Exhibit
10.1


 


COMMON
STOCk PURCHASE AGREEMENT


 


This
Common Stock Purchase Agreement (this “Agreement”) is dated as of May 31, 2018, between American Power Group
Corporation, a Delaware corporation (the “Company”), and Dual Fuel, LLC, an Arizona limited liability company
(the “Purchaser”). The Purchaser and the Company individually and jointly may also be referred to as “Party”
or “Parties”.


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended, and Rule 506 of Regulation D promulgated thereunder, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, Common Stock of the Company, as more fully described in this Agreement; and


 


WHEREAS,
the Purchaser is an “Accredited Investor”, as such term is defined in Rule 501(a) of Regulation D;


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:


 


ARTICLE
I.

DEFINITIONS


 


1.1
Definitions. In addition to the terms
defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(i).


 


“Additional
Closings” means the Closings after the Initial Tranche Closings.


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.


 


“AGI
Guaranty” means the Guaranty executed by Advanced Green Innovations, LLC, in the form of Exhibit A attached hereto.


 


“Amended
and Restated Voting Agreement” means the Amended and Restated Voting Agreement in the form of Exhibit B attached
hereto.


 


“Board
of Directors” means the board of directors of the Company.


 


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


 



    	 



    	 



    

 


“Closings”
mean the Initial Tranche Closings (including the Initial Closing) and the Additional Closings.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to the Purchaser’s obligations to pay the Subscription Amount or the Deposit
Amount (as the case may be) have been satisfied or waived.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company and any other class of securities into which such securities may hereafter
be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.


 


“Current
Certificate of Incorporation” means the Company’s Certificate of Incorporation, in effect on the Initial Closing
Date.


 


“Debt
Extension Agreement” means the Debt Extension Agreement by and among the Company and the Requisite Convertible Debtholders,
pursuant to which, among other things, the Requisite Convertible Debtholders shall agree to extend the maturity date of the Company’s
outstanding indebtedness for the holders of the convertible debt.


 


“Debt
Forgiveness Agreement” means the Confidential Settlement Agreement and Release by and among the Company and WPU Leasing,
pursuant to which, among other things, WPU Leasing shall agree to forgive the Company’s outstanding indebtedness owed to
it.


 


“Deposit
Amount” means any amount advanced to the Company by the Purchaser prior to the effectiveness of the Restated Certificate
of Incorporation, in contemplation of the purchase of the Purchased Shares.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“GAAP”
shall mean United States generally accepted accounting principles applied on a consistent basis.


 


“Initial
Closing” means the first Closing pursuant to this Agreement.


 


“Initial
Closing Date” means the date of the Initial Closing.


 



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“Initial
Closing Deposit Amount” means Three Hundred Thousand Dollars ($300,000).


 


“Initial
Tranche” means the first Five Hundred Thousand Dollars ($500,000) to be invested by the Purchaser, including the Initial
Closing Deposit Amount.


 


“Initial
Tranche Closings” means the Closings of the Initial Tranche.


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(n).


 


“Lien”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permit” shall have the meaning assigned to such term in Section 3.1(l).


 


“Option”
means any stock option granted pursuant to the 2016 Stock Option Plan and outstanding immediately prior to the Initial Closing
Date.


 


“Optionholder”
means the holder of any Option.


 


“Option
Plan” means the 2016 Stock Option Plan of the Company.


 


“Option
Termination Agreements” mean the Option Termination Agreements by and among the Company and each Optionholder, pursuant
to which each outstanding Option of the Company shall be terminated.


 


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


 


“Preferred
Stock” means the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series D-2 Preferred Stock and the Series D-3 Preferred Stock, each having the rights, preferences and privileges
set forth in the Current Certificate of Incorporation, as amended from time to time.


 


“Preferred
Stock Conversion Agreements” means the Convertible Preferred Stock Conversion and Warrant Termination Agreements by
and among the Company and the Preferred Stockholders provided for therein, pursuant to which the outstanding shares of Preferred
Stock of the Company held by such Preferred Stockholders shall be converted to Common Stock.


 


“Preferred
Stockholder” means a holder of Preferred Stock.


 



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“Purchase
Price Per Share” mean $0.005 per Purchased Share.


