THE
      SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
      HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
      AMENDED, (II) SUCH SECURITIES MAY BE SOLD WITHOUT RESTRICTIONS OR VOLUME
      LIMITATIONS PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION
      OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE
      MADE
      WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER
      APPLICABLE STATE SECURITIES LAWS.

    


    THIS
      WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON THE FIFTH ANNIVERSARY
      OF
      THE INITIAL EXERCISE DATE (the “EXPIRATION DATE”).

    


    No.
      122

    


    NATIONAL
      HOLDINGS CORPORATION

    


    WARRANT
      TO PURCHASE 468,750 SHARES OF

    COMMON
      STOCK, PAR VALUE $0.02 PER SHARE

    


    For
      VALUE
      RECEIVED, St. Cloud Capital Partners II, L.P. (“Warrantholder”), is entitled to
      purchase, subject to the provisions of this Warrant, from National Holdings
      Corporation, a Delaware corporation (“Company”), at any time from and after June
      30, 2008 (the “Initial Exercise Date”) and not later than 5:00 P.M., Eastern
      time, on the Expiration Date, at an exercise price per share equal to $2.00
      (the
      exercise price in effect being herein called the “Warrant Price”), 468,750
      shares (“Warrant Shares”) of the Company’s common stock, par value $0.02 per
      share (“Common Stock”). The number of Warrant Shares purchasable upon exercise
      of this Warrant and the Warrant Price shall be subject to adjustment from time
      to time as described herein.

     

    This
      Warrant is issued pursuant to that certain Securities Purchase Agreement of
      even
      date herewith by and among the Company and the Warrantholder (the “Purchase
      Agreement”) that is being executed and delivered in connection with that certain
      private placement of a convertible promissory note (the “Note”) and this
      Warrant.

    


    Section
      1. Registration.
      The
      Company shall maintain books for the transfer and registration of the Warrant.
      Upon the initial issuance of this Warrant, the Company shall issue and register
      the Warrant in the name of the Warrantholder.

    


    Section
      2. Transfers.
      As
      provided herein, this Warrant may be transferred only pursuant to a registration
      statement filed under the Securities Act of 1933, as amended (the “Securities
      Act”), or an exemption from such registration. Subject to such restrictions, the
      Company shall transfer this Warrant from time to time upon the books to be
      maintained by the Company for that purpose, upon surrender thereof for transfer
      properly endorsed or accompanied by appropriate instructions for transfer and
      such other documents as may be reasonably required by the Company, including,
      if
      required by the Company, an opinion of its counsel to the effect that such
      transfer is exempt from the registration requirements of the Securities Act,
      to
      establish that such transfer is being made in accordance with the terms hereof,
      and a new Warrant shall be issued to the transferee and the surrendered Warrant
      shall be canceled by the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3. Exercise
      of Warrant.
      Subject
      to the provisions hereof, the Warrantholder may exercise this Warrant in whole
      or in part at any time from and after the Initial Exercise Date and not later
      than 5:00 P.M., Eastern time, on the Expiration Date upon surrender of the
      Warrant, together with delivery of the duly executed Warrant exercise form
      attached hereto as Appendix
      A
      (the
“Exercise Form”) and payment by cash, certified check or wire transfer of funds
      for the aggregate Warrant Price for that number of Warrant Shares then being
      purchased, to the Company during normal business hours on any business day
      at
      the Company’s principal executive offices (or such other office or agency of the
      Company as it may designate by notice to the Warrantholder). The Warrant Shares
      so purchased shall be deemed to be issued to the Warrantholder or the
      Warrantholder’s designee, as the record owner of such shares, as of the close of
      business on the date on which this Warrant shall have been duly surrendered
      (or
      evidence of loss, theft or destruction thereof and security or indemnity
      satisfactory to the Company), the Warrant Price shall have been paid and the
      completed Exercise Form shall have been delivered. Certificates for the Warrant
      Shares so purchased, representing the aggregate number of shares specified
      in
      the Exercise Form, shall be delivered promptly to the Warrantholder after this
      Warrant shall have been so exercised. The certificates so delivered shall be
      in
      such denominations as may be requested by the Warrantholder and shall be
      registered in the name of the Warrantholder or such other name as shall be
      designated by the Warrantholder. If this Warrant shall have been exercised
      only
      in part, then, unless this Warrant has expired, the Company shall, at its
      expense, at the time of delivery of such certificates, deliver to the
      Warrantholder a new Warrant representing the number of shares with respect
      to
      which this Warrant shall not then have been exercised. As used herein, “business
      day” means a day, other than a Saturday, Sunday or holiday, on which banks in
      New York City are open for the general transaction of business. Each exercise
      hereof shall constitute the re-affirmation by the Warrantholder that the
      representations and warranties contained in Section 5 of the Purchase Agreement
      are true and correct in all material respects with respect to the Warrantholder
      as of the time of such exercise.

