UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 26, 2013 Ener-Core, Inc. (Exact name of registrant as specified in its charter) Nevada 333-173040 46-0525350 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 9400 Toledo Way, Irvine, California 92618 (Address of principal executive offices) (Zip Code) (949) 616-3300 (Registrant s telephone number, including area code) (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o o o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant s Business and Operations Item 1.01 Entry into a Material Definitive Agreement. On September 26, 2013, we entered into an Assignment and Assumption of Lease (the Assignment ) with FlexEnergy, Inc. ( Flex ) for 9400 Toledo Way, Irvine, California 92618 (the Property ), with an effective date of August 1, 2013 (the Effective Date ). The Property, which serves as our corporate headquarters, consists of a mixed use commercial office, production, and warehouse facility of 32,649 square feet. Pursuant to the Assignment, we are now formally obligated under the Standard Industrial/Commercial Single-Tenant Lease, dated May 26, 2011 (the Lease ), originally between Flex and Meehan Holdings, LLC ( Meehan ). On September 4, 2013, Meehan executed a Lessor s Consent to Assignment and Sublease, which was also executed by Flex and the company. We also entered into a letter agreement with Meehan, by which we agreed to prepayment of rent under the Lease of $26,043.80 by September 30, 2013, which prepayment shall be applied to the December 2014 rent payment, and $26,825.12 by July 31, 2014, which prepayment shall be applied to the December 2015 rent payment. The Lease terminates on December 31, 2016. Our unpaid, outstanding obligation for the remainder of the Lease is $1,025,428.89. The monthly rent under the Lease is currently $25,285.25, which increases on August 1, 2014 to $26,043.80, August 1, 2015 to $26,825.12, and August 1, 2016 to $27,629.87. Previously, as provided in the Contribution Agreement dated November 12, 2012 (the Contribution Agreement ), by and among Ener- Core Power, Inc., Flex, and its subsidiary, FlexEnergy Energy Systems, Inc., we had occupied a portion of the Property, and assumed onethird of all liabilities, under the Lease (with Flex remaining responsible for the remaining two-thirds). Notwithstanding this arrangement, Meehan did not view us as formally obligated under the Lease. Section 9 - Financial Statements and Exhibits Item 9.01 (d) Financial Statements and Exhibits. Exhibits. 10.17 Assignment and Assumption of Lease between Ener-Core, Inc. and FlexEnergy, Inc., effective August 1, 2013. 10.17A Lessor s Consent to Assignment and Sublease, dated September 4, 2013. 10.17B Letter Agreement between Ener-Core, Inc. and Meehan Holdings, LLC, dated September 4, 2013 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENER-CORE, INC. Dated: October 1, 2013 By: /s/ Alain Castro Alain Castro, Chief Executive Officer 2
ASSIGNMENT AND ASSUMPTION OF LEASE THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this Assignment ) is made effective as of August 1, 2013 (the Effective Date ), by and between FLEXENERGY, INC., a Delaware corporation, ( Assignor ), and ENER-CORE, INC., a Nevada corporation, ( Assignee ). WITNESSETH: WHEREAS, Assignor and Meehan Holdings, LLC, a California limited liability company ( Lessor ), entered into that certain lease dated May 26, 2011 for approximately 32,649 rentable square feet in a freestanding building located at 9400 Toledo Way, Irvine, California 92618 ( Lease ); and WHEREAS, Assignor desires to assign the Lease to Assignee and Assignee desires to accept the assignment of the Lease from Assignor and to assume all of Lessee s duties, obligations, and liabilities thereunder from and after the Effective Date; and NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Assignment. As of the Effective Date, Assignor hereby assigns, gives, grants, bargains, sells, conveys, transfers and sets over unto Assignee, all of Assignor s right, title, interest, duties, obligations, and liabilities in, to, and under the Lease, including, without limitation, the Security Deposit in the amount of Twenty-Seven Thousand Six Hundred Twenty-Nine and 87/100 Dollars ($27,629.87) and the Lessee Owned Alterations and/or Utility Installations. 2. Assumption. Assignee hereby accepts the foregoing assignment and, in consideration thereof, Assignee hereby covenants and agrees that Assignee will assume, observe, perform, fulfill and be bound by all terms, covenants, conditions, duties, obligations, and liabilities of Assignor, as Lessee under the Lease, which arise on and after the Effective Date. Assignee agrees that the provisions of Paragraph 12 of the Lease shall continue to be binding upon Assignee with respect to all future assignments or subleases. 3. Assignor s Representation. The Lease attached hereto as Exhibit A and made a part hereof is a true and complete copy and there have been no amendments or modifications thereto except as otherwise set forth in Exhibit A. 4. Service Contracts. Within five (5) days after the execution of this Assignment, Assignor agrees to provide Assignee with a copy of each service contract relating to the Premises.
