Insider filing report for Changes in Beneficial Ownership
- Schedule 13G & 13D forms are used to report a party's ownership of stock which exceeds 5% of a company's total stock issue.
- Schedule 13G is a shorter version of Schedule 13D with fewer reporting requirements.
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SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
13D
INFORMATION
TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE
13d-2(a)
(Amendment
No. ___)*
NATIONAL HOLDINGS
CORPORATION
(Name of
Issuer)
Common Stock, par value
$0.02 per share
(Title of
Class of Securities)
636375107
(CUSIP
Number)
Linden
Asset Management Inc.
200
Abington Executive Park, Suite 205
Clarks
Summit, Pennsylvania 18411
Attention:
Paul J. Coviello
Tel: 570.586.8600
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
October 5,
2010
(Date of
Event Which Requires Filing of this Statement)
If the filing person has previously
filed a statement on Schedule 13G to report the acquisition that is the
subject of this Schedule 13D, and is filing this schedule because of
Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box o.
Note. Schedules
filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
* The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
or otherwise subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the Notes.)
CUSIP
No.: 636375107
NAME OF
REPORTING PERSON
1. S.S.
OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paul J. Coviello
2 CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o
3 SEC
USE ONLY
4 SOURCE
OF FUNDS
AF
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
or 2(e) o
|
6. CITIZENSHIP
OR PLACE OF ORGANIZATION
United
States
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7 SOLE
VOTING POWER - 0
8 SHARED
VOTING POWER - 3,416,798*
9 SOLE
DISPOSITIVE
POWER - 0
10 SHARED
DISPOSITIVE POWER -
3,416,798*
|
11 AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,416,798*
12 CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13 PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%*
14 TYPE
OF REPORTING PERSON
IN
* As of
October 13, 2010 (the date of filing of this Schedule 13D).
Page 2 of
11 pages
CUSIP
No.: 636375107
1 NAME
OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
Linden
Asset Management Inc.
2 CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o
3 SEC
USE ONLY
4 SOURCE
OF FUNDS
AF
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
or 2(e) o
|
6 CITIZENSHIP
OR PLACE OF ORGANIZATION
Pennsylvania
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7 SOLE
VOTING POWER - 0
8 SHARED
VOTING POWER - 3,416,798*
9 SOLE
DISPOSITIVE POWER - 0
10 SHARED
DISPOSITIVE
POWER - 3,416,798*
|
11 AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,416,798*
12 CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
13 PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%*
14 TYPE
OF REPORTING PERSON
IA
* As of
October 13, 2010 (the date of filing of this Schedule 13D).
Page 3 of
11 pages
CUSIP
No.: 636375107
1 NAME
OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
2 CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o
3 SEC
USE ONLY
4 SOURCE
OF FUNDS
WC
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
or 2(e) o
|
6 CITIZENSHIP
OR PLACE OF ORGANIZATION
Cayman
Islands
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7 SOLE
VOTING POWER - 0
8 SHARED
VOTING POWER - 3,416,798*
9 SOLE
DISPOSITIVE POWER - 0
10 SHARED
DISPOSITIVE
POWER - 3,416,798*
|
11 AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,416,798*
12 CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
13 PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
14 TYPE
OF REPORTING PERSON
PN
* As of
October 13, 2010 (the date of filing of this Schedule 13D).
Page 4 of
11 pages
CUSIP
No.: 636375107
NAME OF
REPORTING PERSON
1. S.S.
OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Linden Capital Management IV,
LLC
2 CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o
3 SEC
USE ONLY
4 SOURCE
OF FUNDS
AF
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)
or 2(e) o
|
6. CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7 SOLE
VOTING POWER - 0
8 SHARED
VOTING POWER - 3,416,798*
9 SOLE
DISPOSITIVE
POWER - 0
10 SHARED
DISPOSITIVE POWER -
3,416,798*
|
11 AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,416,798*
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES o
|
13 PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
14 TYPE
OF REPORTING PERSON
OO
* As of
October 13, 2010 (the date of filing of this Schedule 13D).
