Unassociated Document


    
      EMPLOYMENT
        TERMINATION AGREEMENT

      


      This
        Employment Termination Agreement (the “Agreement”) dated as of July 1, 2008 (the
“Effective Date”) is entered into between vFinance, Inc. (the “Employer”) and
        Leonard J. Sokolow (the “Employee”) (collectively, the “Parties”).

      


      RECITALS:

      


      A. The
        Employee is employed as Chairman and Chief Executive Officer of Employer
        pursuant to an Amended and Restated Employment Agreement dated November 16,
        2004, as amended on May 12 and December 29, 2006 (the “Employment Agreement”);


      


      B. Upon
        the
        merger with a wholly-owned subsidiary of National Holdings Corporation
        (“National”), the principal office of the Employer will be relocated to New York
        (the “Merger”); 

      


      C. Pursuant
        to the terms of the Employment Agreement, as a result of the Merger of National
        and the relocation of the principal office of the Employer, Employee would
        be
        entitled to a lump sum payment of One Million One Hundred and Fifty Thousand
        ($1,150,000) in cash as of the effective date (“Effective Date”) of such merger;


      


      D. The
        Parties have agreed that the Employment Agreement shall be terminated and
        replaced with a new employment agreement with National of even date herewith
        (the “New Employment Agreement”).

      


      NOW,
        THEREFORE, the Employer and Employee agree as follows:

      


      1. Termination
        of Employment.
        The
        Employee shall resign from his positions as Chairman and Chief Executive
        Officer
        of the Employer and the Employment Agreement shall terminate as of the Effective
        Date. From and after the Effective Date, neither party has or will have any
        right, liability or obligation arising under the Employment
        Agreement.

      


      2. Payments.
        

       

      (a) Salary
        and Bonus.
        On the
        Effective Date, the Employer shall pay to the Employee all salary and all
        accrued payments due and payable to the Employee on the Effective Date pursuant
        to the terms of the Employment Agreement. 

      


      (b) Triggering
        Event Payment.
        The
        Employer shall pay to the Employee the principal sum of $1,150,000 on the
        Effective Date. 

      


      3. Waiver
        of Acceleration of Derivative Securities.
        Notwithstanding the fact that in accordance with the terms of the Employment
        Agreement, as of the Effective Date, all Employer stock options held by Employee
        would otherwise become immediately and fully vested, Employee hereby waives
        such
        acceleration of Employer stock options and acknowledges that in connection
        with
        the Merger such stock options shall be exchanged for stock options of National
        at the applicable exchange ratio of the Merger (the “Exchanged Options”).
        However, in the event Employee is terminated by National with cause or Employee
        voluntarily resigns from National for any reason, all Exchanged Options shall
        become 100% vested and shall remain exercisable by the Employee or his
        beneficiaries for a period of nine (9) months from the date of such event;
        provided, however, such period of nine (9) months shall not exceed the earlier
        of the latest date upon which such options could have expired by their original
        terms under any circumstances or the tenth anniversary of the original date
        of
        grant of such options. Notwithstanding anything contained in the New Employment
        Agreement to the contrary, the terms of this Section 3 shall control with
        respect to the acceleration of the vesting terms of the Exchange Options
        in the
        event of Employee’s termination of employment from the National.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      


      4. Taxes.
        If any
        of the payments under this Agreement or any other agreement, including the
        acceleration of derivative securities pursuant to Section 3 of this Agreement
        (the “Payments”),
        will
        be subject to the tax (the “Excise
        Tax”)
        imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
        (the
“Code”)
        on the
        Employee, (or any similar tax that may hereafter be imposed) the Company
        shall
        pay to the Employee an additional amount (the “Gross-Up
        Payment”)
        in a
        manner consistent with Section 6(i) of the New Employment
        Agreement.

      


      5. Indemnification.
        In
        accordance with and subject to Employer’s corporate bylaws, Employer recognizes
        its continuing duty to indemnify, defend and hold Employee harmless to the
        fullest extent of Delaware law for any liabilities that may arise as a result
        of
        any acts taken by Employee (including, without limitation, the failure to
        take
        action) in the course of performing his duties for Employer. In addition,
        in
        accordance with Employer’s corporate bylaws, Employer shall pay any expenses
        (including reasonable attorneys’ fees), judgments, penalties, fines,
        settlements, and other liabilities incurred by Employee in investigating,
        defending, settling or appealing any action, suit or proceeding in advance
        of
        the final disposition of such action, suit or proceeding. Employer shall
        promptly pay the amount of such expenses to Employee, but in no event later
        than
        ten (10) days following Employee’s delivery to Employer of a written request for
        an advance pursuant to this Section 5, together with a reasonable accounting
        of
        such expenses. 

      


      6. Release.
        Simultaneous with the execution and delivery of this Agreement, the Employee
        shall deliver a release in favor of the Company substantially in form and
        substance identical to the release attached as Exhibit B to the New Employment
        Agreement.

      


      7. Severability;
        Entire Agreement; Governing Law.
        In the
        event any provision hereof becomes or is declared by a court of competent
        jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
        in full force and effect without said provision. If any court refuses to
        enforce
        any part of this Agreement as written, the court shall modify that part to
        the
        minimum extent necessary to make it enforceable under applicable law, and
        shall
        enforce it as so modified. This Agreement represents the entire agreement
        and
        understanding concerning Employee’s separation from Employer. This
        Agreement supersedes and replaces any and all prior agreements, understandings,
        discussions, negotiations, or proposals concerning Employee’s relationship with
        Employer.
        This
        Agreement may only be amended in writing signed by the Employee and an executive
        officer of the Employer. This Agreement shall be governed by the laws of
        the
        State of Florida, without regard to its conflict of laws rules. Each Party
        hereby irrevocably submits to the exclusive jurisdiction of any Federal or
        state
        court sitting in Palm Beach County, Florida for the adjudication of any dispute
        arising out of or relating to the Agreement and the transactions contemplated
        hereunder, and hereby irrevocably waives, and agrees not to assert in any
        proceeding relating to this Agreement, any claim that he or it, as the case
        may
        be, is not personally subject to the jurisdiction of any such court, or that
        any
        such proceeding has been commenced in an improper or inconvenient forum.
        

       

      
        
           

        

        
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      8. Attorneys'
        Fees.
        In the
        event any dispute or litigation arises hereunder between any of the parties
        hereto, the prevailing party shall be entitled to all reasonable costs and
        expenses incurred by it in connection therewith (including, without limitation,
        all reasonable attorneys' fees and costs incurred before and at any trial
        or
        other proceeding and at all tribunal levels), as well as all other relief
        granted in any suit or other proceeding. As used herein, a party shall be
        deemed
        "prevailing" when it recovers (i) as to a damages claim, an aggregate of
        more
        than fifty percent (50%) of the damages which it seeks among its various
        asserted claims exclusive of interest, attorney's fees, costs incurred and
        exemplary damages and (ii) as to an equity claim, substantial injunctive
        or
        other equitable relief upon its asserted claim. Either of the parties herein
        shall be entitled to request the trier of fact in any dispute, litigation
        or
        arbitration between them, to determine which of the parties is
        "prevailing."

      


      9. Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        an original, but all of which together shall constitute one
        instrument.


      
        	 	 	 	
                vFinance,
                  Inc.

                 

                 

                 

              
	
                By: 


              	
                /s/
                  Leonard J. Sokolow

                Leonard J. Sokolow  

              	
                By: 

              	
                
                  /s/
                    Alan B. Levin

                

                Alan
                  B. Levin, Chief Financial Officer

              


      

       

      
        
           

        

        
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