Exhibit 10.2


 


REGISTRATION
RIGHTS AGREEMENT


 


REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of December 30, 2015, by and among Ener-Core, Inc., a Delaware
corporation, with headquarters located at 9400 Toledo Way, Irvine, California 92618 (the “Company”), and the
investors identified in their respective “Buyer Signature Page” attached hereto (each, a “Buyer”
and collectively, the “Buyers”).


 


WHEREAS:


 


A.          In
connection with the Securities Purchase Agreement by and among the parties hereto of even date herewith (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue and sell to each Buyer (i) shares (“Common Shares”) of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”), and (ii) a warrant, which will be exercisable to purchase
shares of Common Stock (as exercised, collectively, the “Warrant Shares”).


 


B.          In
accordance with the terms of the Securities Purchase Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively,
the “1933 Act”), and applicable state securities laws.


 


NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:


 


1.            Definitions.


 


Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the following meanings:


 


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


 


(b)          “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement.


 


(c)          “Effective
Date” means the date on which a Registration Statement, through which Registrable Securities shall be registered, has
been declared effective by the SEC.


 






      


     


    

 


(d)          “Effectiveness
Deadline” means (i) in the event that the Registration Statement is not subject to review by the Staff, the earlier
of (x) 130 days after the Closing Date, and (y) five Trading Days following the date on which the Staff notifies the Company that
the Registration Statement is not subject to review, and (ii) in the event that the Registration Statement is subject to review
by the Staff, the earlier of (x) 170 days after the Closing Date, and (y) five Trading Days following the date on which the Staff
notifies the Company that it has no further comments on the Registration Statement.


 


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


 


(f)          “Filing
Deadline” means the later of the date that is 60 days after the Closing Date and 30 days after the closing of the proposed
offering registered on the Company’s Form S-1 registration statement (File No. 333-205916), or if such registration statement
is withdrawn, any registration statement subsequently filed with respect to such proposed offering, provided, however,
that the Filing Deadline shall be no later than March 31, 2016. If the Filing Deadline falls on a Saturday, Sunday or other day
that the SEC is closed for business, the Filing Deadline shall be extended to the next business day on which the SEC is open for
business.


 


(g)          “Investor”
means a Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to
whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 for so long as any of the foregoing continues to hold Registrable Shares.


 


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


 


(i)          “Principal
Market” means The OTCQB.


 


(j)          “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415, and the declaration
or ordering of effectiveness of such Registration Statement(s) by the SEC.


 


(k)          “Registrable
Securities” means (i) the Common Shares, (ii) the Warrant Shares issued or issuable upon exercise of the Warrants and
(iii) any shares of capital stock of the Company issued or issuable with respect to the Common Shares as a result of any stock
split, stock dividend, recapitalization, exchange or similar event, without regard to any limitations on exercise of the Warrants.


 


(l)          “Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering
Registrable Securities.


 


(m)          “Required
Holders” means holders of at least a majority of the Registrable Securities.


 






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(n)          “Required
Registration Amount” for the Registration Statement means 100% of the sum of (i) the number of Common Shares issued
pursuant to the Securities Purchase Agreement and (ii) the number of Warrant Shares issued and issuable pursuant to the Warrants
as of the trading day immediately preceding the applicable date of determination, all, subject to adjustment as provided in Section
2(b) (without regard to any limitations on exercise of the Warrants).


 


(o)          “Rule
415” means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities on a continuous
or delayed basis.


 


(p)          “SEC”
means the United States Securities and Exchange Commission.


 


(q)          “Staff”
means the staff of the Division of Corporation Finance at the SEC.


 


(r)          “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; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).


 


2.            Registration.


 


(a)          Mandatory
Registration. The Company shall prepare, and, as soon as practicable but in no event later than the Filing Deadline, file
with the SEC the Registration Statement on Form S-1 covering the resale of at least the number of shares of Common Stock equal
to the Required Registration Amount determined as of the date the Registration Statement is initially filed with the SEC. The
Registration Statement shall contain (except if otherwise directed by the Required Holders or required in order to address comments
to the Registration Statement received from the Staff) the “Selling Stockholders” and “Plan of Distribution”
sections in substantially the form attached hereto as Exhibit B. The Company shall use its commercially reasonable efforts
to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness
Deadline. By 5:30 p.m. (Eastern time) on the second Business Day following the Effective Date, the Company shall file with the
SEC, in accordance with Rule 424 under the 1933 Act, the final prospectus to be used in connection with sales pursuant to such
Registration Statement.