Page 5 of
11 pages
ITEM
1. Security
and Issuer.
The class
of equity securities to which this Statement relates is the common stock, par
value $0.02 per share (the “Common Stock”), of National
Holdings Corporation, a Delaware corporation (the “Company” or the “Issuer”), with its principal
executive offices located at 120 Broadway, 27th Floor,
New York, New York 10271.
ITEM
2. Identity
and Background.
(a)-(c)
and (f) The names of the persons filing this Statement (the “Reporting Persons”) are: (1)
Linden Growth Partners Master Fund, L.P., a Cayman Islands exempted limited
partnership (“Master
Fund”); (2) Linden Asset Management Inc., a Pennsylvania corporation
(“Investment Manager”);
(3) Linden Capital Management IV, LLC, a Delaware limited liability company
(“General Partner”);
and (4) Paul J. Coviello, a United States Citizen (“Mr.
Coviello”). The General Partner serves as the general partner
of the Master Fund. The Investment Manager serves as the investment
manager of the Master Fund. Mr. Coviello is the Chief Executive
Officer of the Investment Manager and Manager of the General
Partner.
The
principal business of the Master Fund is that of a private investment vehicle
engaged in investing and trading in a wide variety of securities and financial
instruments for its own account. The principal business of the
Investment Manager is providing investment management services to the Master
Fund and other investment vehicles. The principal business of the
General Partner is serving as the general partner of the Master
Fund. Mr. Coviello’s principal occupation is serving as the Chief
Executive Officer of the Investment Manager. The business address of
each of the Reporting Persons is c/o Linden Asset Management Inc., 200 Abington
Executive Park, Suite 205, Clarks Summit, Pennsylvania 18411.
Attached
as Schedule I hereto and incorporated herein by reference is a list containing
the (a) name, business address and citizenship, (b) present principal occupation
or employment, and (c) the name, principal business and address of any
corporation or other organization in which such employment is conducted, for
each director and executive officer of the Investment Manager (the “Directors and
Officers”).
(d)–(e) During
the last five years, none of the Reporting Persons or, to the knowledge of the
Reporting Persons, the Directors and Officers, has been (a) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(b) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM
3. Source
and Amount of Funds or Other Consideration
The funds
used to acquire the securities described in Item 4 of this Schedule 13D were
from working capital of the Master Fund, and the amount of funds totaled in the
aggregate approximately $1,275,000.
ITEM
4. Purpose
of Transaction.
Description
of Securities of the Issuer Currently Held by the Reporting Persons
Page 6 of
11 pages
Series C
Securities. Pursuant to the terms
of a Securities Purchase Agreement, dated as of July 12, 2010, by and among the
Issuer, the Master Fund and certain other investors set forth therein (“Series C Purchase
Agreement”), the Master Fund acquired 5,525 Units consisting of (i) 5,525
shares of the Issuer’s Series C Convertible Preferred Stock, par value $0.01 per
share (the “Series C Preferred
Stock”), at a purchase price of $50.00 per share, and (ii) warrants (the
“Series C Warrants”; and, together with
the Series C Preferred Stock, the “Series C Securities”) to
purchase 552,486 shares of Common Stock. The Series C Securities were
sold to the Master Fund in consideration of the conversion of $275,000 principal
amount of promissory notes, plus accrued interest, previously acquired by the
Master Fund in June 2010.
