Document:

ex047continentalsubscrip

 {N0110978  } Subscription Agent Agreement  THIS SUBSCRIPTION AGENT AGREEMENT (“Agreement”) between DLH Holdings Corp., a New Jersey corporation (the “Company”), and Continental Stock Transfer & Trust Company (“Continental”), is dated as of ___________, 2016. This agreement also appoints Continental as Information Agent for the beneficial holders. In this capacity, Continental will coordinate with brokers and or their agents disbursement of offering material and offering information as required.   1. Appointment.  (a) The Company is making an offer (the “Subscription Offer”) to issue to the holders of record of its outstanding shares of Common Stock par value $0.001 per share (the “Common Stock”), at the close of business on _________________, 2016 (the “Record Date”), the right to subscribe for and purchase (each a “Right”) shares of Common Stock (the “Additional Common Stock”) at a purchase price of $_______ per share of Additional Common Stock (the “Subscription Price”), payable by cashier’s or certified check, upon the terms and conditions set forth herein. The term “Subscribed” shall mean submitted for purchase from the Company by a stockholder in accordance with the terms of the Subscription Offer, and the term “Subscription” shall mean any such submission.  (b) The Subscription Offer will expire at 5:00 pm on _________________, 2016, New York City Time, on (the “Expiration Time”), unless the Company shall have extended the period of time for which the Subscription Offer is open, in which event the term “Expiration Time” shall mean the latest time and date at which the Subscription Offer, as so extended by the Company from time to time, shall expire.  (c) The Company filed a Registration Statement (SEC File 333- 212380) relating to the Additional Common Stock with the Securities and Exchange Commission under the Securities Act of 1933, as amended, on July 1, 2016 and as amended on _____________, 2016. Said Registration Statement was declared effective on _______day, ______________, 2016. The terms of the Additional Common Stock are more fully described in the Prospectus forming part of the Registration Statement as it was declared effective, and the accompanying Letter of Instruction. Copies of the Prospectus, the Letter of Instruction and the Notice of Guaranteed Delivery are attached hereto as Exhibit 1, Exhibit 2 and Exhibit 3, respectively. All terms used and not defined herein shall have the same meaning as in the Prospectus. Promptly after the Record Date, the Company will provide Continental with a list of holders of Common Stock as of the Record Date (the “Record Stockholders List”).  

 

 {N0110978  } 2 (d) The Company hereby appoints Continental to act as subscription agent (the “Subscription Agent”) for the Subscription Offer in accordance with and subject to the following terms and conditions.   2. Subscription of Rights.   (a) The Rights are evidenced by non-transferable subscription certificates (the “Certificates”), a copy of the form of which is attached hereto as Exhibit 4. The Certificates entitle the holders to subscribe, upon payment of the Subscription Price, for shares of Additional Common Stock at the rate of one share for each _____ Rights evidenced by a Certificate (the “Basic Subscription Privilege”). No fractional shares will be issued. In the event that the number of Rights submitted by a holder are exercisable for a number of shares that is not a whole number, the number of shares of Common Stock issuable to such holder will be rounded down to the nearest whole share.   (b) The Subscription Offer provides that subscribing stockholders, and only those subscribing stockholders who were stockholders on the Record Date and who exercise their Rights in full, may exercise an over- subscription right as more fully described in the Registration Statement (the “Over-subscription Right”). This Over-subscription Right provides subscribing stockholders who were stockholders on the Record Date and who exercise their Rights in full the ability to purchase a portion of the shares of Common Stock that were not purchased by other stockholders. The Over-subscription Right is subject to certain limitations, however, and no subscribing stockholder will be permitted to purchase shares of Additional Common Stock in excess of the number of shares of Common Stock beneficially owned by such stockholder as of the Record Date of the Subscription Offer. Further, the Over-subscription Right is also subject to allocation by the Company in the event sufficient shares of Common Stock are not available to stockholders seeking to exercise an Over- subscription Right. Accordingly, Continental shall, after the initial allocation of Additional Common Stock to those stockholders exercising their Basic Subscription Right, allocate any remaining Basic Subscription Rights, as more fully described in the Registration Statement.   3. Duties of Subscription Agent. As Subscription Agent, Continental is authorized and directed to:   (a) Issue the Certificates in accordance with this Agreement in the names of the holders of the Common Stock of record on the Record Date, keep such records as are necessary for the purpose of recording such issuance, and furnish a copy of such records to the Company. The Certificates may be signed on behalf of the Subscription Agent by the manual or facsimile signature of a Vice President or Assistant Vice President of the Subscription Agent, or by the manual signature of any of its other authorized officers. 

 

 {N0110978  } 3   (b) Promptly after Continental receives the Record Stockholders List, Continental shall:   (i) mail or cause to be mailed, by first class mail, to each holder of Common Stock of record on the Record Date whose address of record is within the United States and Canada, (i) a Certificate evidencing the Rights to which such stockholder is entitled under the Subscription Offer, (ii) a copy of the Prospectus, (iii) a Letter of Instruction, (iv) a Notice of Guaranteed Delivery, and (v) a return envelope addressed to the Subscription Agent; and   (ii) mail or cause to be mailed, by air mail, to each holder of Common Stock of record on the Record Date whose address of record is outside the United States and Canada, or is an A.P.O. or F.P.O. address, (i) a copy of the Prospectus, (ii) a Notice of Guaranteed Delivery, and (iii) a Letter of Instruction (different from the Letter of Instruction sent to stockholders whose address of record is within the United States and Canada). Continental shall refrain from mailing Certificates issuable to any holder of Common Stock of record on the Record Date whose address of record is outside the United States and Canada, or is an A.P.O. or F.P.O. address, and hold such Certificates for the account of such stockholder subject to such stockholder making satisfactory arrangements with the Subscription Agent for the exercise or other disposition of the Rights evidenced thereby, and follow the instructions of such stockholder for the exercise, sale or other disposition of such Rights if such instructions are received at or before 11:00 a.m., New York City Time, on __________________day, __________________, 2016.  (c)  Mail or deliver a copy of the Prospectus (i) to each assignee or transferee of Certificates upon receiving appropriate documents to register the assignment or transfer thereof if the Certificates are transferable, and (ii) with certificates for shares of Additional Common Stock when such are issued to persons other than the registered holder of the Certificate.  (d) Accept Subscriptions upon the due exercise (including payment of the Subscription Price) on or prior to the Expiration Time of Rights in accordance with the terms of the Certificates and the Prospectus.  (e)  Subject to the next sentence, accept Subscriptions from stockholders whose Certificates are alleged to have been lost, stolen or destroyed upon receipt by Continental of an affidavit of theft, loss or destruction and a bond of indemnity in form and substance satisfactory to Continental, accompanied by payment of the Subscription Price for the total number of shares of Additional Common Stock Subscribed for. Upon receipt of such affidavit and bond of indemnity and compliance with any other applicable requirements, stop orders shall be placed on said Certificates and Continental 

