EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

           REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of May 19,
2004, by and between COACH INDUSTRIES GROUP,  INC., a Nevada  corporation,  (the
"COMPANY"), and FUSION CAPITAL FUND II, LLC (together with it permitted assigns,
the "BUYER").  Capitalized  terms used herein and not otherwise  defined  herein
shall  have the  respective  meanings  set forth in the  Common  Stock  Purchase
Agreement  by and between the  parties  hereto,  dated as of the date hereof (as
amended,  restated,  supplemented  or otherwise  modified from time to time, the
"PURCHASE AGREEMENT").

                                    WHEREAS:

           A.  The  Company  has  agreed,  upon the  terms  and  subject  to the
conditions  of the  Purchase  Agreement,  to  issue to the  Buyer  (i) up to Six
Million Dollars ($6,000,000) of the Company's common stock, par value $0.001 per
share (the "COMMON  STOCK")  (the  "PURCHASE  SHARES"),  and (ii) such number of
shares of Common  Stock as is required  pursuant to Section 4(f) of the Purchase
Agreement (the "COMMITMENT SHARES"); and

           B. To induce  the Buyer to enter  into the  Purchase  Agreement,  the
Company has agreed to provide certain  registration  rights under the Securities
Act of 1933,  as  amended,  and the rules  and  regulations  thereunder,  or any
similar successor statute  (collectively,  the "1933 ACT"), and applicable state
securities laws.

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

           1.        DEFINITIONS.

                     As used in this  Agreement,  the following terms shall have
the following meanings:

                     a. "INVESTOR"  means the Buyer,  any transferee or assignee
thereof to whom a Buyer  assigns its rights under this  Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee  thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.

                     b.  "PERSON"  means  any  person or  entity  including  any
corporation,  a limited liability  company,  an association,  a partnership,  an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.

                     c. "REGISTER,"  "REGISTERED," and "REGISTRATION" refer to a
registration   effected  by  preparing  and  filing  one  or  more  registration
statements of the Company in  compliance  with the 1933 Act and pursuant to Rule
415 under the 1933 Act or any successor rule  providing for offering  securities
on a  continuous  basis  ("RULE  415"),  and  the  declaration  or  ordering  of
effectiveness of such registration  statement(s) by the United States Securities
and Exchange Commission (the "SEC").

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                     d. "REGISTRABLE SECURITIES" means the Purchase Shares which
have been, or which may from time to time be, issued or issuable upon  purchases
of the  Available  Amount under the Purchase  Agreement  (without  regard to any
limitation or restriction on purchases) the Signing  Shares,  issued or issuable
to the Investor,  and the  Commitment  Shares issued or issuable to the Investor
and any shares of capital  stock issued or issuable with respect to the Purchase
Shares,  the  Commitment  Shares the Signing  Shares,  issued or issuable to the
Investor,  or the  Purchase  Agreement  as a result  of any stock  split,  stock
dividend,  recapitalization,  exchange or similar  event or  otherwise,  without
regard to any limitation on purchases under the Purchase Agreement.

                     e.   "REGISTRATION   STATEMENT"   means  the   registration
statement of the Company covering the sale of the Registrable Securities.

           2.        REGISTRATION.

                     a.  Mandatory  Registration.  The Company  shall within ten
(10)  Trading  Days  from the date  hereof  file  with the SEC the  Registration
Statement.  The Investor and its counsel shall have a reasonable  opportunity to
review  and  comment  upon such  registration  statement  or  amendment  to such
registration  statement and any related  prospectus prior to its filing with the
SEC. Investor shall furnish all information  reasonably requested by the Company
for  inclusion  therein.  The  Company  shall use its best  efforts  to have the
Registration  Statement  or  amendment  declared  effective  by  the  SEC at the
earliest  possible date.  The Company shall use reasonable  best efforts to keep
the Registration  Statement effective pursuant to Rule 415 promulgated under the
1933 Act and  available  for sales of all of the  Registrable  Securities at all
times until the earlier of (i) the date as of which the Investor may sell all of
the  Registrable   Securities  without  restriction   pursuant  to  Rule  144(k)
promulgated under the 1933 Act (or successor  thereto) or (ii) the date on which
(A) the Investor shall have sold all the Registrable Securities and no Available
Amount remains under the Purchase  Agreement (the  "REGISTRATION  PERIOD").  The
Registration  Statement  (including any  amendments or  supplements  thereto and
prospectuses  contained  therein)  shall not contain any untrue  statement  of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.