The
Master Fund’s Series C Preferred Stock is currently convertible into 552,486
shares of Common Stock (the per share conversion ratio determined by dividing
the Series C Preferred Stock purchase price by the applicable conversion price,
which is initially $0.50). From July 12, 2010 until March 31, 2011,
the conversion price of the Series C Preferred Stock is subject to full-ratchet
price protection in the event the Issuer issues or sells, or is deemed to have
issued or sold, subject to certain standard exceptions, any shares of its Common
Stock for consideration per share less than the conversion price of the Series C
Preferred Stock then in effect. In a
ddition, the conversion price of
the Series C Preferred Stock may be adjusted to reflect subdivisions or
combinations of the Issuer’s Common Stock. Holders of the Series C
Preferred Stock have certain co-sale rights as further described in the Series C
Preferred Stock Certificate of Designation. The holders of Series C
Preferred Stock generally have the right to vote on any matter with the holders
of Common Stock and the Company’s Series A Preferred Stock. Holders
of Series C Preferred Stock are entitled to vote such number of shares of Common
Stock equal to the difference between (i) the number of shares of Common Stock
into which such shares of Series C Preferred Stock could be converted into, and
(ii) one (1) Share of Common Stock. The holders of Series C Preferred
Stock are also entitled to certain protective provisions pursuant to which the
majority of the Series C Preferred Stock have the right to approve certain
actions as further described in the Series C Preferred Stock Certificate of
Designation. The shares of Series C Preferred Stock are not entitled to receive
any dividends.
Each
Series C Warrant has an exercise price of $0.50 per share. One-third
of the Master Fund’s Series C Warrants vested on the date of grant (July 12,
2010), with the remaining Series C Warrants vesting in equal amounts on each of
the first and second anniversaries of the date of grant. Each tranche
of Series C Warrants expires five years from the date of vesting. Until March
31, 2011, the exercise price of the Series C Warrants is subject to full-ratchet
price protection in the event of the Issuer issues or sells, or is deemed to
have issued or sold, subject to certain standard exceptions, any shares of
its Common Stock for consideration per share less that the exercise price of the
Series C Warrants then in effect. In addition, the number of shares
of Common Stock subject to each Series C Warrant is subject to adjustment in the
event of stock splits, dividends, distributions and similar adjustments to the
Issuer’s capital stock.
The
Issuer, the Master Fund and the other investors entered into a Registration
Rights Agreement in connection with shares of Common Stock underlying the Series
C Securities.
Series D
Securities. Pursuant to the terms
of a Securities Purchase Agreement, dated as of September 29, 2010, by and among
the Issuer, the Master Fund and certain other investors set forth therein
(“Series D Purchase
Agreement”), the Master Fund, on October 5, 2010, acquired 20,000 Units
consisting of (i) 20,000 shares of the Issuer’s Series D Convertible Preferred
Stock, par value $0.01 per share (the “Series D Preferred Stock”), at a
purchase price of $50.00 per share, and (ii) warrants (the “Series D Warrants”; and, together with
the Series D Preferred Stock, the “Series D Securities”) to purchase an
aggregate of 2,000,000 shares of Common Stock. The Master Fund
acquired the Series D Securities for $1,000,000.
Page 7 of
11 pages
The
Master Fund’s Series D Preferred Stock is currently convertible into 2,000,000
shares of Common Stock (the per share conversion ratio determined by dividing
the Series D Preferred Stock purchase price by the applicable conversion price,
which is initially $0.50). From September 29, 2010 until March 31,
2011, the conversion price of the Series D Preferred Stock is subject to
full-ratchet price protection in the event the Issuer issues or sells, or is
deemed to have issued or sold, subject to certain standard exceptions, any
shares of its Common Stock for consideration per share less than the conversion
price of the Series D Preferred Stock then in effect. In addition,
the conversion price of the Series D Preferred Stock may be adjusted to reflect
subdivisions or combinations of the Issuer’s Common Stock. Holders of
the Series D Preferred Stock have certain co-sale rights as further described in
the Series D Preferred Stock Certificate of Designation. The holders
of Series D Preferred Stock generally have the right to vote on any matter with
the holders of Common Stock and the Issuer’s Series A Preferred Stock and Series
C Preferred Stock. Holders of Series D Preferred Stock are entitled
to vote such number of shares of Common Stock equal to the difference between
(i) the number of shares of Common Stock into which such shares of Series D
Preferred Stock could be converted into, and (ii) one (1) Share of Common
Stock. The holders of Series D Preferred Stock are also entitled to
certain protective provisions pursuant to which the majority of the Series D
Preferred Stock have the right to approve certain actions as further described
in the Series D Preferred Stock Certificate of Designation. The shares of Series
D Preferred Stock are not entitled to receive any dividends.