 


“Purchased
Shares” means the shares of Common Stock purchased by the Purchaser pursuant to this Agreement.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Requisite
Convertible Debtholder” means each of Neil Braverman and Matt Van Steenwyk.


 


“Restated
Certificate of Incorporation” means the Company’s Restated Certificate of Incorporation, to be filed by the Company
with the Secretary of State of Delaware, in the form of Exhibit C attached hereto, pursuant to Section 4.9 hereof.


 


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


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.2(i).


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Series
A Preferred Stock” means the Company’s 10% Convertible Preferred Stock, par value $1.00 per share.


 


“Series
B Preferred Stock” means the Company’s Series B 10% Convertible Preferred Stock, par value $1.00 per share.


 


“Series
C Preferred Stock” means the Company’s Series C Convertible Preferred Stock, par value $1.00 per share.


 


“Series
D Preferred Stock” means the Company’s Series D Convertible Preferred Stock, par value $1.00 per share.


 


“Series
D-2 Preferred Stock” means the Company’s Series D-2 Convertible Preferred Stock, par value $1.00 per share.


 


“Series
D-3 Preferred Stock” means the Company’s Series D-3 Convertible Preferred Stock, par value $1.00 per share.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).


 



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“Subscription
Amount” means the amount to be paid for the Purchased Shares purchased hereunder at each Closing, in United States dollars
and in immediately available funds.


 


“Subsidiary”
means any subsidiary of the Company as set forth on Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal
year ended September 30, 2014 and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date thereof.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE Alternext, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Amended and Restated Voting Agreement, all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing
address of 6201 15th Avenue

Brooklyn, New York 11219, and a facsimile number of (718) 765-8712, and any successor transfer agent of the Company.


 


“Warrant”
means any warrant of the Company outstanding immediately prior to the Initial Closing Date.


 


“Warrantholder”
means the holder of any Warrants.


 


“Warrant
Termination Agreements” mean the Warrant Termination Agreements by and among the Company and the Warrantholders provided
for therein, pursuant to which the outstanding Warrants held by such Warrantholders of the Company shall be terminated.


 


“WPU
Leasing” shall have the meaning ascribed to such term in Section 2.4(a)(vii).


 



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ARTICLE
II.

PURCHASE AND SALE


 


2.1
Initial Closing. On the Initial Closing
Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Purchaser shall advance to the Company via wire transfer or a certified check of
immediately available funds, the Initial Closing Deposit Amount less any amounts previously advanced to the Company by the Purchaser
prior to the Initial Closing. Upon the effectiveness of the filing of the Restated Certificate of Incorporation pursuant to Section
4.9 hereof, the Company shall sell, and the Purchaser shall purchase, 60,000,000 shares of Common Stock of the Company at the
Purchase Price Per Share in consideration for the Initial Closing Deposit Amount and the Company shall thereafter deliver to the
Purchaser a certificate representing the Purchased Shares for which the Purchaser has subscribed and paid. On the Initial Closing
Date, the Company and the Purchaser shall deliver the other items as set forth herein that are deliverable at the Initial Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.4 and 2.5, the Initial Closing shall occur at the offices
of the Company’s counsel or such other location as the Parties shall mutually agree.


 


2.2
Subsequent Initial Tranche Closings. Following
the Initial Closing Date, upon the terms and subject to the conditions set forth herein, the Purchaser shall advance to the Company
via wire transfer or a certified check of immediately available funds, (i) $50,000 on or before the one month anniversary of the
Initial Closing Date; (ii) $50,000 on or before the two month anniversary of the Initial Closing Date; (iii) $50,000 on or before
the third month anniversary of the Initial Closing Date; and (iv) $50,000 on or before the four month anniversary of the Initial
Closing Date. Upon the effectiveness of the filing of the Restated Certificate of Incorporation pursuant to Section 4.9 hereof,
the Company shall sell, and the Purchaser shall purchase, in consideration for the Deposit Amounts referenced above and received
by the Company, an additional 40,000,000 shares of Common Stock of the Company at the Purchase Price Per Share and the Company
shall thereafter deliver to the Purchaser a certificate (or certificates) representing the Purchased Shares for which the Purchaser
has subscribed and paid at such Closing; and the Company and the Purchaser shall deliver the other items as set forth herein that
are deliverable at such Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.4 and 2.5, each such
Closing shall occur at the offices of the Company’s counsel or such other location as the Parties shall mutually agree.


