Exhibit 10.1

 

FIFTH AMENDMENT TO

SECURITIES PURCHASE AGREEMENT

 

THIS FIFTH AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is made
and entered into as of March 31, 2016, by and among Ener-Core, Inc., a Delaware
corporation (the “Company”) and the undersigned, and amends that certain
Securities Purchase Agreement, dated as of April 22, 2015 (as amended to date,
the “Agreement”), by and among the Company, the “Buyers” identified therein, and
the Collateral Agent identified therein. Capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Agreement.

 

RECITALS

 

WHEREAS, pursuant to Section 9(e) of the Agreement, any term of the Agreement
may be amended only with the written consent of (i) the Company and (ii) the
holders of at least a majority of the aggregate number of the Conversion Shares
and Warrant Shares issued or issuable under the Notes and Warrants (calculated
using the Assumed Conversion Price) and shall include Empery Asset Master, Ltd.
("Empery"), so long as Empery or any of its affiliates holds any Securities (the
“Required Holders”);

 

WHEREAS, any amendment effected in accordance with Section 9(e) of the Agreement
is binding upon each holder of any securities purchased under the Agreement and
the Company; and

 

WHEREAS, the parties hereto wish to amend the Agreement 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 AGREEMENT

 

Section 1.1 Additional Warrants. In consideration of the negotiation, execution
and delivery of this Amendment, each Buyer under the Agreement shall be entitled
to the receipt of additional Warrants, in substantially the form provided in
Exhibit A to this Amendment, consistent with the following terms:

 

(a) Upon effectiveness of this Amendment consistent with Section 2.1 hereof, the
Company shall issue Warrants to each Buyer exercisable for 10 shares of Common
Stock per $100 of outstanding principal of the Notes held by such Buyer (as set
forth on Schedule A attached hereto), which shall be exercisable for five years
from the date of issuance at an exercise price of $5.00 per share, subject to
adjustment as set forth within the Warrants (the “Additional Warrants”).

 

(b) The Additional Warrants are duly authorized and, upon issuance, shall be
validly issued and free from all taxes, liens and charges with respect to the
issue thereof. As of the date of this Amendment, an additional number of shares
of Common Stock have been duly authorized and reserved for issuance upon
exercise of the Additional Warrants which equals or exceeds 100% of the maximum
number of Warrant Shares issuable pursuant to the Additional Warrants (without
regard to any restrictions or limitations upon exercise of such Additional
Warrants) (the “Additional Warrant Shares”). Assuming the accuracy of each of
the representations and warranties set forth in Section 2 of the Agreement as
applicable to the Additional Warrants and Additional Warrant Shares, as
incorporated by reference in Section 1.1(c) below, the offer and issuance by the
Company of the Additional Warrants is exempt from registration under the 1933
Act.

 

(c) Upon acceptance of the Additional Warrants, each Buyer affirms the continued
accuracy of the representations and warranties set forth in Section 2 of the
Agreement, which are hereby incorporated by reference herein, as applicable to
the Additional Warrants and Additional Warrant Shares.

 

(d) For purposes of Section 9(e) of the Agreement with respect to any subsequent
amendments or waivers, all references to the “Warrants” shall be deemed to
include the issued Additional Warrants and all references to the “Warrant
Shares” shall be deemed to include the Additional Warrant Shares underlying the
issued Additional Warrants.

 

 

 

 

Section 1.2 Removal of QPO Requirement. Section 4(t) of the Agreement is hereby
amended and restated as follows:

 

“(t) [Intentionally Omitted.]”

 

Section 1.3 Extension of Listing Deadline. The first sentence of Section 4(f) of
the Agreement is hereby amended and restated as follows:

 

“The Company shall commence trading of its Common Stock on either The New York
Stock Exchange, Inc., the NYSE MKT LLC, The NASDAQ Capital Market, The NASDAQ
Global Select Market or The NASDAQ Global Market (collectively, the “Qualified
Eligible Markets”) no later than April 14, 2016, provided, however, if the
Company consummates a private offering of its securities resulting in gross
proceeds to the Company of at least $3,000,000 after March 31, 2016 and prior to
or on April 14, 2016, such deadline shall be automatically extended to October
15, 2016 (as applicable, the “Listing Deadline”).”

 

Section 1.4 Additional Covenant. Section 4 is hereby amended to add Section 4(y)
as follows:

 

“(y) Commercial License Agreement. On or prior to April 14, 2016, the Company
shall cause its net monthly cash flow directly associated with the November 14,
2014 Commercial License Agreement, as amended (the “CLA”), taken together with
its monthly capital expenditure spending associated with such license, and
excluding expenditures associated with the Full Scale Acceptance Test
requirements defined in the CLA, to be neutral or positive, which may be
accomplished by re-negotiation or termination of such license.”

 

ARTICLE II
MISCELLANEOUS

 

Section 2.1 Effect of this Amendment. This Amendment shall form a part of the
Agreement for all purposes, and each party thereto and hereto 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 “Buyers” holding a sufficient number of Conversion Shares and Warrant Shares
issued or issuable under their respective Notes and Warrants that, together with
undersigned, constitute the Required Holders. 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.

 

Section 2.2 Entire Agreement. This Amendment, together with the Agreement,
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 Fifth Amendment to
Securities Purchase Agreement as of the date first written above.

 

  COMPANY:       ENER - CORE, INC.         By:       Name: Alain J. Castro    
Title: Chief Executive Officer

 

[Signature Page to Fifth Amendment to Securities Purchase Agreement]

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amendment to
Securities Purchase Agreement as of the date first written above.

 

 

BUYER:

        By:       Name:     Title:

 

 

[Signature Page to Fifth Amendment to Securities Purchase Agreement]