Exhibit 4.2


 


[FORM OF WARRANT]


 


NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.


 


ENER-CORE,
INC.


 


Warrant
To Purchase Common Stock


 


Warrant No.: _________


Number of Shares of Common Stock: ___________


Date of Issuance: November 1, 2017 (“Issuance Date”)


 


Ener-Core, Inc., a Delaware
corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m.,
New York time, on the Expiration Date, (as defined below), ______________ (_____________) fully paid nonassessable shares of Common
Stock, subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein,
capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange,
transfer or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 17. This Warrant
is one of the Warrants to purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain
Amended and Restated Securities Purchase Agreement, dated as of November 1, 2017 (the “Subscription Date”),
by and among the Company and the investors (the “Buyers”) referred to therein (as amended, restated, modified
or joined from time to time, the “Securities Purchase Agreement”). Capitalized terms used herein and not otherwise
defined shall have the definitions ascribed to such terms in the Securities Purchase Agreement.


 






    


     


    

 


1. EXERCISE
OF WARRANT.


 


(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in part, by
(i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”),
of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds or (B) by notifying the Company that this Warrant
is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than
all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before the first (1st) Trading Day following the
date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment
of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer agent (the “Transfer
Agent”). On or before the earlier of (i) the third (3rd) Trading Day and (ii) the number of Trading Days comprising the
Standard Settlement Period, in each case, following the date on which the Holder has delivered the Exercise Notice, so long as
the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2nd) Trading Day
following the date on which the Company has received the Exercise Notice (such earlier date, the “Share Delivery Date”)
(provided that if the Aggregate Exercise Price has not been delivered by such date, the Share Delivery Date shall be one (1) Trading
Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered), the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder
or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall
be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant
Shares via DTC, if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for purposes of Rule 200(b) of Regulation
SHO to have become the owner of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such
Warrant Shares, as the case may be, provided that the Holder delivers the Aggregate Exercise Price (or a duly executed notice
of a Cashless Exercise) on or prior to the second (2nd) Trading Day following the date on which the Exercise Notice
has been delivered to the Company. If this Warrant is physically delivered to the Company in connection with any exercise pursuant
to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number
of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three
(3) Trading Days after any exercise and at its own expense, issue to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares
are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded up to
the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance
with the terms and subject to the conditions 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; provided, however,
that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery
of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.


 


(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $1.50, subject to adjustment as provided herein.


 






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(c) Company’s
Failure to Timely Deliver Securities. If the Company shall fail for any reason or for no reason to issue to the Holder on or
prior to the Share Delivery Date, if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock
on the Company’s share register or if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program,
to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise of this Warrant (an “Exercise Failure”), then, in addition to all other remedies
available to the Holder, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise
that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3)
Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation
to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for
such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to
the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period
beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the 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 shares
of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant
to the terms hereof.


 


(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if the Registration Statement covering the resale of the
Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available
for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, elect to exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment
of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):


 


Net Number
= (A x B) - (A x C)


D


 


For purposes
of the foregoing formula:


 


	 	A= 	the total number of shares with respect to which this Warrant is then being exercised.
	 	 	 
	 	B= 	the arithmetic average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the
date immediately preceding the date of the Exercise Notice.
	 	 	 
	 	C= 	the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
	 	 	 
	 	D= 	the Closing Sale Price of the Common Stock on the date of the Exercise Notice.




 






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For purposes of Rule
144(d) promulgated under the 1933 Act, as in effect on the date hereof, it is intended that the Warrant Shares issued in a Cashless
Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.


 


(e) 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 12.


 


(f) 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 the other Attribution Parties collectively would beneficially own in excess of [4.99%/9.99%][1]
(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 the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other
Attribution Parties 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 the other Attribution
Parties 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, including the other SPA Warrants) beneficially
owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 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 (the “SEC”), 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 1(f), 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 other Attribution Party 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 the other Attribution Parties 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
1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ 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 (i)
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 and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties
and not to any other holder of SPA Warrants that is not an Attribution Party of the Holder. 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 1934 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 1(f) 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 1(f) 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.