5. Indemnification. (a) Assignee hereby indemnifies and agrees to defend and hold harmless Assignor, its members, managers, stockholders, directors, officers, successors and assigns from and against any and all actual or alleged claims, demands, liability, loss, damage, cost and expense, including without limitation reasonable attorneys fees, which Assignor may or shall incur under the Lease by reason of any failure or alleged failure of Assignee to perform or fulfill the duties, obligations, and liabilities of the Lessee under the Lease from and after the Effective Date. (b) Assignor hereby indemnifies and agrees to defend and hold harmless Assignee its members, managers, stockholders, directors, officers, successors and assigns from and against any and all actual or alleged claims, demands, liability, loss, damage, cost and expense, including without limitation reasonable attorneys fees, which Assignee may or shall incur by reason of any failure or alleged failure of Assignor to have complied with, performed, or fulfilled the duties, obligations, and liabilities of the Lessee under the Lease prior to the Effective Date. 6. Contribution Agreement. As of the Effective Date, Assignor, its parents and subsidiaries (including, without limitation FlexEnergy Systems, Inc.) hereby release and hold harmless Assignee, its parents and subsidiaries (including, without limitation, Flex Power Generation, Inc.) from all obligations relating to the Lease arising from and after the Effective Date as set forth in that certain Contribution Agreement effective as of November 12, 2012, which obligations include, but are not limited to, the obligation of Assignee to reimburse Assignor for one-third (1/3) of the liabilities associated with the Lease. 7. Successors and Assigns. The terms and conditions of this Assignment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns, subject to the restrictions on assignment in the Lease. 8. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original, and all of which shall constitute one document. Facsimile and electronic signatures will be effective as original signatures with regard to this Assignment. 9. Governing Law. This Assignment shall be construed, and the rights and obligations of Assignor and Assignee hereunder shall be determined, in accordance with the substantive laws of the State of California without regard to any choice of law provisions therein. Venue is proper in the county in which the Premises is located. 1 0. Effectiveness of Assignment. Both Assignor and Assignee acknowledge that this Assignment is not effective unless and until the Lessor under this Lease has consented hereto in writing (the Approval Date ). Within two (2) business days after the Approval Date, Assignee shall pay to Assignor all of the Rent and other charges paid by Assignor to Lessor under the Lease for the period from and after the Effective Date. Assignor has provided a list of the other charges to Assignee prior to the date hereof. 11. Construction. Any capitalized terms used in this Assignment and not defined shall have the same meaning as set forth in the Lease unless otherwise expressly set forth herein to the contrary. 2
1 2. Attorneys Fees. If either party hereto brings an action or proceeding against the other party to enforce or interpret any of the covenants, conditions, agreements, or other provisions of this Assignment, the prevailing party shall be entitled to recover as an element of its cost of suit, and not as damages, actual attorneys fees to be fixed by the court. The prevailing party shall be the party who is entitled to recover his costs of suit, whether or not the suit proceeds to final judgment. The party not entitled to recover his costs shall not recover attorneys fees. 3
above. IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly executed on the day and year first set forth ASSIGNOR: ASSIGNEE: FLEXENERGY, INC., ENER-CORE, INC., a Delaware corporation a Nevada corporation By: /s/ Mark G. Schnepel By: /s/ Boris A. Maslov Name: Mark G. Schnepel Name: Boris Maslov Title: President Title: President 4
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LESSOR S CONSENT TO ASSIGNMENT AND SUBLEASE MEEHAN HOLDINGS, LLC, a California limited liability company ( Lessor ), hereby consents to: (a) the assignment by FLEXENERGY, INC., a Delaware corporation ( Lessee ), the tenant under a lease dated as of May 26, 2011 for approximately 32,649 rentable square feet in a freestanding building located at 9400 Toledo Way, Irvine, California 92618 ( Lease ), of the Lease in its entirety to ENER-CORE, INC., a Nevada corporation ( Assignee ), pursuant to that certain Assignment and Assumption of Lease ( Assignment ), a copy of which is attached hereto as Exhibit A and incorporated herein and (b) the sublease of a portion of the Premises by Assignee to Lessee, pursuant to that certain Sublease Agreement ( Sublease ), a copy of which is attached hereto as Exhibit B and incorporated herein. Lessor s consent to the Assignment and Sublease ( Consent ) is subject to all of the terms and conditions contained herein. All capitalized terms used herein and not defined shall have the meaning ascribed to such terms in the Lease. This Consent is effective as of the date set forth next to Lessor s signature below ( Effective Date ). 1. Lessee and Assignee jointly and severally covenant to deliver to Lessor contemporaneously with the delivery of an executed original copy of this Consent, a fully executed copy of each of the Assignment and Sublease. Lessor s Consent is conditioned upon Lessor s receipt of a fully executed copy of each of the Assignment and Sublease. 2. In the event of any inconsistency between the terms and conditions of this Consent and the terms and conditions of the Lease, the terms and conditions of this Consent shall prevail as between Lessor, on the one hand, and Assignee and/or Lessee, on the other hand. 3. Nothing herein contained shall be construed to modify, waive, impair or affect any of the provisions, covenants, agreements, terms or conditions contained in the Lease (except as may be herein expressly provided). All provisions, covenants, agreements, terms and conditions of the Lease are hereby declared by Lessor, Lessee and Assignee to be in full force and effect and Lessee and Lessor further declare and acknowledge that neither party is in default under any of its obligations under the Lease. 4. Notwithstanding Paragraph 12.2 of the Lease, Lessee is hereby released of all obligations that accrue under the Lease on or after the Effective Date. Lessee shall remain responsible for all obligations that accrued under the Lease prior to the Effective Date. 5. Notwithstanding Paragraph 39.2 of the Lease, Lessor hereby consents and agrees to the assignment of the Option to Extend contained in Paragraph 56 of the Lease by Lessee to Assignee. Assignee shall be entitled to exercise the Option to Extend in accordance with the terms of the Lease. 6. Lessee and Assignee jointly and severally covenant to deliver to Lessor contemporaneously with the delivery of an executed original copy of this Consent, a check or checks from Lessee and/or Assignee, subject to collection, made payable to the order of Lessor, in an amount equal to $500.00, representing Lessor s administrative fees in connection with the granting of this Consent, plus such additional amount as may be requested by Lessor to reimburse Lessor for the reasonable attorneys fees incurred in connection with the granting of this Consent.
