
      certified or cashier’s check made payable to the order of the Holder (or such
      designee of the Holder).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. Representations
      and Warranties of the Obligor.
      The
      Obligor has full legal capacity, power and authority to execute and deliver
      this
      promissory note and to perform its obligations hereunder, including, without
      limitation the granting of the security interests in the Collateral (as defined
      below) in favor of the Holder as set forth in Section 6 hereof. This
      promissory note is a valid and binding obligation of the Obligor, enforceable
      in
      accordance with its terms, except as limited by bankruptcy, insolvency or other
      laws of general application relating to or affecting the enforcement of
      creditors’ rights generally and general principles of equity. 

     

    5. Events
      of Default; Remedies.

     

    (a) For
      purposes of this promissory note, an “Event of Default” shall mean (i) the
      failure by the Obligor to make any payment due hereunder in full on or before
      the fifth (5th) business day following the Maturity Date; (ii) the Obligor,
      pursuant to or within the meaning of Title 11, U.S. Code, or any similar
      Federal, foreign or state law for the relief of debtors (collectively,
“Bankruptcy Law”), (a) commences a voluntary case, (b) consents to the
      entry of an order for relief against it in an involuntary case,
      (c) consents to the appointment of a receiver, trustee, assignee,
      liquidator or similar official (a “Custodian”), (d) makes a general assignment
      for the benefit of its creditors or (e)  admits in writing that it is
      generally unable to pay its debts as they become due; (iii) a court of
      competent jurisdiction enters an order or decree under any Bankruptcy Law that
      (a) is for relief against the Obligor in an involuntary case, (b) appoints
      a Custodian of the Obligor or (c) orders the liquidation of the Obligor, in
      each case, which order, decree or appointment is not discharged or dismissed
      within sixty (60) days; (iv) a breach by the Obligor of its representations
      an warranties under Section 5 of this promissory note; or (v) a breach
      by the Obligor of any of its material covenants and agreements under this
      promissory note, including, without limitation, its obligations under
      Section 7 hereof, which breaches are not cured within ten (10) business
      days after the Obligor has received written notice thereof from the Holder.
      

     

    (b) Upon
      the
      occurrence of any Event of Default, the entire principal sum outstanding,
      together with all accrued and unpaid interest and any and all other obligations
      owing under this promissory note, shall immediately become due and payable
      at
      the option of the Holder upon written notice to the Obligor. In the event any
      payments of principal or interest or any other sums then owing by the Obligor
      to
      the Holder have not been not paid, following the expiration of any applicable
      grace periods for the payment of such amounts as set forth herein, interest
      on
      such amounts shall accrue at the rate of twelve percent (12%) per annum from
      the
      date such payment was due and payable through but not including the date payment
      is made in satisfaction thereof.

     

    (c) For
      the
      purposes of this promissory note, “business day” shall mean any day other than
      Saturday, Sunday or any other day on which commercial banks in The City of
      New
      York are authorized or required by law to remain closed.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    6. Security. To
      secure
      the full and punctual payment and performance of the obligations of the Obligor
      under the Notes in accordance with the terms thereof, the Obligor grants to
      the
      Holder (and to the other holders of the Notes), for its and their benefit,
      a
      continuing security interest all of the collateral described on Exhibit
      A
      hereto
      now owned or hereafter owned or acquired by the Obligor (the “Collateral”). The
      Obligor will, from time to time, at the Obligor’s expense, execute, deliver,
      file and record any statement, assignment, instrument, document, agreement
      or
      other paper and take any other action (including any filings of financing or
      continuation statements under the Uniform Commercial Code of the applicable
      jurisdiction) that the Holder may reasonably request in order to create,
      preserve, upgrade in rank, perfect, confirm or validate the security interests
      or to enable the Holder to obtain the full benefits of this Section 6, or
      to enable the Holder to execute and file financing statements, financing
      statement amendments, or continuation statements without the Obligor’s signature
      appearing thereon. The Obligor agrees that a carbon, photographic, photostatic
      or other reproduction of this Note is sufficient as evidence of its
      authorization for the Holder to file financing statements (or amendments
      thereto) to perfect its security interest in the Collateral. The Obligor
      covenants and agrees that it will not enter into any agreement for the purpose
      of frustrating, limiting or otherwise impairing any of the rights of the Holder
      under this Section 6. Upon the indefeasible payment in full of all amounts
      due under this promissory, all obligations of the Obligor under this
      Section 6 and all of the security interests in the Collateral granted
      pursuant to this Section 6 shall terminate.