Each
Series D Warrant has an exercise price of $0.50 per share. One-third
of the Master Fund’s Series D Warrants vested on the date of grant (October 5,
2010), with the remaining Series D Warrants vesting in equal amounts on each of
the first and second anniversaries of the date of grant. Each tranche
of Series D Warrants expires five years from the date of vesting. Until March
31, 2011, the exercise price of the Series D Warrants is subject to full-ratchet
price protection in the event of the Issuer issues or sells, or is deemed to
have issued or sold, subject to certain standard exceptions, any shares of its
Common Stock for consideration per share less that the exercise price of the
Series D Warrants then in effect. In addition, the number of shares
of Common Stock subject to each Series D Warrant is subject to adjustment in the
event of stock splits, dividends, distributions and similar adjustments to the
Issuer’s capital stock.
The
Issuer, the Master Fund and the other investors entered into a Registration
Rights Agreement in connection with shares of Common Stock underlying the Series
D Securities.
Waiver by Series C
Holders. On
September 21, 2010, in connection with the issuance of the Series D Securities,
the Master Fund waived certain rights under the Series C Purchase Agreement in
consideration of being issued Series C Warrants to purchase 40,500 shares
of Common Stock. One-third of these Warrants vested on the date of
grant (October 5, 2010), with the remaining vesting in equal amounts on each of
the first and second anniversaries of the date of grant.
Board
Membership
In
connection with the Series D Purchase Agreement, on October 5, 2010, Mr. Paul J.
Coviello was appointed to the Issuer’s Board of Directors as a Class I
Director.
General
The
Reporting Persons acquired the Issuer’s securities for investment
purposes. Except as set forth herein, none of the Reporting Persons
or, to the knowledge of the Reporting Persons, the Directors and Officers, has
any plans or proposals that relate to or would result in any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
Page 8 of
11 pages
The
Reporting Persons reserve the right to acquire, or cause to be acquired,
additional securities of the Issuer, to dispose of, or cause to be disposed,
such securities at any time or to formulate other purposes, plans or proposals
regarding the Issuer or any of its securities, to the extent deemed advisable in
light of general investment and trading policies of the Reporting Persons,
market conditions or other factors.
ITEM
5. Interest
in Securities of the Issuer.
(a) As
of October 13, 2010 (the date of filing of this Schedule 13D), the Master Fund
has the ability to acquire 3,416,798 shares of Common Stock within 60 days
through the exercise or conversion of derivative securities and thus
beneficially owns 3,416,798 shares of Common Stock, representing 16.5% of all of
the Issuer’s outstanding Common Stock. The Investment Manager, the
General Partner and Mr. Coviello may each be deemed to beneficially own the
shares of Common Stock beneficially owned by the Master Fund. Each
disclaims beneficial ownership of such shares. The foregoing is based
on 17,289,204 shares of Common Stock outstanding as of August 13, 2010, as
reported on the Issuer’s Form 10-Q for the quarter ended June 30, 2010 filed
with the SEC on August 16, 2010.
(b) The
Reporting Persons have shared power (with each other and not with any third
party), to vote or direct the vote of and to dispose or direct the disposition
of the 3,416,798 shares of Common Stock reported herein.
(c) Other
than the transactions described in Item 4 above, no transactions in the Common
Stock have been effected by the Reporting Persons in the last sixty (60)
days.
(d) Not
applicable.
