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ex43bpsubnotefinalform

FINAL EXECUTION       THIS NOTE HAS NOT BEEN REGISTERED UNDER THE FEDERAL OR ANY STATE   SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR HYPOTHECATED IN   ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS AS MAY   BE APPLICABLE OR, AN OPINION OF COUNSEL THAT AN EXEMPTION FROM SUCH   APPLICABLE LAWS EXIST.      THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE   SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN   SUBORDINATION AGREEMENT (THE “SUBORDINATION AGREEMENT”) DATED AS OF MAY 2,   2016, BY AND AMONG WYNNEFIELD PARTNERS SMALL CAP VALUE, LP, WYNNEFIELD   PARTNERS SMALL CAP VALUE, LP I AND WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND,   LTD  (“THE “SUBORDINATED LENDER”), DLH HOLDINGS CORP (THE “COMPANY”), AND FIFTH   THIRD BANK (“SENIOR LENDER”) RELATING TO THE INDEBTEDNESS (INCLUDING INTEREST)   OWED BY THE COMPANY PURSUANT TO THAT CERTAIN LOAN AGREEMENT DATED AS OF MAY   2, 2016, AS AMENDED FROM TIME TO TIME, AND THE LOAN DOCUMENTS (AS DEFINED IN THE   LOAN AGREEMENT) AS SUCH LOAN AGREEMENT AND LOAN DOCUMENTS MAY BE AMENDED,   RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO   INDEBTEDNESS REFINANCING THE INDEBTEDNESS THEREUNDER AS CONTEMPLATED BY THE   SUBORDINATION AGREEMENT; AND THE HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE   HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION   AGREEMENT.      DLH HOLDINGS CORP.   SUBORDINATED NOTE      No. 2016- May 2, 2016             U.S. $[                  ]       1.           Subordinated Note.       This Subordinated Note is one of a duly authorized series of Subordinated Notes in the aggregate principal   amount of $2,500,000.00 (individually, the “Subordinated Note” and collectively, the “Subordinated   Notes”) of DLH HOLDINGS CORP., a New Jersey corporation (the “Company”).  This Subordinated Note   is being issued pursuant to the Purchase Agreement (as defined in Section 8 hereof) and by its acceptance   of this Subordinated Note, the Holder agrees to be bound by the terms of the Purchase Agreement. The   Subordinated Notes are unsecured obligations of the Company and are subordinated to the Senior Credit   Facility as set forth under the terms and conditions of that certain  Subordination Agreement dated as of   May 2, 2016, among the Company, the original Holder, and Senior Lender (the “Subordination   Agreement”). Any transferee of this Subordinated Note, by acceptance of such transfer, agrees to assume,   agree to and accept the terms of such Subordination Agreement. Capitalized terms used and not otherwise   defined herein or in the Purchase Agreement, shall have the respective meanings given to those terms in   Section 8 hereof.       2.           Principal and Interest.       (a)           The Company for value received, hereby promises to pay to   [_________________________]  or its registered assigns (the “Holder”), (i) the principal sum of   [_____________________________] DOLLARS (U.S $[________]) and (ii) all accrued and unpaid   interest thereon on the earlier of the Maturity Date (defined below), or the Accelerated Payment Date (as   defined below).  Interest is payable in cash on the first to occur of November 2, 2021 (the “Maturity Date”),   Accelerated Payment Date or on the date of any prepayment. As used herein, the term “Accelerated Payment   Date” shall mean a date within three Business Days from the date that the Company consummates an equity   financing transaction, or series of equity financing transactions during the term of the Subordinated Note,     

 

 2          resulting in aggregate cash proceeds to the Company of at least $2,500,000.00, including, but not limited   to, the Rights Offering.       (b)  This Subordinated Note shall bear interest at the rate of 4% per annum (the   “Interest Rate”). Interest on this Subordinated Note shall by payable in cash on the Maturity Date, the   Accelerated Payment Date, an acceleration of payment in connection with an Event of Default in accordance   with Section 6(b) hereof, or any earlier prepayment of the principal amount of this Subordinated Note, as the   case may be, at which time all accrued and unpaid interest shall be immediately due and payable. All   computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in   the period for which such interest is payable.       (c)         Payment of the principal of (and premium, if any, on), and Interest on this   Subordinated Note shall be made upon the surrender of this Subordinated Note to the Company, at its chief   executive office (or such other office within the United States as shall be designated by the Company to the   Holder hereof) (the “Designated Office”), in such coin or currency of the United States of America as at   the time of payment shall be legal tender for the payment of public and private debts.  Payment of principal,   Interest and all other amounts payable with respect to the Subordinated Notes shall be made by wire transfer   in immediately available funds to the Holder; provided that if the Holder entitled thereto shall not have   furnished wire instructions in writing to the Company on or prior to the third Business Day immediately   prior to the date on which the Company makes such payment, such payment may be made by U.S. dollar   check mailed to the address of the Holder entitled thereto as such address shall appear on the signature page   herewith.       3. Reserved.       4.          Prepayment.  At any time and from time to time prior to the Maturity Date, upon no less   than 30 days’ written notice by the Company to the Holder (the “Prepayment Notice”), all or a portion of   the then outstanding Subordinated Notes may be redeemed by payment of the principal amount thereof,   plus the unpaid interest which has accrued on the principal of the outstanding Subordinated Notes at the   end of such 30-day notice period (the “Prepayment Amount”). The last day of such 30 day notice period   shall be the “Prepayment Date”.        5. Covenants of the Company.       (a)         Payment of Principal and Interest. The Company covenants and agrees that it will   duly and punctually pay or cause to be paid the principal of, and interest on this Subordinated Note, at the   time and in the manner provided for herein.       (b)         Preservation of Business. Unless otherwise permitted herein, the Company will do   or cause to be done all things necessary to preserve and keep in full force and effect its existence and the   rights (charter and statutory) of the Company; provided, however, that the Company shall not be required   to preserve any such right if (a) the Company shall determine in good faith that the preservation thereof is   no longer desirable in the conduct of the business of the Company and that the loss thereof is not   disadvantageous in any material respect to the Holder or (b) the Company shall no longer continue to have   such right as a result of a good faith, arms-length transaction with a Person that is not an Affiliate of the   Company.      (c) Financial Information. From time to time while this Subordinated Note remains   outstanding, the Company shall furnish to the Holder, pursuant to the confidentiality provisions of the   Purchase Agreement, twelve-month cash flow projections as and at the same time that such information is   furnished to the Company’s Board of Directors or audit committee of the Board of Directors.     