     

    7. Successors
      and Assigns.
      This
      promissory note shall be binding upon the Obligor and its successors and
      assigns, but the obligations of the Obligor under this promissory note may
      not
      be assigned without the prior written consent of the Holder. 

     

    8. Waivers;
      Jurisdiction.
      The
      Obligor hereby waives demand, presentment, notice of dishonor, diligence,
      protest, notice of protest and all other notices or demands relating to this
      promissory note. The Obligor also (a) acknowledges and agrees that, in any
      suit,
      action, or proceeding under this promissory note, the courts of the State of
      New
      York in the borough of Manhattan, The City of New York, or the courts of the
      United States District Court for the Southern District of New York shall have
      the exclusive jurisdiction thereof, (b) consents to the jurisdiction of such
      courts and (c) consents to and waives any objection which the Obligor now has
      or
      may hereafter have to proper venue existing in any of such courts. THE
      UNDERSIGNED AGREES THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
      COUNTERCLAIM, ON OR WITH RESPECT TO THIS NOTE, SHALL BE TRIED ONLY BY A COURT
      AND NOT BY A JURY. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION
      OR
      PROCEEDING. 

     

    9. Modifications.
      This
      promissory note cannot be changed, amended, or modified orally but can only
      be
      changed, amended or modified by a writing signed by both the Obligor and the
      Holder, and only with the consent of the holders of a majority (based on
      outstanding principal) of the Notes. This writing is intended by the Obligor
      and
      the initial Holder as a final expression of this promissory note and also is
      intended as a complete and exclusive statement of the terms of this promissory
      note. No course of prior dealing between the Obligor and initial Holder or
      their
      respective affiliates, no usage of trade, and no parol or extrinsic evidence
      of
      any nature shall be used to supplement or modify any term hereof, nor are there
      any conditions to the full effectiveness of this promissory
      note.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    10. Governing
      Law.
      This
      promissory note and any and all matters arising directly or indirectly herefrom
      shall be governed by, and construed in accordance with, the laws of the State
      of
      New York, without regard to the choice or conflict of laws principles thereof.
      

     

    11. Warrants.
      Simultaneously with the delivery of this Note, the Company is issuing and
      delivering to the Holder a warrant to purchase 24,000 shares of the Company's
      common stock at a price per share of $0.20, which shall be exercisable for
      a
      period of five (5) years following the Issue Date.

     

    [Signature
      Page Follows.] 

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Obligor has duly executed this promissory note as of the
      date first above written.

     

    
      	
              OBLIGOR:

            
	 
	
              MANHATTAN
                PHARMACEUTICALS, INC.

            
	 
	
              By:

            	     

	 	
              Name:

            
	 	
              Title:

            

    

    Signature
      Page to Secured Promissory Note

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    “Collateral”
      means only the following specific items of personal property of Debtor, and
      no
      other property, right or interest:

     

    1.
      Rent
      deposit, in the amount of approximately $44,000, held by Metropolitan 810
      7th
      Avenue
      LLC (“Metropolitan”) pursuant to a lease for approximately 4,000 square feet of
      office space on the 4th
      floor of
      810 Seventh Avenue, New York, New York 10021 between the Debtor, as lessee,
      and
      Metropolitan, as lessor, expiring on September 30, 2008 (expected to be received
      by October 31, 2008).