 






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(b)          Rule
415; Cutback. If at any time the Staff takes the position that the offering of some or all of the Registrable Securities
in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under
the 1933 Act or requires any Investor to be named as an “underwriter”, the Company shall use commercially reasonable
efforts to persuade the Staff that the offering contemplated by the Registration Statement is a valid secondary offering and not
an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter.”
In the event that, despite the Company’s commercially reasonable efforts and compliance with the terms of this Section 2(b),
the Staff refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable
Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration
and resale of the Registrable Securities as the Staff may require to assure the Company’s compliance with the requirements
of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company
shall not agree to name any Investor as an “underwriter” in such Registration Statement without the prior written
consent of such Investor. Any cut-back imposed pursuant to this Section 2(b) shall be allocated among the Investors
on a pro rata basis, unless the SEC Restrictions otherwise require or provide or the Required Holders otherwise agree. No liquidated
damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back
Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back
Shares). In furtherance of the foregoing, each Investor shall provide the Company with prompt written notice of its sale of substantially
all of the Registrable Securities under the Registration Statement such that the Company will be able to file one or more additional
registration statements covering the Cut Back Shares. From and after the Restriction Termination Date applicable to any Cut Back
Shares, all of the provisions of this Section 2 (including the liquidated damages provisions) shall again be applicable to such
Cut Back Shares; provided, however, that (i) the Filing Deadline for the Registration Statement including such
Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date and (ii) the Effectiveness Deadline with
respect to such Cut Back Shares shall be the earlier of (A) 120 days after the Restriction Termination Date and (B) five Trading
Days following the date on which the Staff notifies the Company that either (x) such Registration Statement is not subject to
review or (y) the Staff has no further comments to such Registration Statement.


 


(c)          Form
S-3. The Company undertakes to register the Registrable Securities on Form S-3 as soon as such form is available for use by
the Company, provided that if the Registration Statement is on Form S-1, the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.


 






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(d)          Effect
of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. Subject to Section 2(b), if (i)
a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by
the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline (a “Filing Failure”)
or (B) not declared effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”);
or (ii) on any day after the Effective Date sales of all of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than (x) during an Allowable Grace Period (as defined in Section 3(n)) or (y) if the Registration
Statement is on Form S-1, for a period of 15 days following the date on which the Company files a post-effective amendment to
incorporate the Company’s Annual Report on Form 10-K) pursuant to such Registration Statement (including, without limitation,
because of a failure to keep such Registration Statement effective, failure to disclose such information as is necessary for sales
to be made pursuant to such Registration Statement or failure to register a sufficient number of shares of Common Stock) (a “Maintenance
Failure”) then, in satisfaction of the damages to any holder of Registrable Securities by reason of any such delay in
or reduction of its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay to each such holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to one percent (1.0%) of the aggregate Purchase Price (as such term is defined in the Securities
Purchase Agreement) of such Investor’s Registrable Securities included in such Registration Statement on each of the following
dates: (i) the day of a Filing Failure and on every thirtieth day (pro rated for shorter periods) thereafter until such Filing
Failure is cured; (ii) the day of an Effectiveness Failure and on every thirtieth day (pro rated for shorter periods)
thereafter until such Effectiveness Failure is cured; and (iii) the initial day of a Maintenance Failure and on every thirtieth
day (pro rated for shorter periods) thereafter until such Maintenance Failure is cured. The payments to which a holder shall be
entitled pursuant to this Section 2(d) are referred to herein as “Registration Delay Payments.” Registration
Delay Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Registration Delay Payments
are incurred and (ii) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured.
In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall
bear interest at the rate of one percent (1.0%) of such unpaid Registration Delay Payment per month (pro rated for shorter periods)
until paid in full. Notwithstanding anything to the contrary herein or in the Securities Purchase Agreement, in no event shall
the aggregate amount of Registration Delay Payments exceed, in the aggregate, ten percent 10% of the aggregate Purchase Price
of the Common Shares.


