FORBEARANCE AND WARRANT
MODIFICATIONAGREEMENT
This Forbearance and Warrant Modification
Agreement (this “Agreement”) is made and entered into
this 25th day of February 2009, by and between NATIONAL HOLDINGS
CORPORATION , a Delaware corporation (the
“Borrower”) and CHRISTOPHER C. DEWEY (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 Five Hundred Thousand ($500,000) Dollars, as
evidenced by that certain promissory note of even date therewith
(the “Note”) in favor of Lender; and
WHEREAS, as of February 22, 2009 (the “Principal
Payment Date”), $500,000 of principal was due and owing under
the Note, not giving effect to expiration of applicable grace
periods; and
WHEREAS, pursuant to the Securities Purchase Agreement,
the Borrower issued to Lender a warrant, dated February 22, 2007
(the “Warrant”), to purchase 125,000 shares of
Borrower’s Common Stock, $0.02 par value at a purchase price
per share (the “Exercise Price”) of $1.40;
and
WHEREAS, the Borrower desires Lender to presently forbear
from exercising its rights and remedies to collect principal and
accrued interest due under the Note (the
“Indebtedness”) as of the Principal Payment Date;
and
WHEREAS, Lender is willing to presently forbear from
exercising its rights and remedies to collect the Indebtedness,
subject to a modification of the Exercise Price, and on the other
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 ack