 


 


 






1
At the Holder’s election.






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(g) Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least
a number of shares of Common Stock equal to 100% of the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of all of this Warrant then outstanding (the “Required Reserve Amount” and the failure
to have such sufficient number of authorized and unreserved shares of Common Stock, an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure,
the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise of this Warrant,
the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the Holder elects
to void such attempted exercise, the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable
exercise, cash in an amount equal to the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that
the Company is unable to deliver pursuant to this Section 1(g), by (y) the total number of Warrant Shares issuable upon exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value;
provided, that (x) references to “the day immediately following the public announcement of the applicable Fundamental Transaction”
in the definition of “Black Scholes Value” shall instead refer to “the date the Holder exercises this Warrant
and the Company cannot deliver the required number of Warrant Shares because of an Authorized Share Failure” and (y) clause
(iii) of the definition of “Black Scholes Value” shall instead refer to “the underlying price per share used
in such calculation shall be the highest Weighted Average Price during the period beginning on the date of the applicable date
of exercise and the date that the Company makes the applicable cash payment.”


 






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2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:


 


(a) Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.


 


(b) Adjustment
Upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date
combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective
at the close of business on the date the subdivision or combination becomes effective.


 


3. RIGHTS
UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant,
including without limitation, the Maximum Percentage) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the
participation in such Distribution (provided, however, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the
Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of
such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution
held similarly in abeyance) to the same extent as if there had been no such limitation).




 


4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date and on
or prior to the Expiration Date, the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled
to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent)
and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its
right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time
or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right
or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).


 