 


3.            Related
Obligations.


 


At
such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(b) or 2(c), the Company will use its commercially reasonable efforts to effect the registration of the Registrable Securities
in accordance with the intended method of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:


 


(a)          The
Company shall submit to the SEC, within two (2) Business Days after the Company learns that no review of a particular Registration
Statement will be made by the Staff or that the Staff has no further comments on a particular Registration Statement, as the case
may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours
after the submission of such request. The Company shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration
Statement without restriction pursuant to Rule 144 (or any successor thereto) promulgated under the 1933 Act, or (ii) the date
on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration
Period”). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto
and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.


 






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(b)          The
Company shall (i) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration
Statement and the Rule 424 prospectus used in connection with such Registration Statement as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and (ii) during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities covered by such Registration Statement until such time
as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the
seller or sellers as set forth in such Registration Statement.


 


(c)          The
Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge,
(i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor,
all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the
prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies
as such Investor may reasonably request), and (iii) such other documents, including copies of any preliminary or final prospectus,
as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities
owned by such Investor.


 


(d)          The
Company shall notify each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of
such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement
of a material fact or omission to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information),
and, subject to Section 3(n), promptly prepare a supplement or amendment to such Registration Statement to correct such
untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to each Investor (or such other number
of copies as such Investor may reasonably request).


 


(e)          The
Company shall use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness
of a Registration Statement or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction.
If such an order or suspension is issued, the Company shall use its commercially reasonable efforts to obtain the withdrawal of
such order or suspension at the earliest possible moment, and to notify each Investor who holds Registrable Securities being sold
of the issuance of such order and the resolution thereof, or its receipt of notice of the initiation or threat of any proceeding
for such purpose.


 






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(f)          If
any Investor is required under applicable securities law to be described in the Registration Statement as an “underwriter,”
upon the written request of such Investor in connection with such Investor’s due diligence requirements, if any, the Company
shall make available for inspection by (i) such Investor and its legal counsel and (ii) one firm of accountants or other agents
retained the Investors (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed
necessary by each Inspector solely for the purpose of establishing a due diligence defense under underwriter liability under the
1933 Act, and cause the Company’s officers, directors and employees to supply all information that any Inspector may reasonably
request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to such Investor) or use of any Record or other information which the Company determines in good faith
to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary
to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b)
the release of such Records is ordered pursuant to a final, nonappealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure
in violation of this or any other Transaction Document. Each Investor agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to
the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and
any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.


 


(g)          The
Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless
(i) the disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation by
the Company of this Agreement or any other agreement to which the Company is a party. The Company agrees that it shall, upon learning
that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor’s expense,
to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.


 


(h)          The
Company shall use its commercially reasonable efforts either to cause all of the Registrable Securities covered by a Registration
Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange. The Company
shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(h).


 


(i)          The
Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Investors may reasonably request and registered in such names as the Investors may request.


 






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(j)          If
requested by an Investor, the Company shall (i) as soon as practicable, incorporate in a prospectus supplement or posteffective
amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being
offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) as soon as practicable, make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.


 


(k)         The
Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement
to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition
of such Registrable Securities.


 


(l)          The
Company shall otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC
in connection with any registration hereunder.


 


(m)        Within
two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.


 


(n)         Notwithstanding
anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the board of directors
of the Company and its counsel, in the commercially reasonable interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors
in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material, nonpublic information to the Investors) and the date on which the Grace
Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; provided further,
such Grace Periods shall not exceed an aggregate of thirty (30) days during any three hundred sixty five (365) day period and
the first day of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (each, an
“Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the
later of the date the Investors receive the notice referred to in clause (ii) or the date referred to in such notice. The provisions
of Section 3(d) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the
Grace Period, the Company shall again be bound by Section 3(d) with respect to the information giving rise thereto unless
such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor, in accordance with the terms of
the Securities Purchase Agreement, in connection with any sale of Registrable Securities with respect to which an Investor has
entered into a contract for sale prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor
has not yet settled, and deliver a copy of the prospectus included as part of the applicable Registration Statement (unless an
exemption from such prospectus delivery requirement exists).


 






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4.            Obligations
of the Investors.