 


2.3
Additional Closings. Following the Initial
Tranche Closings, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchaser
agrees to purchase an additional 300,000,000 shares of Common Stock, consisting of the following: (i) 100,000,000 shares of Common
Stock of the Company at the Purchase Price Per Share on or before the six month anniversary of the Initial Closing Date; (ii)
100,000,000 shares of Common Stock of the Company at the Purchase Price Per Share on or before the twelve month anniversary of
the Initial Closing Date; and (iii) 100,000,000 shares of Common Stock of the Company at the Purchase Price Per Share on or before
the eighteen month anniversary of the Initial Closing Date. On each of such Closings, the Purchaser shall deliver to the Company,
via wire transfer or a certified check of immediately available funds, an amount equal to the Purchaser’s Subscription Amount
for such Closing and the Company shall deliver to the Purchaser a certificate representing the Purchased Shares for which the
Purchaser has subscribed and paid at such Closing; and the Company and the Purchaser shall deliver the other items as set forth
herein that are deliverable at such Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.4 and 2.5,
each such Closing shall occur at the offices of the Company’s counsel or such other location as the Parties shall mutually
agree.


 



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2.4
Deliverables.


 


(a)
On or prior to the Initial Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:


 


(i)
a copy of this Agreement duly executed by the Company;


 


(ii)
a copy of each Option Termination Agreement, duly executed by the Company and each Optionholder;


 


(iii) 
a copy of each Warrant Termination Agreement, duly executed by the Company and each Warrantholder;


 


(iv)  
a copy of each Preferred Stock Conversion Agreement, duly executed by the Company and each Preferred Stockholder;


 


(v) 
a copy of the Debt Extension Agreement, duly executed by the Company and the Requisite Convertible Debtholders;


 


(vi)  
a copy of the Debt Forgiveness Agreement, duly executed by the Company and WPU Leasing, LLC (“WPU Leasing”);
and


 


(vii)
a copy of the Amended and Restated Voting Agreement, duly executed by the Company and such parties thereto; and


 


(b)
On or prior to the Initial Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following:


 


(i)
a copy of this Agreement duly executed by the Purchaser;


 


(ii)
the Purchaser’s Initial Closing Deposit Amount for such Initial Closing by wire transfer or a certified check of immediately
available funds;


 


(iii) 
a copy of the Amended and Restated Voting Agreement, duly executed by the Purchaser; and


 


(iv)  
a copy of the AGI Guaranty.


 


(c)
On or prior to each Closing after the Initial Tranche Closings, the Company shall cause to be delivered to the Purchaser at such
Closing a certificate evidencing the number of shares of Common Stock equal to the Purchaser’s Subscription Amount for such
Closing, divided by the Purchase Price Per Share or an executed letter of instruction to the Company’s transfer agent authorizing
the issuance of the Purchased Shares.


 


(d) 
On or prior to each Closing after the Initial Closing, the Purchaser shall cause to be delivered to the Company at such Closing
the Purchaser’s Deposit Amount or Subscription Amount (as the case may be) for such Closing by wire transfer or a certificate
check of immediately available funds.


 



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2.5
Closing Conditions.


 


(a)
The obligations of the Company to the Purchaser hereunder in connection with each Closing are subject to the following
conditions being met:


 


(i)
each of the representations and warranties made by the Purchaser in this Agreement is true and correct in all material respects
on and as of such Closing, as though each such representation or warranty had been made on and as of such Closing, except that
those representations and warranties that address matters only as of a particular date shall remain true and correct as of such
date;


 


(ii)
all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing shall have been
performed in all material respects; and


 


(iii) 
the delivery by the Purchaser of the items as set forth herein.


 


(b)
The obligations of the Purchaser hereunder in connection with each Closing are subject to the following conditions being met:


 


(i)
each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects
on and as of such Closing as though each such representation or warranty had been made on and as of such Closing, except that
those representations and warranties that address matters only as a particular date shall remain true and correct as of such date;


 


(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing shall have been performed
in all material respects;


 


(iii) 
the delivery by the Company of the items as set forth herein;


 


(iv)  
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and


 


(v) 
from the date hereof to such Closing, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension
shall be terminated prior to such Closing).


 


ARTICLE
III.

