Document:

Exhibit 4.1

 

WARRANT

 

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

 

ENER-CORE,
INC.

 

WARRANT

 

	Warrant
    No.	Original
    Issue Date: November 2, 2015

 

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

 

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

 

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

 

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

 

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

 

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

 

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“Exercise
Price” means $15.00, subject to adjustment in accordance with Section 9.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	 	5.	Delivery of Warrant Shares. 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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10.         Payment of Exercise Price. 

 

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

 

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

 

	 	 X=
	 Y (A-B)	 	 	 	 
	 	A	 	 	 	 

	 	 	 	 	 	 	 
	Where:	 	X	 	=	 	the
    number of the Warrant Shares to be issued to the Holder.
	 	 	 	 
	 	 	Y	 	=	 	the
    number of the Warrant Shares purchasable under this Warrant.
	 	 	 	 
	 	 	A	 	=	 	the
    Fair Market Value of one share of Common Stock for the date of determination.
	 	 	 	 
	 	 	B	 	=	 	the
    per share Exercise Price (as adjusted to the date of such calculation)

 

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

 

12.          Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise
Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be: (i) if to the Company, to 9400 Toledo Way, Irvine, CA 92618, Attn: Chief
Executive Officer, or to Facsimile No.: (949) 616-3399 (or such other address as the Company shall indicate in writing in
accordance with this Section), or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register
or such other address or facsimile number as the Holder may provide to the Company in accordance with this
Section.

 

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

 

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	 	14.	Miscellaneous.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	 	ENER-CORE, INC.
	 	 	 
	 	By:	/s/ Domonic Carney
	 	Name
    :	Domonic
    Carney
	 	Title:	Chief
    Financial Officer

  

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EXERCISE
NOTICE

ENER-CORE,
INC.

WARRANT
DATED November 2, 2015

 

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

 

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

 

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

 

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

 

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

 

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

  

	 Dated:_______________	Name
    of Holder:	 

 

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

  

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Warrant
Shares Exercise Log

 

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

Shares Exercised	 	Number
    of Warrant Shares Remaining to be Exercised
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

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ENER-CORE,
INC.

WARRANT
DATED ________ __, 201_

WARRANT
NO. ______________

 

FORM
OF ASSIGNMENT

 

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

 

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

 

	 Dated:_______________	 
	 	 
	 	 
	 	(Signature
    must conform in all respects to name of holder as specified on the face of the Warrant)
	 	 
	 	 
	 	Address
    of Transferee
	 	 
	 	 
	 	 

 

	In
    the presence of:	 
	 	 
	 	 

 

 

 A-12Exhibit 4.2

 

AMENDMENT TO

SENIOR SECURED NOTES

 

THIS AMENDMENT TO
SENIOR SECURED NOTES (this “Amendment”) is made and entered into as of  November 2, 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 (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 the 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 affects 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 purchased under the Agreement and the
Company;

 

WHEREAS, the Company
wishes to enter into a Backstop Security Support Agreement, in the form attached hereto as Exhibit A, obligating the Company
to pay certain fees and pledge certain collateral for assistance in obtaining a letter of credit to satisfy certain existing contractual
commitments central to its operations; and

 

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

 

AGREEMENT

 

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

 

 ARTICLE
I

AMENDMENT TO THE NOTES

 

Section 1.1 Additional
Permitted Indebtedness. Section 29(t) of the Notes is hereby amended and restated as follows:

 

“(t)“Permitted Indebtedness"
means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) trade payables incurred in the ordinary course of business
consistent with past practice, (iii) Indebtedness incurred by the Company that is made expressly subordinate in right of payment
to the Indebtedness evidenced by this Note, as reflected in a written agreement acceptable to the Required Holders and approved
by the Required Holders in writing, and which Indebtedness does not provide at any time for (a) the payment, prepayment, repayment,
repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after
the Maturity Date or later and (b) total interest and fees at a rate in excess of twelve percent (12.0%) per annum, (iv) Indebtedness
secured by Permitted Liens described in clauses (iv) of the definition of Permitted Liens, (v) deemed Indebtedness arising from
one or more operating leases, including, without limitation, the leases for one or more test turbines from Dresser-Rand, but only
if such lease, if secured, is secured solely by such test turbine, (vi) Indebtedness listed on Schedule 29(t) attached hereto,
and Indebtedness incurred pursuant to the Backstop Agreement.”

  

     

     

    

 

Section 1.2 Additional
Permitted Lien. Section 29(u) of the Notes is hereby amended and restated as follows:

 

“(u)“Permitted Liens”
means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation
of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as materialmen's
liens, mechanics' liens and other similar liens, arising in the ordinary course of business with respect to a liability that is
not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment
acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or Indebtedness incurred
solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of
its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds
of such equipment, (v) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens
of the type described in clause (iv) above, provided that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase,
(vi) leases or subleases and licenses and sublicenses granted to others in the ordinary course of the Company's business, not interfering
in any material respect with the business of the Company and its Subsidiaries taken as a whole, (vii) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods,
(viii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section
4(a)(viii) and (ix) Liens created pursuant to the Backstop Agreement.”

 

Section 1.3 Additional
Definition. Section 29(nn) of the Notes is hereby added as follows:

 

“(nn)“Backstop
Agreement” means that certain Backstop Security Support Agreement entered into on November 2, 2015 by an individual
investor and the Company.”

 

ARTICLE
II

MISCELLANEOUS

 

Section 2.1 Effect of
this Amendment. This Amendment shall form a part of each Note for all purposes, and each holder thereof shall be bound hereby.
This Amendment shall only be deemed to be in full force and effect from and after both the execution of this Amendment by the parties
hereto and the execution of agreements substantially identical to this Amendment by the Company and holders of Notes 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]

 

    	 	2	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed this
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 Amendment to Senior Secured
Notes - April 2015 Notes]

 

    	 	3	 

     

    

 

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

 

	 	
        HOLDER:

        

	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

[Signature Page to Amendment to Senior Secured Notes - April 2015 Notes]

 

    	 	4	 

     

    

 

EXHIBIT A

 

BACKSTOP SECURITY SUPPORT AGREEMENT

 

 

A-1

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