(e) Not
applicable.
|
ITEM
6.
|
Contracts,
Arrangements, Understandings or Relationships With Respect to Securities
of the Issuer.
|
Except as
disclosed in Items 4 and 7, there are no contracts, arrangements, understandings
or relationships (legal or otherwise) among the Reporting Persons and any other
person with respect to any securities of the Issuer, including, but not limited
to transfer or voting of any of the securities, finder’s fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
ITEM
7. Material
to be Filed as Exhibits.
Exhibit
No. Document
|
1.
|
Joint Filing
Agreement†
|
|
2.
|
Certificate
of Designation of Series C Preferred Stock (incorporated by reference to
Exhibit 3.8 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
3.
|
Certificate
of Correction to the Certificate of Designation of Series C Preferred
Stock (incorporated by reference to Exhibit 3.9 to the Issuer’s Form 8-K,
as filed with the SEC on July 14,
2010)
|
Page 9 of
11 pages
|
4.
|
Form
of Series C Warrant, dated July 12, 2010 (incorporated by reference to
Exhibit 4.9 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
5.
|
Securities
Purchase Agreement, dated as of July 12, 2010, by and among the Issuer and
the Investors signatory thereto (incorporated by reference to Exhibit
10.35 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
6.
|
Registration
Rights Agreement, dated as of July 12, 2010, by and among the Issuer and
the Investors signatory thereto (incorporated by reference to Exhibit
10.36 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
7.
|
Waiver
and Agreement, dated as of September 21, 2010, by and between the Issuer
and the Master Fund†
|
|
8.
|
Certificate
of Designation of Series D Preferred Stock (incorporated by reference to
Exhibit 3.10 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
9.
|
Form
of Series D Warrant dated October 5, 2010 (incorporated by reference to
Exhibit 4.10 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
10.
|
Form
of Series C Warrant, dated October 5, 2010 (incorporated by reference to
Exhibit 4.11 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
11.
|
Securities
Purchase Agreement, dated September 29, 2010, by and among the Company and
the Investors signatory thereto (incorporated by reference to Exhibit
10.37 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
12.
|
Registration
Rights Agreement, dated as of September 29, 2010, by and among the Company
and the Investors signatory thereto (incorporated by reference to Exhibit
10.38 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
†
Attached hereto.
Page 10
of 11 pages
SIGNATURE
After reasonable inquiry and to the
best of my knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: October
13, 2010
|
PAUL
J. COVIELLO
LINDEN
ASSET MANAGEMENT INC.
LINDEN
GROWTH PARTNERS MASTER FUND, L.P.
LINDEN
CAPITAL MANAGEMENT IV, LLC
|
|||
|
|
|||
|
By:
|
/s/ Paul J. Coviello | ||
|
Paul
J. Coviello, for himself, as Chief Executive Officer of
the
Investment Manager and as Manager of the General
Partner
(for itself and the Master Fund)
|
|||
Page 11
of 11 pages
SCHEDULE
I
The
following information sets forth the (a) name, business address and citizenship,
(b) present principal occupation or employment and (c) the name, principal
business and address of any corporation or other organization in which such
employment is conducted, for each of the directors and executive officers of the
Investment Manager.
INVESTMENT
MANAGER DIRECTORS
Paul J.
Coviello (US Citizen)
Chief
Executive Officer
Linden
Asset Management Inc. (a private investment management firm)
200
Abington Executive Park, Suite 205
Clarks
Summit, Pennsylvania 18411
INVESTMENT
MANAGER EXECUTIVE OFFICERS
Paul J.