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(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Required Holders and
approved by the Required Holders prior to such Fundamental Transaction, including agreements, if so requested by the Holder, to
deliver to each holder of the SPA Warrants in exchange for such SPA Warrants a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise
price equal to the value for the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable
for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and satisfactory to the Required Holders, and with an exercise price which applies the exercise price hereunder to such shares
of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price
being for the purpose of protecting the economic value of this Warrant immediately prior to the occurrence or consummation of
such Fundamental Transaction). Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required
condition to the occurrence or consummation of any Fundamental Transaction that, the Company and the Successor Entity or Successor
Entities, jointly and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly
and severally succeed to, and be added to the term “Company” under this Warrant (so that from and after the date of
such Fundamental Transaction, each and every provision of this Warrant referring to the “Company” shall refer instead
to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor
Entity or Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall
assume all of the obligations of the Company prior thereto under this Warrant with the same effect as if the Company and such
Successor Entity or Successor Entities, jointly and severally, had been named as the Company in this Warrant, and, solely at the
request of the Holder, if the Successor Entity and/or Successor Entities is/are a publicly traded corporation whose common stock
is quoted on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right under this
Warrant) to the Holder in exchange for this Warrant a security of the Successor Entity and/or Successor Entities evidenced by
a written instrument substantially similar in form and substance to this Warrant and exercisable for a corresponding number of
shares of capital stock of the Successor Entity and/or Successor Entities (the “Successor Capital Stock”) equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) prior to such Fundamental Transaction (such corresponding number of shares of Successor Capital Stock
to be delivered to the Holder shall be equal to the greater of (A) the quotient of (i) the aggregate dollar value of all consideration
(including cash consideration and any consideration other than cash (“Non-Cash Consideration”), in such Fundamental
Transaction, as such values are set forth in any definitive agreement for the Fundamental Transaction that has been executed at
the time of the first public announcement of the Fundamental Transaction or, if no such value is determinable from such definitive
agreement, as determined in accordance with Section 12 with the term “Non-Cash Consideration” being substituted for
the term “Exercise Price”) that the Holder would have been entitled to receive upon the happening of such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had
this Warrant been exercised immediately prior to such Fundamental Transaction or the record, eligibility or other determination
date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant)
(the “Aggregate Consideration”) divided by (ii) the per share Closing Sale Price of such Successor Capital
Stock on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction and (B) the product
of (i) the Aggregate Consideration and (ii) the highest exchange ratio pursuant to which any stockholder of the Company may exchange
Common Stock for Successor Capital Stock) (provided, however, to the extent that the Holder’s right to receive any such
shares of publicly traded common stock (or their equivalent) of the Successor Entity would result in the Holder and its other
Attribution Parties exceeding the Maximum Percentage, if applicable, then the Holder shall not be entitled to receive such shares
to such extent (and shall not be entitled to beneficial ownership of such shares of publicly traded common stock (or their equivalent)
of the Successor Entity as a result of such consideration to such extent) and the portion of such shares shall be held in abeyance
for the Holder until such time or times, as its right thereto would not result in the Holder and its other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be delivered such shares to the extent as if there had
been no such limitation), and such security shall be satisfactory to the Holder, and with an identical exercise price to the Exercise
Price hereunder (such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting
after the consummation or occurrence of such Fundamental Transaction the economic value of this Warrant that was in effect immediately
prior to the consummation or occurrence of such Fundamental Transaction, as elected by the Holder solely at its option). Upon
occurrence or consummation of the Fundamental Transaction, and it shall be a required condition to the occurrence or consummation
of such Fundamental Transaction that, the Company and the Successor Entity or Successor Entities shall deliver to the Holder confirmation
that there shall be issued upon exercise of this Warrant at any time after the occurrence or consummation of the Fundamental Transaction,
as elected by the Holder solely at its option, shares of Common Stock, Successor Capital Stock or, in lieu of the shares of Common
Stock or Successor Capital Stock (or other securities, cash, assets or other property purchasable upon the exercise of this Warrant
prior to such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights), which for purposes of clarification may continue to be shares of Common Stock,
if any, that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record,
eligibility or other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised
immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting
in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance
with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the occurrence
or consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities,
cash, assets or other property with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that, and any applicable Successor Entity or Successor Entities shall ensure
that, and it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will thereafter
have the right to receive upon exercise of this Warrant at any time after the occurrence or consummation of the Corporate Event,
shares of Common Stock or Successor Capital Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Corporate Event (but not
in lieu of such items still issuable under Sections 3 and 4(a), which shall continue to be receivable on the Common Stock or on
such shares of stock, securities, cash, assets or any other property otherwise receivable with respect to or in exchange for shares
of Common Stock), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other
purchase or subscription rights and any shares of Common Stock) which the Holder would have been entitled to receive upon the
occurrence or consummation of such Corporate Event or the record, eligibility or other determination date for the event resulting
in such Corporate Event, had this Warrant been exercised immediately prior to such Corporate Event or the record, eligibility
or other determination date for the event resulting in such Corporate Event (without regard to any limitations on exercise of
this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder. The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events.






    - 7 -


     


    

 


(c) Notwithstanding
the foregoing, in the event of a Fundamental Transaction, at the request of the Holder delivered before the thirtieth (30th) day
after the occurrence or consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase this
Warrant from the Holder by paying to the Holder, within ten (10) Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), at the option of the Company, either (x) Common Stock (or corresponding consideration payable
as provided in the third-to-last sentence of Section 4(b) in connection with a Corporate Event, as applicable) valued at the value
of the consideration received by the shareholders in such Fundamental Transaction or (y) cash, in each case, in an amount equal
to the Black Scholes Value of the remaining unexercised portion of this Warrant on the effective date of such Fundamental Transaction.


 


5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the SPA Warrants, 100% of the number of shares of Common Stock as shall from
time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).


 


6.WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.


 


7.REISSUANCE
OF WARRANTS.


 


(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.


 


(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.


 


(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no SPA
Warrants for fractional Warrant Shares shall be given.


 


(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.


