Ener-Core, Inc. (Form: 8-K, Received: 05/01/2017 17:02:49)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 27, 2017

ENER-CORE, Inc.

(Exact name of registrant as specified in its charter)

Delaware		001-37642		45-0525350
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

8965 Research Drive

Irvine, California 92618

(Address of principal executive offices) (Zip Code)

(949) 616-3300

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement.

Amendment to Backstop Security Support Agreement

Effective as of April 27, 2017, Ener-Core, Inc. (the “Company”) executed a First Amendment to Backstop Security Support Agreement (the “BSSA Amendment”), with an individual investor (the “Guarantor”). The Company previously disclosed the terms of the Backstop Security Support Agreement, dated as of November 2, 2015, by and between the Company and the Guarantor (the “BSSA”), in its Current Report on Form 8-K dated November 3, 2015. The BSSA Amendment is intended to conform the terms of the BSSA and related letter of credit (the “Letter of Credit”) to the terms of the Commercial and Manufacturing License Agreement (as amended to date, the “CMLA”), dated as of June 29, 2016, by and between the Company and the Dresser-Rand Company (“D-R”). The BSSA Amendment (i) reduces the security obligation underlying the Letter of Credit from $2.1 million to $500,000, consistent with the current terms of the CMLA, (ii) extends the term of the backstop security to March 31, 2018, (iii) reduces the related fee payable under the BSSA to 1% per month for the remainder of the term, (iv) provides that, in consideration of the Guarantor’s agreement to the BSSA Amendment, the Company will amend and restate the warrant issued to the Guarantor in connection with the execution of the BSSA to reduce the exercise price per share of common stock of the Company, par value $0.0001 per share (the “Common Stock”), to $3.00 and insert a beneficial ownership blocker provision at 4.99% (as amended and restated, the “Restated Warrant”), and (v) provides that, in further consideration of the Guarantor’s agreement to the BSSA Amendment, the Company will issue the Guarantor an additional warrant (the “Warrant”) to purchase 41,000 shares of Common Stock at an exercise price of $3.00 per share, subject to a 4.99% beneficial ownership blocker.

Warrants for Backstop Security Support Agreement

As described above, in connection with the execution of the BSSA Amendment, the Company agreed to amend and restate the Restated Warrant and issue the Warrant to the Guarantor. The Restated Warrant and the Warrant will be exercisable immediately for cash or by way of a cashless exercise. The Restated Warrant and Warrant also provide that the exercise price thereof will be adjusted upon the occurrence of certain events such as stock dividends, stock splits and other similar events. The Restated Warrant and Warrant include a blocker provision that prevents the Company from effecting any exercise in the event that the holder, together with certain affiliated parties, would beneficially own in excess of 4.99% of the shares of Common Stock outstanding immediately after giving effect to such exercise.

The Restated Warrant and Warrant were not registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and were issued in reliance on the exemption from registration under the Securities Act provided by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder (“Regulation D”). The shares of Common Stock issuable to the Guarantor upon exercise of the Restated Warrant and Warrant were not registered under the Securities Act, or the securities laws of any state, and were offered in reliance on the exemption from registration under the Securities Act provided by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D and may be sold upon exercise pursuant to an available exemption, including Section 4(a)(2) and Section 3(a)(9) of the Securities Act. The Guarantor is an accredited investor (as defined in Rule 501 of Regulation D under the Securities Act) at the time of the BSSA Amendment.

Amendments to Senior Secured Notes

Effective as of April 27, 2017, the Company and certain investors holding convertible senior secured promissory notes originally issued on (i) April 22, 2015 and May 7, 2015, as amended and restated on December 2, 2016, and (ii) December 2, 2016 and December 20, 2016 (collectively, the “Senior Notes”) executed first amendments to such Senior Notes (the “Senior Notes Amendments”) to revise the definition of “Backstop Agreement” to include any amendments, restatements, supplements or other modifications thereof, as may be permitted thereunder. The Senior Notes Amendments are binding upon all of the issued Senior Notes pursuant to the terms thereof.

The form of BSSA Amendment is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The forms of Restated Warrant, Warrant and Senior Notes Amendments are attached as Exhibits 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K and are also incorporated herein by reference. The foregoing descriptions of these agreements and instruments do not purport to be complete and are qualified in their entirety by reference to such exhibits.

Item 2.03

Creation of a Direct Financial Obligation of a Registrant.

The disclosures under Item 1.01 with respect to the BSSA Amendment and the Senior Notes Amendments are incorporated in this Item 2.03 by reference.