Coviello (US Citizen)
Chief
Executive Officer
Linden
Asset Management Inc. (a private investment management firm)
200
Abington Executive Park, Suite 205
Clarks
Summit, Pennsylvania 18411
Lara
Coviello (US Citizen)
President
Linden
Asset Management Inc. (a private investment management firm)
200
Abington Executive Park, Suite 205
Clarks
Summit, Pennsylvania 18411
EXHIBIT
INDEX
|
Exhibit
No.
|
Document |
|
1.
|
Joint
Filing Agreement†
|
|
2.
|
Certificate
of Designation of Series C Preferred Stock (incorporated by reference to
Exhibit 3.8 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
3.
|
Certificate
of Correction to the Certificate of Designation of Series C Preferred
Stock (incorporated by reference to Exhibit 3.9 to the Issuer’s Form 8-K,
as filed with the SEC on July 14,
2010)
|
|
4.
|
Form
of Series C Warrant, dated July 12, 2010 (incorporated by reference to
Exhibit 4.9 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
5.
|
Securities
Purchase Agreement, dated as of July 12, 2010, by and betwee
n the Issuer
and the Investors signatory thereto (incorporated by reference to Exhibit
10.35 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
6.
|
Registration
Rights Agreement dated as of July 12, 2010 by and between the Issuer and
the Investors signatory thereto (incorporated by reference to Exhibit
10.36 to the Issuer’s Form 8-K, as filed with the SEC on July 14,
2010)
|
|
7.
|
Waiver
and Agreement, dated as of September 21, 2010, by and between the Issuer
and the Master Fund†
|
|
8.
|
Certificate
of Designation of Series D Preferred Stock (incorporated by reference to
Exhibit 3.10 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
9.
|
Form
of Series D Warrant dated October 5, 2010 (incorporated by reference to
Exhibit 4.10 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
10.
|
Form
of Series C Warrant, dated October 5, 2010 (incorporated by reference to
Exhibit 4.11 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
11.
|
Securities
Purchase Agreement, dated September 29, 2010, by and between the Company
and the Investors signatory thereto (incorporated by reference to Exhibit
10.37 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
|
12.
|
Registration
Rights Agreement dated as of September 29, 2010 by and between the Company
and the Investors signatory thereto (incorporated by reference to Exhibit
10.38 to the Issuer’s Form 8-K, as filed with the SEC on October 5,
2010)
|
†
Attached hereto.
Exhibit
1
JOINT
FILING AGREEMENT
In
accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as
amended, the persons named below agree to the joint filing on behalf of each of
them of a statement on Schedule 13D (including amendments thereto) with respect
to the Common Stock, par value $0.02 per share, of National Securities
Corporation, and further agree that this Joint Filing Agreement be included as
an Exhibit to such joint filing. In evidence thereof, the undersigned
hereby execute this Agreement.
Dated: October
13, 2010
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PAUL
J. COVIELLO
LINDEN
ASSET MANAGEMENT INC.
LINDEN
GROWTH PARTNERS MASTER FUND, L.P.
LINDEN
CAPITAL MANAGEMENT IV, LLC
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By:
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/s/ Paul J. Coviello | ||
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Paul
J. Coviello, for himself, as Chief Executive Officer of
the
Investment Manager and as Manager of the General
Partner
(for itself and the Master Fund)
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Exhibit
7
WAIVER
AND AGREEMENT
WAIVER
AND AGREEMENT (“Agreement”) dated as
of September 21, 2010 by and between National Holdings Corporation (the “Company”) and the holders of
the Company’s Series C Preferred Stock (each a &#
x201C;Holder” and
collectively the “Holders”).
