Manhattan Pharmaceuticals obtains forbearance agreement for 12% notes

Company allows holders to convert notes to shares at $0.01 per share

By Devika Patel

Knoxville, Tenn., Feb. 14 - Manhattan Pharmaceuticals, Inc. arranged a forbearance agreement with holders of its $1,725,000 of 12% senior secured notes on Feb. 9, according to an 8-K filed Monday with the Securities and Exchange Commission. The notes were issued in 2008 and 2009.

Under the agreement, the noteholders agreed to refrain from exercising their rights under the notes and waive the default until Dec. 31.

Of the notes, $1,035,000 matured on Nov. 19, 2010, $280,000 matured on Dec. 22, 2010 and $410,000 matured on Feb. 3, 2011.

As part of the agreement, the company has agreed to take steps to reduce its debt by permitting the noteholders to convert the notes into common shares at a conversion price of $0.01 per share, which will require stockholder approval.

New York-based Manhattan Pharmaceuticals is a specialty health care products company.

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