Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of June 2, 2015 (the “Closing
Date”), is by and among American Power Group Corporation, a Delaware corporation
(the “Company”), and the Purchasers listed on the signature pages of this
Agreement (each a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, the Company and the Purchasers are parties to a Convertible Note
Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”),
pursuant to which the Purchasers are purchasing certain Promissory Notes (as
defined below) of the Company, or such Purchasers are otherwise entitled to
become parties to this Agreement;
WHEREAS, subject to the satisfaction of certain conditions precedent, the
Promissory Notes are convertible into shares of the Company’s Series C Preferred
Stock (as defined below); and
WHEREAS, in connection with the consummation of the transactions contemplated by
the Purchase Agreement, and pursuant to the terms of the Purchase Agreement, the
parties hereto desire to enter into this Agreement in order to grant certain
registration rights to the Purchasers as set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent
covenants hereinafter set forth, the parties hereto agree as follows:
1.
Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:

“Affiliate” of a Person means any other Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
“Agreement” has the meaning set forth in the preamble.
“Board” means the board of directors (or any successor governing body) of the
Company.
“Commission” means the Securities and Exchange Commission or any other federal
agency administering the Securities Act and the Exchange Act at the time.

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“Common Stock” means the common stock, par value $0.01, of the Company and any
other shares of stock issued or issuable with respect thereto (whether by way of
a stock dividend or stock split or in exchange for or upon conversion of such
shares or otherwise in connection with a combination of shares, distribution,
recapitalization, merger, consolidation, other corporate reorganization or other
similar event with respect to the Common Stock).
“Company” has the meaning set forth in the preamble and includes the Company's
successors by merger, acquisition, reorganization or otherwise.
“Controlling Person” has the meaning set forth in Section 5(g).
“Demand Registration” has the meaning set forth in Section 2.
“DTCDRS” has the meaning set forth in Section 5(r).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
“Governmental Authority” means any federal, state, local or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of law), or any arbitrator, court or tribunal of competent
jurisdiction.
“Inspectors” has the meaning set forth in Section 5(h).
“Long-Form Registration” has the meaning set forth in Section 2(a).
“Person” means an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity.
“Piggyback Registration” has the meaning set forth in Section 3(a).
“Piggyback Registration Statement” has the meaning set forth in Section 3(a).
“Piggyback Shelf Registration Statement” has the meaning set forth in Section
3(a).
“Piggyback Shelf Takedown” has the meaning set forth in Section 3(a).
“Preferred Shares” means the shares of Series C Preferred Stock issued or
issuable to the Purchasers upon the conversion of the Promissory Notes.
“Promissory Notes” means the Company’s Contingent Convertible Promissory Notes
issued pursuant to the Purchase Agreement.

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“Prospectus” means the prospectus or prospectuses included in any Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
Registration Statement in reliance on Rule 430A under the Securities Act or any
successor rule thereto), as amended or supplemented by any prospectus
supplement, including any Shelf Supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus or prospectuses.
“Purchase Agreement” has the meaning set forth in the recitals.
“Purchasers” has the meaning set forth in the preamble.
“Records” has the meaning set forth in Section 5(h).
“Registrable Securities” means (a) any shares of Common Stock beneficially owned
by the Purchasers; (b) any shares of Common Stock issuable upon conversion of
the Preferred Shares; (c) any shares of Common Stock issuable upon conversion of
Company’s 10% Convertible Preferred Stock beneficially owned by the Purchasers;
(d) any shares of Common Stock issuable upon conversion of the Company’s Series
B 10% Convertible Preferred Stock beneficially owned by the Purchasers; (d) all
shares of Common Stock then issuable upon exercise of the Warrants; and (e) any
shares of Common Stock issued or issuable with respect to any shares described
in subsection (a) above by way of a stock dividend or stock split or in exchange
for or upon conversion of such shares or otherwise in connection with a
combination of shares, distribution, recapitalization, merger, consolidation,
other reorganization or other similar event with respect to the Common Stock (it
being understood that, for purposes of this Agreement, a Person shall be deemed
to be a holder of Registrable Securities whenever such Person has the right to
then acquire or obtain from the Company any Registrable Securities, whether or
not such acquisition has actually been effected).
“Registration Date” means the date on which the Company becomes subject to
Section 13(a) or Section 15(d) of the Exchange Act.
“Registration Statement” means any registration statement of the Company,
including the Prospectus, amendments and supplements (including Shelf
Supplements) to such registration statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
registration statement.
“Rule 144” means Rule 144 under the Securities Act or any successor rule
thereto.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