Item 3.02

Unregistered Sales of Equity Securities.

As more fully described in Item 1.01 above, which disclosure regarding the Restated Warrant and Warrant is incorporated by reference herein, on April 27, 2017, the Company amended and restated the Restated Warrant and issued the Warrant to the Guarantor pursuant to the BSSA Amendment. The amendment and restatement of the Restated Warrant and the issuance of the Warrant are, and upon exercise of each of the Restated Warrant and/or Warrant on its terms, the issuance and sale of the shares of Common Stock issuable upon such exercise will be, exempt from registration pursuant to an exemption afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D, based on representations of the Guarantor that it is an “accredited investor” as that term is defined in Rule 501 of Regulation D, who acquired the Restated Warrant and Warrant for investment purposes for its own account and not as nominee or agent, and not with a view to the resale or distribution thereof, and that such Guarantor understands that the Restated Warrant and Warrant may not be sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
4.1		Form of Amended and Restated Warrant, originally issued on November 2, 2015 in support of Backstop Security Support Agreement, dated November 2, 2015, as amended to date, as amended and restated on April 27, 2017
4.2		Form of Warrant issued on April 27, 2017 in support of Backstop Security Support Agreement, dated November 2, 2015, as amended to date
4.3		Form of Amendment to Senior Secured Notes issued in April 2015, May 2015 and December 2016, effective April 27, 2017
10.1		First Amendment to Backstop Security Support Agreement between Ener-Core, Inc. and an investor, dated November 2, 2015, effective April 27, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ENER-CORE, Inc.

Dated: May 1, 2017	By:	/s/ Domonic J. Carney
		Domonic J. Carney
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number		Description
4.1		Form of Amended and Restated Warrant, originally issued on November 2, 2015 in support of Backstop Security Support Agreement, dated November 2, 2015, as amended to date, as amended and restated on April 27, 2017
4.2		Form of Warrant issued on April 27, 2017 in support of Backstop Security Support Agreement, dated November 2, 2015, as amended to date
4.3		Form of Amendment to Senior Secured Notes issued in April 2015, May 2015 and December 2016, effective April 27, 2017
10.1		First Amendment to Backstop Security Support Agreement between Ener-Core, Inc. and an investor, dated November 2, 2015, effective April 27, 2017

Exhibit 4.1

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

ENER-CORE, INC.

AMENDED AND RESTATED WARRANT

Warrant No.	Original Issue Date: November 2, 2015
	Amended and Restated Date: April 27, 2017

Ener-Core, Inc. , a Delaware corporation (the “ Company ”), hereby certifies that, for value received, or its registered assigns (the “ Holder ”), is entitled to purchase from the Company up to a total of 74,000 shares of Common Stock (each such share, a “Warrant Share” and all such shares, the “ Warrant Shares ”), at any time and from time to time from and after November 2, 2016 (the “ Commencement Date ”), and through and including the date of the expiration of five years beginning on the Commencement Date (the “ Expiration Date ”), and subject to the following terms and conditions:

1. Definitions . As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.

“ Affiliate ” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144.

“ Business Day ” means any day except Saturday, Sunday and any day which is a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“ Common Stock ” means the common stock of the Company, $0.0001 par value per share, and any securities into which such common stock may hereafter be reclassified or for which it may be exchanged as a class.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Exercise Price ” means $3.00, subject to adjustment in accordance with Section 9.

“ Fair Market Value ” of one share of Common Stock means (i) if the Common Stock is publicly traded, the average of the per share closing prices of the Common Stock as quoted on the Over-the-Counter Bulletin Board, or the principal exchange on which the Common Stock is listed, in each case for the fifteen trading days ending five trading days prior to the date of determination of fair market value or (ii) if the Common Stock is not so publicly traded, the per share fair market value as is determined in good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including, without limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm’s length.

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“ Fundamental Transaction ” means any of the following: (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.

“ California Courts ” means the state and federal courts sitting in the City of Los Angeles, County of Los Angeles.

“ Original Issue Date ” means the Original Issue Date first set forth on the first page of this Warrant.

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Rule 144 ” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such Rule.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Subsidiary ” means any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission under the Exchange Act.

“ Trading Day ” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the OTC Markets Group, Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day.

“ Trading Market ” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Bulletin Board, or the OTC Markets Group, Inc. OTCQX or OTCQB tier on which the Common Stock is listed or quoted for trading on the date in question.