 

 3             (d) Equity Financing. The Company will agree to use commercially reasonable efforts   to effectuate an equity financing for gross proceeds to the Company of at least $2,500,000.00 within six   months of the date of issuance of this Subordinated Note.      6.   Events of Default.       (a)       An “Event of Default”, wherever used herein, means any one of the following   events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or   be effected by operation of law or pursuant to any judgment, decree or order of any court or any order,   rule or regulation of any administrative or governmental body):       (1)         the Company defaults in the payment of the principal or premium, if any   (a “Defaulted Payment”) on any of the Subordinated Notes when the same becomes due and payable at the   Maturity Date, and such default continues for 15 days or longer;       (2)         the Company fails to perform or observe any other term, covenant or   agreement contained in this Subordinated Note or the Purchase Agreement, and the default continues for a   period of 30 days after written notice of such failure, requiring the Company to remedy the same, shall have   been given to the Company by the holders of at least a Majority in Interest of the outstanding Subordinated   Notes;       (3)        any representation or warranty made or deemed made by or on behalf of   the Company in or in connection with the Purchase Agreement or in the other agreements entered into in   connection herewith, shall have been incorrect in any material respect when made or deemed made;   (4) the Company shall fail to make any payment (whether of principal, interest   or otherwise and regardless of amount) in respect of any Material Indebtedness, when and as the same shall   become due and payable, after giving effect to any grace or cure periods with respect thereto. As used   herein, the term “Material Indebtedness” means Indebtedness (other than (i) the indebtedness incurred   hereunder and (ii) pursuant to the Company’s Senior Credit Facility (defined below) in an aggregate   principal amount exceeding $100,000;       (5) an event of default has been declared by the Senior Lender with respect to   the Company’s Senior Credit Facility and after giving effect to any grace or cure periods with respect   thereto such event of default has not be cured or waived by such Senior Lender;       (6) a final judgment or judgments for the payment of money in excess of   $100,000 in the aggregate (exclusive of judgment amounts fully covered by insurance where the insurer   has admitted liability in respect of such judgment), shall be rendered by one or more courts, administrative   tribunals or other bodies having jurisdiction against the Company and the same shall not be discharged (or   provision shall not be made for such discharge), bonded, or a stay of execution thereof shall not be procured,   within 60 days from the date of entry thereof and the Company shall not, within said period of 60 days, or   such longer period during which execution of the same shall have been stayed, appeal therefrom and cause   the execution thereof to be stayed during such appeal;    (7)  there shall occur, without the consent of the Majority-in-Interest, any   Change of Control;       (8) the Company shall fail to timely file the periodic reports required to be   filed by it under the Exchange Act, as amended, after giving effect to any extensions of such relevant time     

 

 4          periods as provided for under the rules and regulations adopted by the U.S. Securities and Exchange   Commission;       (9)  any proceeding under any applicable U.S. federal or state bankruptcy,   insolvency, reorganization or other similar law relating to the Company or to all or any material part of its   properties is instituted against the Company without its consent and continues undismissed or unsteady for   sixty (60) calendar days, or any order for relief is entered in any such proceeding or there is an entry by a   court having competent jurisdiction of (A) a decree or order for relief in respect of the Company in an   involuntary case or proceeding under any applicable U.S. federal or state bankruptcy, insolvency,   reorganization or other similar law or (B) a decree or order adjudging the Company bankrupt or insolvent,   or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition   of or in respect of the Company, under any applicable U.S. federal or state law, or appointing a custodian,   receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any   substantial part of its property, or ordering the winding up or liquidation of its affairs;        (10)           the commencement by the Company of a voluntary case or proceeding   under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law or of   any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company to   the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding   under any applicable U.S. federal or state bankruptcy, insolvency, reorganization or other similar law or to   the commencement of any bankruptcy or insolvency case or proceeding against the Company, or the   consent by the Company to the appointment of or the taking possession by a custodian, receiver, liquidator,   assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its   property, or the making by the Company of an assignment for the benefit of creditors; or      (11) the Acquisition shall not have been consummated within 30 days   following the issuance of this Subordinated Note.       (b)           Acceleration of Payment. If an Event of Default (other than an Event of Default   specified in Section 6(a)(9) or 6(a)(10) hereof with respect to the Company) occurs and is continuing, the   holders of at least a Majority in Interest of the Subordinated Notes, by written notice to the Company, may   declare due and payable the principal amount of this Subordinated Note and all other outstanding   Subordinated Notes, plus any accrued and unpaid interest to the date of payment. Upon a declaration of   acceleration, such principal and accrued and unpaid interest, to the date of payment shall be immediately   due and payable. If an Event of Default specified in Section 6(a)(9) or 6(a)(10) occurs with respect to the   Company, the principal, if any, and accrued and unpaid interest, on this Subordinated Note shall become   and be immediately due and payable, without any declaration or other act on the part of the Holder. The   exercise of the rights of the Holders set forth in Sections 6(b) – (d), however, is subject to the Company’s   obligations with respect to the Senior Indebtedness.          The holders of not less than a Majority in Interest of the principal of the outstanding   Subordinated Notes may, on behalf of the holders of all of the Subordinated Notes, rescind and annul an   acceleration and its consequences (including waiver of any defaults) if: (1) all existing Events of Default,   other than the nonpayment of a Defaulted Payment on this Subordinated Note and any of the other   Subordinated Notes that have become due solely because of the acceleration, have been remedied, cured or   waived, and (2) the rescission would not conflict with any judgment or decree of a court of competent   jurisdiction.       (c)           Collections. If an Event of Default with respect to this Subordinated Note occurs   and is continuing, the Holder may pursue any available remedy by proceeding at law or in equity to collect     

 

 5          the Defaulted Payment or interest due and payable on this Subordinated Note or to enforce the performance   of any provision of this Subordinated Note.            (d)           Right to Receive Payment Upon Default. Notwithstanding any other provision in   this Subordinated Note, the Holder of this Subordinated Note shall have the right, which is absolute and   unconditional, to receive payment of the principal and interest in respect of the Subordinated Notes held by   the Holder, on or after the final Maturity Date, or to bring suit for the enforcement of any such payment on   or after such date, and such rights shall not be impaired or affected adversely without the consent of the   Holder.      (e)           No Exclusive Right or Remedy. Except as otherwise provided herein, no right or   remedy conferred in this Subordinated Note upon the Holder is intended to be exclusive of any other right   or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition   to every other right and remedy given hereunder or hereafter existing at law or in equity or otherwise.  The   assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent   assertion or employment of any other appropriate right or remedy.       (f)           No Waiver of Right or Remedy. No delay or omission of the Holder of this   Subordinated Note to exercise any right or remedy accruing upon any Event of Default shall impair any   such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein.  Every   right and remedy given by this Section 6 or by law to the Holder may be exercised from time to time, and   as often as may be deemed expedient, by the Holder.      7.   Restrictions on Transfer.      (a) This Subordinated Note has not been registered under the Securities Act, or the   securities laws of any state or other jurisdiction. Neither this Subordinated Note nor any interest or   participation herein may be reoffered, sold, assigned, transferred, pledged, encumbered or otherwise   disposed of (a “Transfer”) in the absence of such registration, unless (i) such transaction is exempt from, or   not subject to, registration under the Securities Act or the securities laws of any state or other jurisdiction   and (ii) is made in compliance with applicable federal and state statutory resale restrictions, if any.  The   Holder by its acceptance of this Subordinated Note agrees that it shall not offer, sell, assign, transfer, pledge,   encumber or otherwise dispose of this Subordinated Note or any portion thereof or interest therein other   than in a minimum denomination of $50,000 principal amount (or any integral multiple of $10,000 in excess   thereof) and then (other than with respect to a Transfer pursuant to a registration statement that is effective   at the time of such Transfer) only (a) to the Company, (b) to an Affiliate of the Holder, (c) to a person it   reasonably believes to be an “accredited investor” within the meaning of Rule 501(a) under the Securities   Act, or (d) pursuant to a transaction in compliance with Rule 144 or Rule 144A under the Securities Act,   and in the case of (b), (c) and (d) above in which the transferor furnishes the Company with such   certifications, legal opinions or other information as the Company may reasonably request to confirm that   such transfer is being made pursuant to  an exemption from, or in a transaction not subject to, the registration   requirements of the Securities Act as applicable.          (b) The Holder represents that it is an “accredited investor” within the meaning of   Rule 501 of the Securities Act.  The Holder has been advised that this Subordinated Note has not been   registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless it is   registered under the Securities Act and applicable state securities laws or unless an exemption from such   registration requirements is available.  The Holder is aware that the Company is under no obligation to   effect any such registration or to file for or comply with any exemption from registration.  The Holder has   not been formed solely for the purpose of making this investment and is acquiring the Subordinated Note   for its own account for investment, and not with a view to, or for resale in connection with, the distribution     

