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...
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., ▇▇▇▇▇ 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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
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+▇▇▇▇▇, 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:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
DLH Holdings Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Standby Purchaser:
Wynnefield Capital, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
1350 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
{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