Exhibit 4.3

 

AMENDMENT AGREEMENT AND WAIVER

 

This AMENDMENT AGREEMENT AND WAIVER (the “Amendment”), dated as of June 5, 2018, is made by and between Ener-Core, Inc., a Delaware corporation, with headquarters located at 8965 Research Drive, Suite 100, Irvine, California 92618 (the “Company”), and the investor listed on the signature page attached hereto (the “Holder”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the SPAs (as defined below), as applicable.

 

RECITALS

 

A.   Reference is made to that certain Securities Purchase Agreement dated as of April 22, 2015, by and among the Company, the Holder (if applicable) and the other investors (the “April 2015 Other Holders”) listed on the signature pages attached thereto (the “April 2015 SPA”) and, if applicable, the Senior Secured Notes issued to the Holder pursuant thereto, as amended and restated on December 2, 2016 pursuant to certain amendment agreements (as amended from time to time prior to the date hereof, the “April 2015 Notes”);

 

B.    Reference is made to that certain Securities Purchase Agreement dated as of May 7, 2015, by and among the Company, the Holder (if applicable) and the other investors (the “May 2015 Other Holders” and together with the April 2015 Other Holders, the “Other Holders” and together with the Holder, the “Holders”) listed on the signature pages attached thereto (the “May 2015 SPA” and together with the April 2015 SPA, individually, an “SPA” and collectively, the “SPAs”), and, if applicable, the Senior Secured Notes issued to the Holder pursuant thereto, as amended and restated on December 2, 2016 pursuant to certain amendment agreements (as amended from time to time prior to the date hereof, the “May 2015 Notes” and together with the April 2015 Notes, the “2015 Notes”);

 

C.   The Company intends to issue additional convertible senior secured promissory notes (the “June 2018 Notes”) and related warrants to purchase up to an aggregate of 1,000,000 shares of the Company’s Common Stock (the “June 2018 Warrants”) in order to support its working capital needs; and

 

D.   In compliance with Section 15 of the 2015 Notes and the SPAs, this Amendment shall only be effective upon the execution and delivery of this Amendment and agreements in form and substance identical to this Amendment (other than with respect to the identity of the Holder and any provision regarding the reimbursement of legal fees) (the “Other Agreements” and together with this Amendment, the “Amendments”) by Other Holders of the 2015 Notes (each an “Other Holder”) representing on the Closing Date at least the Required Holders (as defined in each of the 2015 Notes) (such time, the “Effective Time”).

 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing mutual premises and the covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt, and legal adequacy of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

SECURITIES PURCHASE AGREEMENTS

 

1.   Removal of Listing Deadline. Effective upon the issuance by the Company of June 2018 Notes for aggregate gross proceeds of at least $2.0 million pursuant to that certain Securities Purchase Agreement, dated as of June 5, 2018, by and among the Company, the investors set forth on the Schedule of Buyers thereto and the investors, if any, party to a joinder agreement with respect thereto, as the same may be amended or otherwise modified from time to time pursuant to the terms thereof (the “June 2018 SPA”), the first sentence of Section 4(f) of each of the SPAs is hereby amended and restated as follows:

 

“[Reserved].”

 

2.   Waiver of Effect of Issuance of June 2018 Notes on SPAs. Each Required Holder hereby consents to the waiver of, and hereby irrevocably waives, the effect of the issuance of the June 2018 Notes and the June 2018 Warrants pursuant to that certain June 2018 SPA on any representation, warranty or covenant in the SPAs, including but not limited to Sections 4(k) thereof.

 

ARTICLE II

NOTES

 

1.   Waiver of Effect of Issuance of June 2018 Notes on 2015 Notes. Each Required Holder hereby consents to the waiver of, and hereby irrevocably waives, the effect of the issuance of the June 2018 Notes pursuant to the June 2018 SPA on any representation, warranty or covenant in the 2015 Notes, including but not limited to Sections 4(a) and 14(d) thereof.

 

2.   Maturity Date. Effective upon the issuance by the Company of June 2018 Notes for aggregate gross proceeds of at least $2.0 million pursuant to the June 2018 SPA, the third sentence of Section 1 of the 2015 Notes is hereby amended and restated as follows:

 

“The “Maturity Date” shall be December 31, 2020, as may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date.”