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“Selling Expenses” means all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for any holder of Registrable Securities, except
for the fees and disbursements of counsel for the holders of Registrable
Securities required to be paid by the Company pursuant to Section 6.
“Series B 10% Convertible Preferred Stock” means the Series B 10% Convertible
Preferred Stock, par value $1.00, of the Company.
“Series C Preferred Stock” means the Series C Convertible Preferred Stock, par
value $1.00, of the Company.
“Shares” means the shares of Common Stock issued or issuable to the Purchasers
pursuant to the Purchase Agreement.
“Shelf Registration” has the meaning set forth in Section 2(b).
“Shelf Registration Statement” has the meaning set forth in Section 2(b).
“Shelf Supplement” has the meaning set forth in Section 2(c).
“Shelf Takedown” has the meaning set forth in Section 2(c).
“Shelf Takedown Notice” has the meaning set forth in Section 2(c).
“Target Filing Date” has the meaning set forth in Section 2(b).
“Warrants” means, collectively, (i) the Common Stock purchase warrants delivered
to Holders upon the conversion of the Notes into Series C Preferred Stock
pursuant to the terms of the Purchase Agreement, (ii) as the context reasonably
requires, any Common Stock purchase warrants issued upon the exercise, transfer
or assignment, in whole or in part, of such warrants, (iii) the Common Stock
purchase warrants delivered to holders upon the conversion of the Series B 10%
Convertible Stock pursuant to the terms of that certain Securities Purchase
Agreement, dated as of November 26, 2014, by and among American Power Group
Corporation and those purchasers listed therein, and (iv) as the context
reasonably requires, any Common Stock purchase warrants issued upon the
exercise, transfer or assignment, in whole or in part, of such warrants.

2.
Demand Registration.

(a)At any time after the date of this Agreement, holders of a majority of the
Registrable Securities then outstanding may request registration under the
Securities Act of all or any portion of their Registrable Securities pursuant to
a Registration Statement on Form S-1 or any successor form thereto (each, a
“Long-

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Form Registration”). Each request for a Long-Form Registration shall specify the
number of Registrable Securities requested to be included in the Long-Form
Registration. Upon receipt of any such request, the Company shall promptly (but
in no event later than 30 days following receipt thereof) deliver notice of such
request to all other holders of Registrable Securities who shall then have 30
days from the date such notice is given to notify the Company in writing of
their desire to be included in such registration. The Company shall prepare and
file with (or confidentially submit to) the Commission a Registration Statement
on Form S-1 or any successor form thereto covering all of the Registrable
Securities that the holders thereof have requested to be included in such
Long-Form Registration within 45 days after the date on which the initial
request is given and shall cause such Registration Statement to be declared
effective by the Commission as soon as practicable thereafter, provided, that
the Company may use a Registration Statement on Form S-3 or any successor form
thereto if the Company would qualify to use such form within 30 days after the
date on which the initial request is given and the Company shall not be required
to file such Registration Statement until it is so qualified. The Company shall
not be required to effect a Long-Form Registration more than 3 times for the
holders of Registrable Securities as a group; provided, that a Registration
Statement shall not count as a Long-Form Registration requested under this
Section 2(a) unless and until it has become effective and the holders requesting
such registration are able to register and sell at least 75% of the Registrable
Securities requested to be included in such registration.
(b)At such time as the Company shall have qualified for the use of a
Registration Statement on Form S-3 or the then appropriate form for an offering
to be made on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act or any successor rule thereto (a “Shelf Registration Statement”),
the holders of Registrable Securities shall have the right to request
registration under the Securities Act of all or any portion of their Registrable
Securities for an offering on a delayed or continuous basis pursuant to Rule 415
under the Securities Act or any successor rule thereto (a “Shelf Registration”).
Each request for a Shelf Registration shall specify the number of Registrable
Securities requested to be included in the Shelf Registration. Upon receipt of
any such request, the Company shall promptly (but in no event later than 10 days
following receipt thereof) deliver notice of such request to all other holders
of Registrable Securities who shall then have 20 days from the date such notice
is given to notify the Company in writing of their desire to be included in such
registration. The Company shall prepare and file with (or confidentially submit
to) the Commission a Shelf Registration Statement covering all of the
Registrable Securities that the holders thereof have requested to be included in
such Shelf Registration within 30 days after the date on which the initial
request is given and shall use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission as soon as practicable
thereafter.
(c)The Company shall not be obligated to effect any Long-Form Registration or
Shelf Registration with respect to fewer than 20% of the Registrable Securities
then outstanding. The Company