 






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8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such
information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly
understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not
be disputed or challenged by the Company.


 


9. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders.


 


10.     GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, 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 suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement 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. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or
other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.


 






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11.CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.


 


12.DISPUTE
RESOLUTION. 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 submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the
Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within
three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price
to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense
the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company
and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations.
Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.


 


13.REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.


 


14.TRANSFER;
LEGENDS.This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the
consent of the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement, and the
Warrants and Warrant Shares shall bear any legends required by Section 2(g) of the Securities Purchase Agreement.


 


15.SEVERABILITY.If
any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 






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16. DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to
the Company or its Subsidiaries (as defined in the Securities Purchase Agreement), the Company shall within one (1) Business
Day after any such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K
or otherwise. In the event that the Company believes that a notice contains material, nonpublic information relating to the
Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and
in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not
constitute material, nonpublic information relating to the Company or its Subsidiaries.


 


17.CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


 


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


 


(b) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.


 


(c) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any
of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.


 


(d) “Black
Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction,
or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, for pricing
purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental
Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated,
(iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction, (iv) a zero cost of borrow
and (v) a 360 day annualization factor.


 


(e) “Bloomberg”
means Bloomberg Financial Markets.


 


(f) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.


 






    - 11 -


     


    

 


(g) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.


 


(h) “Common
Stock” means (i) the Company’s shares of common stock, par value $0.0001 per share, and (ii) any capital
stock into which such common stock shall have been changed or any capital stock resulting from a reclassification of such common
stock.


 


(i) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.


 


(j) “Eligible
Market” means the Principal Market, the NYSE American LLC, The NASDAQ Global Market, The NASDAQ Global Select Market,
The NASDAQ Capital Market or The New York Stock Exchange, Inc.


 


(k) “Expiration
Date” means the date sixty (60) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a “Holiday”), the next day that is not
a Holiday.


 






    - 12 -


     


    

 


(l) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange
offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated
with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number
of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934
Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of
the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares
of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to,
such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that
the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock,
(y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were
not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger
or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of
the stockholders of the Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.


 


(m) “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.


 


(n) “Lead
Investor” means Empery Asset Master, Ltd.


 


(o) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(p) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common shares or common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected
by the Required Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Required Holders or in the absence of such designation, such Person or entity with
the largest public market capitalization as of the date of consummation of the Fundamental Transaction.


 


(q) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 






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(r) “Principal
Market” means the OTCQB.


 


(s) [Reserved].


 


(t) “Required
Holders” means the holders of the SPA Warrants representing at least a majority of the shares of Common Stock underlying
the SPA Warrants then outstanding and shall include the Lead Investor so long as the Lead Investor or any of its Affiliates holds
any SPA Warrants.


 


(u) “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s
principal Eligible Market with respect to the Common Stock that is in effect on the date of receipt of an applicable Exercise Notice.


 


(v) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.


 


(w) “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.


 


(x) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.


 


(y) “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 12 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.


 


[Signature Page Follows]


 




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IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.


 





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




 






    


     


    

 


EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS


WARRANT TO PURCHASE COMMON STOCK


 


ENER-CORE,
inc. 


 


The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
Ener-Core, Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common
Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.


 


1. Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:


 


____________a
“Cash Exercise” with respect to _________________ Warrant Shares; and/or


 


____________a
“Cashless Exercise” with respect to _______________ Warrant Shares.


 


2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.


 


3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.


 


Date: _______________ __, ______


 


 


 






Name of Registered Holder


 





	By:	 	 
	 	Name:	 
	 	Title:	 




 




    


     


    

 


ACKNOWLEDGMENT


 


The Company hereby
acknowledges this Exercise Notice and hereby directs VStock Transfer, LLC to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated November 1, 2017 from the Company and acknowledged and agreed to
by VStock Transfer, LLC.


 





	ENER-CORE, INC.	 
	 	 	 
	By:	            	 
	Name:	 	 
	Title: