Exhibit
10.4





 


AMENDMENT
to Promissory NoteS AND WAIVER





 


THIS
AMENDMENT TO PROMISSORY NOTES AND WAIVER (this “Amendment”) is made as of the 31st day of
May, 2018, among American Power Group Corporation, a Delaware corporation
(the “Company”), and the parties who execute the signature page hereto. Capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in the Note Purchase Agreement or the Notes (each as hereinafter
defined).


 


WHEREAS,
the Company has issued its subordinated contingent convertible promissory notes (the “Notes”) in the
aggregate principal amount of $3,000,000 to certain investors (each, a “Holder” and, collectively, the
“Holders”), pursuant to that certain Convertible Note Purchase Agreement dated as of January 27, 2017
(the “Note Purchase Agreement”);


 


WHEREAS,
the Maturity Date of each of the Notes is currently June 30, 2018;


 


WHEREAS,
under certain circumstances, the Notes convert into Series E Preferred;


 


WHEREAS,
the Company may not prepay the Notes prior to the Maturity Date without the prior written consent of each Holder;


 


WHEREAS,
the Company and the undersigned Holders wish to amend all of the Notes in accordance with the terms of this Amendment;


 


WHEREAS,
the Maturity Date may be changed or amended with the written consent of the Company and the Holders of Notes representing 75%
of the principal amount of the Notes outstanding from time to time and the other changes provided for herein require the written
consent of the Company and the Holders of Notes representing 67% of the principal amount of the Notes outstanding from time to
time;


 


WHEREAS,
Section 4.14 of the Note Purchase Agreement provides that the Company shall file the Certificate of Designation with the Secretary
of State of Delaware within two Business Days after receiving written notice from the Holders of 67% of the principal amount of
the Notes outstanding requesting that the Company file said Certificate of Designations; and


 


WHEREAS,
any provision of the Note Purchase Agreement may be waived by the Holders of Notes representing 67% of the principal amount of
the Notes outstanding from time to time.


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and such Holders hereby agree as follows:


 






    	 



    	 



    




 


1.                 
Section 1 of each of the Notes is hereby amended to read as follows:


 


“1.Repayment.
All payments of interest and principal shall be in lawful money of the United States of America. All payments shall be applied
first to accrued interest, and thereafter to principal. Except as otherwise provided below, the outstanding principal amount of
this Note shall be due and payable on June 30, 2021 (the “Maturity Date”).


 


2.                 
Section 3 of each of the Notes is hereby amended to read as follows:


 


“3.Conversion.


 


		(a)	The
                                         outstanding principal balance of this Note, together with all accrued but unpaid interest
                                         thereon, may be converted at the option of the Holder hereof into Common Stock of the
                                         Company at a conversion price equal to $0.25 per share.



 


		(b)	If
                                         the outstanding principal balance of this Note, together with all accrued but unpaid
                                         interest thereon, is not prepaid by the Company pursuant to Section 5 hereof, then at
                                         the Maturity Date it shall automatically convert in whole without any further action
                                         by the Holder or the Holders of the other Notes into shares (including fractional shares,
                                         rounded to the nearest thousandth of a share) of Common Stock, at a conversion price
                                         of $0.25 per share.



 


3.                 
Section 5 of each of the Notes is hereby amended to read as follows:


 


“5.Prepayment.
Upon approval of the majority of the Board of Directors of the Company, the Company may prepay this Note prior to the Maturity
Date at any time but only in cash.


 


4.       The
Holders hereby: (i) waive all rights to provide notice to the Company pursuant to Section 4.14 of the Note Purchase Agreement,
which would otherwise require the Company to file the Certificate of Designations; and (ii) acknowledge that the Notes shall only
be convertible into Common Stock pursuant to the terms of this Agreement.


 


5.       Except
as specifically set forth above, the Notes shall remain in full force and effect in accordance with their terms.


 


6.       This
Amendment shall become effective upon its execution by the Company and by the Holders holding Notes representing 75% of the principal
amount of all of the Notes, and shall be binding on all of the Holders of the Notes.


 





[Remainder
of Page Intentionally Left Blank]


 




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[SIGNATURE
PAGE TO AMENDMENT TO


AMERICAN
POWER GROUP CORPORATION


SUBORDINATED
CONTINGENT CONVERTIBLE PROMISSORY NOTES]




 


IN
WITNESS WHEREOF, the Company has caused this Amendment dated as of May 31, 2018 to be duly executed by its authorized officer
as of such date.


 





	 	AMERICAN POWER GROUP CORPORATION
	 	 	 
	 	By:	/s/
    Charles E. Coppa
	 	 	Charles E. Coppa
	 	 	Chief Executive Officer












 


IN
WITNESS WHEREOF, the undersigned Holder has caused this Amendment dated as of May 31, 2018 to be duly executed by its authorized
signatory as of such date.


 


Name
of Holder: Arrow, LLC


 


Signature
of Authorized Signatory of Holder: /s/ Matthew Van Steenwyk


 


Name
of Authorized Signatory: _____________________________________________


 


Title
of Authorized Signatory: ________________________________________________





 


Name
of Holder: Associated Private Equity, LLC


 


Signature
of Authorized Signatory of Holder: /s/ Neil Braverman


 


Name
of Authorized Signatory: _____________________________________________


 


Title
of Authorized Signatory: ________________________________________________


 








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