     

    2.
      Refund
      of prepayment in the amount of $10,000 from Dow Pharmaceutical Sciences, Inc.
      (“Dow”) pursuant to Task 1 of the Master Services Agreement dated March 14, 2007
      between Dow and the Debtor (expected to be received by September 15,
      2008).

     

    3.
      Company income tax refund anticipated to be received by November 30, 2008,
      from
      the State of New York and the City of New York.

    
      
        
        

      

      
        -6-Exhibit
      10.2

     

    THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED
      FOR
      INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THIS WARRANT AND SUCH
      SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR
      HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY OF AN OPINION
      OF
      COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
      OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
      ACT
      OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

     

    MANHATTAN
      PHARMACEUTICALS, INC.

    

    Warrant
      for the Purchase of Shares of

    Common
      Stock

    

    Issuance
      Date:
      [               
 ], 2008

    
      	
               
                No. 2008-[   ]

            	
              ___________ 
                Shares

            

    

     

    FOR
      VALUE
      RECEIVED, MANHATTAN PHARMACEUTICALS, INC., a Delaware corporation (the “
Company”),
      hereby certifies that [________________], its designee or its permitted assigns
      is entitled to purchase from the Company, at any time or from time to time
      commencing on September 11, 2008 and prior to 5:00 P.M., New York City time,
      on
      September 10, 2013 (the “Exercise
      Period”
      ),
      [             ]
      fully paid and non-assessable shares of common stock, $0.001 par value per
      share, of the Company for a purchase price per share of $0.20.  
Hereinafter, (i) said common stock, $0.001 par value per share, of the Company,
      is referred to as the “ Common
      Stock”;
      (ii)
      the shares of the Common Stock (subject to adjustment as set forth herein)
      purchasable hereunder or under any other Warrant (as hereinafter defined) are
      referred to as the “ Warrant
      Shares”;
      (iii)
      the aggregate purchase price payable for the Warrant Shares purchasable
      hereunder is referred to as the “ Aggregate
      Warrant Price”;
      (iv)
      the price payable (initially $0.20 per share subject to adjustment as set forth
      herein) for each of the Warrant Shares hereunder is referred to as the “
Per
      Share Warrant Price”;
      (v)
      this Warrant, all similar Warrants issued on the date hereof and all warrants
      hereafter issued in exchange or substitution for this Warrant or such similar
      Warrants are referred to as the “ Warrants”;
      (vi)
      the registered holder of this Warrant is referred to as the “ Holder”
and
      the
      holder of this Warrant and all other Warrants and Warrant Shares are referred
      to
      as the “ Holders”
and
      Holders of at least two-thirds of the Warrant Shares then issuable upon exercise
      of then outstanding Warrants are referred to as the “ Majority
      of the Holders”)
      and
      (vii) the then Current Market Price per share of the Common Stock (the
“Current
      Market Price”
      ) shall
      be deemed to be the last reported sale price of the Common Stock on the Trading
      Day (as defined below) immediately prior to such date or, in case no such
      reported sales take place on such day, the average of the last reported bid
      and
      asked prices of the Common Stock on such day, in either case on the principal
      national securities exchange on which the Common Stock is admitted to trading
      or
      listed, or if not listed or admitted to trading on any such exchange, the per
      share sale price for the Common Stock in the over-the-counter market as reported
      by the OTC Bulletin Board or another over-the-counter market, or if not so
      available, the fair market value of the Common Stock as determined in good
      faith
      by the Company’s Board of Directors. A “ Trading
      Day”
shall
      mean any day on which such principal exchange or market is open for trading,
      or
      if there is no such exchange or market, then any day except Saturdays, Sundays
      or federal holidays. The Aggregate Warrant Price is not subject to
      adjustment.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Warrant is one in a series of related warrants constituting in the aggregate
      Warrants to purchase 140,000 Warrant Shares, which were originally issued
      pursuant to a series of secured promissory notes (each, a “Subscription
      Agreement”)
      between
      the Company and certain of the Company’s directors, officers and an employee on
      September 11, 2008.