 


(a)          At
least five (5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of
such Investor’s Registrable Securities included in such Registration Statement, including the number of Registrable Securities
such Investor wishes to include in such Registration Statement. It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that
(i) such Investor furnish to the Company such information regarding itself, the Registrable Securities held by it (including the
number of Registrable Securities to be included in the Registration Statement) and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities,
and (ii) the Investor execute such documents in connection with such registration as the Company may reasonably request.


 


(b)          Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.


 


(c)          Each
Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section
3(d) or Section 3(e), such Investor will immediately discontinue disposition of Registrable Securities pursuant to
any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(b) or receipt of notice that no supplement or amendment is required. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee
of an Investor, in accordance with the terms of the Securities Purchase Agreement, in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice
from the Company of the happening of any event of the kind described in Section 3(d) or Section 3(e), and for which
the Investor has not yet settled.


 






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(d)          Each
Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it
or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.


 


5.            Expenses
of Registration.


 


All
reasonable expenses, other than underwriting discounts and commissions or other charges of any broker-dealer acting on behalf
of the Investors, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements
of counsel for the Company, shall be paid by the Company.


 


6.            Indemnification.


 


In
the event any Registrable Securities are included in a Registration Statement under this Agreement:


 


(a)          To
the fullest extent permitted by law, the Company will, and hereby does agree to indemnify, hold harmless and defend each Investor,
the directors, officers, partners, employees and agents of, and each Person, if any, who controls any Investor within the meaning
of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”) (each, an “Indemnified
Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”), incurred
in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending
or threatened, whether or not an indemnified party is or may be a party thereto, to which any of them may become subject insofar
as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky”
laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior
to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other
law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale
of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred
by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein,
the indemnification contained in this Section 6(a) shall not apply to: (w) a Claim sought by an Indemnified Person arising
out of or based upon a Violation that occurs in reliance upon and in conformity with information furnished in writing to the Company
by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (x) a Claim by an Indemnified Person arising out of or based on
the use by an Investor of an outdated or defective prospectus after the Company has notified such Investor in writing that the
prospectus is outdated or defective; (y) a Claim by an Indemnified Person arising out of or based on an Investor’s (or any
other Indemnified Person’s) failure to send or give a copy of the prospectus or supplement (as then amended or supplemented),
if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement or omission
at or prior to the written confirmation of the sale of Registrable Securities; or (z) amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld
or delayed.


 






    	 	10	 



     


    

 


(b)          In
connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a),
the Company, each of its directors, officers and employees, each of the other holders of the Company’s securities covered
by such Registration Statement and each Person, if any, who controls the Company or any other such Person within the meaning of
the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claims to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claims arise out of or are based upon any Violation that
occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement (or any amendment thereof or supplement thereto); and, subject to Section 6(c),
such Investor shall reimburse the Indemnified Party for any legal or other expenses reasonably incurred by an Indemnified Party
in connection with investigating or defending any such Claim; provided, however, that the indemnification contained
in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent
shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable
under this Section 6(b) for only that amount of a Claim as does not exceed the net proceeds to such Investor as a result
of the sale of Registrable Securities pursuant to such Registration Statement.


 


(c)          Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action
or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall
have the right to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person
or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified
Person or Indemnified Party, as applicable, the representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person,
legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority
in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party
or Indemnified Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of
any such action or proceeding or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person that relates to such action or proceeding or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person reasonably apprised at all times as to the status of the defense
or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim
or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified
Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise that does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation and such settlement shall not include any admission as to fault
on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating
to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action or proceeding shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action or proceeding as a result of such failure.


 






    	 	11	 



     


    

 


(d)          The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received.


 


(e)          The
indemnity agreements contained herein shall be in addition to any liabilities the indemnifying party may be subject to pursuant
to the law.