 

 {N0110978  } 4 shall withhold delivery of the shares of Additional Common Stock subscribed for until after the Certificates have expired and it has been determined that the Rights evidenced by the Certificates have not otherwise been purported to have been exercised or otherwise surrendered.  (f)  Accept Subscriptions, without further authorization or direction from the Company, without procuring supporting legal papers or other proof of authority to sign (including without limitation proof of appointment of a fiduciary or other person acting in a representative capacity), and without signatures of co-fiduciaries, co-representatives or any other person:   (i) if the Certificate is registered in the name of a fiduciary and is executed by, and the Additional Common Stock is to be issued in the name of, such fiduciary;  (ii) if the Certificate is registered in the name of joint tenants and is executed by one of the joint tenants, provided the certificate representing the Additional Common Stock is issued in the names of, and is to be delivered to, such joint tenants;  (iii)  if the Certificate is registered in the name of a corporation and is executed by a person in a manner which appears or purports to be done in the capacity of an officer, or agent thereof, provided the Additional Common Stock is to be issued in the name of such corporation; or  (iv)  if the Certificate is registered in the name of an individual and is executed by a person purporting to act as such individual’s executor, administrator or personal representative, provided, the Additional Common Stock is to be registered in the name of the subscriber as executor or administrator of the estate of the deceased registered holder and there is no evidence indicating the subscriber is not the duly authorized representative that he purports to be.  (g)  Accept Subscriptions not accompanied by Certificates if submitted by a firm having membership in the New York Stock Exchange or another national securities exchange or by a commercial bank or trust company having an office in the United States together with the Notice of Guaranteed Delivery and accompanied by proper payment for the total number of shares of Additional Common Stock Subscribed for.  (h) Accept Subscriptions even though unaccompanied by Certificates, under the circumstances and in compliance with the terms and conditions set forth in the Prospectus under the heading “Procedures for DTC Participants.” 

 

 {N0110978  } 5  (i)  Refer to the Company for specific instructions as to acceptance or rejection, Subscriptions received after the Expiration Time, Subscriptions not authorized to be accepted pursuant to this Paragraph 1, and Subscriptions otherwise failing to comply with the requirements of the Prospectus and the terms and conditions of the Certificates.   4. Acceptance of Subscriptions. Upon acceptance of a Subscription, Continental shall:  (a)  Hold all monies received in a special account for the benefit of the Company. Promptly following the Expiration Time Continental shall distribute to the Company the funds in such account and issue certificates for shares of Additional Common Stock issuable with respect to Subscriptions that have been accepted. Continental will not be obligated to calculate or pay interest to any holder or any other party claiming through a holder or otherwise. It is hereby agreed immediately following the effective date of the Subscription, immediately available funds, represented by certified check, money order, or wire transfer but not personal check, will be deposited with Continental.  (b)  Advise the Company daily by telecopy and confirm by letter to the attention of Kathryn M. JohnBull, Chief Financial Officer (the “Company Representative”) as to the total number of shares of Additional Common Stock Subscribed for, total number of Rights sold, total number of Rights partially Subscribed for and the amount of funds received, with cumulative totals for each; and in addition advise the Company Representative, by telephone at (678) 935-1520, confirmed by telecopy, of the amount of funds received identified in accordance with (a) above, deposited, available or transferred in accordance with (a) above, with cumulative totals; and  (c)  As promptly as possible but in any event on or before 3:30 p.m., New York City Time, on the first full business day following the Expiration Time, advise the Company Representative in accordance with (b) above of the number of shares Subscribed for, the number of Subscription guarantees received and the number of shares of Additional Common Stock unsubscribed for.   5. Completion of Subscription Offer. Upon completion of the Subscription Offer:  (a)  Continental shall requisition certificates from the Transfer Agent for the Common Stock for shares of Additional Common Stock for which Subscriptions have been received.  

 

 {N0110978  } 6 (b)  The Certificates shall be issued in registered form only. The Company shall appoint and have in office at all times a Transfer Agent and Registrar for the Certificates, which may be Continental and which shall keep books and records of the registration and transfers and exchanges of Certificates (such books and records are hereinafter called the “Certificate Register”). The Company shall promptly notify the Transfer Agent and Registrar of the exercise of any Certificates. The Company shall promptly notify Continental of any change in the Transfer Agent and Registrar of the Certificates.  (c)  All Certificates issued upon any registration of transfer or exchange of Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Certificates surrendered for such registration of transfer or exchange.  (d)  Any Certificate when duly endorsed in blank shall be deemed negotiable, and when a Certificate shall have been so endorsed the holder thereof may be treated by the Company, Continental and all other persons dealing therewith as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented thereby, any notice to the contrary notwithstanding, but until such transfer is registered in the Certificate Register, the Company and Continental may treat the registered holder thereof as the owner for all purposes.  (e)  For so long as this Agreement shall be in effect, the Company will reserve for issuance and keep available free from preemptive rights a sufficient number of shares of Additional Common Stock to permit the exercise in full of all Rights issued pursuant to the Subscription Offer. Subject to the terms and conditions of this Agreement, Continental will request the Transfer Agent for the Common Stock to issue certificates evidencing the appropriate number of shares of Additional Common Stock as required from time to time in order to effectuate the Subscriptions.  (f)  The Company shall take any and all action, including without limitation obtaining the authorization, consent, lack of objection, registration or approval of any governmental authority, or the taking of any other action under the laws of the United States of America or any political subdivision thereof, to insure that all shares of Additional Common Stock issuable upon the exercise of the Certificates at the time of delivery of the certificates therefor (subject to payment of the Subscription Price) will be duly and validly issued and fully paid and non-assessable shares of Common Stock, free from all preemptive rights and taxes, liens, charges and security interests created by or imposed upon the Company with respect thereto.  

 

 {N0110978  } 7 (g)  The Company shall from time to time take all action necessary or appropriate to obtain and keep effective all registrations, permits, consents and approvals of the Securities and Exchange Commission and any other governmental agency or authority and make such filings under Federal and state laws which may be necessary or appropriate in connection with the issuance, sale, transfer and delivery of Certificates or Additional Common Stock issued upon exercise of Certificates.   6. Procedure for Discrepancies. Continental shall follow its regular procedures to attempt to reconcile any discrepancies between the number of shares of Additional Common Stock that any Certificate may indicate are to be issued to a stockholder and the number that the Record Stockholders List indicates may be issued to such stockholder. In any instance where Continental cannot reconcile such discrepancies by following such procedures, Continental will consult with the Company for instructions as to the number of shares of Additional Common Stock, if any, it is authorized to issue. In the absence of such instructions, Continental is authorized not to issue any shares of Additional Common Stock to such stockholder.   7. Procedure for Deficient Items. Continental shall examine the Certificates received by it as Subscription Agent to ascertain whether they appear to have been completed and executed in accordance with the applicable Letter of Instruction. In the event Continental determines that any Certificate does not appear to have been properly completed or executed, or where the Certificates do not appear to be in proper form for Subscription, or any other irregularity in connection with the Subscription appears to exist, Continental shall follow, where possible, its regular procedures to attempt to cause such irregularity to be corrected. Continental is not authorized to waive any irregularity in connection with the Subscription, unless Continental shall have received from the Company the Certificate which was delivered, duly dated and signed by an authorized officer of the Company, indicating that any irregularity in such Certificate has been cured or waived and that such Certificate has been accepted by the Company. If any such irregularity is neither corrected nor waived, Continental will return to the subscribing stockholder (at its option by either first class mail under a blanket surety bond or insurance protecting Continental and the Company from losses or liabilities arising out of the non- receipt or nondelivery of Certificates or by registered mail insured separately for the value of such Certificates) to such stockholder’s address as set forth in the Subscription any Certificates surrendered in connection therewith and any other documents received with such Certificates, and a letter of notice to be furnished by the Company explaining the reasons for the return of the Certificates and other documents.  8. Date/Time Stamp. Each document received by Continental relating to its duties hereunder shall be dated and time stamped when received. 

 

 {N0110978  } 8  9. Transfer Procedures. If certificates representing shares of Additional Common Stock are to be delivered by Continental to a person other than the person in whose name a surrendered Certificate is registered, Continental shall issue no certificate for Additional Common Stock until the Certificate so surrendered has been properly endorsed (or otherwise put in proper form for transfer).  10. Tax Reporting. Should any issue arise regarding federal income tax reporting or withholding, Continental shall take such action as the Company reasonably instructs in writing.  11. Termination. The Company may terminate this Agreement at any time by so notifying Continental in writing. Continental may terminate this Agreement upon 30 days’ prior notice to the Company. Upon any such termination, Continental shall be relieved and discharged of any further responsibilities with respect to its duties hereunder. Upon payment of all Continental’s outstanding fees and expenses, Continental shall forward to the Company or its designee promptly any Certificate or other document relating to Continental’s duties hereunder that Continental may receive after its appointment has so terminated. Sections 12, 13, 14 and 19 of this Agreement shall survive any termination of this Agreement.  12. Authorizations and Protections. As agent for the Company, Continental:  (a)  shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing by Continental and the Company;  (b)  shall have no obligation to issue any shares of Additional Common Stock unless the Company shall have provided a sufficient number of certificates for such Additional Common Stock;  (c)  shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of any Certificates surrendered to Continental hereunder or shares of Additional Common Stock issued in exchange therefor, and will not be required to or be responsible for and will make no representations as to, the validity, sufficiency, value or genuineness of the Subscription Offer;  (d)  shall not be obligated to take any legal action hereunder; if, however, Continental determines to take any legal action hereunder, and where the taking of such action might, in Continental’s judgment, subject or expose it 

 

 {N0110978  } 9 to any expense or liability Continental shall not be required to act unless it shall have been furnished with an indemnity satisfactory to it;  (e)  may rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile transmission or other document or security delivered to Continental and believed by it to be genuine and to have been signed by the proper party or parties;  (f)  shall not be liable or responsible for any recital or statement contained in the Prospectus or any other documents relating thereto;  (g)  shall not be liable or responsible for any failure on the part of the Company to comply with any of its covenants and obligations relating to the Subscription Offer, including without limitation obligations under applicable securities laws;  (h)  may rely on and shall be fully authorized and protected in acting or failing to act upon the written, telephonic or oral instructions of officers of the Company with respect to any matter relating to Continental acting as Subscription Agent covered by this Agreement (or supplementing or qualifying any such actions);   (i)  may consult with counsel satisfactory to Continental, including internal counsel, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by Continental hereunder in good faith and in reliance upon the advice of such counsel; and  (j)  are not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person.  13. Indemnification. The Company agrees to indemnify Continental for, and hold it harmless from and against, any loss, liability, claim or expense (“Loss”) arising out of or in connection with Continental’s performance of its duties under this Agreement or this appointment, including the costs and expenses of defending itself against any Loss or enforcing this Agreement, except to the extent that such Loss shall have been determined by a court of competent jurisdiction to be a result of Continental’s gross negligence or intentional misconduct.  14. Limitation of Liability.   (a)  In the absence of gross negligence or intentional misconduct on its part, Continental shall not be liable for any action taken, suffered, or 

 

 {N0110978  } 10 omitted by it or for any error of judgment made by it in the performance of its duties under this Agreement. Anything in this agreement to the contrary notwithstanding, in no event shall Continental be liable for special, indirect, incidental or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if Continental has been advised of the likelihood of such damages and regardless of the form of action. Any liability of Continental will be limited to the amount of fees paid by the Company hereunder.  (b)  In the event any question or dispute arises with respect to the proper interpretation of this Agreement or Continental’s duties hereunder or the rights of the Company or of any holders surrendering certificates for Shares pursuant to the Subscription Offer, Continental shall not be required to act and shall not be held liable or responsible for refusing to act until the question or dispute has been judicially settled (and Continental may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all stockholders and parties interested in the matter which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to Continental and executed by the Company and each such stockholder and party. In addition, Continental may require for such purpose, but shall not be obligated to require, the execution of such written settlement by all the stockholders and all other parties that may have an interest in the settlement.    15. Representations, Warranties and Covenants. The Company represents, warrants and covenants that (a) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, (b) the making and consummation of the Subscription Offer and the execution, delivery and performance of all transactions contemplated thereby (including without limitation this Agreement) have been duly authorized by all necessary corporate action and will not result in a breach of or constitute a default under the certificate of incorporation or bylaws of the Company or any indenture, agreement or instrument to which either is a party or is bound, (c) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid, binding obligation of the Company, enforceable against the Company in accordance with its terms, (d) the Subscription Offer will comply in all material respects with all applicable requirements of law, and (e) to the best of their knowledge, there is no litigation pending or threatened as of the date hereof in connection with the Subscription Offer.  16. Notices. All notices, demands and other communications given pursuant to the terms and provisions hereof shall be in writing, shall be 

 

 {N0110978  } 11 deemed effective on the date of receipt, and may be sent by facsimile, overnight delivery services, or by certified or registered mail, return receipt requested to:    If to the Company:   DLH Holdings Corp.  3565 Piedmont Street, NE  Building 3, Suite 700   Atlanta, GA 30305  (678) 935-1520  (886) 415-3534 (fax)    with a copy to:     Becker & Poliakoff, LLP   45 Broadway, 8th Floor   New York, NY 10006   (212) 599-3322   (212) 557-0295 (fax)   If to Continental:    Continental Stock Transfer & Trust Company   17 Battery Place, 8th Floor   New York, NY 10004   212-509-4000   212-616-7616 (fax)   with a copy to:        17. Specimen Signatures. Set forth in Exhibit 5 hereto is a list of the names and specimen signatures of the persons authorized to act for the Company under this Agreement. The Secretary of the Company shall, from time to time, certify to Continental the names and signatures of any other persons authorized to act for the Company, as the case may be, under this Agreement.    18. Instructions. Any instructions given to Continental orally, as permitted by any provision of this Agreement, shall be confirmed in writing by 

 

 {N0110978  } 12 the Company as soon as practicable. Continental shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation received in accordance with this Section.  19. Fees. Whether or not any Certificates are surrendered to Continental, for its services as Subscription Agent hereunder, the Company shall pay to Continental a fee of $______________, together with reimbursement for out-of-pocket expenses. All amounts owed to Continental hereunder are due upon receipt of the invoice.   20. Force Majeure. Continental shall not be liable for any failure or delay arising out of conditions beyond its reasonable control including, but not limited to, work stoppages, fires, civil disobedience, riots, rebellions, storms, electrical, mechanical, computer or communications facilities failures, acts of God or similar occurrences.  21. Miscellaneous.  (a)  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to conflict of laws, rules or principles.  (b)  No provision of this Agreement may be amended, modified or waived, except in writing signed by all of the parties hereto.   (c)  Except as expressly set forth elsewhere in this Agreement, all notices, instructions and communications under this Agreement shall be in writing, shall be effective upon receipt and shall be addressed as provided in Section 16 to such other address as a party hereto shall notify the other parties in writing.  (d)  In the event that any claim of inconsistency between this Agreement and the terms of the Subscription Offer arise, as they may from time to time be amended, the terms of the Subscription Offer shall control, except with respect to Continental’s duties, liabilities and rights, including without limitation compensation and indemnification, which shall be controlled by the terms of this Agreement.  (e)  If any provision of this Agreement shall be held illegal, invalid, or unenforceable by any court, this Agreement shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement among the parties hereto to the full extent permitted by applicable law.  

 

 {N0110978  } 13 (f)  This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective successors and assigns of the parties hereto.  (g)  This Agreement may not be assigned by any party without the prior written consent of all parties.  (h)  Sections 12, 13, 14 and 19 hereof shall survive termination of this Agreement.    (Signature page follows) 

 

 {N0110978  } 14 Signature Page  to Subscription Agent Agreement    IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the day and year above written.        Continental Stock Transfer &        Trust Company, as Subscription        Agent           By:_________________________    Name:______________________   Title:_______________________   DLH HOLDINGS CORP.    By:_________________________  Name: Title:      Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5   Prospectus Letter of Instruction Notice of Guaranteed Delivery Form of Certificate List of Authorized Representatives   

 

 {N0110978  } 15 Exhibit 1  to Subscription Agent Agreement  Prospectus 

 

 {N0110978  } 16 Exhibit 2 to Subscription Agent Agreement  Letter of Instruction 

 

 {N0110978  } 17 Exhibit 3 to Subscription Agent Agreement  Notice of Guaranteed Delivery 

 

 {N0110978  } 18 Exhibit 4 to Subscription Agent Agreement  Form of Certificate 

 

 {N0110978  } 19 Exhibit 5  to Subscription Agent Agreement  List of Authorized Representatives     Authorized Representative  Specimen Signature    Zachary C. Parker Chief Executive Officer  Kathryn M. JohnBull        Chief Financial Officer    /s/           /s/ex102standbypurchaseagre

Exhibit 10.2  {N0119778 2 }  419576v3 STANDBY PURCHASE AGREEMENT  This STANDBY PURCHASE AGREEMENT (this “Agreement”), dated as of ________, 2016, is by and among DLH Holdings Corp. (the “Company”), and Wynnefield Capital, Inc.  WITNESSETH: WHEREAS, the Company proposes pursuant to the Registration Statement (as defined herein), to commence an offering to holders of its common stock, par value $0.001 per share (the “Common Stock”), of record as of the close of business on August 19, 2016 (the “Record Date”), of non-transferable rights (the “Rights”) to subscribe for and purchase additional shares of Common Stock (the “Rights Offering”); and  WHEREAS, pursuant to the Rights Offering, the Company will distribute to each of its shareholders of record as of the Record Date, at no charge, one Right for each share of Common Stock held by such shareholders as of the Record Date; each Right will entitle the holder to purchase up to 0.06827 shares of Common Stock for a purchase price of $3.73  per whole share (“Share”) (the “Subscription Price”);  WHEREAS, each holder of Rights who exercises in full its Rights in the Rights Offering (the “Basic Subscription Privilege”) will be entitled to subscribe for additional shares of Common Stock to the extent they are available, at the Subscription Price (the “Over-Subscription Privilege”) in proportion to the number of shares of Common Stock owned by each such holder on the Record Date, relative to the number of shares owned on the Record Date by all shareholders exercising the Over-Subscription Privilege; and  WHEREAS, in order to facilitate the Rights Offering, the Company has requested the Standby Purchaser to agree, and the Standby Purchaser has agreed, to acquire up to 670,241 shares of Common Stock from the Company at the Subscription Price, or an aggregate of $2,500,000, upon the terms and conditions set forth herein (the “Committed Offering”); and  NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the parties hereto, intending to be legally bound hereby, agree as follows:  Section 1. Certain Other Definitions. The following terms used herein shall have the meanings set forth below:  “Affiliate” shall mean an affiliate (as defined in Rule 12b-2 under the Exchange Act) of such Standby Purchaser; provided that the Standby Purchaser or any of his affiliates exercises investment authority with respect to such affiliate, including, without limitation, voting and dispositive rights with respect to such affiliate.  “Agreement” shall have the meaning set forth in the preamble hereof.  “Basic Subscription Privilege” shall have the meaning set forth in the recitals hereof.  “Board” shall mean the Board of Directors of the Company.  “Business Day” shall mean any day that is not a Saturday, a Sunday or a day on which banks are generally closed in the State of New York. “Closing” shall mean the closing of the purchases described in Section 2 hereof, which shall be held at the offices of Continental Stock Transfer Company, at 10:00 a.m., Eastern Time, on the Closing Date or at such other place and time as shall be agreed upon by the parties hereto, and in no event more than five (5) business days after completion of the Rights Offering.  

 

 {N0119778 2 }   2  419576v3 “Closing Date” shall mean the date of the Closing.  “Commission” shall mean the United States Securities and Exchange Commission, or any successor agency thereto.  “Committed Offering” shall have the meaning set forth in the recitals hereof.  “Common Stock” shall have the meaning set forth in the recitals hereof.  “Company” shall have the meaning set forth in the preamble hereof.  “Cure Period” shall have the meaning set forth in Section 8(a) hereof.  “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.  “Material Adverse Effect” shall mean a material adverse effect on the financial condition, or on the earnings, financial position, shareholders’ equity, operations, assets, results of operations, regulatory compliance or business of the Company and the Subsidiaries taken as a whole; provided that the meaning shall exclude any changes from general economic, industry, market or competitive conditions or changes in laws, rules or regulations generally affecting Persons of similar size operating in the Company’s industry so long as such change does not materially disproportionately adversely affect the Company and the Subsidiaries taken as a whole as compared to such other Persons in the industry.   “Over-Subscription Privilege” shall have the meaning set forth in the recitals hereof. “Permitted Assignee” shall mean an affiliated entity of any Standby Purchaser who agrees to be bound by the terms hereof.    “Person” shall mean an individual, corporation, partnership, association, joint stock company, limited liability company, joint venture, trust, governmental entity, unincorporated organization or other legal entity.   “Prospectus” shall mean the final Prospectus, including any information relating to the offer and sale of Rights and Common Stock including the offer and sale of Common Stock to the Standby Purchaser, that is filed with the Commission pursuant to Rule 424(b) and deemed by virtue of Rule 430A of the Securities Act to be part of such Registration Statement, each as amended, for use in connection with the offer and sale of such securities.   “Record Date” shall have the meaning set forth in the recitals hereof.  “Registration Statement” shall mean the Company’s Registration Statement on Form S-3 initially filed with the Commission on July 1, 2016, as amended, together with all exhibits thereto and the Prospectus and any prospectus supplement, relating to the offer and sale of Rights and Common Stock in the Rights Offerings including (subject to Section 2(a) and the limitations under Section 4(b)) the offer and sale of Common Stock to the Standby Purchaser, pursuant to which the offer and sale of such securities have been registered pursuant to the Securities Act.     “Rights” shall have the meaning set forth in the recitals hereof.  “Rights Offering” shall have the meaning set forth in the recitals hereof.  “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.  “Standby Purchaser” shall mean the Standby Purchaser named in the recitals hereof.  

 

 {N0119778 2 }   3  419576v3 “Subscription Price” shall have the meaning set forth in the recitals hereof.  “Subsidiary” or “Subsidiaries” shall mean DLH Solutions, Inc., Danya International, LLC and any other direct or indirect subsidiary of the Company.  Section 2. Standby Purchase Commitment. (a) The Standby Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Standby Purchaser, at the Subscription Price, up to 670,241 shares of Common Stock in the Committed Offering, if and only to the extent that such shares of Common Stock are available after the exercise of the Basic Subscription Privilege and the Over-Subscription Privilege.   (b) Payment shall be made to the Company by the Standby Purchaser, on the Closing Date, against delivery of the Common Stock purchased by the Standby Purchaser, in United States dollars by means of certified or cashier’s checks, bank drafts, money orders or wire transfers.  Section 3. Representations and Warranties of the Company. The Company represents and warrants to the Standby Purchaser as follows:  (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey and has all requisite corporate power and authority to carry on its business as now conducted.  (b) This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a binding obligation of the Company enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).  (c) Prior to Closing, the Registration Statement will have been declared effective by the Commission and no stop order will have been issued with respect thereto and no proceedings therefore will have been initiated or, to the knowledge of the Company, threatened by the Commission, and any request on the part of the Commission for additional information will have been complied with. On the effective date, the Registration Statement will comply in all material respects with the requirements of the Securities Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. On the Closing Date, the Registration Statement and the Prospectus will not include an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with the information furnished to the Company in writing by the Standby Purchaser expressly for use in the Registration Statement or in the Prospectus pursuant to Section 6(c) below.  (d) All of the shares of Common Stock  issued in the Rights Offering will have been duly authorized for issuance prior to the Closing, and, when issued and distributed as set forth in the Prospectus, will be validly issued, fully paid and non-assessable; and none of the shares of Common Stock issued in the Rights Offering will have been issued in violation of the preemptive rights of any security holders of the Company arising as a matter of law or under or pursuant to the Company’s Articles of Incorporation (as amended through the Closing Date), Amended and Restated Bylaws, or any material agreement or instrument to which the Company is a party or by which it is bound.  

 

 {N0119778 2 }   4  419576v3 (e) Neither the Company nor any Subsidiary is in violation of its charter, certificate of trust or by-laws or in default under any agreement, indenture or instrument to which the Company or any Subsidiary is a party, the effect of which violation or default could reasonably be expected to have a Material Adverse Effect on the Company and the Subsidiaries taken as a whole, and the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby will not conflict with, or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any Subsidiary pursuant to the terms of any agreement, indenture or instrument to which the Company or any Subsidiary is a party which lien, charge or encumbrance could reasonably be expected to have a Material Adverse Effect on the Company and the Subsidiaries taken as a whole, or result in a violation of the articles of incorporation, charter, or by-laws of the Company or any Subsidiary or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company, any Subsidiary or any of their property; and, except as required by the Securities Act, the Exchange Act, and applicable state securities law, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement.  (f) The Company and the Subsidiaries have taken all actions necessary to ensure that the transactions contemplated by this Agreement, individually or in the aggregate, shall not give rise to a change in control under, or result in the breach or the violation of, or the acceleration of any right under, or result in any additional rights, or the triggering of any rights of first refusal, preferential purchase or similar rights with respect to any securities of the Company, anti-dilution adjustment under any contract or agreement to which the Company or any Subsidiary is a party, including, without limitation, any employment agreement or employee benefit plan of the Company or any Subsidiary. Such actions may include, without limitation, having any such contracts or agreements or rights granted under any such contract or agreement waived in writing or amended prior to Closing.  (g) The Company’s Board of Directors has approved this Agreement and the transactions contemplated by this Agreement to the extent required by the laws, regulations and policies of the State of New Jersey and the Nasdaq Capital Market, and such laws, regulations and policies do not require that the Company’s shareholders approve the Agreement and the transactions contemplated by the Agreement.  (h) The Prospectus and the Rights Offering subscription documents contain adequate and appropriate disclosure and binding covenants limiting shareholders in the Over-Subscription Privilege to a number of shares equal to 100% of the shares owned by such shareholder as of the Record Date. Section 4. Representations and Warranties of the Standby Purchaser. The Standby Purchaser (and any Permitted Assignee for an on behalf of itself as if it were executing this Agreement) represents and warrants to the Company as follows:  (a) Each Standby Purchaser has the relevant entity power and authority to perform its obligations under this Agreement.  (b) The Standby Purchaser is acquiring the shares of Common Stock purchased hereunder for its own account, with the intention of holding such securities for investment and with no present intention of participating, directly or indirectly, in a distribution of such securities. The Standby Purchaser understands that the shares of Common Stock purchased by it hereunder shall be deemed “restricted securities” under the Securities Act and shall bear a restrictive legend to that effect. (c) The Standby Purchaser is familiar with the business in which the Company is engaged, and based upon its knowledge and experience in financial and business matters, it is familiar with the investments of the type that it is undertaking to purchase; it is fully aware of the problems and risks involved in making an investment of this type; and it is capable of evaluating the merits and risks of this 

 

 {N0119778 2 }   5  419576v3 investment. The Standby Purchaser acknowledges that, prior to executing this Agreement, it has had the opportunity to ask questions of and receive answers or obtain additional information from a representative of the Company concerning the financial and other affairs of the Company.  (d) This Agreement has been duly and validly executed and delivered by such Standby Purchaser and constitutes a binding obligation of the Standby Purchaser enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).  (e) The Standby Purchaser understands that the Commission may express the position that shares of Common Stock purchased by the Standby Purchaser are deemed “restricted securities” as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold except pursuant to Rule 144 or pursuant to a registration statement under the Securities Act.  Further, the following legends (or similar language) shall be placed on such certificate(s) representing the shares of Common Stock: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.      Section 5. Deliveries at Closing.  (a) At the Closing, the Company shall deliver to the Standby Purchaser a certificate or certificates representing the shares of Common Stock issued to the Standby Purchaser pursuant to Section 2 hereof.  (b) At the Closing, the Standby Purchaser shall deliver to the Company payment in an amount equal to the Subscription Price multiplied by the number of shares of Common Stock purchased by the Standby Purchaser.  Section 6. Covenants.  (a) Covenants. The Company agrees and covenants with the Standby Purchaser, between the date hereof and the earlier of the Closing Date or the effective date of any termination pursuant to Section 8 hereof, as follows:   (i) To use commercially reasonable efforts to effectuate the Rights Offering;   (ii) As soon as reasonably practicable after the Company is advised or obtains knowledge thereof, to advise the Standby Purchaser with a confirmation in writing, of (A) the time when the Prospectus or any amendment or supplement thereto has been filed, (B) the issuance by the Commission of any stop order, or of the initiation or threatening of any proceeding, suspending the 

 

 {N0119778 2 }   6  419576v3 effectiveness of the Registration Statement or any amendment thereto or any order preventing or suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto, (C) the issuance by any state securities commission of any notice of any proceedings for the suspension of the qualification of the Common Stock for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for such purpose, (D) the receipt of any comments from the Commission directed toward the Registration Statement or any document incorporated therein by reference and (E) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information. The Company will use its commercially reasonable efforts to prevent the issuance of any such order or the imposition of any such suspension and, if any such order is issued or suspension is imposed, to obtain the withdrawal thereof as promptly as possible;   (iii) To operate the Company’s business in the ordinary course of business consistent with past practice;   (iv) To notify the Standby Purchaser, on a daily basis or at such time as the Standby Purchaser may request, of the aggregate number of subscriptions received pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege in the Rights Offering;   (v) Not to issue any shares of capital stock of the Company, or options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, securities convertible into or exchangeable for capital stock of the Company, or other agreements or rights to purchase or otherwise acquire capital stock of the Company, except for (i) shares of Common Stock issuable upon exercise of the Company’s presently outstanding stock options or other issued and outstanding convertible or derivative securities as of the date hereof and (ii) restricted shares of Common Stock, options to purchase shares of Common Stock, or other awards made in the ordinary course of business and as authorized pursuant to the Company’s 2016 Omnibus Equity Incentive Plan; and   (vi) filing on a timely basis all reports required to be filed by the Company pursuant to the Exchange Act, with such reports conforming in all material respects with the requirements of the Exchange Act and being true and correct in all material respects. (b) Certain Acquisitions. Between the date hereof and the earlier of the Closing Date or the effective date of any termination pursuant to Section 8 hereof, the Standby Purchaser and his Affiliates shall not acquire any shares of Common Stock unless authorized to do so by the Company.  (c)  Information. The Standby Purchaser agrees to furnish to the Company all information with respect to the Standby Purchaser that the Company may reasonably request in connection with the Prospectus and any such information furnished to the Company expressly for inclusion in the Prospectus by the Standby Purchaser shall not contain any untrue statement of material fact or omit to state a material fact required to be stated in the Prospectus or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  (d) Public Statements. Neither the Company nor the Standby Purchaser shall issue any public announcement, statement or other disclosure with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other parties hereto, which consent shall not be unreasonably withheld or delayed, except (i) if such public announcement, statement or other disclosure is required by applicable law or applicable stock market regulations, in which case the disclosing party shall consult in advance with respect to such disclosure with the other parties to the extent reasonably practicable, (ii) with respect to the filing by the Standby Purchaser of any Schedule 13D or Schedule 13G, 

 

 {N0119778 2 }   7  419576v3 or any amendment thereto, to which a copy of this Agreement may be attached as an exhibit thereto, or (iii) with respect to the filing by the Standby Purchaser of any Form 3, 4 or 5 under the Exchange Act.  (e) Regulatory Filing. If the Company or the Standby Purchaser determines a filing is or may be required under applicable law in connection with the transactions contemplated hereunder, the Company and the Standby Purchaser shall use commercially reasonable efforts to promptly prepare and file all necessary documentation and to effect all applications that are necessary or advisable under applicable law with respect to the transactions contemplated hereunder so that any applicable waiting period shall have expired or been terminated as soon as practicable after the date hereof.  (f) Expenses. On the earlier of the Closing Date and the termination of this Agreement, other than a termination under circumstances that are directly and solely attributable to a material breach of this Agreement by the Standby Purchaser, the Company shall reimburse the Standby Purchaser for all out-of- pocket fees and expenses incurred in connection with the transactions contemplated hereby, including due diligence efforts, the negotiation and preparation of documents relating to the transaction, the preparation and filing of regulatory applications and notices, and the undertaking of the transactions contemplated hereby, including, but not limited to, the fees and expenses of the Standby Purchaser’s accounting, financial and investment banking advisors, legal counsel and credit review. Such reimbursement shall not exceed the sum of $50,000.  (g) Due Diligence. Should the Standby Purchaser at any time request a financial institution to extend credit to the Standby Purchaser collateralized by securities of the Company, and should such financial institution request reasonable access to information concerning the Company in order to underwrite such credit request, then the Company shall grant such financial institution reasonable access to the information so requested.  (h) Nasdaq Listing Application. The Company will timely file a “Listing of Additional Shares Notification Form” with the Nasdaq Capital Market in connection with the Common Stock issued in the Rights Offering. The Company will use its best efforts to obtain, effect and maintain the listing of such securities on the Nasdaq Capital Market and will file with the Nasdaq Capital Market all documents and notices required by the Nasdaq Capital Market of companies that have securities that are listed on the Nasdaq Capital Market. (i) Registration of Securities Issued to the Standby Purchaser. The Company will register under the Securities Act the shares of Common Stock offered and/or sold to the Standby Purchaser pursuant to this Rights Offering or this Agreement, and will maintain a current prospectus providing for the resale by the Standby Purchaser of such shares. If for any reason any offer or sale of such shares to the Standby Purchaser is not registered on the Registration Statement under the Securities Act or available for resale by the Standby Purchaser under the Prospectus, the Company shall as promptly as practicable enter into a registration rights agreement with the Standby Purchaser to provide for the registration for resale under the Securities Act within 120 days of such date of the shares Common Stock purchased by the Standby Purchaser hereunder and all other shares of Common Stock beneficially owned by the Standby Purchaser (except to the extent such other shares beneficially owned by the Standby Purchaser have previously been registered for resale by the Company and are covered by a current prospectus). Any such registration rights agreement shall include other reasonable terms pursuant to which the Company agrees to register, under the Securities Act and applicable state securities laws and regulations, the Standby Purchaser’s resale of shares of Common Stock beneficially owned by any Standby Purchaser or its Affiliates, at no cost to the Standby Purchaser other than issued and customary brokerage commission and expenses.  

 

 {N0119778 2 }   8  419576v3 (j) Indemnification.  Whether or not the transactions contemplated hereby are consummated, the Company agrees to indemnify and hold harmless each Standby Purchaser and each of their respective shareholders, members and general and limited partners and the respective officers, directors, employees, affiliates, advisors, agents, attorneys, accountants and consultants of each such entity and to hold  each Standby Purchaser and such other persons and entities (each, an “Indemnified Person”) harmless from and against any and all losses, claims, damages, liabilities and expenses, joint or several, which any such person or entity may incur, have asserted against it or be involved in as a result of or arising out of or in any way related to this Agreement, the matters referred to herein, the proposed Committed Offering contemplated hereby, the use of proceeds thereunder or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any of such Indemnified Persons is a party thereto, and to reimburse each such Indemnified Person within five (5) business days of demand for any legal or other expenses incurred in connection with any of the foregoing; provided, however, that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent they have resulted from the bad faith, willful misconduct or gross negligence of such Indemnified Person.  (k) Use of Proceeds.  The Company shall solely use the proceeds of the Rights Offering in accordance with the description set forth in the Registration Statement.   Section 7. Conditions to Closing.  (a) The obligations of the Standby Purchaser to consummate the transactions contemplated hereunder are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:   (i) The representations and warranties of the Company in Section 3 shall be true and correct in all material respects as of the date hereof and at and as of the Closing Date as if made on such date (except for representations and warranties made as of a specified date, which shall be true and correct in all material respects as of such specified date) and the Company shall have performed all of its obligations hereunder;   (ii) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have been any Material Adverse Effect, nor shall there have occurred any breach of any covenant of the Company set forth in Section 7 hereof;   (iii) As of the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or Nasdaq Capital Market or trading in securities generally on the Nasdaq Capital Market shall not have been suspended or limited or minimum prices shall not have been established on the Nasdaq Capital Market (a “Market Adverse Effect”);   (iv) The Company shall have obtained any required federal, state and regulatory approvals for the Right Offering on conditions reasonably satisfactory to the Standby Purchaser;   (v) If required by Section 6(i), the Company shall have executed and delivered a registration rights agreement substantially in the form of Exhibit A hereto, or if such form of registration rights agreement is not included as Exhibit A hereto, a registration rights agreement that includes reasonable terms pursuant to which the Company agrees to register, under the Securities Act and applicable state securities laws and regulations, the Standby Purchaser’s resale of any of its shares of Common Stock purchased pursuant to the Rights Offering or this Agreement or otherwise beneficially owned by any Standby Purchaser or its Affiliates (except to the extent limited in Section 6(i)), at no cost to the Standby Purchaser;  

 

 {N0119778 2 }   9  419576v3  (vi)   The receipt by the Standby Purchaser of a legal opinion from Becker & Poliakoff, LLP with respect to customary matters in a form satisfactory to the Standby Purchaser in its reasonable discretion relating to the due authorization of the issuance of the Rights and the shares of Common Stock in the Rights Offering, the due authorization of this Agreement and such other matters; and   (vii) The Standby Purchaser shall have received from WithumSmith+Brown, PC a letter or letters, dated as of the Closing Date, in form and substance reasonably satisfactory to the Standby Purchaser, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, and the Prospectus. (b)  The obligations of each of the Company and the Standby Purchaser to consummate the transactions contemplated hereunder are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:   (i) No judgment, injunction, decree, regulatory proceeding or other legal restraint shall prohibit, or have the effect of rendering unachievable, the consummation of the Rights Offering or the material transactions contemplated by this Agreement;   (ii) The Registration Statement shall have become effective and no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or otherwise shall have been complied with; and   (iii) The Common Stock issued in the Rights Offering shall have been authorized for listing on the Nasdaq Capital Market. Section 8. Termination.   (a) This Agreement may be terminated at any time prior to the Closing Date, by the Standby Purchaser by written notice to the Company if there has been (i) a Market Adverse Effect that is not cured within twenty-one (21) days after the occurrence thereof (the “Cure Period”) or (ii) a Material Adverse Effect.  (b) This Agreement may be terminated by the Company on one hand or by the Standby Purchaser on the other hand, by written notice to the other party hereto:   (i) At any time prior to the Closing Date, if there is a material breach of this Agreement by the other party that is not cured within fifteen (15) days after the non-breaching party has delivered written notice to the breaching party of such breach;   (ii) At any time after October 30, 2016, unless the Closing has occurred prior to such date; or   (iii) Consummation of the Committed Offering is prohibited by law, rule or regulation.  (c) This Agreement may be terminated by the Company in the event that the Company determines that it is not in the best interests of the Company and its shareholders to go forward with the Rights Offering.  (d) The Company and the Standby Purchaser hereby agree that any termination of this Agreement pursuant to Sections, 8(a), 8(b)(ii), 8(b)(iii), or 8(c) shall be without liability of the Company 

 

 {N0119778 2 }   10  419576v3 or the Standby Purchaser, following any termination of this Agreement, or the Closing Date, the Company will pay the Standby Purchaser an amount for its expense reimbursement in the amount not to exceed $50,000.  Such payment shall be made within three (3) Business Days of any such termination or the Closing Date, as the case may be.    Section 9. Survival. The representations and warranties of the Company and the Standby Purchaser contained in this Agreement or in any certificate delivered hereunder together with Sections 6(f), 6(i), 6(j) and 6(k) shall survive the Closing hereunder.  Section 10. Notices. All notices, communications and deliveries required or permitted by this Agreement shall be made in writing signed by the party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (a) on the date delivered if delivered in person, (b) on the third (3rd) Business Day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid) or (c) on the day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows:  If to the Company:  Zachary Parker DLH Holdings Corp. 3565 Piedmont Road, N.E. Building 3, Suite 700   Atlanta, GA  30305 Telephone: (866) 952-1647 with a copy to:  Brian Daughney, Esq.  Becker & Poliakoff, LLP 45 Broadway, 8th Floor New York, NY  10006 Telephone: (212) 599-3322 If to the Standby Purchaser:   Wynnefield Capital, Inc.   450 Seventh Avenue, Suite 509 New York, NY 10123 Attention: Nelson Obus Telephone: (212) 760-0814 with a copy to:   Kane Kessler, P.C. 1350 Avenue of the Americas 26th Floor New York, NY 10019 Attn: Robert L. Lawrence Telephone: (212) 541-6222   

 

 {N0119778 2 }   11  419576v3 or to such other representative or at such other address of a party as such party hereto may furnish to the other parties in writing in accordance with this Section 10.  Section 11. Assignment. This Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the parties hereto and their respective successors and assigns. The Standby Purchaser shall have the right, at their option, to assign any or all of the rights to purchase Shares in the Committed Offering to a Permitted Assignee to the Company prior to the Closing Date.  Section 12. Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, or undertakings, other than those set forth or referred to herein with respect to the standby purchase commitments with respect to the Company’s securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter of this Agreement.  Section 13. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York (other than its rules of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby). This Agreement shall be subject to the exclusive jurisdiction of the State and Federal courts sitting in New York County, New York. Section 14. Severability. If any provision of this Agreement or the application thereof to any person or circumstances is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid, void or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to affect the original intent of the parties.  Section 15. Extension or Modification of the Rights Offering.  The Company may (a) waive irregularities in the manner of exercise of the Rights, and (b) waive conditions relating to the method (but not the timing) of the exercise of the Rights to the extent that such waiver does not materially adversely affect the interests of the Standby Purchaser.  Section 16. Miscellaneous.  (a) The Company shall not after the date of this Agreement enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Standby Purchaser in this Agreement.  (b) Notwithstanding any term to the contrary herein, no Person other than the Company and the Standby Purchaser shall be entitled to rely on and/or have the benefit of, as a third party beneficiary or under any other theory, any of the representations, warranties, agreements, covenants or other provisions of this Agreement.  (c) The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement.  (d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument.   

 

 {N0119778 2 }   12  419576v3  [EXECUTION PAGE APPEARS NEXT] 

 

 {N0119778 2 }   13  419576v3 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.    COMPANY    DLH HOLDINGS CORP.    By: ______________________    Name:      Title:         STANDBY PURCHASER    WYNNEFIELD CAPITAL, INC.     By: _____________________    Name:     Title:      

 

 {N0119778 2 }   14  419576v3 Standby Purchase Agreement Schedule I  Standby Purchasers   Name   Address  Number of Shares Subscription Price

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