FORBEARANCE
AGREEMENT
This
Forbearance Agreement (this “Agreement”) is made and
entered into this 23rd day of February 2009, by and between
NATIONAL HOLDINGS CORPORATION , a Delaware corporation (the
“Borrower”) and ST. CLOUD CAPITAL PARTNERS, L.P.
(the “Lender “).
W I T N E S S E T
H:
WHEREAS, prior hereto, Borrower and Lender entered into a
Securities Purchase Agreement dated February 22, 2007 (the
“Securities Purchase Agreement”), whereby Lender agreed
to loan Borrower Two Hundred Fifty Thousand ($250,000) Dollars, as
evidenced by that certain promissory note of even date therewith
(the “Note”) in favor of Lender; and
WHEREAS, as of the date hereof (the “Principal
Payment Date”), $250,000 of principal is due and owing under
the Note, not giving effect to expiration of applicable grace
periods; and
WHEREAS, the Borrower desires Lender to presently forbear
from exercising its rights and remedies to collect principal due
under the Note (the “Indebtedness”) on the Principal
Payment Date; and
WHEREAS, Lender is willing to presently forbear from
exercising its rights and remedies to collect the Indebtedness, on
the terms and subject to the conditions contained in this
Agreement.
NOW,
THEREFORE, in
consideration of the foregoing, the mutual promises and
understandings of the parties hereto set forth herein and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Lender and the Borrower each hereby
agree as set forth in this Agreement.
1.
Use of Defined Terms . Except as expressly set
forth in this Agreement, all terms which have an initial capital
letter where not required by the rules of grammar are defined to
the Note or Securities Purchase Agreement.
2.
Reservation of Rights. Subject to Section 3
below, Lender reserves the ri