7. This Consent shall be construed and enforced in accordance with the laws of the State of California. Venue is proper in the county in which the Premises is located. 8. If any one or more of the provisions contained in this Consent shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 9. Lessor s Consent hereunder is not, and shall not be construed as consent by Lessor to any further assignment or reassignment of the Lease by Lessee or Assignee or to any further subletting of all or any portion of the Premises. The Lease shall not be further assigned or reassigned nor shall all or any portion of the Premises be further sublet without complying with the terms of Paragraph 12 of the Lease in each instance. 10. Any bills, statements, notices, demands, requests, consents or other communications given or required to be given to Assignee under the Lease shall be effective if rendered or given at the Premises or at the address for notice provided for in the Assignment. 11. This Consent shall not be effective until executed by all the parties hereto and may be executed in several counterparts, each of which will constitute an original instrument and all of which will together constitute one and the same instrument. 12. The terms and provisions of this Consent bind and inure to the benefit of the parties hereto and their respective permitted successors and assigns. 13. This Consent constitutes the entire agreement of the parties hereto with respect to the matters stated herein and may not be altered, amended, modified or changed orally, except by an agreement signed by the party against whom enforcement of any such alteration, amendment, modification or change is being sought. 14. Lessor, Lessee and Assignee each represent and warrant to the other that it is authorized to enter into this Consent and that the party executing this Consent has the power and authority to bind Lessor, Lessee or Assignee, as the case may be. [SIGNATURE PAGE TO FOLLOW] 2
LESSOR: IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals as of the Effective Date. MEEHAN HOLDINGS, LLC, Effective Date: September 4, 2013 a California limited liability company By: /s/ John Meehan Name: John Meehan Title: CEO LESSEE: ASSIGNEE: FLEXENERGY, INC., ENER-CORE, INC., a Delaware corporation a Nevada corporation By: /s/ Mark G. Schnepel By: /s/ Alain Castro Name: Mark G. Schnepel Name: Alain Castro Title: President Title: CEO 3
EXHIBIT A ASSIGNMENT AND ASSUMPTION OF LEASE A-1
EXHIBIT B SUBLEASE AGREEMENT B-1
Alain Castro Chief Executive Officer Ener-Core, Inc. 9400 Toledo Way Irvine, CA 92618 949-616-3300 949-616-3399 Fax September 4, 2013 John Meehan Meehan Holdings, LLC 9400 Toledo Way Irvine, CA 92618 Re: Landlord Consent to Assignment & Sublease Dear John: Meehan Holdings, LLC, a California limited liability company ( Meehan ) has executed a Consent to Assignment and Sublease, dated the same day hereof ( Consent ), consenting to the assignment of a lease dated as of May 26, 2011 for approximately 32,649 rentable square feet in a freestanding building located at 9400 Toledo Way, Irvine, California 92618 ( Lease ), in its entirety to Ener-Core, Inc., a Nevada corporation ( Ener-Core ), pursuant to that certain Assignment and Assumption of Lease ( Assignment ), between Ener-Core and FlexEnergy, Inc., and related documents. Pursuant to the Assignment and Consent of the Lease, Ener-Core agrees as follows: (i) Prepayment of Rent a. On or before September 30, 2013, Ener-Core shall make a prepayment of Rent (as defined in Section 4.1 of the Lease) of $26,043.80, which prepayment shall be applied to the December 2014 Rent payment. Upon such prepayment, no additional payment of Rent shall be due for December 2014. b. On or before July 31, 2014, Ener-Core shall make an additional prepayment of Rent of $26,825.12, which prepayment shall be applied to the December 2015 Rent payment. Upon such prepayment, no additional payment of Rent shall be due for December 2015. (ii) Notice of Default a. Ener-Core shall make reasonable efforts to notify landlord in a timely manner of any event which may lead to Default (as defined by Section 13.1 of the Lease). Ener-Core, Inc. By: Name: Title: /s/ Alain Castro Alain Castro CEO ACKNOWLEDGED AND AGREED TO BY: Meehan Holdings, LLC By: /s/ John Meehan John Meehan ENER-CORE.COM