“ Warrant ” means this Amended and Restated Warrant executed on April 27, 2017, as it amends and restates the original warrant issued November 2, 2015.

“ Warrant Shares ” means the shares of Common Stock issuable upon exercise of this Warrant.

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2. Registration of Warrant . The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the “ Warrant Register ”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3. Registration of Transfers . The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “ New Warrant ”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

4. Exercise and Duration of Warrant. This Warrant shall be exercisable by the registered Holder at any time and from time to time from and after the date of the expiration of twelve calendar months beginning on the Commencement Date, and through and including the Expiration Date. At 5:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder.

5. Delivery of Warrant Shares .

(a) To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless all of the Warrant Shares then represented by this Warrant are being exercised. Upon delivery of the Exercise Notice (in the form attached hereto) to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon (i) payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder or (ii) effecting a net issue exercise as provided for in Section 10(b), the Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise. The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission, use its reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust & Clearing Corporation or another established clearing corporation performing similar functions, if available, provided , that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust Corporation. A “ Date of Exercise ” means the date on which the Holder shall have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased.

(b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise.

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(c) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.

6. Charges, Taxes and Expenses . Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7. Replacement of Warrant . If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8. Reservation of Warrant Shares . The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

9. Certain Adjustments . The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a) Stock Dividends and Splits . If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

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(b) Fundamental Transactions . If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “ Alternate Consideration ”). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall use its reasonable best efforts to ensure that at the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The Company shall use its reasonable best efforts to ensure that the terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and ensuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

(c) Number of Warrant Shares . Simultaneously with any adjustment to the Exercise Price pursuant to this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

(d) Calculations . All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(e) Notice of Adjustments . Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent.

(f) Notice of Corporate Events . If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to ensure that the Holder is given the opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

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10. Payment of Exercise Price .

(a) Cash Exercise . The Holder shall pay the Exercise Price by delivery of immediately available funds; or

(b) Net Issue Exercise . In lieu of exercising this Warrant, the Holder may elect to receive Warrant Shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder a number of Warrant Shares computed using the following formula:

Y (A-B)

X = ———————


Where:	X	=	the number of the Warrant Shares to be issued to the Holder.

	Y	=	the number of the Warrant Shares purchasable under this Warrant.

	A	=	the Fair Market Value of one share of Common Stock for the date of determination.

	B	=	the per share Exercise Price (as adjusted to the date of such calculation)

(c) Disputes . In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 14(b).

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(d) Beneficial Ownership . Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with it affiliates collectively would beneficially own in excess of 4.99% (the “ Maximum Percentage ”) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock held by the Holder and all of its affiliates plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any of its affiliates subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 10(d). For purposes of this Section 10(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (y) a more recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “ Reported Outstanding Share Number ”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 10(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “ Reduction Shares ”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any of its affiliates since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and its affiliates being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and its affiliates’ aggregate beneficial ownership exceeds the Maximum Percentage (the “ Excess Shares ”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 10(d) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 10(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

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11. No Fractional Shares . No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.

12. Notices . Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to 8965 Research Drive, Irvine, CA 92618, Attn: Chief Executive Officer, or to Facsimile No.: (949) 616-3399 (or such other address as the Company shall indicate in writing in accordance with this Section), or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.

13. Warrant Agent . The Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

14. Miscellaneous .

(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.

(b) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“ Proceedings ”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the California Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the California Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any California Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

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(c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(d) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the Amended and Restated date first indicated above.

	ENER-CORE, INC.

	By:
	Name:
	Title:

Accepted and agreed as of the Amended and Restated date first indicated above:

_____________________

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EXERCISE NOTICE

ENER-CORE, INC.

AMENDED AND RESTATED WARRANT EXECUTED APRIL 27, 2017,

AS to WARRANT DATED NOVEMBER 2, 2015

The undersigned Holder hereby irrevocably elects to purchase______________ shares of Common Stock pursuant to the above referenced Warrant. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

(1)

The undersigned Holder hereby exercises its right to purchase ______________________ Warrant Shares pursuant to the Warrant.

(2)

Method of Exercise (Please initial the applicable blank):

____

The undersigned Holder elects to exercise the Warrant by means of a cash payment in accordance with Section 10(a) of the Warrant, and tenders herewith or by concurrent wire transfer payment in full for the purchase price of the Warrant Shares being purchased, together with all applicable transfer taxes, if any.

____

The undersigned Holder elects to exercise the Warrant by means of the net exercise provisions of Section 10(b) of the Warrant.

