FORBEARANCE AGREEMENT
Exhibit
10.27
This Forbearance Agreement (this
“Agreement”) is made and entered into this 6th 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 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 Notes or Purchase Agreements.
2. Reservation of
Rights. Subject to Section 3 below, Lender reserves the right,
in its discretion, to exercise any or all of its rights and remedies arising
under the Notes or Purchase Agreements, applicable law or otherwise, as a result
of any Events of Default occurring after the date hereof. Subject to
Section 3 hereof, nothing contained herein shall be construed as a waiver of the
failure of the Borrower to comply with the terms of the Notes or Purchase
Agreements after the date hereof.
3. Forbearance. For
good and valuable consideration, Lender agrees that it shall not exercise any
rights (including, but not limited to, payment demand or setoff rights as a
result of failure of payment of the accrued interest on the Notes, on the
Interest Payment Date), nor directly or indirectly seek to collect from the
Borrower any obligations evidenced by the Notes or take any other action,
including a declaration of default as to, or acceleration of, the Notes or
assertion of any claims or joining in any petition or otherwise initiating any
insolvency case, reorganization or any other legal proceeding against the
Borrower, so long as the Interest Payment is paid by the close of business April
13, 2009; provided,
however, that in the event that the Company shall have obtained $500,000
in financing with an unrelated third party on or prior to April 13, 2009, the
term of this forbearance shall automatically, without any further action of any
of the parties hereto, be extended until the close of business April 30,
2009.
4. Authority to Execute this
Agreement. The Borrower represents and warrants that it has
the right, power and capacity and is duly authorized and empowered to enter
into, execute, deliver and perform this Agreement.
5. Construction.
A. This
Agreement shall be interpreted, construed and governed by and under the laws of
the State of New York, without regard to its conflicts of law
doctrine.
B. This
Agreement shall be binding on the Borrower and its respective successors and
heirs, and shall inure to the benefit of Lender, its successors, assigns,
affiliates, divisions and parent. This Agreement cannot be assigned
by the Borrower at any time. Lender may assign this Agreement without
notice or to the consent of the Borrower.
C. Whenever required by context, the
masculine pronouns will include the feminine and neuter genders, and the
singular will include the plural, and vice versa. This Agreement
constitutes the entire agreement between the Borrower and Lender with regard to
the subject matter hereof.
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IN WITNESS WHEREOF, the Borrower and
Lender have executed this Agreement as of the date first set forth
above.
NATIONAL
HOLDINGS CORPORATION
By:/S/ XXXX
XXXXXXXXXX
Xxxx
Xxxxxxxxxx, CEO
ST. CLOUD
CAPITAL PARTNERS II, L.P.
By: SGCP
II, LLC
Its:
General Partner
By:/S/ XXXXXXXX X.
XXXXXX
Xxxxxxxx
X. Xxxxxx
Managing
Member
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