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shall not be obligated to effect any Long-Form Registration within 90 days after
the effective date of a previous Long-Form Registration, Shelf Registration or a
previous Piggyback Registration in which holders of Registrable Securities were
permitted to register the offer and sale under the Securities Act, all of the
shares of Registrable Securities requested to be included therein. The Company
may postpone for up to 130 days the filing or effectiveness of a Registration
Statement for a Demand Registration or the filing of a Shelf Registration
Statement if the Board determines in its reasonable good faith judgment that
such Demand Registration or Shelf Takedown would (i) materially interfere with a
significant acquisition, corporate organization, financing, securities offering
or other similar transaction involving the Company; (ii) require premature
disclosure of material information that the Company has a bona fide business
purpose for preserving as confidential; or (iii) render the Company unable to
comply with requirements under the Securities Act or Exchange Act; provided,
that in such event the holders of a majority of the Registrable Securities
initiating such Demand Registration or Shelf shall be entitled to withdraw such
request and, if such request for a Demand Registration is withdrawn, such Demand
Registration shall not count as one of the permitted Demand Registrations
hereunder and the Company shall pay all registration expenses in connection with
such registration. The Company may delay a Demand Registration or Shelf Takedown
hereunder only twice in any period of 12 consecutive months.
(d)If the holders of the Registrable Securities initially requesting a Demand
Registration or Shelf Takedown elect to distribute the Registrable Securities
covered by their request in an underwritten offering, they shall so advise the
Company as a part of their request made pursuant to Section 2(a), Section 2(b)
or Section 2(c), and the Company shall include such information in its notice to
the other holders of Registrable Securities. The holders of a majority of the
Registrable Securities initially requesting the Demand Registration or Shelf
Takedown shall select the investment banking firm or firms to act as the
managing underwriter or underwriters in connection with such offering; provided,
that such selection shall be subject to the consent of the Company, which
consent shall not be unreasonably withheld or delayed.
(e)The Company shall not include in any Demand Registration or Shelf Takedown
any securities which are not Registrable Securities without the prior written
consent of the holders of a majority of the Registrable Securities included in
such Demand Registration or Shelf Takedown, which consent shall not be
unreasonably withheld or delayed. If a Demand Registration or Shelf Takedown
involves an underwritten offering and the managing underwriter of the requested
Demand Registration or Shelf Takedown advises the Company and the holders of
Registrable Securities in writing that in its reasonable and good faith opinion
the number of shares of Common Stock proposed to be included in the Demand
Registration or Shelf Takedown, including all Registrable Securities and all
other shares of Common Stock proposed to be included in such underwritten
offering, exceeds the number of shares of Common Stock which can be sold in such
underwritten offering and/or the number of shares of Common Stock proposed to be
included in such Demand

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Registration or Shelf Takedown would adversely affect the price per share of the
Common Stock proposed to be sold in such underwritten offering, the Company
shall include in such Demand Registration or Shelf Takedown (i) first, the
shares of Common Stock that the holders of Registrable Securities propose to
sell, and (ii) second, the shares of Common Stock proposed to be included
therein by any other Persons (including shares of Common Stock to be sold for
the account of the Company and/or other holders of Common Stock) allocated among
such Persons in such manner as they may agree. If the managing underwriter
determines that less than all of the Registrable Securities proposed to be sold
can be included in such offering, then the Registrable Securities that are
included in such offering shall be allocated pro rata among the respective
holders thereof on the basis of the number of Registrable Securities owned by
each such holder.

3.Piggyback Registration.
(a)Whenever the Company proposes to register the offer and sale of any shares of
its Common Stock under the Securities Act (other than a registration (i)
pursuant to a Registration Statement on Form S-8 (or other registration solely
relating to an offering or sale to employees or directors of the Company
pursuant to any employee stock plan or other employee benefit arrangement), (ii)
pursuant to a Registration Statement on Form S-4 (or similar form that relates
to a transaction subject to Rule 145 under the Securities Act or any successor
rule thereto), or (iii) in connection with any dividend or distribution
reinvestment or similar plan, whether for its own account or for the account of
one or more stockholders of the Company and the form of Registration Statement
(a “Piggyback Registration Statement”) to be used may be used for any
registration of Registrable Securities (a “Piggyback Registration”), the Company
shall give prompt written notice (in any event no later than 30 days prior to
the filing of such Registration Statement) to the holders of Registrable
Securities of its intention to effect such a registration and, subject to
Section 3(b) and Section 3(c), shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion from the holders of Registrable Securities within 20 days
after the Company's notice has been given to each such holder. The Company may
postpone or withdraw the filing or the effectiveness of a Piggyback Registration
at any time in its sole discretion. A Piggyback Registration shall not be
considered a Demand Registration for purposes of Section 2. If any Piggyback
Registration Statement pursuant to which holders of Registrable Securities have
registered the offer and sale of Registrable Securities is a Registration
Statement on Form S-3 or the then appropriate form for an offering to be made on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act or
any successor rule thereto (a “Piggyback Shelf Registration Statement”), such
holder(s) shall have the right, but not the obligation, to be notified of and to
participate in any offering under such Piggyback Shelf Registration Statement (a
“Piggyback Shelf Takedown”).