(3)

Pursuant to this Exercise Notice, the Company shall deliver to the holder ______________________ Warrant Shares in accordance with the terms of the Warrant.

Dated:_______________

	Name of Holder :

	(Print)

	By:
	Name:
	Title:
	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

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Warrant Shares Exercise Log

Date

Number of Warrant Shares Available to be Exercised

Number of Warrant Shares Exercised

Number of Warrant Shares Remaining to be Exercised

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ENER-CORE, INC.

WARRANT DATED ________ __, 201_

WARRANT NO. ______________

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________ the right represented by the above-captioned Warrant to purchase ________________ shares of Common Stock to which such Warrant relates and appoints _________________ attorney to transfer said right on the books of the Company with full power of substitution in the premises.

Dated:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)


	Address of Transferee

In the presence of:

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Exhibit 4.2

ENER-CORE, INC.

WARRANT

Warrant No.

Original Issue Date: April 27, 2017

Ener-Core, Inc. , a Delaware corporation (the “ Company ”), hereby certifies that, for value received, or its registered assigns (the “ Holder ”), is entitled to purchase from the Company up to a total of 41,000 shares of Common Stock (each such share, a “ Warrant Share ” and all such shares, the “ Warrant Shares ”), at any time and from time to time from and after April 27, 2017 (the “ Commencement Date ”), and through and including the date of the expiration of five years beginning on the Commencement Date (the “ Expiration Date ”), and subject to the following terms and conditions:

1. Definitions . As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Exercise Price ” means $3.00, subject to adjustment in accordance with Section 9.

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“ California Courts ” means the state and federal courts sitting in the City of Los Angeles, County of Los Angeles.

“ Original Issue Date ” means the Original Issue Date first set forth on the first page of this Warrant.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Subsidiary ” means any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission under the Exchange Act.

“ Warrant Shares ” means the shares of Common Stock issuable upon exercise of this Warrant.

2. Registration of Warrant . The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the “ Warrant Register ”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

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3. Registration of Transfers . The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “ New Warrant ”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

4. Exercise and Duration of Warrant. This Warrant shall be exercisable by the registered Holder at any time and from time to time from and after the date of the expiration of twelve calendar months beginning on the Commencement Date, and through and including the Expiration Date. At 5:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder.

5. Delivery of Warrant Shares .

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6. Charges, Taxes and Expenses . Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7. Replacement of Warrant . If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8. Reservation of Warrant Shares . The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

9. Certain Adjustments . The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

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10. Payment of Exercise Price .

(a) Cash Exercise . The Holder shall pay the Exercise Price by delivery of immediately available funds; or

Y (A-B)

X = ———————


Where:	X	=	the number of the Warrant Shares to be issued to the Holder.

	Y	=	the number of the Warrant Shares purchasable under this Warrant.

	A	=	the Fair Market Value of one share of Common Stock for the date of determination.

	B	=	the per share Exercise Price (as adjusted to the date of such calculation)

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11. No Fractional Shares . No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.

12. Notices . Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to 8965 Research Drive, Irvine, CA 92618, Attn: Chief Executive Officer, or to Facsimile No.: (949) 616-3399 (or such other address as the Company shall indicate in writing in accordance with this Section), or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.

13. Warrant Agent . The Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

14. Miscellaneous .

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(c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

	ENER-CORE, INC.

	By:
	Name:
	Title:

Accepted and agreed as of the date first indicated above:

_____________________

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EXERCISE NOTICE

ENER-CORE, INC.

WARRANT DATED APRIL 27, 2017

(1)	The undersigned Holder hereby exercises its right to purchase ______________________ Warrant Shares pursuant to the Warrant.

(2)	Method of Exercise (Please initial the applicable blank):

____

____	The undersigned Holder elects to exercise the Warrant by means of the net exercise provisions of Section 10(b) of the Warrant.

(3)	Pursuant to this Exercise Notice, the Company shall deliver to the holder ______________________ Warrant Shares in accordance with the terms of the Warrant.

Dated:_______________

	Name of Holder :

	(Print)

	By:
	Name:
	Title:
	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

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Warrant Shares Exercise Log

Date	Number of Warrant Shares Available to be Exercised	Number of Warrant Shares Exercised	Number of Warrant Shares Remaining to be Exercised

A- 11

ENER-CORE, INC.