 

 6          thereof. The Holder further represents to the Company that it has such knowledge, sophistication and   experience in business and financial matters so as to be capable of evaluating the merits and risks of the   prospective investment in the Subordinated Note, and has so evaluated the merits and risks of such   investment; and is able to bear the economic risk of an investment in the Note and, at the present time, is   able to afford a complete loss of such investment.         (c)  The Company shall cooperate with the Holder and take all actions reasonably   necessary to effectuate any Transfer of this Subordinated Note by the Holder that is permitted under this   Section.      8.  Definitions.         Unless otherwise defined in this Subordinated Note, the following capitalized terms shall   have the following respective meanings when used herein. Other capitalized terms used in this Subordinated   Note that are not defined herein shall have the respective meanings ascribed to such terms as set forth in   the Purchase Agreement:         “Affiliate” of any specified Person means any other Person directly or indirectly   controlling or controlled by or under direct or indirect common control with such specified Person.  For the   purposes of this definition, “control”, when used with respect to any specified Person, means the power to   direct the management and policies of such Person, directly or indirectly, whether through the ownership   of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings   correlative to the foregoing.        “Board of Directors” means the board of directors of the Company or any authorized   committee of the board of directors.        “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is   not a day on which the banking institutions in the City of New York, New York are authorized or obligated   by law or executive order to close or be closed.        “Capital Stock” of any Person means any and all shares, interests, rights to purchase,   warrants, options, participations or other equivalents of or interest in (however designated) equity of such   Person, but excluding any debt securities convertible into such equity.        “Change of Control” means if any Person or group of Persons acting in concert, other than   the owners of more than 10% of outstanding securities of the Company as of Closing Date, having voting   rights in the election of directors, shall acquire beneficial ownership (within the meaning of Rule 13d-3   promulgated under the Exchange Act), directly or indirectly, of more than 50% of the outstanding voting   securities of the Company having voting rights in the election of directors.          “Defaulted Payment” has the meaning set forth in Section 6 hereof.        “Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and   regulations promulgated thereunder.        “Holder” means the person in whose name this Subordinated Note is registered on the   Subordinated Note Register.         “Indebtedness” shall have the meaning ascribed to such term as set forth in Section 1.1 of   the Purchase Agreement.     

 

 7               “Majority in Interest” has the meaning set forth in Section 9(d).       “Maturity Date” has the meaning set forth in Section 2(a) hereof.       “Person” shall mean and include an individual, a partnership, a corporation (including a   business trust), a joint stock company, a limited liability company, an unincorporated association, a joint   venture or other entity or a governmental authority.        “Purchase Agreement” means the Note Purchase Agreement, dated as of _________, 2016   among the Company and the initial holders of the Subordinated Notes.        “Securities Act” means the Securities Act of 1933, as amended and the rules and   regulations promulgated thereunder.          “Senior Credit Facility” shall have the meaning ascribed to such term as set forth in Section   1.1 of the Purchase Agreement.         “Senior Lender” shall have the meaning ascribed to such term as set forth in Section 1.1 of   the Purchase Agreement.        “Subsidiary” means, in respect of any Person, any corporation, association, partnership or   other business entity of which more than 50% of the total voting power of shares of Capital Stock or other   interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to   vote in the election of directors, managers, general partners or trustees thereof is at the time owned or   controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such   Person; or (iii) one or more Subsidiaries of such Person.        “Subordinated Note Register” means the register or other ledger maintained by the   Company that records the record owners of the Subordinated Notes.      9.   Miscellaneous.       (a) Payment. No provision of this Subordinated Note shall alter or impair the   obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if   any) and interest, if any, on this Subordinated Note at the times, places and rate, and in the coin or currency,   herein prescribed. This Subordinated Note is issued upon the express condition, to which each successive   holder expressly assents and by receiving the same agrees, that no recourse under or upon any obligation,   covenant or agreement of the Subordinated Note, or for the payment of the principal of, or the Interest on,   the Subordinated Note, or for any claim based on the Subordinated Note, or otherwise in respect hereof,   shall be had against any incorporator or any past, present or future stockholder, officer or director, as such,   of the Company or of any successor corporation, whether by virtue of the constitution, statute or rule of law   or by any assessment or penalty or otherwise howsoever, all such individual liability being hereby expressly   waived and released as a condition of and as a part of the consideration for the execution and issue of the   Subordinated Note.       (b) Notice. The Company will give prompt written notice to the Holder of this   Subordinated Note of any change in the location of the Designated Office.  Any notice to the Company or   to the holder of this Subordinated Note shall be given in the manner set forth in the Purchase Agreement;   provided that the Holder of this Subordinated Note, if not a party to such Purchase Agreement, may specify   alternative notice instructions to the Company.     

 

