Document:

Exhibit 4.2

 

[FORM OF WARRANT]

 

NEITHER THE SECURITIES REPRESENTED BY THIS
INSTRUMENT NOR THE SECURITIES FOR 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, 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: ____________ ___, 2015 (“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), ______________ (_____________)1 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 “Additional Warrants”) issued pursuant
to Section 1.1 of that certain [Fourth][Third]2 Amendment to Securities Purchase Agreement, dated as of December
30, 2015 (the “Subscription Date”), amending that certain Securities Purchase Agreement, dated as of [April
22][May 7]3, 2015, by and among the Company and the investors (the “Buyers”) referred to therein
(as amended as of the Issuance Date, 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
Calculated as set forth in Section 1.1 of the applicable amendment, based upon the relevant triggering event.

2
As applicable.

3
As applicable.

 

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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 third (3rd) Trading Day following the date on which the Company has received 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 (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 all corporate purposes to
have become the holder of record 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. If this Warrant is submitted 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 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.

 

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(b) Exercise Price.
For purposes of this Warrant, “Exercise Price” means $12.50, subject to adjustment as provided herein.

 

(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, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery
Date and during such Exercise Failure an amount equal to 1.5% of the product of (A) the sum of the number of shares of Common
Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (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, and (Y) the Holder, upon written notice to the Company, may void
its Exercise Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not
been exercised pursuant to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company’s
obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise.
In addition to the foregoing, on or prior to the Share Delivery Date, if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder 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, the Company shall fail to cause the Transfer Agent to credit the Holder’s balance account with
DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below, 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. While this Warrant is outstanding, the Company
shall maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program.

 

(d) Cashless Exercise.
Notwithstanding anything contained herein to the contrary, unless all of the Warrant Shares that are subject to an Exercise Notice
are registered for resale pursuant to an effective registration statement and are issuable without any restrictive legends, 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.

 

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.

 

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(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% (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 and Additional 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 (with such increase not effective until the sixty-first (61st) day after delivery of
such notice) 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 or Additional 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.

 

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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, without
proxy solicitation requiring a stockholders’ meeting and filing of a Proxy Statement on Schedule 14A, 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.”

 

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.

 

(c) Adjustment Upon
Subsequent Issuances of Warrants. If prior to the earlier of (i) thirty (30) days from the date of effectiveness of the Registration
Statement required to be filed by the Company pursuant to that certain Registration Rights Agreement dated as of December 30,
2015 and (ii) six months after the Closing Date pursuant to that certain Securities Purchase Agreement by and between the Company
and certain Buyers (as such terms are defined therein) dated December 30, 2015 (the “Adjustment Period”),
the Company issues or sells any warrants to purchase shares of Common Stock with an exercise price per whole share that is less
than the Exercise Price per Warrant Share hereunder (as in effect immediately prior to the issuance of such warrants, after adjustments
for any stock dividend, stock split, stock combination, reclassification or similar transaction after the date hereof) (such issuances,
a “Dilutive Issuance”), then the Exercise Price hereunder shall immediately be adjusted, with no additional
action required by the Holder, to equal the exercise price per whole share of Common Stock as set forth in the warrants issued
in the Dilutive Issuance (a “Dilution Adjustment”), provided, there shall be no concurrent adjustment of the
number of Warrant Shares issuable under this Warrant, and provided, further, there shall be no adjustment to the Exercise Price
of this Warrant as a result of an Exempt Issuance. A Dilution Adjustment shall be made successively whenever a Dilutive Issuance
is made within the Adjustment Period. If this Warrant is exercised in part during the Adjustment Period, the Dilution Adjustment
shall only be applicable as to the number of Warrant Shares remaining unexercised and unissued under such Warrant.

 

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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 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 Additional Warrants, in exchange for such Additional 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 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
the 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 Fundamental Transaction, at the request of the Holder delivered before the ninetieth (90th)
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 five (5) Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the 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 Additional
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 Additional Warrants, 100% of the number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of the Additional 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 share capital 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.

 

    8

     

    

  

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, subject to
satisfaction of the requirements of Section 14, 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 Additional
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.

 

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 pro rata 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 Holder.

 

    9

     

    

 

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. TO THE EXTENT ALLOWABLE UNDER APPLICABLE LAW, 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.

 

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.

 

    10

     

    

 

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. 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.

 

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).

 

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.

 

    11

     

    

 

(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.

 

(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 share capital 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 MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market, The
NASDAQ Capital Market or The New York Stock Exchange, Inc.

