November
23, 2009
   Board of
Directors of
 National
Holdings Corporation
 120
Broadway, 27th
Floor
 New York,
NY  10271
 
 
 Re:
                Modifications to
      Employment Agreement
  Dear
Sirs:
  This
letter will confirm my agreement to certain modifications of the compensation
arrangements as set forth in my Employment Agreement with the Company, dated
July 1, 2008 (the “Agreement”):
 
 1.
                With
      respect to accrued bonus of $206,250 due me through September 30, 2009, I
      hereby agree to the following payout of such bonus (subject to normal
      withholding and other deductions):
 
 (a)
                $61,875,
      which shall be withheld by the Company for withholding taxes and other
      similar deductions; and
 (b)
                Balance
      of $144,375 payable as follows:
 ii.
                Cash
      payments aggregating $61,875, payable in three tranches as
      follows:  $20,000 payable immediately; $20,000 payable on or
      before November 30, 2009; and $21,875, payable on or before December 31,
      2009; and
 iii.
                $82,500,
      payable in the form of issuance of restricted Company common stock, valued
      at $0.75 per share.
 
 Notwithstanding
the mandatory cash payments referred to in Section 1(b)(ii) above (the
“Payments”), the undersigned understands and agrees that if at the time a
Payment is due, that the Company would otherwise be required to use all or a
portion of the cash to make the Payment as a capital infusion into any of its
operating broker-dealer subsidiaries in order to avoid having to make the “early
warning” filing contemplated by SEC Rule 17a-11, then the Payment shall be
delayed (but the obligation to make same shall continue to be accrued) until
such time that Payment could be made without invoking the “early warning”
requirements.
  
 
 The
undersigned further acknowledges that any additional bonuses to be paid me, if
any, shall be at the sole discretion of the Board of Directors of the Company
and that in any event, under no circumstance shall I be entitled to receive any
investment banking warrants earned through the investment banking activities of
the Company’s broker-dealer subsidiaries.
 
 2.           In
addition, Mr. Leonard Sokolow is entitled to a bonus of $290,698 as of June 30,
2008, assumed by the Company in connection with our merger with
vFinance.  Each of Mr. Sokolow and the Compensation Committee of the
Company has agreed that $60,698 of such bonus be divided equally between Mr.
Sokolow and the undersigned (subject to normal withholding and other
deductions), which shall be payable as follows:
 
 (a)
                $9,104,
      which shall be withheld by the Company for withholding taxes and other
      similar deductions; and
 (b)
                Balance
      of $21,245 payable as follows:
 i.
                Cash
      payment $9,104 in one tranche, payable immediately;
  and
 ii.
                $12,141,payable in the form of
      issuance of restricted Company common stock, valued at $0.75 per
      share.
 
 It is
agreed that cash portions of this additional bonus shall not be paid until (i)
the cash portions of the bonus set forth in Item 1 have been paid (including the
similar bonus being paid to Mr. Sokolow) and (ii) the ‘early warning’
requirements of Section 1 are met.
 
 3.           With
respect to bonuses payable to the undersigned for the fiscal years ending
September 30, 2010 and thereafter, the undersigned shall execute and deliver an
amendment to the Agreement in the form attached hereto as Exhibit
A.
 
 Except as
amended hereby, all terms and provisions of the Agreement shall continue
unmodified and remain in full force and effect.
 Sincerely,/S/
      MARK GOLDWASSER
                    Mark
      Goldwasser
  Accepted
and Agreed:
  National
Holdings Corporation
  By: /S/ LEONARD J.
SOKOLOW
 Leonard
J. Sokolow, President
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