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(b)If a Piggyback Registration or Piggyback Shelf Takedown is initiated as a
primary underwritten offering on behalf of the Company and the managing
underwriter advises the Company and the holders of Registrable Securities (if
any holders of Registrable Securities have elected to include Registrable
Securities in such Piggyback Registration or Piggyback Shelf Takedown) in
writing that in its reasonable and good faith opinion the number of shares of
Common Stock proposed to be included in such registration or takedown, including
all Registrable Securities and all other shares of Common Stock proposed to be
included in such underwritten offering, exceeds the number of shares of Common
Stock which can be sold in such offering and/or that the number of shares of
Common Stock proposed to be included in any such registration or takedown would
adversely affect the price per share of the Common Stock to be sold in such
offering, the Company shall include in such registration or takedown (i) first,
the shares of Common Stock that the Company proposes to sell; (ii) second, the
shares of Common Stock requested to be included therein by holders of
Registrable Securities, allocated pro rata among all such holders on the basis
of the number of Registrable Securities owned by each such holder or in such
manner as they may otherwise agree; and (iii) third, the shares of Common Stock
requested to be included therein by holders of Common Stock other than holders
of Registrable Securities, allocated among such holders in such manner as they
may agree.
(c)If a Piggyback Registration or Piggyback Shelf Takedown is initiated as an
underwritten offering on behalf of a holder of Common Stock other than
Registrable Securities, and the managing underwriter advises the Company in
writing that in its reasonable and good faith opinion the number of shares of
Common Stock proposed to be included in such registration or takedown, including
all Registrable Securities and all other shares of Common Stock proposed to be
included in such underwritten offering, exceeds the number of shares of Common
Stock which can be sold in such offering and/or that the number of shares of
Common Stock proposed to be included in any such registration or takedown would
adversely affect the price per share of the Common Stock to be sold in such
offering, the Company shall include in such registration or takedown (i) first,
the shares of Common Stock requested to be included therein by the holder(s)
requesting such registration or takedown and by the holders of Registrable
Securities, allocated pro rata among all such holders on the basis of the number
of shares of Common Stock other than the Registrable Securities (on a fully
diluted, as converted basis) and the number of Registrable Securities, as
applicable, owned by all such holders or in such manner as they may otherwise
agree; and (ii) second, the shares of Common Stock requested to be included
therein by other holders of Common Stock, allocated among such holders in such
manner as they may agree.
(d)If any Piggyback Registration or Piggyback Shelf Takedown is initiated as a
primary underwritten offering on behalf of the Company, the Company shall select
the investment banking firm or firms to act as the managing underwriter or
underwriters in connection with such offering.

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4.Lock-up Agreement. Each holder of Registrable Securities agrees that in
connection with any registered offering of the Common Stock or other equity
securities of the Company, and upon the request of the managing underwriter in
such offering, such holder shall not, without the prior written consent of such
managing underwriter, during the period commencing on the effective date of such
registration and ending on the date specified by such managing underwriter (such
period not to exceed 180 days in any registration under the Securities Act, (a)
offer, pledge, sell, contract to sell, grant any option or contract to purchase,
purchase any option or contract to sell, hedge the beneficial ownership of or
otherwise dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into, exercisable for or exchangeable for shares of
Common Stock (whether such shares or any such securities are then owned by the
holder or are thereafter acquired), or (b) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of such securities, whether any such transaction
described in clause (a) or (b) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing provisions
of this Section 4 shall not apply to sales of Registrable Securities to be
included in such offering pursuant to Section 2(a), Section 2(b), Section 2(c)
or Section 3(a), and shall be applicable to the holders of Registrable
Securities only if (i) all officers and directors of the Company and all
stockholders owning 5% or more of the Company’s outstanding Common Stock are
subject to the same restrictions and (ii) the Company uses commercially
reasonable efforts to obtain a similar agreement from all stockholders
individually owning more than 2% of the Company’s outstanding Common Stock. Each
holder of Registrable Securities agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the managing
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. Notwithstanding anything to the contrary contained
in this Section 4, each holder of Registrable Securities shall be released, pro
rata, from any lock-up agreement entered into pursuant to this Section 4 in the
event and to the extent that the managing underwriter or the Company permit any
discretionary waiver or termination of the restrictions of any lock-up agreement
pertaining to any officer, director or holder of greater than 2% of the
outstanding Common Stock.

5.Registration Procedures. If and whenever the holders of Registrable Securities
request that the offer and sale of any Registrable Securities be registered
under the Securities Act or any Registrable Securities be distributed in a Shelf
Takedown pursuant to the provisions of this Agreement, the Company shall effect
the registration of the offer and sale of such Registrable Securities under the
Securities Act in accordance with the intended method of disposition thereof,
and pursuant thereto the Company shall as soon as practicable and as applicable:

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(a)subject to Section 2(a) and Section 2(b), prepare and file with the
Commission a Registration Statement covering such Registrable Securities and use
its best efforts to cause such Registration Statement to be declared effective;
(b)in the case of a Long-Form Registration, prepare and file with the Commission
such amendments, post-effective amendments and supplements to such Registration
Statement and the Prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective for a period of not less than 90
days, or if earlier, until all of such Registrable Securities have been disposed
of and to comply with the provisions of the Securities Act with respect to the
disposition of such Registrable Securities in accordance with the intended
methods of disposition set forth in such Registration Statement;
(c)within a reasonable time before filing such Registration Statement,
Prospectus or amendments or supplements thereto with the Commission, furnish to
one counsel selected by holders of a majority of such Registrable Securities
copies of such documents proposed to be filed, which documents shall be subject
to the review, comment and approval of such counsel;
(d)notify each selling holder of Registrable Securities, promptly after the
Company receives notice thereof, of the time when such Registration Statement
has been declared effective or a supplement, including a Shelf Supplement, to
any Prospectus forming a part of such Registration Statement has been filed with
the Commission;
(e)furnish to each selling holder of Registrable Securities such number of
copies of the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and any supplement thereto, including a Shelf Supplement
(in each case including all exhibits and documents incorporated by reference
therein) and such other documents as such seller may request in order to
facilitate the disposition of the Registrable Securities owned by such seller;
(f)register or qualify such Registrable Securities under such other securities
or “blue sky” laws of such jurisdictions as any selling holder requests and do
any and all other acts and things which may be necessary or advisable to enable
such holders to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such holders; provided, that the Company shall
not be required to qualify generally to do business, subject itself to general
taxation or consent to general service of process in any jurisdiction where it
would not otherwise be required to do so but for this Section 5(f);
(g)notify each selling holder of such Registrable Securities, at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event that would cause the Prospectus included in
such Registration Statement to contain an untrue statement of a material fact or
omit any fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading, and, at the
request of any such holder, the Company shall prepare a supplement or amendment
to such Prospectus so that, as thereafter delivered to the purchasers of such

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Registrable Securities, such Prospectus shall not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(h)make available for inspection by any selling holder of Registrable
Securities, any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent retained by
any such holder or underwriter (collectively, the “Inspectors”), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”), and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with such Registration Statement;
(i)provide a transfer agent and registrar (which may be the same entity) for all
such Registrable Securities not later than the effective date of such
registration;
(j)use its best efforts to cause such Registrable Securities to be listed on
each securities exchange on which the Common Stock is then listed or, if the
Common Stock is not then listed, on a national securities exchange selected by
the holders of a majority of such Registrable Securities;
(k)in connection with an underwritten offering, enter into such customary
agreements (including underwriting and lock-up agreements in customary form) and
take all such other customary actions as the holders of such Registrable
Securities or the managing underwriter of such offering reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, making appropriate officers of the Company
available to participate in “road show” and other customary marketing activities
(including one-on-one meetings with prospective purchasers of the Registrable
Securities));
(l)otherwise use its best to comply with all applicable rules and regulations of
the Commission and make available to its stockholders an earnings statement (in
a form that satisfies the provisions of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act or any successor rule thereto) no later than
thirty (30) days after the end of the 12-month period beginning with the first
day of the Company's first full fiscal quarter after the effective date of such
Registration Statement, which earnings statement shall cover said 12-month
period, and which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under
the Exchange Act and otherwise complies with Rule 158 under the Securities Act
or any successor rule thereto; and
(m)furnish to each selling holder of Registrable Securities and each
underwriter, if any, with (i) a written legal opinion of the Company's outside
counsel, dated the closing date of the offering, in form and substance as is
customarily given in opinions of the Company's counsel to underwriters in
underwritten registered offerings; and (ii) on the date of the applicable
Prospectus, on the effective date of any post-effective amendment to the
applicable Registration Statement and at the closing of the offering, dated the

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respective dates of delivery thereof, a “comfort” letter signed by the Company's
independent certified public accountants in form and substance as is customarily
given in accountants' letters to underwriters in underwritten registered
offerings;
(n)without limiting Section 5(f), use its best efforts to cause such Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and operations of
the Company to enable the holders of such Registrable Securities to consummate
the disposition of such Registrable Securities in accordance with their intended
method of distribution thereof;
(o)notify the holders of Registrable Securities promptly of any request by the
Commission for the amending or supplementing of such Registration Statement or
Prospectus or for additional information;
(p)advise the holders of Registrable Securities, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such Registration Statement or the
initiation or threatening of any proceeding for such purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued;
(q)permit any holder of Registrable Securities which holder, in its sole and
exclusive judgment, might be deemed to be an underwriter or a “controlling
person” (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act) (a “Controlling Person”) of the Company, to participate in
the preparation of such Registration Statement and to require the insertion
therein of language, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be included;
(r)cooperate with the holders of the Registrable Securities to facilitate the
timely preparation and delivery of certificates representing the Registrable
Securities to be sold pursuant to such Registration Statement or Rule 144 free
of any restrictive legends and representing such number of shares of Common
Stock and registered in such names as the holders of the Registrable Securities
may reasonably request a reasonable period of time prior to sales of Registrable
Securities pursuant to such Registration Statement or Rule 144; provided, that
the Company may satisfy its obligations hereunder without issuing physical stock
certificates through the use of The Depository Trust Company's Direct
Registration System (the “DTCDRS”);
(s)not later than the effective date of such Registration Statement, provide a
CUSIP number for all Registrable Securities and provide the applicable transfer
agent with printed certificates for the Registrable Securities which are in a
form eligible for deposit with The Depository Trust Company; provided, that the
Company may satisfy its obligations hereunder without issuing physical stock
certificates through the use of the DTCDRS;

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(t)take no direct or indirect action prohibited by Regulation M under the
Exchange Act; provided, that, to the extent that any prohibition is applicable
to the Company, the Company will take all reasonable action to make any such
prohibition inapplicable; and
(u)otherwise use its best efforts to take all other steps necessary to effect
the registration of such Registrable Securities contemplated hereby.

