Document:

Exhibit
      10.8

     

    AMENDMENT
      NO. 1 TO EMPLOYMENT AGREEMENT

     

    This
      AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Amendment")
      is
      entered into as of November 19, 2008 and shall be effective as of October 1,
      2008, by and between Manhattan Pharmaceuticals, Inc. (the "Company")
      and
      Michael G. McGuinness (the "Executive").

     

    WITNESSETH
      THAT:

     

    WHEREAS,
      the
      Company and the Executive entered into that certain Employment Agreement, dated
      as of July 7, 2006 (the "Agreement”);
      

     

    WHEREAS,
      the
      Company proposes to offer and sell (the “Offering”)
      up to
      $2,500,000 of units (each a “Unit”
and
      collectively, the “Units”)
      consisting of (i) a senior secured note in the principal amount of $5,000 (each
      a “Note”
and
      collectively, the “Notes”)
      and
      (ii) a warrant to purchase up to a number of shares of the Company’s common
      stock, $.001 par value per share, determined by dividing 300% of the principal
      amount of the Note by $.09, the exercise price per share of the
      warrant;

    

    WHEREAS,
      if
      $2,500,000 of Units are sold (the “Maximum
      Amount”),
[l]
      (the “Placement
      Agent”)
      has
      the option to sell an additional $1,000,000 of Units (the “Overallotment
      Amount”)
      as
      part of the Offering; 

    

    WHEREAS,
      the
      Company may hold a closing at any time after subscriptions for at least
      $1,000,000 of Units have been received and accepted and other conditions to
      the
      closing have been satisfied (the “First
      Closing”);

    

    WHEREAS,
      after
      the
      First Closing the Company may sell up to the Maximum Amount (or any
      Overallotment Amount, if applicable) until December 31, 2008 or, upon mutual
      agreement of the Company and the Placement Agent, January 31, 2009 (the
“Expiration
      Date”);
      provided that the final closing (the “Final
      Closing”)
      shall
      occur no later than 10 business days after the Expiration Date; and

    

    WHEREAS,
      in
      connection with Offering, the Executive has determined that it is in the best
      interest of the Company to temporarily reduce his salary effective as of October
      1, 2008 in accordance with the terms of this Amendment until such time as the
      Company shall have received at least $2,500,000 of gross proceeds from the
      sale
      of the Units or other sales of securities (including any warrant exercise)
      or
      from other revenue received by the Company in the operation of its business
      or
      any combination of the foregoing (collectively, the “Qualified
      Payments”).

    

    NOW
      THEREFORE,
      for and
      in consideration of the foregoing, the Company and the Executive hereby agree
      as
      follows:

     

    1. Section
      4(a)
      of the
      Agreement is hereby amended and restated in its entirety to read as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “(a) Base
      Salary.
      

     

    (i) During
      the Term, the Company shall pay the Executive a salary (the “Base
      Salary”)
      which
      shall initially be equal to $300,000 per year. Effective as of October 1, 2008,
      the Base Salary payable to the Executive shall be decreased to $200,000 per
      year
      (the “First
      Tier Amount”).
      Upon
      consummation of the Final Closing (as defined in Amendment No. 1 to this
      Agreement, dated November 19, 2008 (“Amendment
      No. 1”)),
      the
      Base Salary of the Executive shall be adjusted as follows: (i) in the event
      that
      the Company sells at least $1,500,000 but less than $2,000,000 of Units in
      the
      Offering (as defined in Amendment No. 1), the Base Salary shall be increased
      to
      $240,000 per year (the “Second
      Tier Amount”),
      (ii)
      in the event that the Company sells at least $2,000,000 but less than $2,500,000
      of Units in the Offering, the Base Salary shall be increased to $270,000 per
      year (the “Third
      Tier Amount”)
      and
      (iii) in the event that the Company sells $2,500,000 of Units or more Units
      in
      the Offering, the Base Salary shall be increased to $300,000 (the “Fourth
      Tier Amount”,
      and
      each of the of the First Tier Amount, Second Tier Amount, Third Tier Amount
      or
      Fourth Tier Amount, a “Tier
      Amount”),
      in
      each case, retroactively effective on and as of October 1, 2008; provided,
      however,
      that to
      the extent the Base Salary shall be increased above the First Tier Amount
      following the Final Closing (as defined in Amendment No. 1), the Executive
      shall
      receive a lump sum payment equal to the difference between the amount received
      during the entire pay period following October 1, 2008 based upon a Base Salary
      of $200,000 and the applicable Tier Amount determined following the Final
      Closing in the next payroll payment made to the Executive.

     

    (ii) In
      the
      event that the aggregate principal amount of Notes sold in the Offering is
      equal
      to or greater than $1,000,000 but less than $2,500,000, then following the
      Final
      Closing the Executive’s Base Salary shall be adjusted to the next applicable
      Tier Amount for every additional $500,000 received by the Company following
      the
      Final Closing (other than from the sale of the Units) up to the Fourth Tier
      Amount. Any increase pursuant to this Section
      4(a)(ii)
      shall be
      effective as of the date the Company receives additional Qualified Payments
      which result in the aggregate amount received by the Company (other than from
      the sale of the Notes) being at least equal to $500,000, $1,000,000 or
      $1,500,000, as the case may be. 

     

    (iii) Payments
      to the Executive of his Base Salary shall be made in accordance with the
      Company’s normal payroll practices. 