                     b. Rule 424  Prospectus.  The Company shall, as required by
applicable securities regulations, from time to time file with the SEC, pursuant
to Rule 424  promulgated  under  the 1933 Act,  the  prospectus  and  prospectus
supplements,  if any,  to be used in  connection  with sales of the  Registrable
Securities under the Registration Statement.  The Investor and its counsel shall
have a reasonable  opportunity to review and comment upon such prospectus  prior
to its filing with the SEC. The Investor shall use its  reasonable  best efforts
to comment  upon such  prospectus  within one (1)  Trading Day from the date the
Investor receives the final version of such prospectus.

                     c. Sufficient Number of Shares Registered. In the event the
number of shares available under the  Registration  Statement is insufficient to
cover  all  of  the  Registrable   Securities,   the  Company  shall  amend  the
Registration Statement or file a new registration statement (a "NEW REGISTRATION
STATEMENT"),  so as to  cover  all of  such  Registrable  Securities  as soon as
practicable,  but in any event not later  than ten (10)  Trading  Days after the
necessity  therefor arises.  The Company shall use it reasonable best efforts to
cause such amendment  and/or New  Registration  Statement to become effective as
soon as practicable following the filing thereof.

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           3. RELATED OBLIGATIONS.

           With  respect  to  the   Registration   Statement  and  whenever  any
Registrable  Securities are to be registered  pursuant to Section 2(b) including
on any New  Registration  Statement,  the Company shall use its reasonable  best
efforts to effect the  registration of the Registrable  Securities in accordance
with the intended  method of  disposition  thereof and,  pursuant  thereto,  the
Company shall have the following obligations:

                     a. The  Company  shall  prepare  and file with the SEC such
amendments  (including   post-effective   amendments)  and  supplements  to  any
registration   statement  and  the  prospectus  used  in  connection  with  such
registration  statement,  which  prospectus is to be filed  pursuant to Rule 424
promulgated  under the 1933 Act, as may be  necessary  to keep the  Registration
Statement or any New  Registration  Statement  effective at all times during the
Registration Period, and, during such period,  comply with the provisions of the
1933 Act with respect to the  disposition of all  Registrable  Securities of the
Company covered by the Registration  Statement or any New Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers thereof as set forth in such registration statement.

                     b. The  Company  shall  permit the  Investor  to review and
comment upon the Registration  Statement or any New  Registration  Statement and
all  amendments and  supplements  thereto at least two (2) Trading Days prior to
their filing with the SEC, and not file any document in a form to which Investor
reasonably  objects.  The  Investor  shall use its  reasonable  best  efforts to
comment upon the Registration  Statement or any New  Registration  Statement and
any amendments or supplements  thereto within two (2) Trading Days from the date
the Investor  receives the final version  thereof.  The Company shall furnish to
the Investor, without charge any correspondence from the SEC or the staff of the
SEC to the Company or its representatives relating to the Registration Statement
or any New Registration Statement.

                     c. Upon request of the Investor,  the Company shall furnish
to the Investor, (i) promptly after the same is prepared and filed with the SEC,
at least one copy of such registration  statement and any amendment(s)  thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits,  (ii) upon the  effectiveness of any registration
statement,  ten (10)  copies of the  prospectus  included  in such  registration
statement and all  amendments and  supplements  thereto (or such other number of
copies as the Investor may reasonably  request) and (iii) such other  documents,
including  copies of any  preliminary or final  prospectus,  as the Investor may
reasonably  request from time to time in order to facilitate the  disposition of
the Registrable Securities owned by the Investor.

                     d. The Company  shall use  reasonable  best  efforts to (i)
register  and  qualify  the  Registrable  Securities  covered by a  registration
statement under such other  securities or "blue sky" laws of such  jurisdictions
in the United States as the Investor reasonably requests,  (ii) prepare and file
in those jurisdictions,  such amendments (including  post-effective  amendments)
and supplements to such  registrations and qualifications as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (x)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3(d),  (y) subject  itself

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to general taxation in any such  jurisdiction,  or (z) file a general consent to
service of process in any such  jurisdiction.  The Company shall promptly notify
the Investor who holds  Registrable  Securities of the receipt by the Company of
any  notification  with  respect  to  the  suspension  of  the  registration  or
qualification of any of the Registrable Securities for sale under the securities
or "blue sky" laws of any  jurisdiction  in the United  States or its receipt of
actual  notice of the  initiation  or  threatening  of any  proceeding  for such
purpose.