6.Expenses. All expenses (other than Selling Expenses) incurred by the Company
in complying with its obligations pursuant to this Agreement and in connection
with the registration and disposition of Registrable Securities shall be paid by
the Company, including, without limitation, all (i) registration and filing fees
(including, without limitation, any fees relating to filings required to be made
with, or the listing of any Registrable Securities on, any securities exchange
or over-the-counter trading market on which the Registrable Securities are
listed or quoted); (ii) underwriting expenses (other than fees, commissions or
discounts); (iii) expenses of any audits incident to or required by any such
registration; (iv) fees and expenses of complying with securities and “blue sky”
laws (including, without limitation, fees and disbursements of counsel for the
Company in connection with “blue sky” qualifications or exemptions of the
Registrable Securities); (v) printing expenses; (vi) messenger, telephone and
delivery expenses; (vii) fees and expenses of the Company's counsel and
accountants; (viii) Financial Industry Regulatory Authority, Inc. filing fees
(if any); and (ix) reasonable fees and expenses of one counsel for the holders
of Registrable Securities participating in such registration as a group
(selected by, in the case of a registration under Section 2(a), the holders of a
majority of the Registrable Securities initially requesting such registration,
and, in the case of all other registrations hereunder, the holders of a majority
of the Registrable Securities included in the registration). In addition, the
Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties) and the expense of
any annual audits. All Selling Expenses relating to the offer and sale of
Registrable Securities registered under the Securities Act pursuant to this
Agreement shall be borne and paid by the holders of such Registrable Securities,
in proportion to the number of Registrable Securities included in such
registration for each such holder.

7.Indemnification.
(a)The Company shall indemnify and hold harmless, to the fullest extent
permitted by law, each holder of Registrable Securities, such holder's officers,
directors, managers, members, partners, stockholders and Affiliates, each
underwriter, broker or any other Person acting on behalf of such holder of
Registrable Securities and each other Controlling Person, if any, who controls
any of the foregoing Persons, against all

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losses, claims, actions, damages, liabilities and expenses, joint or several, to
which any of the foregoing Persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, actions, damages, liabilities or
expenses arise out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, Prospectus,
preliminary Prospectus, free writing prospectus (as defined in Rule 405 under
the Securities Act or any successor rule thereto) or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus, preliminary Prospectus or free writing prospectus, in
light of the circumstances under which they were made) not misleading; and shall
reimburse such Persons for any legal or other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
action, damage or liability, except that the indemnity agreement contained in
this Section 7(a) shall not apply (i) to amounts paid in settlement of any
claim, action or proceeding if such settlement is effected without the consent
of the Company, which consent shall not be unreasonably withheld, and (ii)
insofar as the same are caused by or contained in any information furnished in
writing to the Company by or on behalf of such holder expressly for use therein
or by such holder's failure to deliver a copy of the Registration Statement,
Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule
405 under the Securities Act or any successor rule thereto) or any amendments or
supplements thereto (if the same was required by applicable law to be so
delivered) after the Company has furnished such holder with a sufficient number
of copies of the same prior to any written confirmation of the sale of
Registrable Securities. This indemnity shall be in addition to any liability the
Company may otherwise have.
(b)In connection with any registration in which a holder of Registrable
Securities is participating, each such holder shall furnish to the Company in
writing such information as the Company reasonably requests for use in
connection with any such Registration Statement or Prospectus and, to the extent
permitted by law, shall indemnify and hold harmless, the Company, each director
of the Company, each officer of the Company who shall sign such Registration
Statement, each underwriter, broker or other Person acting on behalf of the
holders of Registrable Securities and each Controlling Person who controls any
of the foregoing Persons against any losses, claims, actions, damages,
liabilities or expenses resulting from any untrue or alleged untrue statement of
material fact contained in the Registration Statement, Prospectus, preliminary
Prospectus, free writing prospectus (as defined in Rule 405 under the Securities
Act or any successor rule thereto) or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
Prospectus, preliminary Prospectus or free writing prospectus, in light of the
circumstances under which they were made) not misleading, but only to the extent
that such untrue statement or omission is contained in any information so
furnished in writing by or on behalf of such holder; provided, that the
obligation to indemnify shall be