REPRESENTATIONS AND WARRANTIES


 


3.1
Representations and Warranties of the Company.
The Company hereby makes the following representations and warranties to the Purchaser as of the Initial Closing Date, except
as otherwise set forth on the Disclosure Schedule attached hereto as Exhibit D to this Agreement, which exceptions shall be deemed
to be part of the representations and warranties made hereunder:


 



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(a) Subsidiaries.
Section 3.1(a) of the Disclosure Schedules sets forth a list of all direct and indirect Subsidiaries of the Company existing
as of the date hereof. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each
Subsidiary, including any direct or indirect subsidiary of the Company formed or acquired subsequent to the filing of the
above-referenced annual report, free and clear of any Liens, and all of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.


 


(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its formation, with the requisite power and
authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not reasonably be expected to result in: (i) a
material adverse effect on the legality, validity or enforceability of any Transaction Document and the transactions
contemplated thereby, (ii) a material adverse effect on the results of operations, assets, business or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim, suit, investigation or
proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition) has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.


 


(c) Authorization;
Enforcement. The Company or any Subsidiary of the Company that is a party to this Agreement or any other Transaction
Document has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of the Transaction Documents and the consummation by the Company and each
Subsidiary of the transactions contemplated hereby and thereby have been duly authorized by all required corporate or other
action on the part of the Company and each Subsidiary other than in connection with the Required Approvals. Each Transaction
Document to which the Company and each Subsidiary is a party has been (or upon delivery will have been) duly executed by the
Company or such Subsidiary, as the case may be, and, when delivered in accordance with the terms hereof and thereof, will
constitute the valid and binding obligation of, and will be enforceable against, the Company or the Subsidiary, as the case
may be, in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as the Company’s indemnification obligations under the provisions of Section 4.7 may be
limited by applicable law.


 



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(d) No
Conflicts. The execution, delivery and performance by the Company and each Subsidiary of the Transaction Documents, the
issuance and sale of the Purchased Shares, and the consummation of the transactions contemplated by the Transaction
Documents to which the applicable entity is a party (i) will not conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) do not and will not conflict with, or constitute a default (or an event that with notice or lapse of time
or both would constitute a default) under, result in the creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, do not
and will not conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could not reasonably be expected to result in a
Material Adverse Effect.


 


(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii) such filings as are required to be made under applicable
state securities laws, and (iii) certain stockholder approvals as contemplated by Section 4.9 of this Agreement (collectively,
the “Required Approvals”).


 


(f)
Issuance of the Common Stock. Subject to the effectiveness of the filing of the Restated Certificate of Incorporation with
the Secretary of State of Delaware, the Purchased Shares are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided in the Transaction Documents.


 



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(g)
Capitalization. The Company has not issued any capital stock since the filing of its June 2017 10-Q, other than pursuant
to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common
Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. The issuance and sale of the Purchased Shares will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except as contemplated by Section 4.9 of this Agreement, no further approval or
authorization of any stockholder, the Board of Directors or other Persons is required for the issuance and sale of the Purchased
Shares. Other than the Amended and Restated Voting Agreement, and as contemplated hereby, there are no stockholders agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party
or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 


(h)
Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements, (i) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the Commission, (ii) the Company has not altered its method
of accounting, (iii) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders,
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (iv) the Company has not
issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The
Company does not have pending before the Commission any request for confidential treatment of information.


 


(i)
Litigation. Except as otherwise set forth in Section 3.1(i) of the Disclosure Schedules, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting
the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the transactions
contemplated thereby or the Purchased Shares or (ii) could, if there were an unfavorable decision, reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any Subsidiary, to the knowledge of the Company, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any current or former officer or any current director
of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.


 



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(j)
Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any
of the employees of the Company. None of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries
is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their
employees are good. No executive officer, to the knowledge of the Company, is now or is expected to be in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each
such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance in all material respects with all U.S. federal, state, local laws
and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours.


 


(k)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree
or order of any court, arbitrator or governmental body or (iii) except as disclosed in the Company’s Current Report on Form
8-K filed with the Commission on May 21, 2015, is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and
all such laws that affect the environment, except in each case as could not reasonably be expected to result in a Material Adverse
Effect.


 


(l)
Regulatory Permits. The Company and all Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.