                     e. As promptly as practicable  after becoming aware of such
event or facts,  the  Company  shall  notify  the  Investor  in  writing  of the
happening  of any  event or  existence  of such  facts as a result  of which the
prospectus included in any registration  statement,  as then in effect, includes
an  untrue  statement  of a  material  fact or omits to  state a  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the  circumstances  under  which they were made,  not  misleading,  and
promptly  prepare a supplement  or amendment to such  registration  statement to
correct such untrue  statement or omission,  and deliver ten (10) copies of such
supplement  or  amendment to the Investor (or such other number of copies as the
Investor may  reasonably  request).  The Company shall also promptly  notify the
Investor  in writing  (i) when a  prospectus  or any  prospectus  supplement  or
post-effective  amendment has been filed,  and when a registration  statement or
any  post-effective   amendment  has  become  effective  (notification  of  such
effectiveness shall be delivered to the Investor by facsimile on the same day of
such  effectiveness  and by overnight mail),  (ii) of any request by the SEC for
amendments or supplements to any registration statement or related prospectus or
related information,  and (iii) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate.

                     f. The Company  shall use its  reasonable  best  efforts to
prevent the issuance of any stop order or other  suspension of  effectiveness of
any  registration  statement,  or the  suspension  of the  qualification  of any
Registrable  Securities  for sale in any  jurisdiction  and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible moment and to notify the Investor of the issuance of such
order  and the  resolution  thereof  or its  receipt  of  actual  notice  of the
initiation or threat of any proceeding for such purpose.

                     g.  The  Company  shall  (i)  cause  all  the   Registrable
Securities to be listed on each securities  exchange on which  securities of the
same class or series  issued by the  Company  are then  listed,  if any,  if the
listing of such Registrable Securities is then permitted under the rules of such
exchange,  or (ii)  secure  designation  and  quotation  of all the  Registrable
Securities on the Principal Market.  The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section.

                     h.  The  Company  shall  cooperate  with  the  Investor  to
facilitate the timely  preparation and delivery of certificates (not bearing any
restrictive  legend)  representing  the  Registrable  Securities  to be  offered
pursuant to any  registration  statement and enable such  certificates  to be in
such  denominations  or amounts  as the  Investor  may  reasonably  request  and
registered in such names as the Investor may request.

                     i. The Company shall at all times provide a transfer  agent
and registrar with respect to its Common Stock.

                     j. If  reasonably  requested by the  Investor,  the Company
shall (i) immediately  incorporate in a prospectus  supplement or post-effective
amendment such  information as the Investor  believes should be included therein
relating to the sale and  distribution  of  Registrable  Securities,  including,

<PAGE>

without  limitation,  information  with  respect  to the  number of  Registrable
Securities  being sold,  the  purchase  price being paid  therefor and any other
terms of the  offering of the  Registrable  Securities;  (ii) make all  required
filings of such  prospectus  supplement or  post-effective  amendment as soon as
notified of the matters to be  incorporated  in such  prospectus  supplement  or
post-effective  amendment;  and  (iii)  supplement  or  make  amendments  to any
registration statement.

                     k. The Company  shall use its  reasonable  best  efforts to
cause the Registrable Securities covered by the any registration statement to be
registered with or approved by such other  governmental  agencies or authorities
as  may  be  necessary  to  consummate  the  disposition  of  such   Registrable
Securities.

                     l.  Within  one (1)  Trading  Day  after  any  registration
statement which includes the Registrable  Securities is ordered effective by the
SEC, the Company shall deliver, and shall cause legal counsel for the Company to
deliver,  to the transfer agent for such Registrable  Securities (with copies to
the Investor)  confirmation that such  registration  statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.

                     m. The  Company  shall  take all other  reasonable  actions
necessary to expedite and facilitate  disposition by the Investor of Registrable
Securities pursuant to any registration statement.