 8              (c) Transfer.   (1)  Subject to Holder’s compliance with Section 7 hereof, the transfer   of this Subordinated Note is registrable on the Subordinated Note Register upon surrender of this   Subordinated Note for registration of transfer at the Designated Office, duly endorsed by, or accompanied   by a written instrument of transfer in form satisfactory to the Company duly executed by, the Holder hereof   or such Holder’s attorney duly authorized in writing, and thereupon one or more new Subordinated Notes,   of authorized denominations and for the same aggregate principal amount, will be issued to the designated   transferee or transferees. No service charge shall be made for any such registration of transfer, but the   Company may require payment of a sum sufficient to recover any tax or other governmental charge payable   in connection therewith. Prior to due presentation of this Subordinated Note for registration of transfer, the   Company and any agent of the Company may treat the Person in whose name this Subordinated Note is   registered as the owner thereof for all purposes, whether or not this Subordinated Note be overdue, and   neither the Company nor any such agent shall be affected by notice to the contrary.          (2)          Subject to Holder’s compliance with Section 7 hereof, upon presentation   of this Subordinated Note for registration of transfer at the Designated Office accompanied by   (i) certification by the transferor that such transfer is in compliance with the terms hereof and (ii) by a   written instrument of transfer in a form approved by the Company executed by the Holder, in person or by   the Holder’s attorney thereunto duly authorized in writing, and including the name, address and telephone   and fax numbers of the transferee and name of the contact person of the transferee, such Subordinated Note   shall be transferred on the Subordinated Note Register, and a new Subordinated Note of like tenor and   bearing the same legends shall be issued in the name of the transferee and sent to the transferee at the   address and c/o the contact person so indicated.  Transfers and exchanges of Subordinated Notes shall be   subject to such additional restrictions as are set forth in the legends on the Subordinated Notes and to such   additional reasonable regulations as may be prescribed by the Company as specified in this Subordinated   Note.  Successive registrations of transfers as aforesaid may be made from time to time as desired, and each   such registration shall be Subordinated Noted on the Subordinated Note register.       (3)           Upon receipt by the Company of evidence reasonably satisfactory to it   of the loss, theft, destruction or mutilation of this Subordinated Note, and in the case of loss, theft or   destruction, receipt of indemnity reasonably satisfactory to the Company and upon surrender and   cancellation of this Subordinated Note, if mutilated, the Company will deliver a new Subordinated Note of   like tenor and dated as of such cancellation, in lieu of such Subordinated Note.         (d)        Amendments; Waivers.  Neither this Subordinated Note nor any term hereof may   be amended or waived orally or in writing, except that any term of this Subordinated Note and the other   Subordinated Notes may be amended and the observance of any term of this Subordinated Note and the   other Subordinated Notes may be waived (either generally or in a particular instance and either retroactively   or prospectively), and such amendment or waiver shall be applicable to all of the Subordinated Notes, upon   the approval of the Company and the holders of fifty-one percent (51%) or more of the outstanding principal   amount of all then outstanding Subordinated Notes (a “Majority in Interest”); provided, however, that any   amendment that would (i) change the maturity of the principal of or any installment of interest on any of   the Subordinated Notes, (ii) reduce the principal amount of, or interest on any Subordinated Note, (iii)   reduce the percentage in aggregate principal amount of Subordinated Notes outstanding necessary to   modify or amend the Subordinated Notes or to waive any past default; or (iv) modify this Section 9(d) shall,   in each case, require the approval of the holder of each Subordinated Note to which such amendment shall   apply. The Company may, without the consent of any holder of the Subordinated Notes, amend the   Subordinated Notes for the purpose curing any ambiguity or correcting or supplementing any defective   provision contained in the Subordinated Notes; provided that such modification or amendment does not, in   the good faith opinion of the Board of Directors, adversely affect the interests of the holders of the   Subordinated Notes in any material respect, or adding or modifying any other provisions with respect to     

 

 9          matters or questions arising under the Subordinated Notes which the Company may deem necessary or   desirable and which will not adversely affect the interests of the holders of the Subordinated Notes.  The   Company will not amend any provision of any other Subordinated Note in a manner favorable to any holder   thereof unless a similar amendment is made or offered with respect to all of the Subordinated Notes.       (e) Governing Law. THIS SECURITY SHALL BE GOVERNED BY AND   CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.       (f) Headings.  Section headings used herein are for convenience of reference only, are   not part of this Subordinated Note and shall not affect the construction of, or be taken into consideration in   interpreting, this Subordinated Note.          (g) Severability. If any provision of this Subordinated Note is invalid, illegal or   unenforceable, the balance of this Subordinated Note shall remain in effect, and if any provision is   inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and   circumstances. This Subordinated Note is subject to the express condition that at no time shall the Company   be obligated or required to pay interest hereunder at a rate which could subject the Holder or any other   Person to either civil or criminal liability as a result of being in excess of the maximum interest rate which   the Company is permitted by applicable law to contract or agree to pay.  If by the terms of this Subordinated   Note, the Company is at any time required or obligated to pay interest hereunder at a rate in excess of such   maximum rate, the rate of interest under this Subordinated Note shall be deemed to be immediately reduced   to such maximum rate and the interest payable shall be computed at such maximum rate and all prior interest   payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in   reduction of the principal balance of this Subordinated Note.           (h) Entirety. This Subordinated Note constitutes the entire contract among the parties   relating to the subject matter hereof and supersede any and all previous agreements and understandings,   oral or written, relating to the subject matter hereof.             [Remainder of page intentionally left blank.]      [DLH Subordinated Note signature page appears next]    

 

 10            [DLH Subordinated Note Signature Page]               IN WITNESS WHEREOF, the Company has caused this Subordinated Note to be duly executed   on the date first written above.        DLH HOLDINGS CORP.                By:                                                                               Name: Zachary C. Parker     Title:   Chief Executive Officerex44dlhbridgewarrantfina

FINAL EXECUTION          NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS   EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE   COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON   AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS   AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE   SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED,   PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION   STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR APPLICABLE   STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION   THEREFROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION   REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE   STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE   TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY   ACCEPTABLE TO THE COMPANY.      THE TRANSFERABILITY OF THIS WARRANT IS   RESTRICTED AS PROVIDED IN SECTION 4       DLH HOLDINGS CORP.   COMMON STOCK PURCHASE WARRANT      Dated as of: May 2, 2016  No. of Warrant Shares: [          ]     Warrant No. DLH 2016 W [       ]               For good and valuable consideration, the receipt of which is hereby acknowledged by DLH   HOLDINGS CORP., a New Jersey corporation (the “Company”), __________________ (the “Holder”),   is hereby granted the right to purchase, during the Exercise Period, up to ___________________(______)   fully-paid and non-assessable shares of the Company’s Common Stock, $.001 par value per share   (“Common Stock”), at the Exercise Price stated below, subject to the provisions and limitations and upon   the terms and conditions hereinafter set forth. This warrant (the “Warrant”) is issued by the Company   pursuant to that certain Note Purchase Agreement between the Company and the original Holder of this   Warrant dated May 2, 2016 (the “Purchase Agreement”) pursuant to which the Company has offered and   sold to the purchasers named therein subordinated notes (the “Subordinated Notes”) and Warrants.      1. Definitions of Certain Terms. Capitalized terms used and not otherwise defined herein shall have   the meanings set forth in the Purchase Agreement. In addition to the terms defined elsewhere in this   Warrant, the following terms have the following meanings:   (a) “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is   not a day on which the banking institutions in the City of New York, New York are authorized or obligated   by law or executive order to close or be closed.   (b) “Commission” means the U.S. Securities and Exchange Commission.   (c) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules   and regulations promulgated thereunder.   (d) “Exercise Price” means the price at which the Holder may purchase one share of Common   Stock upon exercise of this Warrant as determined from time to time pursuant to the provisions hereof. The   initial Exercise Price is $3.73 per share, subject to adjustment as provided herein.     