 


7.            Contribution.


 


To
the extent any indemnification contemplated hereby by an indemnifying party is prohibited or limited by applicable law, the indemnifying
party shall to the extent permitted by applicable law contribute to the amount paid or payable by such Indemnified Person or Indemnified
Party as a result of such Claim in such proportion as is appropriate to reflect the relative fault of the indemnifying party,
on the one hand, and of the Indemnified Person or Indemnified Party, on the other, in connection with such Violation. The relative
fault of the indemnifying party, on the one hand and of the Indemnified Person or Indemnified Party, on the other hand, shall
be determined by a court of law by reference to, among other things, whether the Violation relates to information supplied or
actions undertaken by the indemnifying party, on the one hand, or by the Indemnified Person or Indemnified Party, on the other
hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such Violation;
provided, that in no event shall any contribution by an Investor hereunder exceed the amount of net proceeds to such Investor
of the Registrable Securities sold in any such Registration Statement. The amount paid or payable by a party as a result of any
Claim shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other
reasonable fees or expenses incurred by such party in connection with any proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in Section 6 was available to such party in accordance
with its terms. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Investors’ obligations
to contribute pursuant to this Section 7 are several and not joint.


 






    	 	12	 



     


    

 


8.            Reports
Under the 1934 Act.


 


With
a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule
or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration
(“Rule 144”), the Company agrees to:


 


(a)          make
and keep public information available, as those terms are understood and defined in Rule 144, during the Registration Period;


 


(b)          file
with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act so long as the Company
remains subject to such requirements, during the Registration Period; and


 


(c)          furnish
to each Investor so long as such Investor owns Registrable Securities, promptly upon request during the Registration Period, (i)
a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144 and the 1934 Act,
(ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant
to Rule 144 without registration.


 


9.            Assignment
of Registration Rights.


 


The
rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such
Investor’s Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such
rights and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee
is restricted under the 1933 Act or applicable state securities laws; (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound
by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements
of the Securities Purchase Agreement.


 






    	 	13	 



     


    

 


10.          Amendment
of Registration Rights.


 


Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Required Holders; provided that any such
amendment or waiver that complies with the foregoing but that disproportionately, materially and adversely affects the rights
and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior
written consent of such adversely affected Investor. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less
than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent
to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties
to this Agreement.


 


11.          Miscellaneous.


 


(a)          A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record
owner of such Registrable Securities.


 


(b)          Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); (iii) when sent, if sent by electronic mail; or (iv) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and email
addresses for such communications shall be:


 


If
to the Company:


 


Ener-Core,
Inc.


9400
Toledo Way





Irvine,
California 92618 


	 	Telephone:	(949)
    616-3300
	 	Facsimile:	(949)
    616-3399
	 	Attention:	Domonic
    J. Carney
	 	Email:	DJ.Carney@ener-core.com










 






    	 	14	 



     


    

 


With
a copy (for informational purposes only) to:


 


K&L
Gates LLP





1
Park Plaza, 12th Floor





Irvine,
California 92614





	 	Telephone:	(949)
    253-0900
	 	Facsimile:	(949)
    253-0902
	 	Attention:	David
    C. Lee
	 	 	Shoshannah
    D. Katz
	 	E-mail:	david.lee@klgates.com
	 	 	shoshannah.katz@klgates.com



 


If
to the Transfer Agent:


 


VStock
Transfer, LLC


18
Lafayette Place





Woodmere,
New York 11598





	 	Telephone:	(212)
    828-8436
	 	Facsimile:	(646)
    536-3179
	 	Attention:	Yoel
    Goldfeder
	 	E-mail:	yoel@vstocktransfer.com



 


If
to an Investor, to its address, facsimile number and/or email address set forth on such Investor’s “Buyer Signature
Page,” or to such other address, facsimile number and/or email address to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine or email containing the time, date, recipient facsimile number
or recipient electronic email address, as applicable, and an image of the first page of such transmission, if applicable, or (C)
provided by a courier or overnight courier service, shall be rebuttable evidence of personal service, receipt by facsimile, receipt
by email or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii), (iii) or (iv)
above, respectively.


 


(c)          Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.


 






    	 	15	 



     


    

 


(d)          All
questions concerning the construction, validity, enforcement and interpretation of this Agreement 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. Each party 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. Each party
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 such party at the address for such notices to it under this 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. EACH PARTY 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 HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(e)          If
any provision of this Agreement 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 Agreement so long as this Agreement 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).


 


(f)          This
Agreement, the other Transaction Documents (as defined in the Securities Purchase Agreement) and the instruments referenced herein
and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This
Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter hereof and thereof.