    


    Section
      4. Net
      Issuance.
       In
      addition, the Warrantholder may at anytime during the Exercise Period, in its
      sole discretion, exercise all or any part of the Warrant in a “cashless” or
“net-issue” exercise by delivering to the Company (1) the Exercise Form and (2)
      the original Warrant, pursuant to which the Warrantholder shall surrender the
      right to receive upon exercise of this Warrant, a number of Warrant Shares
      calculated using the following formula:


    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                 

              	
                
                  
                    
                      X    
                        =    Y * (A -
                        B)

                    

                  

                

              
	 	 	
                                    
                  A

              
	 	 	 
	
                with:

              	
                X
                  =
                  

              	
                the
                  number of Warrant Shares to be issued to the
                  Warrantholder

              
	 	 	 
	 	
                Y
                  =

              	
                the
                  number of Warrant Shares with respect to which the Warrant is being
                  exercised

              
	 	 	 
	 	
                A
                  =

              	
                the
                  fair value per share of Common Stock on the date of exercise of
                  this
                  Warrant

              
	 	 	 
	 	
                B
                  =

              	
                the
                  then-current Warrant Price of the
                  Warrant

              


      

    

     

    Solely
      for the purposes of this paragraph, “fair value” per share of Common Stock shall
      mean (A) the average of the closing sales prices, as quoted on the primary
      national stock exchange or the Nasdaq Stock Market on which the Common Stock
      is
      listed, or, if not listed,
      the OTC
      Bulletin Board if quoted thereon, on the ten
      (10)
      trading days immediately preceding the date on which the Exercise Form is deemed
      to have been given to the Company pursuant to Section 15 hereof, or (B) if
      the
      Common Stock is not publicly traded as set forth above, as reasonably and in
      good faith determined by the Board of Directors of the Company as of the date
      which the Exercise Form is deemed to have been given to the
      Company.

    


    Section
      5. Adjustments
      to Conversion Price.
      For the
      purposes of this Section 5, the term Warrant Price shall mean the Warrant Price
      per share set forth on the first page of this Warrant as adjusted from time
      to
      time pursuant to the provisions of this Section 5. The number and kind of
      Warrant Shares (or any shares of stock or other securities which may be)
      issuable upon the exercise of this Warrant and the Warrant Price hereunder
      shall
      be subject to adjustment from time to time upon the happening of certain events,
      as follows:

    


    (a) Splits
      and Subdivisions.
      In the
      event the Company should at any time or from time to time fix a record date
      for
      the effectuation of a split or subdivision of the outstanding shares of Common
      Stock or the determination of the holders of Common Stock entitled to receive
      a
      dividend or other distribution payable in additional shares of Common Stock
      or
      other securities or rights convertible into, or entitling the holder thereof
      to
      receive directly or indirectly, additional shares of Common Stock (hereinafter
      referred to as the “Common Stock Equivalents”) without payment of any
      consideration by such holder for the additional shares of Common Stock or Common
      Stock Equivalents, then, as of such record date (or the date of such
      distribution, split or subdivision if no record date is fixed), the Warrant
      Price shall be appropriately decreased and the number of Warrant Shares for
      which this Warrant is exercisable shall be appropriately increased in proportion
      to such increase of outstanding shares.

    


    (b) Combination
      of Shares.
      If the
      number of shares of Common Stock outstanding at any time after the date hereof
      is decreased by a combination of the outstanding shares of Common Stock, the
      Warrant Price shall be appropriately increased and the number of Warrant Shares
      for which this Warrant is exercisable shall be appropriately decreased in
      proportion to such decrease in outstanding shares.

    


    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (c) Reclassification
      or Reorganization.
      If the
      Warrant Shares issuable upon the exercise of this Warrant shall be changed
      into
      the same or different number of shares of any class or classes of stock, whether
      by capital reorganization, reclassification or otherwise (other than a split,
      subdivision or stock dividend provided for in Section 5(a) above or a
      combination of shares provided for in Section 5(b) above, or a reorganization,
      merger or consolidation provided for in Section 5(d) below, then and in each
      such event the Warrantholder shall be entitled to receive upon the exercise
      of
      this Warrant the kind and amount of shares of stock and other securities and
      property receivable upon such reorganization, reclassification or other change,
      to which a holder of the number of Warrant Shares issuable upon the exercise
      of
      this Warrant would have received if this Warrant had been exercised immediately
      prior to such reorganization, reclassification or other change, all subject
      to
      further adjustment as provided herein.

    


    (d) Merger
      or Consolidation.
      If at
      any time or from time to time there shall be a capital reclassification or
      reorganization of the Warrant Shares or a Corporate Transaction (as defined
      herein, other than a subdivision, combination, reclassification or exchange
      of
      shares provided for elsewhere in this Section 5 and excluding the proposed
      merger with vFinance, Inc.) of the Company, then as a part of such
      reorganization or Corporate Transaction, adequate provision shall be made so
      that the Warrantholder shall thereafter be entitled to receive upon the exercise
      of this Warrant, the number of shares of stock or other securities or property
      of the Company, resulting from such reorganization, recapitalization or
      Corporate Transaction to which a holder of the number of Warrant Shares issuable
      upon the exercise of this Warrant would have received if this Warrant had been
      exercised immediately prior to such reorganization or Corporate Transaction.
      In
      any such case, the Company will make appropriate provision to insure that the
      provisions of this Section 5(d) hereof will thereafter be applicable as nearly
      as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Warrant.
      The
      Company shall not effect any such Corporate Transaction unless prior to or
      simultaneously with the consummation thereof the successor corporation (if
      other
      than the Company) resulting from such Corporate Transaction or the corporation
      purchasing or acquiring such assets or other appropriate corporation or entity
      shall assume the obligation to deliver to the Warrantholder, at the last address
      of the Warrantholder appearing on the books of the Company, such shares of
      stock, securities or assets as, in accordance with the foregoing provisions,
      the
      Warrantholder may be entitled to purchase, and the other obligations under
      this
      Warrant. The provisions of this Section 5(d) shall similarly apply to successive
      reorganizations, reclassifications, or Corporate Transactions. 

    


    As
      used
      herein, the term “Corporate Transaction” shall mean (i) a sale, lease, transfer
      or conveyance of all or substantially all of the assets of the Company; (ii)
      a
      consolidation of the Company with, or merger of the Company with or into,
      another corporation or other business entity in which the stockholders of the
      Company immediately prior to such consolidation or merger own less than 50%
      of
      the voting power of the surviving entity immediately after such consolidation
      or
      merger; or (iii) any transaction or series of related transactions to which
      the
      Company is a party in which in excess of 50% of the Company’s voting power is
      transferred, excluding any consolidation or merger effected exclusively to
      change the domicile of the Company.

    


    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (e) Adjustment
      in Number of Warrant Shares.
      Upon
      each adjustment of the Warrant Price pursuant to the provisions of this Section
      5, the number of Warrant Shares issuable upon the exercise of this Warrant
      shall
      be adjusted to the nearest full amount by multiplying a number equal to the
      Warrant Price in effect immediately prior to such adjustment by the number
      of
      Warrant Shares issuable upon exercise of the Warrants immediately prior to
      such
      adjustment and dividing the product so obtained by the adjusted Warrant
      Price.

    


    (f) Cashless
      Exercise.
      Notwithstanding the provisions of Section 5(d), in the event that holders of
      Common Stock receive only cash for their shares of Common Stock as a result
      of
      any Corporate Transaction, not later than five (5) Business Days after the
      effective date of such Corporate Transaction, the Warrantholder shall be
      entitled to receive in full satisfaction of its rights under this Warrant an
      amount in cash (the “Spread”) equal to (x) the difference between (A) the per
      share cash to be received by holders of Common Stock in connection with such
      Corporate Transaction and (B) the Warrant Price in effect immediately prior
      to
      the effective date of such Corporate Transaction, multiplied by (y) the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the effective date of such Corporate Transaction. Upon payment in
      full
      of the Spread to the Warrantholder as provided above, this Warrant shall expire
      and be of no further force and effect. In the event that the Spread is not
      a
      positive number, no amount shall be payable to the Warrantholder as a result
      of
      such Corporate Transaction, and this Warrant shall expire and be of no further
      force and effect as of the effective date of such Corporate
      Transaction.

    


    (g) No
      Adjustment of Warrant Price in Certain Cases.
      No
      adjustment of the Warrant Price shall be made:

    


    (i)
       Upon
      issuance or sale of the Warrant or Warrant Shares, or the Notes, the shares
      of
      Common Stock issuable upon conversion of the Notes, other warrants and warrant
      shares issued in connection herewith pursuant to the Purchase Agreement, or
      shares of Common Stock issuable upon exercise of other options, warrants and
      convertible securities outstanding as of the date hereof.

     

    (ii) Upon
      the
      issuance or sale of any shares of capital stock, or the grant of options
      exercisable therefor, issued or issuable after the date of this Warrant, to
      directors, officers, employees, advisers and consultants of the Company or
      any
      subsidiary pursuant to any incentive or non-qualified stock option plan or
      agreement, stock purchase plan or agreement, stock restriction agreement or
      restricted stock plan, employee stock ownership plan (ESOP), consulting
      agreement, stock appreciation right (SAR), stock depreciation right (SDR),
      bonus
      stock arrangement, or such other similar compensatory options, issuances,
      arrangements, agreements or plans approved by the Board of Directors of the
      Company.

     

    (iii)
       Upon
      the
      issuance of any shares of capital stock or the grant of warrants or options
      (or
      the exercise thereof) as consideration for mergers, acquisitions, strategic
      alliances and other commercial transactions, including without limitation the
      proposed merger with vFinance, Inc., other than in connection with a financing
      transaction.

    


    (iv) If
      the
      amount of said adjustment shall be less than one cent ($0.01) per security
      issuable upon exercise of this Warrant; provided,
      however,
      that in
      such case any adjustment that would otherwise be required then to be made shall
      be carried forward and shall be made at the time of and together with the next
      subsequent adjustment which, together with any adjustment so carried forward,
      shall amount to at least one cent ($0.01) per security issuable upon exercise
      of
      this Warrant.

    


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (h) Notice
      of Record Dates; Adjustments.
      In the
      event of a Corporate Transaction, the Company shall provide to the Warrantholder
      twenty (20) days advance written notice of such Corporate Transaction. The
      Company shall promptly notify the Warrantholder in writing of each adjustment
      or
      readjustment of the Warrant Price hereunder and the number of Warrant Shares
      issuable upon the exercise of this Warrant. Such notice shall state the
      adjustment or readjustment and show in reasonable detail the facts on which
      that
      adjustment or readjustment is based.

    


    Section
      6. Compliance
      with the Securities Act of 1933.
      The
      Company may cause the legend set forth on the first page of this Warrant to
      be
      set forth on each Warrant or similar legend on any security issued or issuable
      upon exercise of this Warrant, unless counsel for the Company is of the opinion
      as to any such security that such legend is unnecessary.

    


    Section
      7. Payment
      of Taxes.
      The
      Company will pay any documentary stamp taxes attributable to the initial
      issuance of Warrant Shares issuable upon the exercise of the Warrant; provided,
      however, that the Company shall not be required to pay any tax or taxes which
      may be payable in respect of any transfer involved in the issuance or delivery
      of any certificates for Warrant Shares in a name other than that of the
      Warrantholder in respect of which such shares are issued, and in such case,
      the
      Company shall not be required to issue or deliver any certificate for Warrant
      Shares or any Warrant until the person requesting the same has paid to the
      Company the amount of such tax or has established to the Company’s reasonable
      satisfaction that such tax has been paid. The Warrantholder shall be responsible
      for income taxes due under federal, state or other law, if any such tax is
      due.

    


    Section
      8. Mutilated
      or Missing Warrants.
      In case
      this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall
      issue in exchange and substitution of and upon cancellation of the mutilated
      Warrant, or in lieu of and substitution for the Warrant lost, stolen or
      destroyed, a new Warrant of like tenor and for the purchase of a like number
      of
      Warrant Shares, but only upon receipt of evidence reasonably satisfactory to
      the
      Company of such loss, theft or destruction of the Warrant, and with respect
      to a
      lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect
      thereto, if requested by the Company.

    


    Section
      9. Reservation
      of Common Stock.
      The
      Company hereby represents and warrants that there have been reserved, and the
      Company shall at all applicable times keep reserved until issued (if necessary)
      as contemplated by this Section 9, out of the authorized and unissued shares
      of
      Common Stock, sufficient shares to provide for the exercise of the rights of
      purchase represented by this Warrant. The Company agrees that all Warrant Shares
      issued upon due exercise of the Warrant shall be, at the time of delivery of
      the
      certificates for such Warrant Shares, duly authorized, validly issued, fully
      paid and non-assessable shares of Common Stock of the Company.

    


    Section
      10. Fractional
      Interest.
      The
      Company shall not be required to issue fractions of Warrant Shares upon the
      exercise of this Warrant. If any fractional share of Common Stock would, except
      for the provisions of the first sentence of this Section 10, be deliverable
      upon
      such exercise, the Company, in lieu of delivering such fractional share, shall
      pay to the exercising Warrantholder an amount in cash equal to the Fair Market
      Value of such fractional share of Common Stock on the date of
      exercise.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    Section
      11. Registration
      Rights.
      The
      Warrantholder shall be entitled to the rights set forth under the Registration
      Rights Agreement dated as of June 30, 2008 to allow for the registration of
      the
      resale of the Warrant Shares under the Securities Act of 1933, as
      amended.

    


    Section
      12. Benefits.
      Nothing
      in this Warrant shall be construed to give any person, firm or corporation
      (other than the Company and the Warrantholder) any legal or equitable right,
      remedy or claim, it being agreed that this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrantholder.

    


    Section
      13. Notices
      to Warrantholder.
      Upon
      the happening of any event requiring an adjustment of the Warrant Price, the
      Company shall promptly give written notice thereof to the Warrantholder at
      the
      address appearing in the records of the Company, stating the adjusted Warrant
      Price and the adjusted number of Warrant Shares resulting from such event and
      setting forth in reasonable detail the method of calculation and the facts
      upon
      which such calculation is based. Failure to give such notice to the
      Warrantholder or any defect therein shall not affect the legality or validity
      of
      the subject adjustment.

    


    Section
      14. Identity
      of Transfer Agent.
      The
      Transfer Agent for the Common Stock is Computershare Trust Company, Inc. Upon
      the appointment of any subsequent transfer agent for the Common Stock or other
      shares of the Company’s capital stock issuable upon the exercise of the rights
      of purchase represented by the Warrant, the Company will mail to the
      Warrantholder a statement setting forth the name and address of such transfer
      agent.

    


    Section
      15. Notices.
      Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given as hereinafter described
      (i) if given by personal delivery, then such notice shall be deemed given upon
      such delivery, (ii) if given by telex or facsimile, then such notice shall
      be
      deemed given upon receipt of confirmation of complete transmittal, (iii) if
      given by mail, then such notice shall be deemed given upon the seventh day
      after
      such notice is deposited in first class mail, postage prepaid, and (iv) if
      given
      by an nationally recognized overnight air courier, then such notice shall be
      deemed given upon delivery to the intended recipient. All notices shall be
      addressed as follows: if to the Warrantholder, at its address as set forth
      in
      the Company’s books and records and, if to the Company, at the address as
      follows, or at such other address as the Warrantholder or the Company may
      designate by ten days’ advance written notice to the other:

    


    If
      to the
      Company:

    


    National
      Holdings Corporation

    120
      Broadway, 27th
      Floor

    New
      York,
      NY 10271

    Attention:
      Mark Goldwasser, CEO

    Fax:
      (212) 417-8010

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    With
      a
      copy to:

    


    Littman
      Krooks LLP

    655
      Third
      Avenue, 20th
      Floor

    New
      York,
      NY 10017

    Attention:
      Mitchell C. Littman, Esq.

    Fax:
      (212) 490-2990

    


    Section
      16. 
      Successors.
      All the
      covenants and provisions hereof by or for the benefit of the Warrantholder
      shall
      bind and inure to the benefit of its respective successors and assigns
      hereunder. 

    


    Section
      17. Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.
      This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to the choice of law principles
      thereof. Each of the parties hereto irrevocably submits to the exclusive
      jurisdiction of the courts of the State of New York located in New York County
      and the United States District Court for the Southern District of New York
      for
      the purpose of any suit, action, proceeding or judgment relating to or arising
      out of this Agreement and the transactions contemplated hereby. Service of
      process in connection with any such suit, action or proceeding may be served
      on
      each party hereto anywhere in the world by the same methods as are specified
      for
      the giving of notices under this Agreement. Each of the parties hereto
      irrevocably consents to the jurisdiction of any such court in any such suit,
      action or proceeding and to the laying of venue in such court. Each party hereto
      irrevocably waives any objection to the laying of venue of any such suit, action
      or proceeding brought in such courts and irrevocably waives any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum. EACH
      OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
      LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
      CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    


    Section
      18. No
      Rights as Stockholder.
      Prior
      to the exercise of this Warrant in accordance with Sections 3 or 4 hereof,
      the
      Warrantholder shall not have or exercise any rights as a stockholder of the
      Company by virtue of its ownership of this Warrant.