 

         - 2 -   (e) “Expiration Date” means the 60-month anniversary of the Initial Exercise Date.    (f) “Initial Exercise Date” means the first Business Day following the six-month anniversary   of the Issue Date.    (g) “Issue Date” means May 2, 2016.    (h) “Securities Act” means the Securities Act of 1933, as amended.   (i) “Trading Day” means a day on which the principal Trading Market is open for trading.   (j)  “Warrant” means this Common Stock purchase warrant and any warrant or warrants   hereafter issued as a consequence of the exercise or transfer of this warrant in whole or in part.   2. Exercise of Warrant.     (a) Manner of Exercise.     (i) Cash Exercise.  This Warrant may be exercised, in whole or in part, at any time or   from time to time, during the period commencing as of 9:30:01 a.m., New York time, on the Initial Exercise   Date and ending as of 5:30 p.m., New York time, on the Expiration Date (the “Exercise Period”), for   _____________ fully paid and non-assessable shares of Common Stock (the “Warrant Shares”), for an   exercise price per share equal to the Exercise Price, by delivery to the Company at its headquarters, or at   such other place as is designated in writing by the Company, of:    (1) a duly executed Notice of Exercise, substantially in the form of   Attachment I attached hereto and incorporated by reference herein;    (2) this Warrant; and    (3) subject to Section 2(a)(ii) below, payment of an amount in cash equal to   the product of the Exercise Price multiplied by the number of Warrant Shares being purchased upon such   exercise, with such payment being in the form of a wire transfer of immediately available U.S. funds to an   account designated in writing by the Company.      The date on which the Company receives the Notice of Exercise, this Warrant, and the Exercise   Price payable with respect to the Warrant Shares being purchased shall be deemed to be the date of exercise   (the “Date of Exercise”).     (ii) Cashless Exercise. Notwithstanding the provisions of Section 2(a)(i)(3) above   (requiring payment by wire transfer), the Company agrees that, if at the time of exercise hereof there is no   effective registration statement registering, or the prospectus contained therein is not available for, the   issuance of the Warrant Shares to the Holder, then unless otherwise prohibited by applicable law, the Holder   shall have the right to exercise this Warrant in full or in part on a cashless basis, computed using the   following formula:   X = Y (A - B)           A    Where:        X = The number of Warrant Shares to be issued to the Holder pursuant to this cashless exercise;     

 

         - 3 -       Y =  The number of Warrant Shares in respect of which the net issue election is made;       A =  The Fair Market Value  (as defined below) of one Warrant Share at the time the cashless   exercise election is made; and       B =  The Exercise Price then in effect at the time of such exercise.       The term “Fair Market Value” shall mean, on any given day: (A) if the class of Warrant Shares is   exchange-traded, the average of the closing sales prices per share of the class of Warrant Shares for the ten   (10) consecutive Trading Days ending on the day that is two (2) Trading Days prior to the applicable date   of determination of Fair Market Value; or (B) if the class of Warrant Shares is not listed or admitted to   trading on any securities exchange but is regularly traded in any over-the-counter market, then the average   of the bid and ask prices per share of the class of Warrant Shares for the ten (10) consecutive Trading Days   ending on the day that is two (2) Trading Days prior to the applicable date of determination of Fair Market   Value; or (C) if the class of Warrant Shares is not traded as described in clauses (A) or (B), then the per   share fair market value of the class of Warrant Shares as reasonably determined in good faith by the   Company’s Board of Directors.         (b) Delivery of Certificates.  Certificates for Warrant Shares purchased hereunder shall be   transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s   prime broker with the Depository Trust Company (“DTC”) through its Deposit Withdrawal Agent   Commission system if the Company is a participant in such system and such Warrant Shares are eligible   for delivery in such a manner, and otherwise by physical delivery to the address specified by the Holder in   the Notice of Exercise within three Business Days from the delivery to the Company of the Notice of   Exercise, surrender of this Warrant and payment of the aggregate Exercise Price as set forth above. This   Warrant shall be deemed to have been exercised on the date on which this Warrant is surrendered and   payment of the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have   been issued, and Holder or any other person so designated to be named therein shall be deemed to have   become a holder of record of such shares for all purposes, as of the date on which all of the criteria described   in the immediately preceding sentence have occurred, irrespective of the date of delivery of such certificate   or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books   of the Company are closed, such person shall be deemed to have become the holder of such shares at the   close of business on the next succeeding date on which the stock transfer books are open. If fewer than all   of the Warrant Shares purchasable under the Warrant are purchased, the Company will, upon such partial   exercise, execute and deliver to the Holder a new Warrant (dated as of the Issue Date), in the same form   and tenor as this Warrant, evidencing that portion of the Warrant not exercised.    (c) No Charge to Holder Upon Issuance.  The issuance of Warrant Shares upon exercise of   this Warrant shall be made without charge to Holder for any issuance tax in respect thereof or other cost   incurred by the Company in connection with such exercise and the related issuance of Warrant Shares (other   than any transfer taxes resulting from the issuance of Warrant Shares to any person other than Holder).       (d)  Reservation of Shares.  During the Exercise Period, the Company shall reserve and keep   available out of its authorized but unissued Common Stock shares of Common Stock equal to 100% of the   number of Warrant Shares issuable upon the full exercise of this Warrant.  All Warrant Shares which are   so issuable shall, when issued and upon the payment of the applicable Exercise Price, be duly and validly   issued, fully paid and non-assessable and free from all taxes, liens and charges and not subject to the pre-   emptive rights of any holder of Common Stock or any other class or series of stock of the Company.  During   the Exercise Period, the Company shall not take any action which would cause the number of authorized   but unissued shares of Common Stock to be less than the number of such shares required to be reserved     

 

         - 4 -   hereunder for issuance upon exercise of this Warrant.       (e) No Fractional Shares. If a fractional share of Warrant Shares would, but for the provisions   of this Section 2(e), be issuable upon exercise of the rights represented by this Warrant, the Company shall   round a fractional share to be delivered to Holder up to the next whole share. In no event shall the Company   be required to issue scrip or pay cash in lieu of fractional interests.      3. Adjustments and Extraordinary Events.        (a)  Stock Dividends, Subdivisions, Reclassifications or Combinations.  If the Company, at   any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or   distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in   shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock   issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock   into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares   of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the   Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be   multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding   treasury shares, if any) outstanding immediately before such event and of which the denominator shall be   the number of shares of Common Stock outstanding immediately after such event, and the number of shares   issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise   Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall   become effective immediately after the record date for the determination of stockholders entitled to receive   such dividend or distribution and shall become effective immediately after the effective date in the case of   a subdivision, combination or re-classification.      (b) Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. If during   the Exercise Period (i) the Company shall reorganize its capital, reclassify its capital stock, consolidate or   merge with or into another corporation (where the Company is not the surviving corporation or where there   is a change in or distribution with respect to the Common Stock of the Company); (ii) any tender offer or   exchange offer (whether by the Company or another individual or entity) is completed pursuant to which   holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or   property; (iii) the Company shall sell, transfer or otherwise dispose all or substantially all of its property,   assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification,   merger, consolidation, tender or exchange offer, or disposition of assets, shares of common stock of the   successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature   whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common   stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to   the holders of Common Stock of the Company, then the Holder shall have the right thereafter to receive,   upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring   corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as   a result of such reorganization, reclassification, merger, consolidation, tender or exchange offer, or   disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is   exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger,   tender or exchange offer, consolidation or disposition of assets (“Extraordinary Transaction”), the successor   or acquiring corporation (if other than the Company) shall expressly assume the due and punctual   observance and performance of each and every covenant and condition of this Warrant to be performed and   observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as   may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the   Company) in order to provide for adjustments of Warrant Shares for which this Warrant is exercisable   which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 3(b).  As     