           4. OBLIGATIONS OF THE INVESTOR.

                     a. The Company  shall notify the Investor in writing of the
information the Company reasonably requires from the Investor in connection with
any registration statement hereunder.  The Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such  documents in connection  with such  registration  as the
Company may reasonably request.


                     b. The  Investor  agrees to  cooperate  with the Company as
reasonably  requested  by the Company in  connection  with the  preparation  and
filing of any registration statement hereunder.

                     c. The  Investor  agrees  that,  upon receipt of any notice
from the Company of the happening of any event or existence of facts of the kind
described  in Section  3(f) or the first  sentence of 3(e),  the  Investor  will
immediately  discontinue  disposition of Registrable  Securities pursuant to any
registration   statement(s)  covering  such  Registrable  Securities  until  the
Investor's  receipt of the  copies of the  supplemented  or  amended  prospectus
contemplated  by Section  3(f) or the first  sentence  of 3(e).  Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to promptly
deliver shares of Common Stock without any restrictive legend in accordance with

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the terms of the Purchase  Agreement in connection  with any sale of Registrable
Securities  with  respect to which an Investor  has entered  into a contract for
sale  prior to the  Investor's  receipt  of a notice  from  the  Company  of the
happening  of any  event of the kind  described  in  Section  3(f) or the  first
sentence of 3(e) and for which the Investor has not yet settled.

           5. EXPENSES OF REGISTRATION.

                     All  reasonable  expenses,  other than  sales or  brokerage
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company, shall be paid by the Company.

           6.        INDEMNIFICATION.

                     a. To the  fullest  extent  permitted  by law,  the Company
will, and hereby does,  indemnify,  hold harmless and defend the Investor,  each
Person, if any, who controls the Investor, the members, the directors, officers,
partners, employees, agents, representatives of the Investor and each Person, if
any,  who  controls  the  Investor  within  the  meaning  of the 1933 Act or the
Securities  Exchange  Act of  1934,  as  amended  (the  "1934  ACT")  (each,  an
"INDEMNIFIED  PERSON"),  against  any  losses,  claims,  damages,   liabilities,
judgments,  fines,  penalties,  charges, costs, attorneys' fees, amounts paid in
settlement or expenses, joint or several,  (collectively,  "CLAIMS") incurred in
investigating,   preparing  or  defending  any  action,  claim,  suit,  inquiry,
proceeding,  investigation  or appeal taken from the  foregoing by or before any
court or governmental,  administrative or other regulatory  agency,  body or the
SEC,  whether pending or threatened,  whether or not an indemnified  party is or
may be a party thereto ("INDEMNIFIED  DAMAGES"), to which any of them may become
subject insofar as such Claims (or actions or proceedings,  whether commenced or
threatened,  in respect  thereof) arise out of or are based upon: (i) any untrue
statement or alleged  untrue  statement of a material  fact in the  Registration
Statement,  any  New  Registration  Statement  or any  post-effective  amendment
thereto  or in any  filing  made in  connection  with the  qualification  of the
offering  under the securities or other "blue sky" laws of any  jurisdiction  in
which Registrable Securities are offered ("BLUE SKY FILING"), or the omission or
alleged  omission  to state a material  fact  required  to be stated  therein or
necessary  to make the  statements  therein  not  misleading,  (ii)  any  untrue
statement or alleged untrue  statement of a material fact contained in the final
prospectus  (as  amended or  supplemented,  if the Company  files any  amendment
thereof or supplement  thereto with the SEC) or the omission or alleged omission
to state  therein  any  material  fact  necessary  to make the  statements  made
therein,  in light of the circumstances  under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other law, including,  without  limitation,  any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable  Securities pursuant to the Registration Statement or
any New Registration  Statement or (iv) any material violation by the Company of
this  Agreement  (the matters in the  foregoing  clauses (i) through (iv) being,
collectively, "VIOLATIONS"). The Company shall reimburse each Indemnified Person
promptly as such  expenses are  incurred and are due and payable,  for any legal
fees  or  other  reasonable   expenses  incurred  by  them  in  connection  with
investigating  or  defending  any such  Claim.  Notwithstanding  anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section 6(a):  (i) shall not apply to a Claim by an  Indemnified  Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by such Indemnified Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement,  any New  Registration  Statement  or any such  amendment  thereof or

<PAGE>

supplement  thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) or Section  3(e);  (ii) with respect to any  superceded
prospectus,  shall not inure to the  benefit  of any such  person  from whom the
person  asserting any such Claim purchased the  Registrable  Securities that are
the subject thereof (or to the benefit of any person controlling such person) if
the untrue  statement or omission of material fact  contained in the  superceded
prospectus  was  corrected  in  the  revised  prospectus,  as  then  amended  or
supplemented,  if such  revised  prospectus  was timely  made  available  by the
Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person was
promptly advised in writing not to use the incorrect prospectus prior to the use
giving rise to a violation and such  Indemnified  Person,  notwithstanding  such
advice,  used it; (iii) shall not be available to the extent such Claim is based
on a  failure  of the  Investor  to  deliver  or to  cause to be  delivered  the
prospectus  made  available by the Company,  if such  prospectus was timely made
available  by the Company  pursuant to Section  3(c) or Section  3(e);  and (iv)
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected  without the prior written consent of the Company,  which consent shall
not be  unreasonably  withheld.  Such  indemnity  shall remain in full force and
effect regardless of any  investigation  made by or on behalf of the Indemnified
Person and shall  survive the  transfer  of the  Registrable  Securities  by the
Investor pursuant to Section 9.