 

(k) “Exempt Issuance”
means the issuance of (i) additional warrants (or adjustment of shares of Common Stock underlying or the exercise price of outstanding
warrants) in conjunction with a stock dividend, stock split, stock combination, reclassification or similar transaction, (ii)
options or other derivative securities issued to employees, officers, directors, consultants or other service providers of the
Company pursuant to any equity incentive plan of the Company, (iii) additional warrants issuable pursuant to the conversion or exercise of derivative securities, including options, warrants,
notes or other similar rights, or warrants issuable pursuant to contractual commitments, that are issued and outstanding or
committed as of the Subscription Date (including pursuant to the Securities Purchase Agreement dated December 30, 2015), (iv) warrants issued in connection with a business acquisition of or by
the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, (v) warrants issued in
connection with bona fide real estate transactions, equipment lease financing, bank or similar credit or debt arrangements, license
agreements or other partnering agreements, so long as such issuances are not for the principal purpose of raising capital, and
(vi) warrants issued in a Qualified Public Offering consummated in conjunction with the listing of the Company’s Common
Stock on a Qualified Eligible Market.

 

(l) “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

     

    

 

(m) “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 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 date of this Warrant 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.

 

(n) “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.

 

(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.

 

(r) “Principal
Market” means the OTCQB, unless and until the Company lists its Common Stock on another Eligible Market, at which time
such Eligible Market shall become the Principal Market for purposes of this Warrant.

 

(s)
“Required Holders” means [the holders of the SPA Warrants and Additional Warrants representing at least a
majority of the sum of the shares of Common Stock underlying the SPA Warrants and Additional Warrants then outstanding, and
shall include Empery Asset Master, Ltd. (“Empery”) so long as Empery or any of its Affiliates holds any
SPA Warrants or Additional Warrants.]4 [the holders of the SPA Warrants and Additional Warrants representing at
least a majority of the sum of (1) the shares of Common Stock underlying the SPA Warrants and Additional Warrants then
outstanding and (2) the shares of Common Stock underlying the April 2015 Warrants and any additional warrants issued pursuant
to the April 2015 SPA, as amended (“April Additional Warrants”), then outstanding, and shall include
Empery Asset Master, Ltd. (“Empery”) so long as Empery or any of its Affiliates holds any April 2015
Warrants or April Additional Warrants.]5

 

 

4
For additional warrants issued to holders under the April
2015 SPA as amended.

5
For additional warrants issued to holders under the May 2015
SPA as amended.

    13

     

    

 

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

 

(u) “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.

 

(v) “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).

 

(w) “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]

 

     

     

    

 

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 _____________ ___, 2015 from the Company and acknowledged and agreed to
by VStock Transfer, LLC.

 

	 	ENER-CORE, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:Exhibit 4.3

 

THIRD AMENDMENT TO

SENIOR SECURED NOTES

 

THIS THIRD AMENDMENT TO
SENIOR SECURED NOTES (this “Amendment”) is made and entered into as of December 30, 2015 by and among
Ener-Core, Inc., a Delaware corporation (the “Company”), and the undersigned, and amends those certain
Senior Secured Notes dated as of April 23, 2015 (as amended to date, the “Notes”) as issued by the Company
pursuant to that certain Securities Purchase Agreement, dated April 22, 2015, by and among the Company, the “Buyers”
identified therein, and the Collateral Agent identified therein (as amended to date, the “Agreement”).
Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Notes.

 

RECITALS

 

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

 

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

 

WHEREAS, the parties
hereto wish to amend the Notes as set forth below in order to facilitate the Company’s efforts to consummate a bridge financing
and subsequent Qualified Public Offering.

 

AGREEMENT

 

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

 

ARTICLE
I

AMENDMENTS TO THE NOTES

 

Section 1.1 Qualified
Public Offering. Section 29(y) of the Notes is hereby amended and restated as follows:

 

“(t)“Qualified Public
Offering” means a sale of the Company's Common Stock and/or QPO Derivative Securities in a firm commitment underwritten
public offering registered under the Securities Act (other than a registration relating solely to a transaction under Rule 145
under the Securities Act (or any successor thereto) or to an employee benefit plan of the Company).”

 

Section 1.2 Cashless Exercise.
The following sentence is hereby added to the end of Section 3(a):

 

“If the form of QPO Derivative
Securities issued in the QPO do not include a cashless or net exercise provision, the Company shall include such a cashless or
net exercise provision in the form of such securities issuable upon conversion pursuant to this Section 3.”

 

Section 1.3 Removal of QPO Conversion
Limitation. Section 3(d)(ii) of the Notes is hereby deleted in full.

 

Section 1.4 Third
Tranche Notes. The defined term “Other Notes” shall include senior secured notes issued pursuant to the
Third Tranche Subscription as defined in that certain Fourth Amendment to Securities Purchase Agreement dated of even date herewith.

 

     

     

    

 

ARTICLE
II

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

[Signature Pages Follow]

 

    1

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Third Amendment to Senior Secured Notes as of the date first written above.

 

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

 

 

[Signature Page to Third Amendment to Senior
Secured Notes—April 2015 Notes]

 

    2

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Third Amendment to Senior Secured Notes as of the date first written above.

 

	 	
        HOLDER:

         

        By:

         

	 	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title: 

  

 

[Signature Page to Third Amendment to Senior
Secured Notes—April 2015 Notes]

 

 

 4

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