National Holdings enters forbearance agreements for 10% notes

By Devika Patel

Knoxville, Tenn., March 2 - National Holdings Corp. has entered into forbearance agreements in regards to $1 million in 10% promissory notes that were sold in a private placement on Feb. 22, 2007, according to an 8-K filed Monday with the Securities and Exchange Commission.

The Feb. 24 agreement with investor St. Cloud Capital Partners, LP provides that St. Cloud will not exercise any of its rights under its note as long as the principal amount of $250,000 is paid according to a new schedule delineated within the agreement.

On Feb. 25, the company executed another forbearance agreement with investor Bedford Oak Partners, LP. Bedford Oak agreed to forbear from exercising its rights under the note until May 1. The company, in exchange for this concession, agreed to reduce the strike price of Bedford Oak's accompanying warrant to $0.75 per share from $1.40 per share.

Also on Feb. 25, investor Christopher C. Dewey agreed to forbear from exercising his rights under the note until May 1. In consideration for this, the company agreed to reduce the strike price of Dewey's warrant to $1.00 per share from $1.40 per share.

New York-based National Holdings is a holding company for National Securities Corp., National Insurance Corp. and National Holdings Mortgage Corp.

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