 

         - 5 -   soon as commercially practicable following the Extraordinary Transaction, the successor or acquiring   corporation (if other than the Company), shall deliver to Holder a new warrant in repacement of this Warrant   consistent with the provisions referenced in the immediately preceding sentence against receipt by such   successor or acquiring corporation of the original of this Warrant.  For purposes of this Section 3(b),   “common stock of the successor or acquiring corporation” shall include stock of such corporation of any   class which is not preferred as to dividends or assets over any other class of stock of such corporation and   which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or   other securities which are convertible into or exchangeable for any such stock, either immediately or upon   the arrival of a specified date or the happening of a specified event and any warrants or other rights to   subscribe for or purchase any such stock.  The foregoing provisions of this Section 3(b) shall similarly   apply to successive reorganizations, reclassifications, mergers, tender or exchange offers, consolidations or   disposition of assets.       (c) Adjustment of Exercise Price upon Issuance of Common Stock, Options, Convertible   Securities, Etc.       (1) If during any period while this Warrant is outstanding, the Company (A) issues or   sells any Common Stock, Convertible Securities, warrants, or Options or (B) directly or indirectly   effectively reduces the conversion, exercise or exchange price for any Convertible Securities or Options   which are currently outstanding, at or to an effective Per Share Selling Price (as defined below) which is   less than the then-current Exercise Price, then in each such case the Exercise Price in effect immediately   prior to such issue or sale date, as applicable, shall be automatically reduced effective concurrently with   such issue or sale to an amount determined by multiplying the Exercise Price then in effect by a fraction,   (x) the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding   immediately prior to such issue or sale, plus (2) the number of shares of Common Stock which the aggregate   consideration received by the Company for such additional shares would purchase at such Exercise Price,   and (y) the denominator of which shall be the number of shares of Common Stock of the Company   outstanding immediately after such issue or sale. Notwithstanding the foregoing, however, no adjustment   hereunder shall be made with respect to an Exempt Issuance, as defined below.       (2) For the purposes of the foregoing adjustment, in the case of the issuance of any   Convertible Securities or Options, the maximum number of shares of Common Stock issuable upon   exercise, exchange or conversion of such Convertible Securities or Options shall be deemed to be   outstanding at the initial conversion or exercise price applicable to such securities, provided that no further   adjustment shall be made upon the actual issuance of Common Stock upon exercise, exchange or   conversion of such Convertible Securities or Options, and provided further that to the extent such   Convertible Securities or Options expire or terminate unconverted or unexercised, then at such time the   Exercise Price shall be readjusted as if such portion of such Convertible Securities or Options had not been   issued. For purposes of this Section 2.4, if an event occurs that triggers more than one of the above   adjustment provisions, then only one adjustment shall be made and the calculation method which yields the   greatest downward adjustment in the Exercise Price shall be used. If shares are issued for a consideration   other than cash, the Per Share Selling Price shall be the fair value of such consideration as determined in   good faith by independent certified public accountants mutually acceptable to the Company and the Holder.   In the event the Company directly or indirectly effectively reduces the conversion, exercise or exchange   price for any Convertible Securities or Options which are currently outstanding, then the Per Share Selling   Price shall equal such effectively reduced conversion, exercise or exchange price.       (3) As used herein, “Exempt Issuance” means the issuance of (a) shares of Common   Stock or Options or Convertible Securities to employees, officers, consultants or directors of the Company   pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee   members of the Board of Directors or a majority of the members of a committee of non-employee directors     

 

         - 6 -   established for such purpose, (b) Common Stock, Convertible Securities, warrants, or Options upon the   exercise or exchange of or conversion of any securities issued hereunder and/or other securities exercisable   or exchangeable for or convertible into shares of Common Stock issued and outstanding as of the date of   the Agreement, provided that such securities have not been amended since the date of the Agreement to   increase the number of such securities or to decrease the exercise price, exchange price or conversion price   of such securities; (c) shares of Common Stock issued by reason of a dividend, stock split, split-up or other   distribution on shares of Common Stock; (d) shares of Common Stock, Convertible Securities, warrants or   Options in connection with transactions with lenders or other commercial partners, the terms of which are   approved by the Board of Directors, in each case, the primary purpose of which is not to raise equity capital;   (e) shares of Common Stock, Convertible Securities, warrants or Options issued pursuant to mergers,   acquisitions, or asset sales approved by a majority of the disinterested directors of the Company, provided   that any such issuance shall provide to the Company additional benefits in addition to the investment of   funds, but shall not include a transaction in which the Company is issuing securities primarily for the   purpose of raising equity capital;  (f) shares of Common Stock, Convertible Securities, Warrants or Options   issued pursuant to the Agreement   and (g) shares of Common stock issued by the Company in connection   with a rights offering by the Company to its stockholders (including any standby or similar commitment   thereunder)  to be undertaken and completed within 150 days of the Issue Date.       (4) For purposes hereof: (i) “Convertible Securities” means any stock or securities   (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common   Stock; (ii) “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or   Convertible Securities; and (iii) “Per Share Selling Price” shall include the amount actually paid by third   parties for each share of Common Stock in a sale or issuance by the Company. A sale of shares of Common   Stock shall include the sale or issuance of Convertible Securities or Options, and in such circumstances the   Per Share Selling Price of the Common Stock covered thereby shall also include the exercise, exchange or   conversion price thereof (in addition to the consideration received by the Company upon such sale or   issuance less the fee amount as provided above).      4. Restrictions on Transfer.        (a) Restricted Securities.  The Holder acknowledges that: (i) it has been advised by the   Company that this Warrant and the Warrant Shares issuable upon exercise thereof (collectively the   “Securities”) have not been registered under the Securities Act of 1933, as amended (the “Securities Act”)   and (ii) assuming the accuracy of the representations and warranties of the Holder contained  herein, this   Warrant has been issued and the Warrant Shares will be issued in a transaction exempt from the registration   requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and/or Regulation D   promulgated thereunder and exempt from state registration or qualification under applicable state laws. The   Holder acknowledges that he has been informed by the Company of, or is otherwise familiar with, the   nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the   transfer of securities. In particular, the Holder agrees that no sale, assignment or transfer of the Securities   shall be valid or effective, and the Company shall not be required to give any effect to any such sale,   assignment or transfer, unless (i) the sale, assignment or transfer of the Securities is registered under the   Securities Act, and the Company has no obligations or intention to so register the Securities except as may   otherwise be provided herein, or (ii) the Securities are sold, assigned or transferred in accordance with all   the requirements and limitations of Rule 144 under the Securities Act or such sale, assignment, or transfer   is otherwise exempt from registration under the Securities Act. If, at the time of the surrender of this Warrant   in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant   to an effective registration statement under the Securities Act and under applicable state securities or blue   sky laws, the Company may require, as a condition of allowing such transfer to a transferee that is not an   Affiliate of the Holder (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the   Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for     