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several, not joint and several, for each holder and shall not exceed an amount
equal to the net proceeds (after underwriting fees, commissions or discounts)
actually received by such holder from the sale of Registrable Securities
pursuant to such Registration Statement. This indemnity shall be in addition to
any liability the selling holder may otherwise have.
(c)Promptly after receipt by an indemnified party of notice of the commencement
of any action involving a claim referred to in this Section 7, such indemnified
party shall, if a claim in respect thereof is made against an indemnifying
party, give written notice to the latter of the commencement of such action. The
failure of any indemnified party to notify an indemnifying party of any such
action shall not (unless such failure shall have a material adverse effect on
the indemnifying party) relieve the indemnifying party from any liability in
respect of such action that it may have to such indemnified party hereunder. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and to assume the defense of the
claims in any such action that are subject or potentially subject to
indemnification hereunder, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after written notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be responsible for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; provided, that, if (i) any indemnified party shall have reasonably
concluded that there may be one or more legal or equitable defenses available to
such indemnified party which are additional to or conflict with those available
to the indemnifying party, or that such claim or litigation involves or could
have an effect upon matters beyond the scope of the indemnity provided
hereunder, or (ii) such action seeks an injunction or equitable relief against
any indemnified party or involves actual or alleged criminal activity, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party without such indemnified party's prior
written consent (but, without such consent, shall have the right to participate
therein with counsel of its choice) and such indemnifying party shall reimburse
such indemnified party and any Controlling Person of such indemnified party for
that portion of the fees and expenses of any counsel retained by the indemnified
party which is reasonably related to the matters covered by the indemnity
provided hereunder. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicting indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of a majority of the
Registrable Securities included in the registration, at the expense of the
indemnifying party.

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(d)If the indemnification provided for hereunder is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss,
claim, damage, liability or action referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amounts paid or payable by such indemnified party as a result
of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions which resulted in such loss, claim, damage, liability or action as
well as any other relevant equitable considerations; provided, that the maximum
amount of liability in respect of such contribution shall be limited, in the
case of each holder of Registrable Securities, to an amount equal to the net
proceeds (after underwriting fees, commissions or discounts) actually received
by such seller from the sale of Registrable Securities effected pursuant to such
registration. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, whether the
violation of the Securities Act or any other similar federal or state securities
laws or rule or regulation promulgated thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
applicable registration, qualification or compliance was perpetrated by the
indemnifying party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just and equitable
if contribution pursuant hereto were determined by pro rata allocation or by any
other method or allocation which does not take account of the equitable
considerations referred to herein. No Person guilty or liable of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

8.Participation in Underwritten Registrations. No Person may participate in any
registration hereunder which is underwritten unless such Person (a) agrees to
sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; provided, that no holder of
Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder,
such holder's ownership of its shares of Common Stock to be sold in the offering
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 7.

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9.Rule 144 Compliance. With a view to making available to the holders of
Registrable Securities the benefits of Rule 144 and any other rule or regulation
of the Commission that may at any time permit a holder to sell securities of the
Company to the public without registration, the Company shall:
(a)make and keep public information available, as those terms are understood and
defined in Rule 144, at all times after the Registration Date;
(b)use best efforts to file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act, at any time after the Registration Date; and
(c)furnish to any holder so long as the holder owns Registrable Securities,
promptly upon request, a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed or furnished by the
Company as such holder may request in connection with the sale of Registrable
Securities without registration.

10.Preservation of Rights. The Company shall not (a) grant any registration
rights to third parties which are more favorable than or inconsistent with the
rights granted hereunder, or (b) enter into any agreement, take any action, or
permit any change to occur, with respect to its securities that violates or
subordinates the rights expressly granted to the holders of Registrable
Securities in this Agreement.

11.Alternative IPO Entities. In the event that the Company elects to effect an
underwritten registered offering of equity securities of any subsidiary of the
Company (collectively, “Alternative IPO Entities”) rather than the equity
securities of the Company, whether as a result of a reorganization of the
Company or otherwise, the Purchasers and the Company shall cause the Alternative
IPO Entity to enter into an agreement with the Purchasers that provides the
Purchasers with registration rights with respect to the equity securities of the
Alternative IPO Entity that are substantially the same as, and in any event no
less favorable in the aggregate to, the registration rights provided to the
Purchasers in this Agreement.

12.Termination. This Agreement shall terminate and be of no further force or
effect when the Purchasers shall no longer hold any Registrable Securities;
provided, that the provisions of Section 6 and Section 7 shall survive any such
termination.

13.Notices. All notices, requests, consents, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
given (a) when delivered by hand (with written confirmation of receipt); (b)
when received by the addressee if sent by a nationally recognized

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overnight courier (receipt requested); (c) on the date sent by facsimile or
e-mail of a PDF document (with confirmation of transmission) if sent during
normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient; or (d) on the third day after the
date mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective parties at the
addresses indicated below (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 13).

If to the Company:
7 Kimball Lane, Lynnfield MA, 01940
Facsimile: (781) 224-0114
E-mail: coppa@americanpowergroupinc.com
Attention: Charles E. Coppa
Chief Financial Officer
with a copy, which shall not constitute notice, to:
Morse, Barnes-Brown & Pendleton, P.C.
Facsimile: (781) 622-5933
E-mail: cbarnes@mbbp.com
Attention: Carl F. Barnes
If to any Purchaser, to such Purchaser's address as set forth on Schedule A
hereto.