    

    1. 
      Exercise
      of Warrant
      .

    

    (a)
        Exercise
      for Cash
      . This
      Warrant may be exercised in whole at any time, or in part from time to time,
      by
      the Holder during the Exercise Period by the surrender of this Warrant (with
      the
      subscription form at the end hereof duly executed) at the address set forth
      in
      subsection 10(a) hereof, together with proper payment of the Aggregate Warrant
      Price, or the proportionate part thereof if this Warrant is exercised in part,
      with payment for the Warrant Shares made by certified or official bank check
      payable to the order of, or wire transfer of immediately available funds to,
      the
      Company; or

    

    (b)
        Cashless
      Exercise. 

    

    (i)
        At any time during the Exercise Period when the resale of the Warrant
      Shares by the Holder is not registered pursuant to an effective registration
      statement filed with the Securities and Exchange Commission under the Securities
      Act of 1933, as amended (the “ Securities
      Act”),
      the
      Holder may, at its option, elect to exercise this Warrant, in whole or in part,
      on a cashless basis, by surrendering this Warrant, with the form of subscription
      appended hereto duly executed by or on behalf of the Holder, at the principal
      office of the Company, or at such other office or agency as the Company may
      designate, by canceling a portion of this Warrant in payment of the Aggregate
      Warrant Price (or proportionate payment thereof in this Warrant is exercise
      in
      part) payable in respect of the number of Warrant Shares purchased upon such
      exercise. In the event of an exercise pursuant to this subsection 1(b), the
      number of Warrant Shares issued to the Holder shall be determined according
      to
      the following formula:

     

    
      	
               

            	
               
                X =

            	
              Y(A-B)

            
	
               

            	
               

            	
                  A

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
                Where:    

            	
              X
                = 

            	
              the
                number of Warrant Shares that shall be issued to the
                Holder;

            
	
               

            	
               

            	
               

            
	
               

            	
              Y
                =

            	
              the
                number of Warrant Shares for which this Warrant is being exercised
                (which
                shall include both the number of Warrant Shares issued to the Registered
                Holder and the number of Warrant Shares subject to the portion of
                the
                Warrant being cancelled in payment of the Purchase
                Price);

            
	
               

            	
               

            	
               

            
	
               

            	
              A
                =

            	
              the
                Fair Market Value (as defined below) of one share of Common Stock;
                and

            
	
               

            	
               

            	
               

            
	
               

            	
              B
                =

            	
              the
                Per Share Warrant Price then in
                effect.

            

    

     

    (ii)
        The “Fair Market Value” per share of Common Stock shall be determined as
      follows:

     

    (1)
        If the Common Stock is listed on a national securities exchange,
      including the Nasdaq Global Market or the Nasdaq Capital Market, or another
      nationally recognized trading system as of the date of exercise, the Fair Market
      Value per share of Common Stock shall be deemed to be the average of the high
      and low reported sale prices per share of Common Stock thereon on the trading
      day immediately preceding the date of exercise (provided that if no such price
      is reported on such day, the Fair Market Value per share of Common Stock shall
      be determined pursuant to clause (2) below).

    

    (2)
        If the Common Stock is not listed on a national securities exchange,
      including the Nasdaq Global Market or the Nasdaq Capital Market, or another
      nationally recognized trading system as of the date of exercise, the Fair Market
      Value per share of Common Stock shall be deemed to be the amount most recently
      determined by the Board of Directors of the Company (the “ Board”)
      to
      represent the fair market value per share of the Common Stock (including without
      limitation a determination for purposes of granting Common Stock options or
      issuing Common Stock under any plan, agreement or arrangement with employees
      of
      the Company); and, upon request of the Holder, the Board (or a representative
      thereof) shall, as promptly as reasonably practicable but in any event not
      later
      than 10 days after such request, notify the Holder of the Fair Market Value
      per
      share of Common Stock and furnish the Holder with reasonable documentation
      of
      the Board’s determination of such Fair Market Value. Notwithstanding the
      foregoing, if the Board has not made such a determination within the three-month
      period prior to the date of exercise, then (A) the Board shall make, and
      shall provide or cause to be provided to the Holder notice of, a determination
      of the Fair Market Value per share of the Common Stock within 15 days of a
      request by the Holder that it do so, and (B) the exercise of this Warrant
      pursuant to this subsection 1(b) shall be delayed until such determination
      is
      made and notice thereof is provided to the Holder.

     

    (c)
        If this Warrant is exercised in part, this Warrant must be exercised for
      a number of whole shares of the Common Stock and the Holder is entitled to
      receive a new Warrant covering the Warrant Shares that have not been exercised
      and setting forth the proportionate part of the Aggregate Warrant Price
      applicable to such Warrant Shares. Upon surrender of this Warrant in connection
      with the exercise of this Warrant pursuant to the terms hereof, the Company
      will
      (i) issue a certificate or certificates in the name of the Holder for the
      largest number of whole shares of the Common Stock to which the Holder shall
      be
      entitled upon such exercise and, if this Warrant is exercised in whole, in
      lieu
      of any fractional share of the Common Stock to which the Holder shall be
      entitled, pay to the Holder cash in an amount equal to the Fair Market Value
      of
      such fractional share (as determined in accordance with subsection 1(b)), and
      (ii) deliver the other securities and properties receivable upon the exercise
      of
      this Warrant, or the proportionate part thereof, if this Warrant is exercised
      in
      part, pursuant to the provisions of this Warrant.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2. 
      Reservation
      of Warrant Shares; Listing
      . The
      Company agrees that, prior to the expiration of this Warrant, the Company shall
      at all times (a) have authorized and in reserve, and shall keep available,
      solely for issuance and delivery upon the exercise of this Warrant, the shares
      of the Common Stock and other securities and properties as from time to time
      shall be receivable upon the exercise of this Warrant, free and clear of all
      restrictions on sale or transfer, other than under Federal or state securities
      laws, and free and clear of all preemptive rights and rights of first refusal
      and (b) as long as the Common Stock is listed on any national securities
      exchange, use its reasonable best efforts to keep the Warrant Shares authorized
      for listing on such exchange upon notice of issuance.

    

    3. 
      Certain
      Adjustments
      .

     

    (a)
        In case the Company shall hereafter (i) pay a dividend or make a
      distribution on its Common Stock in shares of Common Stock, (ii) subdivide
      its
      outstanding shares of Common Stock into a greater number of shares, (iii)
      combine or reverse-split its outstanding shares of Common Stock into a smaller
      number of shares or (iv) issue by reclassification of its Common Stock any
      shares of capital stock of the Company, then the Per Share Warrant Price and
      the
      number of Warrant Shares shall forthwith be proportionately decreased and
      increased, respectively, in the case of a subdivision, distribution or stock
      dividend, or proportionately increased and decreased, respectively, in the
      case
      of a combination or reverse stock split. The Aggregate Warrant Price payable
      for
      the then total number of Warrant Shares available for exercise under this
      Warrant shall remain the same. Adjustments made pursuant to this subsection
      3(a)
      shall become effective on the record date in the case of a dividend or
      distribution, and shall become effective immediately after the effective date
      in
      the case of a subdivision, combination or reclassification. If such dividend,
      distribution, subdivision or combination is not consummated in full, the Per
      Share Warrant Price and Warrant Shares shall be readjusted
      accordingly.

     

    (b)
        In case of any capital reorganization or reclassification, or any
      consolidation or merger to which the Company is a party other than a merger
      or
      consolidation in which the Company is the continuing corporation, or in case
      of
      any sale or conveyance to another entity of all or substantially all of the
      assets of the Company, or in the case of any statutory exchange of securities
      with another corporation (including any exchange effected in connection with
      a
      merger of a third corporation into the Company but excluding any exchange of
      securities or merger with another corporation in which the Company is a
      continuing corporation and that does not result in any reclassification of
      or
      similar change in the Common Stock), the Holder of this Warrant shall have
      the
      right thereafter to receive on the exercise of this Warrant the kind and amount
      of securities, cash or other property which the Holder would have owned or
      have
      been entitled to receive immediately after such reorganization,
      reclassification, consolidation, merger, statutory exchange, sale or conveyance
      had this Warrant been exercised immediately prior to the effective date of
      such
      reorganization, reclassification, consolidation, merger, statutory exchange,
      sale or conveyance and in any such case, if necessary, appropriate adjustment
      shall be made in the application of the provisions set forth in this Section
      3
      with respect to the rights and interests thereafter of the Holder of this
      Warrant to the end that the provisions set forth in this Section 3 shall
      thereafter correspondingly be made applicable, as nearly as may reasonably
      be,
      in relation to any shares of stock or other securities or property thereafter
      deliverable on the exercise of this Warrant. The above provisions of this
      subsection 3(b) shall similarly apply to successive reorganizations,
      reclassifications, consolidations, mergers, statutory exchanges, sales or
      conveyances. The Company shall require the issuer of any shares of stock or
      other securities or property thereafter deliverable on the exercise of this
      Warrant to be responsible for all of the agreements and obligations of the
      Company hereunder. Notice of any such reorganization, reclassification,
      consolidation, merger, statutory exchange, sale or conveyance and of said
      provisions so proposed to be made, shall be mailed to the Holders of the
      Warrants not less than twenty (20) days prior to such event. A sale of all
      or
      substantially all of the assets of the Company for a consideration consisting
      primarily of securities shall be deemed a consolidation or merger for the
      foregoing purposes.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (c)
        No adjustment in the Per Share Warrant Price shall be required unless
      such adjustment would require an increase or decrease of at least $0.01 per
      share of Common Stock; provided
      ,
however
      , that
      any adjustments which by reason of this subsection 3(c) are not required to
      be
      made shall be carried forward and taken into account in any subsequent
      adjustment; provided
      ,
further
      ,
      however, that adjustments shall be required and made in accordance with the
      provisions of this Section 3 (other than this subsection 3(c)) not later than
      such time as may be required in order to preserve the tax-free nature of a
      distribution, if any, to the Holder of this Warrant or Common Stock issuable
      upon the exercise hereof. All calculations under this Section 3 shall be made
      to
      the nearest cent or to the nearest 1/100th of a share, as the case may be.
      Anything in this Section 3 to the contrary notwithstanding, the Company shall
      be
      entitled to make such reductions in the Per Share Warrant Price, in addition
      to
      those required by this Section 3, as it in its discretion shall deem to be
      advisable in order that any stock dividend, subdivision of shares or
      distribution of rights to purchase stock or securities convertible or
      exchangeable for stock hereafter made by the Company to its stockholders shall
      not be taxable.

     

    (d)
        Whenever the Per Share Warrant Price or the number of Warrant Shares is
      adjusted as provided in this Section 3 and upon any modification of the rights
      of a Holder of Warrants in accordance with this Section 3, the Company shall
      promptly prepare a brief statement of the facts requiring such adjustment or
      modification and the manner of computing the same and cause copies of such
      certificate to be mailed to the Holders of the Warrants. The Company may, but
      shall not be obligated to unless requested by a Majority of the Holders, obtain,
      at its expense, a certificate of a firm of independent public accountants of
      recognized standing selected by the Board of Directors (who may be the regular
      auditors of the Company) setting forth the Per Share Warrant Price and the
      number of Warrant Shares in effect after such adjustment or the effect of such
      modification, a brief statement of the facts requiring such adjustment or
      modification and the manner of computing the same and cause copies of such
      certificate to be mailed to the Holders of the Warrants.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (e)
        If the Board of Directors of the Company shall declare any dividend or
      other distribution with respect to the Common Stock other than a cash
      distribution out of earned surplus, the Company shall mail notice thereof to
      the
      Holders of the Warrants not less than ten (10) days prior to the record
      date fixed for determining stockholders entitled to participate in such dividend
      or other distribution.

     

    (f)
        If, as a result of an adjustment made pursuant to this Section 3, the
      Holder of any Warrant thereafter surrendered for exercise shall become entitled
      to receive shares of two or more classes of capital stock or shares of Common
      Stock and other capital stock of the Company, the Board of Directors (whose
      determination shall be conclusive and shall be described in a written notice
      to
      the Holder of any Warrant promptly after such adjustment) shall determine,
      in
      good faith, the allocation of the adjusted Per Share Warrant Price between
      or
      among shares or such classes of capital stock or shares of Common Stock and
      other capital stock.

     

    (g)
        Upon the expiration of any rights, options, warrants or conversion
      privileges with respect to the issuance of which an adjustment to the Per Share
      Warrant Price had been made, if such option, right warrant or conversion shall
      not have been exercised, the number of Warrant Shares purchasable upon exercise
      of this Warrant, to the extent this Warrant has not then been exercised, shall,
      upon such expiration, be readjusted and shall thereafter be such as they would
      have been had they been originally adjusted (or had the original adjustment
      not
      been required, as the case may be) on the basis of (A) the fact that Common
      Stock, if any, actually issued or sold upon the exercise of such rights,
      options, warrants or conversion privileges, and (B) the fact that such shares
      of
      Common Stock, if any, were issued or sold for the consideration actually
      received by the Company upon such exercise plus the consideration, if any,
      actually received by the Company for the issuance, sale or grant of all such
      rights, options, warrants or conversion privileges whether or not exercised;
      provided
      ,
however
      , that
      no such readjustment shall have the effect of decreasing the number of Warrant
      Shares purchasable upon exercise of this Warrant by an amount in excess of
      the
      amount of the adjustment initially made in respect of the issuance, sale or
      grant of such rights, options, warrants or conversion privileges.

    

    (h)
        In case any event shall occur as to which the other provisions of this
      Section 3 are not strictly applicable but as to which the failure to make any
      adjustment would not fairly protect the purchase rights represented by this
      Warrant in accordance with the essential intent and principles of the
      adjustments set forth in this Section 3 then, in each such case, the Board
      of
      Directors of the Company shall in good faith determine the adjustment, if any,
      on a basis consistent with the essential intent and principles established
      herein, necessary to preserve the purchase rights represented by the Warrants.
      Upon such determination, the Company will promptly mail a copy thereof to the
      Holder of this Warrant and shall make the adjustments described
      therein.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4. 
      Fully
      Paid Stock; Taxes
      . The
      shares of the Common Stock represented by each and every certificate for Warrant
      Shares delivered on the exercise of this Warrant shall, subject to compliance
      by
      the Holder with the terms hereof, at the time of such delivery, be duly
      authorized, validly issued and outstanding, fully paid and nonassessable, and
      not subject to preemptive rights or rights of first refusal imposed by any
      agreement to which the Company is a party, and the Company will take all such
      actions as may be necessary to assure that the par value, if any, per share
      of
      the Common Stock is at all times equal to or less than the then Per Share
      Warrant Price. The Company shall pay, when due and payable, any and all Federal
      and state stamp, original issue or similar taxes which may be payable in respect
      of the issue of any Warrant Share or any certificate thereof to the extent
      required because of the issuance by the Company of such security.