 

         - 7 -   opinions of counsel in comparable transactions) to the effect that such transfer may be made without   registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the   holder or transferee execute and deliver to the Company an investment letter in form and substance   acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)   promulgated under the Securities Act or a “qualified institutional buyer” as defined in Rule 144A(a) under   the Securities Act. The Holder represents and warrants that he has acquired this Warrant and will acquire   the Securities for his own account for investment and not with a view to the sale or distribution thereof or   the granting of any participation therein, and that he has no present intention of distributing or selling to   others any of such interest or granting any participation therein. The Holder acknowledges that the Warrant   and Warrant Shares must be held indefinitely unless a subsequent disposition thereof is registered under   the Securities Act or registered or qualified under any applicable state securities or “blue-sky” laws or is   exempt from registration and/or qualification. The Holder has no need for liquidity in its investment in the   Company, and is able to bear the economic risk of such investment for an indefinite period and to afford a   complete loss thereof. The Holder is an “accredited investor” as such term is defined in Rule 501 (the   provisions of which are known to the Holder) promulgated under the Act.       (b) Legends. The Holder understands that this Warrant and the Warrant Shares, as applicable,   shall bear a restrictive legend in substantially the form set forth below (and a stop-transfer order may be   placed against transfer of the certificates for such securities):        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED   UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR   APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR   SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE   REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) AN   OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT   REQUIRED UNDER SAID ACT (II) UNLESS SOLD OR TRANSFERRED TO A “QUALIFIED   INSTITUTIONAL BUYER” WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES   ACT OR (III) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.         (c)   Registration Rights. The Holder shall be entitled to all of the rights and subject to all of the   obligations regarding registration of the shares of Common Stock issuable upon the exercise of this Warrant   as described in the Purchase Agreement.         (d)       Disposition of Warrant or Warrant Shares.  With respect to any offer, sale or other   disposition of this Warrant or any shares of Common Stock acquired pursuant to the exercise of this Warrant   prior to registration of such Warrant or shares of Common Stock, the Holder agrees to give written notice   to the Company prior thereto, describing briefly the manner thereof, together with evidence, reasonably   satisfactory to the Company (which shall include such representation of the transferee regarding investment   intent as the Company may request, to the effect that such offer, sale or other disposition may be effected   without registration or qualification (under the Act as then in effect or any federal or state securities law   then in effect) of this Warrant or such shares of Common Stock and indicating whether or not under the Act   certificates for this Warrant or such shares of Common Stock to be sold or otherwise disposed of require   any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such   law.  Upon receiving such written notice and reasonably satisfactory evidence, the Company, as promptly   as practicable but no later than seven (7) days after receipt of the written notice, shall notify the Holder that   the Holder may sell or otherwise dispose of this Warrant or such Warrant Shares, all in accordance with the   terms of the notice delivered to the Company.  If the Company determines that the evidence is not   reasonably satisfactory to the Company, the Company shall so notify the Holder promptly with details   thereof after such determination has been made. Notwithstanding the foregoing, any shares of Common   Stock issued upon exercise of this Warrant may be offered, sold or otherwise disposed of in accordance     

 

         - 8 -   with Rule 144 under the Act and in compliance with the applicable statutory resale restrictions imposed by   state securities laws, provided that the Company shall have been furnished with such information as the   Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 and the   applicable resale restrictions imposed by state securities laws have been satisfied.  Each certificate   representing this Warrant or the shares of Common Stock thus transferred shall bear a legend as to the   applicable restrictions on transferability in order to ensure compliance with such laws, unless pursuant to   an opinion of counsel for the Holder, such legend is not required in order to ensure compliance with such   laws.  The Company may issue stop transfer instructions to its transfer agent in connection with such   restrictions.       5. Exercise Limitation.  Without the approval of the Company’s stockholders, the Holder (together   with such Holder’s Affiliates, and any Persons acting as a group together with such Holder or any of such   Holder’s Affiliates) shall not have the right to exercise the Warrants to the extent that such exercise would   cause the Company to exceed the aggregate number of shares of Common Stock which the Company may   issue or be deemed to have issued without breaching the Company’s obligations under the applicable rules   and regulations of the Nasdaq Stock Market (including, without limitation, Nasdaq Listing Rule 5635(d))   and such other Trading Market on which the Company’s shares of Common Stock are then quoted or listed   for trading. As used herein, “Trading Market” means any of the following markets or exchanges on which   the Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq   Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock   Exchange or the OTC Bulletin Board.      6. Exchange and Replacement of Warrant Certificates.         (a) Exchanges. This Warrant Certificate is exchangeable without expense, upon the surrender   hereof by the registered Holder at the principal executive office of the Company, for a new Warrant   Certificate of like tenor and date representing in the aggregate the right to purchase the same number of   Warrant Shares in such denominations as shall be designated by the Holder thereof at the time of such   surrender.       (b) Loss, Destruction, Etc. Upon receipt by the Company of evidence reasonably satisfactory   to it of the loss, theft, destruction or mutilation of this Warrant Certificate, and, in case of loss, theft or   destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of   all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrants, if   mutilated, the Company will make and deliver a new Warrant of like tenor, in lieu thereof and any such   lost, stolen, destroyed or mutilated warrant shall thereupon become void.      7. No Rights as Stockholder.  Nothing contained in this Agreement shall be construed as conferring   upon the Holder any rights whatsoever as a stockholder of the Company, either at law or in equity, including   without limitation, or Holders the right to vote or to consent or to receive notice as a stockholder in respect   of any meetings of stockholders for the election of directors the right to receive dividends or any other   matter.          

 

         - 9 -   8. Notices; Adjustments.     (a)   All notices required or permitted hereunder shall be in writing and shall be deemed   effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed   electronic mail or facsimile if sent during normal business hours of the recipient, and if not, then on the   next business day; (iii) two (2) Business Days after having been sent by registered or certified mail, return   receipt requested, postage prepaid; or (iv) one (1) Business Day after deposit with a nationally recognized   overnight courier, specifying next day delivery, with written verification of receipt.  All communications   shall be sent to the Company or to Holder, as applicable, at the respective addresses set forth on the signature   page to the Purchase Agreement or at such other address(es) as they may designate, respectively, by ten   (10) days advance written notice to the other party hereto.    (b) Upon the occurrence of any adjustments pursuant to Section 3 hereof, the Company at its   expense shall, as promptly as reasonably practicable but in any event not later than 10 days thereafter,   compute such adjustment in accordance with the terms hereof and furnish to Holder a certificate setting   forth such adjustment and showing in detail the facts upon which such adjustment is based.  In the event of   any taking by the Company of a record of the holders of any class of securities for the purpose of   determining the holders thereof who are entitled to receive any dividend or other distribution, the Company   shall mail to the Holder, at least ten (10) days prior to the date on which any such record is to be taken for   the purpose of such dividend or distribution, a notice specifying such date.  In the event of any voluntary   dissolution, liquidation or winding up of the Company, the Company shall mail to the Holder, at least ten   (10) days prior to the date of the occurrence of any such event, a notice specifying such date. If the approval   of any stockholders of the Company shall be required in connection with any transaction contemplated by   Section 3(b) above, then, the Company shall cause to be mailed to the Holder at least 10 calendar days prior   to the applicable record or effective date hereinafter specified, a notice stating the date on which such   transaction is expected to become effective or close, and the date as of which it is expected that holders of   the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities,   cash or other property deliverable upon such transaction. Notwithstanding the immediately preceding   sentences, however, if the date on which the Company is obliged to provide notice hereunder to the Holders   is prior to a public announcement relating to the events set forth and on such date the Company’s securities   are traded or quoted on any recognized national securities exchange or quotation system, then such notice   shall be provided to each Holder simultaneously with the notice provided to the Company’s common   stockholders. Failure to give such notice, or any defect therein, shall not, however, affect the legality or   validity of any such action.   9. Miscellaneous.         (a) Successors and Assigns. All the covenants and agreements made by the Company in this   Warrant shall bind its successors and assigns. This Warrant shall be for the sole and exclusive benefit of   the Holder and nothing in this Warrant shall be construed to confer upon any person other than the Holder   any legal or equitable right, remedy or claim hereunder.      (b) Acceptance.  Receipt of this Warrant by the Holder shall constitute acceptance of and   agreement to all of the terms and conditions contained herein.   (c)  Waivers and Amendments. No course of dealing between the Company and the Holder   hereof shall operate as a waiver of any right of any Holder hereof, and no delay on the part of the Holder   in exercising any right hereunder shall so operate. No waivers of any term, condition or provision of this   Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver   of any such term, condition or provision. Any term of this Warrant may be amended, waived, discharged   or terminated (either generally or in a particular instance and either retroactively or prospectively) with the     

 

         - 10 -   written consent of the Company and the Holder of the Warrant. Notwithstanding the foregoing, other than   in connection with a transaction contemplated by Section 3 of this Warrant, the number of Warrant Shares   subject to this Warrant and the Exercise Price of this Warrant may not be amended, and the right to exercise   this Warrant may not be waived, without the written consent of the Holder. Any amendment shall be   endorsed upon this Warrant, and all future Holders shall be bound thereby.        (d) Governing Law. The provisions of this Warrant shall in all respects be constructed   according to, and the rights and liabilities of the parties hereto shall in all respects be governed by, the laws   of the State of New York.  This Warrant shall be deemed a contract made under the laws of the State of   New York and the validity of this Warrant and all rights and liabilities hereunder shall be determined under   the laws of said State.          (e) Headings. The headings of the Sections of this Warrant are inserted for convenience only   and shall not be deemed to constitute a part of this Warrant.        (f) Saturdays, Sundays, Holidays.  If the last or appointed day for the taking of any action or   the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal   holiday in the State of New York, then such action may be taken or such right may be exercised on the next   succeeding day not a legal holiday.        (f) Severability. If any provision of this Warrant shall be held to be invalid or unenforceable,   such invalidity or unenforceability shall not affect any other provisions of this Warrant.         Signature page to Common Stock Purchase Warrant follows.     

 

         - 11 -            IN WITNESS WHEREOF, DLH HOLDINGS CORP. has, as of the date first set forth above,   caused this Warrant to be executed in its corporate name by its officer, and its seal to be affixed hereto.       May 2, 2016           DLH HOLDINGS CORP   .     By:    Name: Zachary C. Parker   Title:   President and Chief Executive Officer    Address for Notice:      DLH Holdings Corp.    3565 Piedmont Road, Suite 3-700   Atlanta, Georgia  30305     

 

         - 12 -   TO: DLH HOLDINGS CORP.      Attention: Chief Financial Officer       The undersigned hereby elects to purchase, pursuant to the provisions of the Common Stock   Warrant issued by DLH Holdings Corp. as of ___________, 2016, and held by the undersigned, the original   of which is attached hereto, and (check the applicable box):    Tenders herewith payment of the Exercise Price in the form of cash, via wire transfer of   immediately available funds, in the amount of $____________ for _________ shares of Common   Stock.    Elects the cashless exercise option pursuant to Section 2(a) of the Warrant, and accordingly requests   delivery of _________ shares of Common Stock, net, pursuant to the following calculation:   X = Y (A-B)/A   (       ) =  (_____) [(_____) - (_____)]/(_____)   Where     X =  The number of shares of Common Stock to be issued to the Holder pursuant to      this cashless exercise;       Y =   The number of shares of Common Stock in respect of which the net issue election     is made;       A =   The Fair Market Value of one share of Common Stock, as calculated per the      terms of the Warrant; and      B =   The Exercise Price then in effect as of the date of exercise.    If this box is checked, as long as the Company’s transfer agent participates in the DTC Fast   Automated Securities Transfer program (“FAST”), and except as otherwise provided in the next   following sentence, the Company shall effect delivery of the shares of Common Stock to the Holder   by crediting to the account of the Holder or its nominee at DTC (as specified in this Exercise Notice)   with the number of shares of Common Stock required to be delivered.  In the event that the   Company’s transfer agent is not a participant in FAST, or if the shares of Common Stock are not   otherwise eligible for delivery through FAST, the Company shall effect delivery of the shares of   Common Stock by delivering to Holder or its nominee physical certificates representing such   shares.   Information for Delivery of uncertificated Shares by DWAC:      Account Number:        Account Name:         DTC Number:                  If this box is checked, the Holder requests delivery of physical certificates representing the Warrant   Shares and requests that such certificates be delivered to the following address:     

 

         - 13 -      Name:  ____________________________________________________________     (please typewrite or print in block letters)       Address: __________________________________________________________          Tax I.D. No. or Social Security No.: ____________________________________       If such number of shares shall not be all the shares purchasable upon the exercise of the Warrants   evidenced by this Warrant, a new warrant certificate for the balance of such Warrants remaining   unexercised shall be registered in the name of and delivered to:   Name:  ____________________________________________________________     (please typewrite or print in block letters)       Address: __________________________________________________________          Tax I.D. No. or Social Security No.: ____________________________________       HOLDER:       Name:   Title:   Date:                      

 

         - 14 -   ATTACHMENT II      [FORM OF ASSIGNMENT]      (To be executed by the registered holder if such holder   desires to transfer the Warrant Certificate.)         FOR VALUE RECEIVED, the undersigned Holder of this Warrant hereby sells, assigns and transfers   the foregoing Warrant and all rights evidenced thereby to   Name:      (Please Print)   Address:      (Please Print)   Tax ID No.: ______________________________________      and does hereby irrevocably constitute and appoint                                         , Attorney, to transfer the   within Warrant Certificate on the books of DLH Holdings Corp., with full power of substitution.      NOTE:  The signature to this Assignment Form 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.      Dated:                                      Holder: ______________________      ______________________________                                                                           (Print Name)                                                                                   ______________________________   (Signature)      STATE OF ___________)   COUNTY OF _________) ss:       On this __ day of ___________, before me personally came ________, to me known, who being   by me duly sworn, did depose and say that he resides at __________________, that he is the holder of the   foregoing instrument and that he executed such instrument and duly acknowledged to me that he executed   the same.              _____________________________          Notary Public

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