 


(g)          Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors
and assigns of each of the parties hereto.


 


(h)          The
headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.


 






    	 	16	 



     


    

 


(i)          This
Agreement and any amendments hereto may be executed and delivered in two or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective when counterparts have been signed by each party hereto and
delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart.  In the event
that any signature to this Agreement or any amendment hereto is delivered by facsimile transmission or by e-mail delivery of a
“.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page
were an original thereof.  No party hereto shall raise the use of a facsimile machine or e-mail delivery of a “.pdf”
format data file to deliver a signature to this Agreement or any amendment hereto or the fact that such signature was transmitted
or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” format data file as a defense
to the formation or enforceability of a contract and each party hereto forever waives any such defense.


 


(j)          Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


(k)         All
consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders.


 


(l)          The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.


 


(m)        This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other Person.


 


(n)         The
obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no Investor shall
be responsible in any way for the performance of the obligations of any other Investor hereunder. Nothing contained herein, and
no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated herein.


 


*
* * * * *


 


[Signature
Page Follows]




    	 	17	 



     


    

 


IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.


 


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


 


[Company
Signature Page To Registration Rights Agreement]




     


     


    

 


IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.


 


BUYER:


 


	INDIVIDUAL
    INVESTOR: 	 	PARTNERSHIP,
    CORPORATION, TRUST, LIMITED LIABILITY COMPANY, CUSTODIAL ACCOUNT, OR OTHER INVESTOR:
	 	 	 	 	 
	 	 	 	 
	 	(print
    name)	 	 	(print
    name of entity)
	 	 	 	 	 
	 	 	By:	 
	 	(signature)
    	 	 	(signature
    of person signing on behalf of entity)
	 	 	 	 	 
	 	 	 	Name:	 
	 	 	 	 	 
	 	 	 	Title:
    	 
	 	 	 	 	 
	 Address
    for Notice:	 	 Address
    for Notice: 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Tel:	 	 	Tel:	 
	 	 	 	 	 
	Fax:	 	 	Fax:	 
	 	 	 	 	 
	Email:	 	 	Email:	 


 


[Buyer
Signature Page To Registration Rights Agreement]




     


     


    

 


EXHIBIT
A


 


FORM
OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT


 


VStock
Transfer, LLC





18
Lafayette Place





Woodmere,
New York 11598





Attention:
          Yoel Goldfeder


 


	 	Re:	Ener-Core,
    Inc.


 


Ladies
and Gentlemen:


 


[We
are][I am] counsel to Ener-Core, Inc., a Delaware corporation (the “Company”), and have represented the Company
in connection with that certain Securities Purchase Agreement, dated as of December 30, 2015 (the “Securities Purchase
Agreement”), entered into by and among the Company and the buyers named therein (collectively, the “Holders”)
pursuant to which the Company issued to the Holders shares of the Company’s common stock, par value $0.0001 per share (the
“Common Stock”) (the shares of Common Stock issuable pursuant to the terms of the Securities Purchase Agreement,
collectively, the “Common Shares”). Pursuant to the Securities Purchase Agreement, the Company also has entered
into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which
the Company agreed, among other things, to register the resale of the Registrable Securities (as defined in the Registration Rights
Agreement), including the Common Shares issuable pursuant to the Securities Purchase Agreement under the Securities Act of 1933,
as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration Rights
Agreement, on ____________ ___, 201__, the Company filed a Registration Statement on Form S-__ (File No. 333-_____________) (the
“Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating
to the Registrable Securities that names each of the Holders as a selling shareholder thereunder.


 


In
connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that
the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the
SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are
pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.


 


This
letter shall serve as our standing instruction to you that the Common Shares are freely transferable by the Holders pursuant to
the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance
of Common Shares to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated ______, 201_.


 


	 	Very
    truly yours,
	 	 
	 	[ISSUER’S
    COUNSEL]
	 	 
	 	By:	 


 


	CC:	[LIST
    NAMES OF HOLDERS]


 




    	 	A-1	 



     


    

 


EXHIBIT
B


 


SELLING
STOCKHOLDERS


 


The
shares of common stock being offered by the selling stockholders are those previously issued to the selling stockholders and those
issuable to the selling stockholders upon exercise of the warrants. For additional information regarding the issuances of common
stock and the warrants, see “Private Placement of Common Shares and Warrants” above. We are registering the shares
of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. [Except for the
ownership of the shares of common stock and the warrants, the selling stockholders have not had any material relationship with
us within the past three years.]