     

    (iv) The
      Base
      Salary will be reviewed by the Board no less frequently then annually and except
      as otherwise provided herein may be increased (but not decreased).”

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    2. This
      Amendment may be executed in counterparts, each of which shall constitute an
      original, but both of which together shall constitute one and the same
      instrument. Signatures
      delivered by facsimile shall have the same effect as original
      signatures. This
      Amendment shall be governed by, and construed and interpreted in accordance
      with, the laws of the State of New York, without giving effect to its principles
      of conflicts of laws.

     

    3. Except
      as
      specifically amended hereby, the Agreement remains otherwise unmodified and
      in
      full force an effect, and is hereby ratified by the Company and the Executive.
      This Amendment may not be amended except in accordance with Section
      10(e)
      of the
      Agreement.

     

    [Signature
      page follows]

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have signed this Amendment to Employment Agreement
      as of the day and year set forth above.

     

    
      	 	
              MANHATTAN
                PHARMACEUTICALS, INC.

            
	 	 
	 	
              By:

            	
               /s/
                Douglas Abel

            
	 	
              Name: 

            	
                    Douglas
                Abel

            
	 	
              Title:
                

            	
                    Chief
                Executive Officer

            
	 	 
	 	
              /s/
                Michael G. McGuinness

            
	 	
              Michael
                G. McGuinnessExhibit
      10.9

    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

    

    
      	
              Warrant
                No. MPI-

            	
              Dated:
                November 19, 2008

            

    

    

    Manhattan
      Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
      hereby certifies that, for value received, [l]
      or its Permitted Transferees (as hereinafter defined) (the “Holder”),
      is
      entitled to purchase from the Company up to a total of 5,175,010 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 $0.09 (as adjusted from time to time as provided in
Section
      9,
      the
“Exercise
      Price”),
      at
      any time and from the date hereof and through December 31, 2013 (the
“Expiration
      Date”),
      and
      subject to the following terms and conditions. This Warrant (“Warrant”)
      is one
      of a series of similar Warrants issued pursuant to that certain Placement Agency
      Agreement, dated as of October 21, 2008, by and among the Company and [l]
      (the “Placement
      Agency Agreement”).
      All
      such warrants are referred to herein, collectively, as the “Warrants”
and
      the
      holders thereof (as well as any subsequent Permitted Transferee) along with
      the
      Holder named herein, the “Holders.”

     

    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
      Placement Agency Agreement.

     

    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.
      For the purposes hereof, the term “Business
      Day”
means
      any day on which banks located in New York City are not required or authorized
      by law to remain closed.

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    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 of 1933, as amended (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. For the
      purposes hereof, the term “Person”
means
      an individual, entity, corporation, partnership, association, limited liability
      company, limited liability partnership, joint-stock company, trust or
      unincorporated organization.

     

    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.

     

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    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. 

     

    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.

    

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    (b) 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 ten (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).

     

    (c) 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.

     

    (d) Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
      (a) 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.

     

    (e) 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.

     

    (f) 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.

     

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    (g) 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 pursuant to the Placement Agency
      Agreement (provided the Securities and Exchange Commission continues to take
      the
      position that such treatment is proper at the time of such exercise).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    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 (i) any such waiver or increase will not be effective until
      the
      61st day after such notice is delivered to the Company, and (ii) any such waiver
      or increase or decrease will apply only to the Holder and not to any other
      holder of Warrants.

     

    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
      in
      the Purchase Agreement 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
      in
      the Purchase Agreement 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
      in
      the Placement Agency Agreement.

     

    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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    15. Automatic
      Conversion upon Expiration.
      Subject
      to Section
      11 above,
      in the
      event that, upon the Expiration Date, the Closing Prices per share of Common
      Stock (or other security issuable upon the exercise hereof) as determined in
      accordance with Section
      10
      above is
      greater than the Exercise Price in effect on such date, then this Warrant shall
      automatically be deemed on and as of such date to be converted pursuant to
      Section
      10
      above as
      to all Warrant Shares (or such other securities) for which it shall not
      previously have been exercised. Upon surrender of this Warrant as provided
      in
Section
      10
      above,
      the Company shall promptly deliver a certificate representing the Warrant Shares
      (or such other securities) issued upon such conversion to Holder. 

     

    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 Holders), 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.

     

    (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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (d) Amendments
      and Waivers.
      The
      Company may, without the consent of the Holders, 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
      Holders (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 Holders
      of
      then outstanding Warrants in any material respect. This Warrant may also be
      amended or waived with the consent of the Company and the Holder. Further,
      the
      Company may, with the consent, in writing or at a meeting, of the Holders (the
      “Required
      Holders”)
      of the
      then outstanding Warrants exercisable for at least a majority of the Common
      Stock eligible under such Warrants, amend in any way, by supplemental agreement
      or otherwise, this Warrant and/or all of the outstanding Warrants; provided,
      however,
      that
      (i) no such amendment by its express terms shall adversely affect any Holder
      differently than it affects all other Holders, unless such Holder consents
      thereto, and (ii) no such amendment concerning the number of Warrant Shares
      or
      Exercise Price shall be made unless any Holder who will be affected by such
      amendment consents thereto. 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
      Holders hereby waive all rights to a trial by jury.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    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

            

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    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.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	 	
              (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
                (h)(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)

            

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    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 Transferee

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