 


(m)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for Liens in favor of Iowa State Bank, Liens reflected in the
Company’s financial statements and Liens for the payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.


 



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(n)
Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights necessary or material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could reasonably be expected to result in a Material Adverse Effect (collectively,
the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a notice (written
or otherwise) that any of the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the
rights of any Person. To the knowledge of the Company, all Intellectual Property Rights that the Company owns or has rights to
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their intellectual
property that consist of trade secrets.


 


(o)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are, to the knowledge of the Company, prudent and customary in the businesses in which
the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a significant increase in cost.


 


(p)
Transactions With Affiliates and Employees. Except as described in the SEC Reports, none of the officers or directors of
the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.


 


(q)
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.


 



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(r)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Purchased
Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act
of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended.


 


(s)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has not yet taken any action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration.


 


(t)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s Current Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a
result of the Purchaser and the Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the Purchased Shares the Purchaser’s ownership
of the Purchased Shares.


 


(u)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or its agents
or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company
understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities
of the Company. All of the disclosure furnished, taken as a whole, by or on behalf of the Company to the Purchaser regarding the
Company, its business and the transactions contemplated hereby, is true and correct in all material respects and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Purchaser
does not make nor has it made any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.2 hereof.


 


(v)
No Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Purchased Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which
would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.


 



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(w)
Tax Status. The Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax
returns (or has filed appropriate extensions) and has paid or accrued all taxes shown as due thereon (subject to any extensions),
and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.


 


(x)
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on
behalf of the Company has, directly or indirectly, (i) used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is
in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.


 


(y)
Accountants. The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company,
such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending September
30, 2016.


 


(z)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Purchased Shares, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Purchased Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.


 


(aa)
Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Purchased Shares by the Company to the Purchaser
as contemplated hereby. To the knowledge of the Company, the issuance and sale of the Purchased Shares hereunder does not contravene
the rules and regulations of any Trading Market.


 


(bb)
No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of
the Purchased Shares by any form of general solicitation or general advertising. The Company has offered the Purchased Shares
for sale only to the Purchaser.


 



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3.2
Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the Company as follows:


 


(a)
Organization; Authority. The Purchaser
is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with
full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and
performance by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document
to which the Purchaser is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.


 


(b)
Understandings or Arrangements. The Purchaser
understands that the Purchased Shares are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law. The Purchaser is acquiring the Purchased Shares as principal for its own account and
not with a view to or for distributing or reselling such Purchased Shares or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Purchased Shares in violation of
the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any
other persons to distribute or regarding the distribution of such Purchased Shares in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting the Purchaser’s right to sell the Purchased Shares in
compliance with applicable federal and state securities laws). The Purchaser is acquiring the Purchased Shares hereunder in the
ordinary course of its business.


 


(c)
Purchaser Status. At the time the Purchaser
was offered the Purchased Shares, it was: (i) an “accredited investor” as defined in Rule 501(a) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. The Purchaser is
not required to be registered as a broker-dealer under Section 15 of the Exchange Act.


 


(d)
Experience of Purchaser. The Purchaser,
either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Shares, and has
so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an investment in the
Purchased Shares and, at the present time, is able to afford a complete loss of such investment.


 



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(e)
No General Solicitation. The Purchaser is not purchasing the Purchased Shares as a result of any press release, Form D
or other filing made by the Company under federal or state securities laws, advertisement, article, notice or other communication
regarding the Purchased Shares published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general advertisement.


 


(f)
Speculative Investment. The Purchaser understands and recognizes that the purchase of the Purchased Shares is highly speculative
and involves a high degree of risk and that only investors who can afford the loss of their entire investment should consider
investing in the Company. The Purchaser has reviewed the risk factors in the SEC Reports.


 


(g)
Principal Place of Business. The address of the Purchaser furnished by the Purchaser on the signature page hereto is the
Purchaser’s principal business address.


 


(h)
U.S. Person. The Purchaser is a United States Person.


 


(i)
SEC Reports. The Purchaser acknowledges and understands that the Company has not filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely basis and has not received a valid
extension of such time of filing.


 


(j)
No Reliance on Other Statements. No statements, promises, warranties or representations have been made to the Purchaser
concerning the Purchased Shares or the Company, its business or prospects, or other matters, by the Company, by the Company’s
representatives, or by any other persons or entities, except as set forth in the Transaction Documents and the SEC Reports. The
Purchaser has not relied on any representation, written or oral, not contained in the Transaction Documents or the SEC Reports
in deciding to purchase the Purchased Shares.