    

    5. 
      Optional Redemption . 

    

    (a)
        In the event that the closing price of the Common Stock for any thirty
      (30) consecutive Trading Days on the American Stock Exchange (or upon another
      national securities exchange or over-the-counter market, if then applicable)
      is
      at least 300% of the Per Share Warrant Price (subject to adjustment for any
      stock splits, combinations, or similar events with respect to the Common Stock
      after the original issuance date of this Warrant) (the “ Redemption
      Price”),
      the
      Company shall be entitled to redeem all, but not less than all, of the Warrants
      at a per Warrant redemption price of $0.01, at any time after the completion
      of
      such thirty (30) consecutive Trading Day period by providing thirty (30)
      business days’ written notice to the Holders. The Holder agrees to return the
      certificate representing the redeemed Warrants to the Company upon their
      redemption (or evidence reasonably satisfactory to the Company of the loss,
      theft, destruction or mutilation of this Warrant in accordance with Section
      8
      hereof).

    

    (b)
        Notwithstanding Section 7(a) hereof, for so long as any Warrant Shares
      are not subject to a registration statement declared effective by the SEC or
      are
      not otherwise permitted to be immediately sold, in whole, pursuant to an
      exemption to registration for such resale, including pursuant to Rule 144(k)
      of
      the Act, the Company shall not be entitled to exercise its redemption rights
      pursuant to Section 7(a) above.

    

    6. 
      Loss,
      etc., of Warrant
      . Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant, and of indemnity reasonably
      satisfactory to the Company, if lost, stolen or destroyed, and upon surrender
      and cancellation of this Warrant, if mutilated, the Company shall execute and
      deliver to the Holder a new Warrant of like date, tenor and
      denomination.

    

    7. 
      Warrant
      Holder Not Stockholder
      . This
      Warrant does not confer upon the Holder any right to vote on or consent to
      or
      receive notice as a stockholder of the Company, as such, in respect of any
      matters whatsoever, nor any other rights or liabilities as a stockholder, prior
      to the exercise hereof; this Warrant does, however, require certain notices
      to
      Holders as set forth herein.

    

    8. 
      Communication
      . No
      notice or other communication under this Warrant shall be effective or deemed
      to
      have been given unless, the same is in writing and is mailed by first-class
      mail, postage prepaid, or via recognized overnight courier with confirmed
      receipt, addressed to:

    

    (a)
        the Company at Manhattan Pharmaceuticals, Inc., 810 Seventh Avenue,
      4th 
      Floor,
      New York, New York 10019, Attn: President, or other such address as the Company
      has designated in writing to the Holder ; or

    

    (b)
        the Holder at the address last furnished to the Company in writing by the
      Holder .

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    9. 
      Headings
      . The
      headings of this Warrant have been inserted as a matter of convenience and
      shall
      not affect the construction hereof.

    

    10. 
      Applicable
      Law
      . This
      Warrant shall be governed by and construed in accordance with the law of the
      State of New York without giving effect to the principles of conflicts of law
      thereof.

    

    11. 
      Amendment,
      Waiver, etc
      . Except
      as expressly provided herein, neither this Warrant nor any term hereof may
      be
      amended, waived, discharged or terminated other than by a written instrument
      signed by the party against whom enforcement of any such amendment, waiver,
      discharge or termination is sought; provided, however, that any provision hereof
      may be amended, waived, discharged or terminated upon the written consent of
      the
      Company and the Majority of the Holders and such amendment, waiver, discharge
      or
      termination shall be effective with respect to the Company and all
      Holders.

    

     IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed by the undersigned duly authorized
      officer, this 11th
      day of
      September, 2008.

     

    
      	
               

            	
              MANHATTAN
                PHARMACEUTICALS, INC.

            
	
               

            	 	 	 
	 	
              By:  

            	 	
               

            
	
               

            	 	 
	
               

            	
              Its:

            	
               

            

    

    
      
        
        

      

      
        8

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