FORBEARANCE
AGREEMENT
This
Forbearance Agreement (this “Agreement”) is made and
entered into this 6 th day of April 2009, by and between NATIONAL
HOLDINGS CORPORATION , a Delaware corporation (the
“Borrower”) and ST. CLOUD CAPITAL PARTNERS II,
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 March 31, 2008 (the
“March Securities Purchase Agreement”), whereby Lender
agreed to loan Borrower Three Million ($3,000,000) Dollars, as
evidenced by that certain promissory note of even date therewith
(the “March Note”) in favor of Lender; and
WHEREAS, prior hereto, Borrower and Lender entered into a
Securities Purchase Agreement, dated June 30, 2008 (the “June
Securities Purchase Agreement”, and together with the March
Securities Agreement, the “Purchase Agreements”),
whereby Lender agreed to loan Borrower Three Million ($3,000,000)
Dollars, as evidenced by that certain promissory note of even date
therewith (the “June Note”, and together with the March
Note, the “Notes”) in favor of Lender; and
WHEREAS, as of March 31, 2009 (the “Interest
Payment Date”) the Company owed Lender an aggregate payment
of $147,945.20 representing accrued interest due and payable on
such date under the Notes (the “Interest Payment”), 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 amounts due
under the Notes or otherwise accelerate amounts due under the Notes
(collectively, the “Indebtedness”); 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
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