 


The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
made by the Company and any Subsidiaries contained in any other Transaction Document or any other document or instrument executed
and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.


 



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ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1
Transfer Restrictions.


 


(a)
The Purchased Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer
of Purchased Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate
of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Purchased Shares under the Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and any other Transaction Documents to which the transferor is a party,
and shall have the rights and obligations of a Purchaser under this Agreement and the other Transaction Documents.


 


(b)
The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Purchased Shares
in the following form:


 


THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER OF SUCH SECURITIES, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.


 


(c)
The Company acknowledges and agrees that Purchaser may from time to time pledge pursuant to a bona fide margin agreement with
a registered broker-dealer or grant a security interest in some or all of the Purchased Shares to a financial institution that
is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions
of this Agreement and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Purchased
Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal
opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice
shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Purchased Shares may reasonably request in connection with a pledge or transfer
of the Purchased Shares, including, if the Purchased Shares are subject to an effective registration statement under the Securities
Act, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) promulgated by the Commission under
the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same purpose and effect as such Rule, or any other applicable provision of
the Securities Act to appropriately amend the list of selling stockholders thereunder.


 



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(d)
The Purchaser agrees with the Company that the Purchaser will sell any Purchased Shares pursuant to either the registration requirements
of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Purchased
Shares are sold pursuant to an effective registration statement, they will be sold in compliance with the plan of distribution
set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Purchased Shares
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.


 


4.2
Integration. The Company shall not sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Purchased Shares in a manner that would require the registration under
the Securities Act of the sale of the Purchased Shares or that would be integrated with the offer or sale of the Purchased Shares
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.


 


4.3
Securities Laws Disclosure; Publicity.
The Company shall, by the close of business (New York City time) on the second day after the Initial Closing, file a Current Report
on Form 8-K, disclosing the material terms of the transactions contemplated hereby and including the Transaction Documents as
exhibits thereto. From and after the filing of such Form 8-K, the Company shall have publicly disclosed all material, non-public
information delivered to the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchaser
shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither
the Company nor the Purchaser shall issue any press release nor otherwise make any such public statement without the prior consent
of the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with respect
to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement
or communication.


 


4.4
Shareholder Rights Plan. No claim will
be made or enforced by the Company or, with the consent of the Company, any other Person, that the Purchaser is an “Acquiring
Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Purchaser could
be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Purchased Shares under the Transaction
Documents or under any other agreement between the Company and the Purchaser.


 



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4.5 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide the
Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public
information, unless prior thereto the Purchaser shall have executed a written agreement with the Company regarding the
confidentiality and use of such information. The Company understands and confirms that the Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.


 


4.6
Indemnification of Purchaser. Subject
to the provisions of this Section 4.6, the Company will indemnify and hold the Purchaser and its directors, officers, shareholders,
members, managers, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members,
managers, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from
any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that a Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made
by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser Party
in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of the
Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based
upon a breach of the Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements
or understandings the Purchaser Party may have with any such stockholder or any violations by the Purchaser Party of state or
federal securities laws or any conduct by the Purchaser Party which constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, the Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have
the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of the Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by the Purchaser Party in this Agreement or in the other Transaction Documents.


 



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4.7
Certain Transactions and Confidentiality.
The Purchaser covenants that neither it nor any Affiliate acting on behalf of or pursuant to any understanding with the Company
will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing
with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the Form 8-K as described in Section 4.3. The Purchaser covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the Form 8-K as described in Section 4.3, the
Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the
Transaction Documents. Notwithstanding the foregoing and notwithstanding anything contained in
this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) the Purchaser makes no representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time
that the transactions contemplated by this Agreement are first publicly announced pursuant to the Form 8-K as described in Section
4.3, (ii) the Purchaser shall not be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the Form 8-K as described in Section 4.3 and (iii) the Purchaser shall not have any duty
of confidentiality to the Company or its Subsidiaries after the issuance of the Form 8-K as described in Section 4.3.


 


4.8
Form D; Blue Sky Filings. The Company
agrees to timely file a Form D with respect to the Purchased Shares as required under Regulation D and to provide to Purchaser
a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for, or to qualify the Purchased Shares for, sale to the Purchaser at each Closing
under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Purchaser; provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process in any such jurisdiction.