 

3.   Conversion Price. Section 3(b)(ii) of the 2015 Notes is hereby amended and restated as follows:

 

“(ii) “Conversion Price” means, as of any Conversion Date or other applicable date of determination, $0.25 per share, subject to adjustment as provided herein.”

 

4.   Optional Redemption at the Holder’s Election. Effective upon the issuance by the Company of June 2018 Notes for aggregate gross proceeds of at least $2.0 million pursuant to the June 2018 SPA:

 

  a. Section 7. Section 7 of the 2015 Notes is hereby amended and restated as follows:

 

“[Reserved].”

 

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  b. Section 11(a). The third sentence of Section 11(a) of the 2015 Notes is hereby deleted.

 

  c. Section 30(ee). The phrase “Holder Optional Redemption Dates” is hereby deleted from Section 30(ee) of the 2015 Notes.

 

  d. Section 30(ff). The phrase “Holder Optional Redemption Notices” is hereby deleted from Section 30(ff) of the 2015 Notes.

 

  e. Section 30(gg). The phrase “Holder Optional Redemption Prices” is hereby deleted from Section 30(gg) of the 2015 Notes.

 

5.   Amendment of Definition of “Permitted Indebtedness”. Section 30(aa) of the 2015 Notes is hereby amended and restated as follows:

 

“(aa) “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 incurred pursuant to the Backstop Agreement, (vii) Indebtedness by the notes issued pursuant to the Securities Purchase Agreement dated as of September 1, 2016 by and among the Company and the investors thereto, as subsequently amended, restated or modified thereafter), (viii) the Additional Notes issued prior to or on the Initial Closing Date, provided that the Indebtedness evidenced by the Additional Notes is not increased, refinanced, amended, changed or modified on or after the date of issuance thereof, (ix) the guarantees pursuant to the Guaranty Agreements, (x) those certain senior secured convertible notes issued by the Company pursuant to that certain Securities Purchase Agreement, dated as of September 19, 2017 by and among the Company and the investors listed on the signature pages attached thereto, as subsequently amended, restated or modified thereafter and (xi) those certain senior secured convertible notes issued by the Company pursuant to that certain Securities Purchase Agreement, dated as of June 5, 2018 by and among the Company and the investors listed on the signature pages attached thereto, as subsequently amended, restated or modified thereafter.”

 

6.   Eligible Market Deadline. Effective upon the issuance by the Company of June 2018 Notes for aggregate gross proceeds of at least $2.0 million pursuant to the June 2018 SPA, Section 30(m) of the 2015 Notes is hereby amended and restated as follows.

 

Eligible Market” means The New York Stock Exchange, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the NYSE American or the Principal Market.”

 

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article III
MISCELLANEOUS

 

1.   Effect of this Amendment. This Amendment shall form a part of the 2015 Notes and SPAs for all purposes, and each holder of 2015 Notes and each party to the SPAs 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 Amendments substantially identical to this Amendment by the Company and “Holders” holding at least a majority of the aggregate principal amount of the 2015 Notes outstanding, including the Lead Investor, as well as the Collateral Agent, that, together with undersigned, constitute the Required Holders under each of the 2015 Notes and SPAs. From and after such effectiveness, any reference to the 2015 Notes and the SPAs shall be deemed to be a reference to the 2015 Notes and SPAs, as amended hereby. Except as specifically amended as set forth herein, each term and condition of the 2015 Notes and SPAs shall continue in full force and effect.

 

2.   Entire Agreement. This Amendment, together with the SPAs and 2015 Notes, as amended and/or amended and restated to date, contains the entire agreement of the parties with respect to the matters contemplated hereby and thereby, and supersedes any prior or contemporaneous written or oral agreements between them concerning the subject matter of this Amendment.

 

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

 

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.

 

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this Amendment to be duly executed as of the date first written above.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this Amendment to be duly executed as of the date first written above.

 

  COMPANY:
   
  ENER-CORE, INC.
     
  By:
    Name: Domonic J. Carney
    Title:   Chief Financial Officer

  

Signature Page to Amendment Agreement and Waiver—June 2018

 

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IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this Amendment to be duly executed as of the date first written above.

 

  HOLDERS:
   
  By:
    Name:
    Title:

 

 

Signature Page to Amendment Agreement and Waiver—June 2018

 

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