WARRANT DATED ________ __, 201_

WARRANT NO. ______________

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

Dated:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)


	Address of Transferee

In the presence of:

A-12

Exhibit 4.3

FIRST AMENDMENT TO

[AMENDED AND RESTATED] SENIOR SECURED NOTES

THIS FIRST AMENDMENT TO [AMENDED AND RESTATED] SENIOR SECURED NOTES (this “ Amendment ”) is made and entered into as of April 27, 2017 by and among Ener-Core, Inc., a Delaware corporation (the “ Company ”), and the undersigned, and amends those certain Senior Secured Notes [amended and restated as of December 2, 2016 (as amended to date, the “ Notes ”), as originally issued by the Company pursuant to (i) that certain Securities Purchase Agreement, dated April 22, 2015, by and among the Company, the “Buyers” identified therein, and the Collateral Agent identified therein (as amended to date, the “ April 2015 Agreement ”); and (ii) that certain Securities Purchase Agreement, dated May 7, 2015, by and among the Company, the “Buyers” identified therein, and the Collateral Agent identified therein (as amended to date and together with the April 2015 Agreement, the “ Agreements ”)] [dated as of December 2, 2016 and December 20, 2016 (as amended to date, the “ Notes ”), issued by the Company pursuant to that certain Securities Purchase Agreement, dated November 23, 2016, by and among the Company and the “Buyers” identified therein (as amended to date, the “ Agreement ”)]. Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Notes.

RECITALS

WHEREAS , pursuant to Section 15 of the Notes, the written consent of the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding, including Empery Asset Master, Ltd. (“ Empery ”) so long as Empery or any of its Affiliates holds any Notes, and the Collateral Agent (the “ Required Holders ”), shall be required for any change or amendment or waiver of any provision of the Notes, provided that any such amendment or waiver does not disproportionately, materially and adversely affect the rights and obligations of any Holder relative to the comparable rights and obligations of the other Holders;

WHEREAS , any amendment or waiver effected in accordance with Section 15 of the Notes is binding upon all holders of Notes; and

WHEREAS , the parties hereto wish to amend the Notes as set forth below.

AGREEMENT

NOW, THEREFORE , in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

ARTICLE I
AMENDMENTS TO THE NOTES

Section 1.1 Backstop Agreement . Section 30(e) of the Notes is hereby amended and restated as follows:

“ Backstop Agreement ” means that certain Backstop Security Support Agreement, originally entered into on November 2, 2015 by and between an individual investor and the Company, as amended pursuant to that certain First Amendment to Backstop Security Support Agreement, dated as of April 27, 2017, by and between an individual investor and the Company.”

article ii
MISCELLANEOUS

Section 2.1 Effect of this Amendment . This Amendment shall form a part of each Note for all purposes, and each holder thereof shall be bound hereby. This Amendment shall only be deemed to be in full force and effect from and after both the execution of this Amendment by the parties hereto and the execution of agreements substantially identical to this Amendment by the Company and holders of Notes representing at least a majority of the sum of the aggregate principal amount of the Notes then outstanding that, together with undersigned, constitute the Required Holders. From and after such effectiveness, any reference to the Notes shall be deemed to be a reference to the Notes as amended hereby. Except as specifically amended as set forth herein, each term and condition of the Notes shall continue in full force and effect.

Section 2.2 Entire Agreement . This Amendment, together with the Notes, contains the entire agreement of the parties and supersedes any prior or contemporaneous written or oral agreements between them concerning the subject matter of this Amendment.

Section 2.3 Governing Law . This Amendment shall be governed by the internal law of the State of New York.

Section 2.4 Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Amendment may be executed by fax or electronic mail, in PDF format, and no party hereto may contest this Amendment’s validity solely because a signature was faxed or otherwise sent electronically.

[Signature Pages Follow]

IN WITNESS WHEREOF , the parties hereto have executed this First Amendment to [Amended and Restated] Senior Secured Notes as of the date first written above.

	COMPANY:

	ENER-CORE, INC.

	By:
		Name:
		Title:

Signature Page to First Amendment to [Amended and Restated] Senior Secured Notes

IN WITNESS WHEREOF , the parties hereto have executed this First Amendment to [Amended and Restated] Senior Secured Notes as of the date first written above.