    


    Section
      19. Amendment;
      Waiver.
      Any
      term of this Warrant may be amended and the observance of any term of this
      Warrant may be waived (either generally or in a particular instance and either
      retroactively or prospectively) with the written consent of the Warrantholder
      and the Company. Any amendment or waiver effected in accordance with this
      Section 19 shall be binding upon the Warrantholder (and of any securities into
      which this Warrant is convertible), each future holder of all such securities,
      and the Company.

    


    Section
      20. Section
      Headings.
      The
      section headings in this Warrant are for the convenience of the Company and
      the
      Warrantholder and in no way alter, modify, amend, limit or restrict the
      provisions hereof.


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as
      of
      the 30th
      day of
      June, 2008.

    


    
      	
              NATIONAL
                HOLDINGS CORPORATION

            
	 
	
              By:

            	
              /S/
                MARK GOLDWASSER

            
	 	
              Mark
                Goldwasser

            
	 	
              President
                and Chief Executive Officer

            


    

    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    


    APPENDIX
      A

    NATIONAL
      HOLDINGS CORPORATION

    WARRANT
      EXERCISE FORM

    


    To
      National Holdings Corporation:

    


    The
      undersigned, pursuant to the provisions set forth in the attached Warrant,
      hereby irrevocably elects to (a) purchase _____ shares of the Common Stock
      covered by such Warrant and herewith makes payment of $ _________, representing
      the full purchase price for such shares at the price per share provided for
      in
      such Warrant, or (b) exercise such Warrant for _______ shares purchasable under
      the Warrant pursuant to the Net Issue Exercise provisions of Section 4 of such
      Warrant.

    


    Please
      issue a certificate or certificates representing ________ shares in the name
      of
      the undersigned or in such other name or names as are specified
      below:

    


    
      	 
	
              Name

            
	 
	
              Address

            
	 


    

     

    and,
      if
      the number of Warrant Shares shall not be all the Warrant Shares purchasable
      upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
      Shares purchasable upon exercise of this Warrant be registered in the name
      of
      the undersigned Warrantholder or the undersigned’s Assignee as below indicated
      and delivered to the address stated below.

    


    The
      undersigned represents that the aforesaid shares are being acquired for the
      account of the undersigned for investment and not with a view to, or for resale
      in connection with, the distribution thereof and that the undersigned has no
      present intention of distributing or reselling such shares, all except as in
      compliance with applicable securities laws.

    


    Dated:
      ___________________, ____

    


    
      	
              Note: The signature must correspond with

            	 	 
	
              the name of the Warrantholder as written

            	 	
              Signature:

            	 
	
              on the first page of the Warrant in every

            	 	 
	
              particular, without alteration or enlargement

            	 	
              Name (please print)

            
	
              or any change whatever, unless the Warrant

            	 	 
	
              has been assigned.

            	 	 
	 	 	 
	 	 	
              Address

            
	 	 	 
	 	 	
              Federal
                Identification or

            
	 	 	
              Social
                Security No.

            


    


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    EXHIBIT
      B

    


    FORM
      OF ASSIGNMENT

     

    (To
      assign the foregoing Warrant, execute this form and

    supply
      required information. Do not use this

    form
      to
      purchase shares.)

     

    For
      Value Received,
      the
      foregoing Warrant and all rights evidenced thereby are hereby assigned
      to:

     

    
      	
              Name:

            	 
	 	
              (Please
                Print)

            
	
              Address:

            	 
	 	
              (Please
                Print)

            


    

    


    Dated:
      __________, 20__

    


    Warrantholder’s

    
      	
              Signature:
                

            	 
	 	 
	
              Warrantholder’s

            
	
              Address:
                

            	 


    

    


    NOTE:
      The
      signature to this Form of Assignment must correspond with the name as it appears
      on the face of the Warrant, without alteration or enlargement or any change
      whatever. Officers of corporations and those acting in a fiduciary or other
      representative capacity should file proper evidence of authority to assign
      the
      foregoing Warrant.

    


    
      
        
        

      

      
        -11-