 


The
table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock
by each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by each selling
shareholder, based on its ownership of the shares of common stock and the warrants, as of , 20[ ], assuming exercise of the warrants
held by the selling stockholders on that date, without regard to any limitation on exercise.


 


The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders.


 


In
accordance with the terms of registration rights agreements with the holders of the shares of common stock and the warrants, this
prospectus generally covers the resale of that number of shares of common stock equal to the number of shares of common stock
issued and the shares of common stock issuable upon exercise of the related warrants, determined as if the outstanding warrants
were exercised, as applicable, in full, in each case as of the trading day immediately preceding the date this registration statement
was initially filed with the SEC. The fourth column assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.


 


	Name
    of Selling

 Stockholder	Number
    of Shares Owned

    Prior to Offering	Maximum
    Number of Shares to be Sold Pursuant to this Prospectus	Number
    of Shares Owned

    After Offering
	 	 	 	 
	 	 	 	 
	 	 	 	 


 




    	 	B-1	 



     


    

 


PLAN
OF DISTRIBUTION


 


We
are registering the shares of common stock previously issued and the shares of common stock issuable upon exercise of the warrants
to permit the resale of these shares of common stock by the holders of the common stock and warrants from time to time after the
date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common
stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.


 


The
selling stockholders may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through
underwriters or broker- dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s
commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,


 


		●	on
                                         any national securities exchange or quotation service on which the securities may be
                                         listed or quoted at the time of sale;



 


		●	in
                                         the over-the-counter market;



 


		●	in
                                         transactions otherwise than on these exchanges or systems or in the over-the-counter
                                         market;



 


		●	through
                                         the writing of options, whether such options are listed on an options exchange or otherwise;



 


		●	ordinary
                                         brokerage transactions and transactions in which the broker-dealer solicits purchasers;



 


		●	block
                                         trades in which the broker-dealer will attempt to sell the shares as agent but may position
                                         and resell a portion of the block as principal to facilitate the transaction;



 


		●	purchases
                                         by a broker-dealer as principal and resale by the broker-dealer for its account;



 


		●	an
                                         exchange distribution in accordance with the rules of the applicable exchange;



 


		●	privately
                                         negotiated transactions;



 


		●	short
                                         sales;



 


		●	sales
                                         pursuant to Rule 144;



 


		●	broker-dealers
                                         may agree with the selling securityholders to sell a specified number of such shares
                                         at a stipulated price per share;



 






    	 	B-2	 



     


    

 


		●	a
                                         combination of any such methods of sale; and



 


		●	any
                                         other method permitted pursuant to applicable law.



 


If
the selling stockholders effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions
from the selling stockholders or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or
agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of Common
Stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage
in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling stockholders may also
sell shares of Common Stock short and deliver shares of Common Stock covered by this prospectus to close out short positions and
to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of Common
Stock to broker-dealers that in turn may sell such shares.


 


The
selling stockholders may pledge or grant a security interest in some or all of the convertible notes, warrants or shares of Common
Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.


 


The
selling stockholders and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be
“underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker- dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the
time a particular offering of the shares of Common Stock is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of shares of Common Stock being offered and the terms of the offering, including the name
or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.


 


Under
the securities laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed
brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered
or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.


 






    	 	B-3	 



     


    

 


There
can be no assurance that any selling stockholder will sell any or all of the shares of Common Stock registered pursuant to the
registration statement, of which this prospectus forms a part.


 


The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of any of the shares of Common Stock by the selling stockholders
and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the
shares of Common Stock to engage in market- making activities with respect to the shares of Common Stock. All of the foregoing
may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.


 


We
will pay all expenses of the registration of the shares of Common Stock pursuant to the registration rights agreement, estimated
to be $[   ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance
with state securities or “Blue Sky” laws; provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities
under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled
to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.


 


Once
sold under the registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable
in the hands of persons other than our affiliates.


 


 


B-4