	HOLDER:

	By:
		Name:
		Title:

Signature Page to First Amendment to [Amended and Restated] Senior Secured Notes

Exhibit 10.1

FIRST AMENDMENT TO BACKSTOP SECURITY SUPPORT AGREEMENT

This First Amendment to Backstop Security Support Agreement (“ Amendment ”) is made and entered into on April 27, 2017, by and between Anthony Tang, an individual investor (the “ Investor ”), and Ener-Core, Inc., a corporation incorporated under the laws of Delaware (“ Ener-Core ”), and amends that certain Backstop Security Support Agreement by and between Investor and Ener-Core dated November 2, 2015 (the “ Agreement ”). Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

RECITALS

WHEREAS , on April 11, 2017, Ener-Core executed a First Amendment to that certain Commercial and Manufacturing License Agreement dated June 29, 2016 (as amended, the “ CMLA ”), with D-R, making the CMLA effective as of January 1, 2017, in replacement of the CLA;

WHEREAS , the CMLA reduces the required backstop security in favor of D-R from $2.1 million to $500,000 and extends the term thereof; and

WHEREAS , in relation to such changes under the CMLA, Ener-Core and Investor wish to reduce the financial obligation covered by the Letter of Credit and formally amend the terms of the Agreement to reflect a reduction in the security obligation underlying the required Letter of Credit, amend the terms of the Warrant and seek a consent pursuant to the Intercreditor Agreement.

AGREEMENT

NOW, THEREFORE , in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1. Reduction in Letter of Credit and Related Obligations. Investor agrees to take prompt action to instruct EW to reduce the commitment under the Letter of Credit to $500,000, to be effective no later than April 19, 2017, and to extend the expiration date of the Letter of Credit to March 31, 2018. Investor and Ener-Core agree that this reduction may not be revoked and that Investor shall not have any obligation to increase such commitment above $500,000. Investor acknowledges that the payment obligations of Ener-Core secured by the security interest granted by the Agreement and governed by the Security Agreement shall likewise be reduced.

2. Amendment to Term . Section 2(c) of the Agreement is hereby deleted in its entirety and replaced as follows:

“ (c) March 31, 2018.”

3. Amendment of Fees . Section 3(d) of the Agreement is hereby deleted in its entirety and replaced as follows:

“(d) if after the initial twelve months the Term has not ended, then (i) for each calendar month (or part thereof if applicable in the case where the Term ends pursuant to Section 2) commencing with the month immediately following the initial twelve months and continuing through April 18, 2017 (unless the Term ends earlier as provided in Section 2), a monthly fee equal to 2% of the amount of the Letter of Credit, and (ii) after April 18, 2017 (unless the Term ends earlier as provided in Section 2), through the end of the Term as provided in Section 2, a monthly fee equal to 1% of the amount of the Letter of Credit (as reduced after such date), which monthly fee in each case will be due and payable at the end of each such calendar month;”

4. Amendment and Restatement of Warrant . Concurrent with execution of and pursuant to this Amendment, Ener-Core and Investor shall amend and restate the terms of the Warrant to change the exercise price per share of common stock of Ener-Core, par value $0.0001 per share (the “ Common Stock ”), to $3.00 and include a beneficial ownership blocker provision at 4.99%, in the form attached hereto as Exhibit A.

5. Additional Warrant . Concurrent with execution of and pursuant to this Amendment, Ener-Core shall issue to Investor an additional warrant to purchase 41,000 shares of Common Stock with a five-year term at $3.00 per share, which shall include a beneficial ownership blocker provision at 4.99%, in the form attached hereto as Exhibit B (the “ Additional Warrant ”).

6. Effect of this Amendment . This Amendment shall form a part of the Agreement for all purposes. From and after such effectiveness, any reference to the Agreement shall be deemed to be a reference to the Agreement as amended hereby. Except as specifically amended as set forth herein, each term and condition of the Agreement shall continue in full force and effect.

7. Entire Agreement . This Amendment, together with the Agreement, the Security Agreement and the Intercreditor Agreement, including any further amendments, consents or waivers related thereto, contains the entire agreement of the parties and supersedes any prior or contemporaneous written or oral agreements between them concerning the subject matter of this Amendment.

8. Governing Law . This Amendment shall be governed by the internal laws of the State of California.

9. Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Amendment may be executed by fax or electronic mail, in PDF format, and no party hereto may contest this Amendment’s validity solely because a signature was faxed or otherwise sent electronically.

[ Signature Page Follows ]

IN WITNESS WHEREOF, the Parties hereto have caused this document to be executed and delivered by their respective authorized representatives as of the date indicated above.

Ener-Core, Inc.			Anthony Tang


By:			Anthony Tang
Its:

Signature Page to First Amendment to Backstop Security Support Agreement

EXHIBIT A

FORM OF AMENDED AND RESTATED WARRANT

[Omitted]

Exhibit A

EXHIBIT B

FORM OF ADDITIONAL WARRANT

[Omitted]

Exhibit B