 


4.9 Stockholders
Consent. The Company shall take all action reasonably necessary in accordance with applicable law to obtain the
appropriate stockholders consent within six (6) months from the date hereof for the purpose of approving the Restated
Certificate of Incorporation and shall promptly file such Restated Certificate of Incorporation with the Secretary of State
of the State of Delaware after the receipt of such stockholder approval. The Company’s Board of Directors shall
recommend to the stockholders the adoption of the Restated Certificate of Incorporation.


 


ARTICLE
V.

MISCELLANEOUS


 


5.1
Fees and Expenses. The Company shall pay
all of the expenses incurred by it in connection with the transactions contemplated by this Agreement, including the fees and
expenses of its advisers, counsel, accountants and other experts, if any. The Company shall pay all Transfer Agent fees, stamp
taxes and other taxes and duties levied in connection with the delivery of any Purchased Shares to the Purchaser. The Purchaser
shall be responsible for the payment of all of the expenses incurred by it in connection with the transactions contemplated by
this Agreement, including the fees and expenses of its advisers, counsel, accountants and other experts, if any.


 



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5.2
Entire Agreement. The Transaction Documents,
together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.3
Governing Agreement. Should any provision
of this Agreement conflict with the provisions of any other Transaction Document, the terms of this Agreement shall govern.


 


5.4
Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature page attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b)
the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for
such notices and communications shall be as set forth on the signature pages attached hereto.


 


5.5
Amendments; Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment,
by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision
is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right.


 


5.6
Headings. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions
hereof.


 


5.7
Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other than by
merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Purchased Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Purchased
Shares, by the provisions of the Transaction Documents that apply to the “Purchaser.”


 



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5.8
No Third-Party Beneficiaries. This Agreement
is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7.


 


5.9
Governing Law. All questions concerning
the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof.
Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated
by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City
of Boston and the non-exclusive jurisdiction of the such courts with respect to the enforcement of any award thereunder. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Boston,
Massachusetts, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If any party shall commence an action or proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.6, the prevailing party in such action or proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.


 


5.10
Survival. The representations and warranties
contained herein shall survive the Closing and the delivery of the Purchased Shares.


 


5.11
Execution. This Agreement may be executed
in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties
need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.


 


5.12
Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to
find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed
the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.


 



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5.13
Replacement of Purchased Shares. If any
certificate or instrument evidencing any Purchased Shares is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay
any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Purchased Shares.


 


5.14
Remedies. In addition to being entitled
to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree
to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would
be adequate.


 


5.15
Further Assurances. Each Party shall do
and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other Party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


5.16
Saturdays, Sundays, Holidays, etc.If
the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be
a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.


 


5.17
Construction. The parties agree that each
of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore,
the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this
Agreement.


 


5.18
WAIVER OF JURY TRIAL. IN ANY ACTION,
SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY,
TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY. 


 


(Signature
Pages Follow)


 



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IN
WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


	American
    Power Group Corporation 	 	Address
    for Notice:
	 	 	 	 
	By:	/s/
    Charles E. Coppa	 	American
    Power Group Corporation
	Name:	Charles
    E. Coppa	 	2503
    East Poplar Street, Algona, IA
	Title:	Chief
    Executive Officer and Chief Financial Officer	 	50511Attention:
    Charles E. Coppa



 


	With
    a copy to (which shall not constitute notice):	 
	 	 
	Morse,
    Barnes-Brown & Pendleton, P.C.	 
	CityPoint	 
	230
    Third Avenue	 
	Waltham,
    Massachusetts 02451	 
	Attention:
    Carl F. Barnes	 
	Fax
    (781) 622-5933	 



 


	PURCHASER:	 	Address
    for Notice:
	 	 	 	 
	DUAL
    FUEL, LLC	 	 
	 	 	 	 
	By:	/s/
    Kenneth Losch	 	Dual
    Fuel, LLC
	Name:	Kenneth
    Losch	 	7030
    W. Oakland Street, Suite 101
	Title:	Manager	 	Chandler,
    Arizona 85226
	 	 	 	Attention:
    Kenneth Losch
	 	 	 	Fax:




 



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