14.Entire Agreement. This Agreement, together with the Purchase Agreement and
any related exhibits and schedules thereto, constitutes the sole and entire
agreement of the parties to this Agreement with respect to the subject matter
contained herein, and supersedes all prior and contemporaneous understandings
and agreements, both written and oral, with respect to such subject matter.
Notwithstanding the foregoing, in the event of any conflict between the terms
and provisions of this Agreement and those of the Purchase Agreement, the terms
and conditions of this Agreement shall control.

15.Successor and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Each Purchaser may assign its rights hereunder to any
purchaser or transferee of Registrable Securities; provided, that such purchaser
or transferee shall, as a condition to the effectiveness of such assignment, be
required to execute a counterpart to this Agreement agreeing to be treated as an
Purchaser whereupon such purchaser or transferee shall have the benefits of, and
shall be subject to the restrictions contained in, this Agreement as if such
purchaser or

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transferee was originally included in the definition of an Purchaser herein and
had originally been a party hereto.

16.No Third-Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their respective successors and permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person
any legal or equitable right, benefit or remedy of any nature whatsoever, under
or by reason of this Agreement; provided, however, the parties hereto hereby
acknowledge that the Persons set forth in Section 7 are express third-party
beneficiaries of the obligations of the parties hereto set forth in Section 7.

17.Headings. The headings in this Agreement are for reference only and shall not
affect the interpretation of this Agreement.

18.Amendment, Modification and Waiver. Except as otherwise provided herein, the
provisions of this Agreement may only be amended, modified, supplemented or
waived with the prior written consent of the Company and the holders of a
majority of the Registrable Securities. No waiver by any party or parties shall
operate or be construed as a waiver in respect of any failure, breach or default
not expressly identified by such written waiver, whether of a similar or
different character, and whether occurring before or after that waiver. Except
as otherwise set forth in this Agreement, no failure to exercise, or delay in
exercising, any right, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

19.Severability. If any term or provision of this Agreement is invalid, illegal
or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Agreement
or invalidate or render unenforceable such term or provision in any other
jurisdiction. Upon such determination that any term or other provision is
invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

20.Remedies. Each holder of Registrable Securities, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of its rights under this Agreement.
The Company acknowledges that monetary damages would not be adequate
compensation

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for any loss incurred by reason of a breach by it of the provisions of this
Agreement and the Company hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

21.Governing Law; Submission to Jurisdiction. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be determined in accordance with the provisions of the Purchase Agreement.

22.Waiver of Jury Trial. Each party acknowledges and agrees that any controversy
which may arise under this Agreement is likely to involve complicated and
difficult issues and, therefore, each such party irrevocably and unconditionally
waives any right it may have to a trial by jury in respect of any legal action
arising out of or relating to this Agreement or the transactions contemplated
hereby. Each party to this Agreement certifies and acknowledges that (a) no
representative of any other party has represented, expressly or otherwise, that
such other party would not seek to enforce the foregoing waiver in the event of
a legal action, (b) such party has considered the implications of this waiver,
(c) such party makes this waiver voluntarily, and (d) such party has been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 22.

23.Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall be deemed to
be one and the same agreement. A signed copy of this Agreement delivered by
facsimile, e-mail or other means of electronic transmission shall be deemed to
have the same legal effect as delivery of an original signed copy of this
Agreement.

24.Further Assurances. Each of the parties to this Agreement shall, and shall
cause their Affiliates to, execute and deliver such additional documents,
instruments, conveyances and assurances and take such further actions as may be
required to carry out the provisions hereof and to give effect to the
transactions contemplated hereby.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
 
SELLER:

AMERICAN POWER GROUP CORPORATION
 

By_____________________

Name: Charles E. Coppa
Title: Chief Financial Officer

PURCHASERS:
 
 
 
ARROW, LLC
 
By_____________________

Name:
Title:
 
 
 
ELIZABETH M. VAN STEENWYK IRREVOCABLE TRUST
 
By_____________________

Name:
Title:
 
 
 
GRETCHEN C. VAN STEENWYK IRREVOCABLE TRUST
 
By_____________________

Name:
Title:
 
 

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MATTHEW T. VAN STEENWYK IRREVOCABLE TRUST
 
By_____________________

Name:
Title:
 
 
 
SMC EMPLOYEES
PARTNERSHIP
 
By_____________________

Name:
Title:
 
 
 
ASSOCIATED PRIVATE
EQUITY
 
By_____________________

Name:
Title:
 
 
 
SET CAPITAL HOLDINGS, LLC
 
By_____________________

Name:
Title:
 
 
 
CHADDS FORD, LLC
 
By_____________________

Name:
Title:

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COUNTERPART SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT

The undersigned agrees to become a Purchaser party to that certain Registration
Rights Agreement (the “Agreement”), dated as of June 2, 2015, by and among
American Power Group Corp. (the “Company”) and the other parties named therein,
and agrees to be bound by all of the provisions of the Agreement that apply to
the Purchasers.
All defined terms used but not defined herein shall have the meaning set forth
in the Agreement.
IN WITNESS WHEREOF, this counterpart signature page has been duly executed by or
on behalf of the undersigned as of the date below written.

                        
                                                
Name:______________________________

    
Address: ___________________________

___________________________
                        

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