RECITALS:
WHEREAS,
the Holders and the Company are parties to a Securities Purchase Agreement dated
as of July 12, 2010 (the “SPA”) pursuant to
which the Holders acquired an aggregate of 34,167 shares of a newly created
class of Series C Preferred Stock (the “Series C Preferred Stock”) convertible
into shares of the Company’s common stock, $0.02 par value per share (the
“Common Stock”) and (b) warrants exercisable for up to 3,416,692 shares of
Common Stock (the “Unit Warrant”); and
WHEREAS,
pursuant to the unanimous decision of the Board of Directors (“Board”) of the
Company on September 21, 2010, the Board has authorized (A) the creation of (i)
an aggregate of 100,000 shares of a newly created class of Series D Preferred
Stock (the “Series D Preferred Stock”) which shall rank pari passu
with the Series C Preferred Stock and (ii) warrants exercisable for up to
10,000,000 shares of Common Stock (the “Series D Warrants” and with the Series D
Preferred Stock, the “Series D Units”) on the same terms and conditions of the
Unit Warrants and (B) the offer and sale of up to $5 million of either Series D
Units and/or a combination of Series D Units, Common Stock and common stock
warrants (the “Subsequent Financing”); and
WHEREAS,
pursuant to Section 7.11 of the SPA, Section 5.6 of that certain note purchase
agreement as of dated June 4, 2010 between the Company and the Holders (“NPA”)
remains in effect, to
wit, that the Company has agreed that the Board shall not be increased
beyond nine (9) members before March 31, 2010 (the “Board Restriction”);
and
WHEREAS,
under Section 7.12 of the SPA, the Subsequent Financing would constitute a
“Triggering Transaction” which would invoke the “Co-Sale Rights,” as such terms
are defined in, and granted under, such Section 7.12; and
WHEREAS,
Section 7.13 of the SPA provides that the SPA “may be amended or terminated and
the observance of any term of this Agreement may be waived with respect to all
parties to [the SPA] (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the
holders of at least 50% of the aggregate amount of Units then held by all
[Holders].”
NOW
THEREFORE, the parties hereto agree as follows, as follows:
1.Waiver and Amendment of
Certain Rights and Provisions under the SPA.
(a) The
Holder hereby irrevocably waives the provisions of Section 7.12 of the SPA
with respect to the Co-Sale Rights triggered by the Subsequent
Financing.
(b) The
Holder hereby irrevocably waives the provisions of Section 7.11 of SPA that
incorporates Section 5.6 of the NPA to the extent that the holders of the Series
D Preferred Stock are granted the right to designate up to two (2) directors to
the Board.
2.No Other Waiver.
Anything contained herein to the contrary notwithstanding, the
parties
hereto expressly acknowledge and agree that the waivers granted by each Holder
pursuant to Section 1 hereof are on a one-time basis, relate only to the
transactions contemplated set forth herein and are not and should not be deemed
to be a waiver of any other rights under the SPA, all of which are expressly
reserved.
3.Warrant Issuance. In
consideration for, and as a material inducement to, the
Holder’s
agreement to the waivers and amendments set forth herein, on the date of the
first closing of the Subsequent Financing, the Company shall issue to each
Holder a common stock purchase warrant identical to the Unit Warrants for that
number of shares of Common Stock equal to the product of (A) a fraction, (i) the
numerator of which is the number of shares of Series C Preferred Stock held by
each Holder who enters into this Agreement and (ii) the denominator of which is
the number of shares of Series C Preferred Stock held by all Holders who have
entered into this Agreement and (B) 250,000.
4.Further Assurances.
The parties shall execute and deliver all such further
instruments
and documents and take all such other actions as may reasonably be required to
carry out the transactions contemplated hereby and to evidence the fulfillment
of the agreements contained herein.
5.Counterparts. This
Agreement may be executed in counterparts, each of which
shall be
deemed to be an original, and all of which together shall constitute one and the
same instrument. In the event that any signature (including a financing
signature page) is delivered by facsimile transmission or by e-mail delivery of
a “.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
6.Governing Law. This
Agreement shall be construed in accordance with and
governed
by the laws of the State of Delaware (without regard to choice of law provisions
thereof).
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties have caused this Waiver and Agreement to be
executed as of the day and year first above written.
| NATIONAL HOLDINGS CORPORATION | |||
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| [HOLDER] | |||
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By:
/s/ Paul J. Coviello, Linden
Growth Partners Master Fund
Print
Name: Paul J. Coviello
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