                     b. In connection with the Registration Statement or any New
Registration  Statement,  the  Investor  agrees  to  severally  and not  jointly
indemnify,  hold harmless and defend,  to the same extent and in the same manner
as is set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement or any New Registration Statement,
each Person, if any, who controls the Company within the meaning of the 1933 Act
or the 1934 Act  (collectively  and  together  with an  Indemnified  Person,  an
"INDEMNIFIED  PARTY"),  against any Claim or Indemnified Damages to which any of
them may become subject, under the 1933 Act, the 1934 Act or otherwise,  insofar
as such  Claim  or  Indemnified  Damages  arise  out of or are  based  upon  any
Violation,  in each  case to the  extent,  and  only to the  extent,  that  such
Violation  occurs in reliance  upon and in conformity  with written  information
about the Investor set forth on Exhibit B attached  hereto and  furnished to the
Company by the Investor  expressly for use in connection with such  registration
statement;  and,  subject to Section 6(d), the Investor will reimburse any legal
or other expenses  reasonably  incurred by them in connection with investigating
or defending any such Claim;  provided,  however,  that the indemnity  agreement
contained in this Section 6(b) and the  agreement  with respect to  contribution
contained  in Section 7 shall not apply to  amounts  paid in  settlement  of any
Claim if such  settlement is effected  without the prior written  consent of the
Investor, which consent shall not be unreasonably withheld;  provided,  further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified  Damages as does not exceed the net proceeds to
the Investor as a result of the sale of Registrable  Securities pursuant to such
registration  statement.  Such  indemnity  shall remain in full force and effect
regardless of any  investigation  made by or on behalf of such Indemnified Party
and shall  survive the transfer of the  Registrable  Securities  by the Investor
pursuant to Section 9.

                     c.  Promptly  after  receipt  by an  Indemnified  Person or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action or proceeding (including any governmental action or proceeding) involving
a Claim,  such  Indemnified  Person or  Indemnified  Party shall,  if a Claim in
respect thereof is to be made against any indemnifying  party under this Section
6,  deliver  to the  indemnifying  party a written  notice  of the  commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the  extent  the  indemnifying  party so  desires,  jointly  with  any  other
indemnifying party similarly  noticed,  to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided,  however, that an
Indemnified  Person or Indemnified  Party shall have the right to retain its own

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counsel with the fees and expenses to be paid by the indemnifying  party, if, in
the  reasonable  opinion of counsel  retained  by the  indemnifying  party,  the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented  by such counsel in such  proceeding.  The  Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with any  negotiation  or defense of any such action or claim by the
indemnifying  party and shall furnish to the indemnifying  party all information
reasonably  available  to the  Indemnified  Party or  Indemnified  Person  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  No
indemnifying  party shall be liable for any  settlement of any action,  claim or
proceeding  effected without its written consent,  provided,  however,  that the
indemnifying  party shall not  unreasonably  withhold,  delay or  condition  its
consent.  No  indemnifying  party shall,  without the consent of the Indemnified
Party or Indemnified Person,  consent to entry of any judgment or enter into any
settlement or other compromise  which does not include as an unconditional  term
thereof the giving by the  claimant or plaintiff  to such  Indemnified  Party or
Indemnified  Person of a release from all  liability in respect to such claim or
litigation.   Following   indemnification   as  provided  for   hereunder,   the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified  Person with  respect to all third  parties,  firms or  corporations
relating to the matter for which  indemnification  has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified  Person or Indemnified  Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

                     d. The indemnification  required by this Section 6 shall be
made by  periodic  payments  of the  amount  thereof  during  the  course of the
investigation or defense,  as and when bills are received or Indemnified Damages
are incurred.

                     e. The indemnity  agreements  contained  herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified  Person  against  the  indemnifying  party or  others,  and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

           7.        CONTRIBUTION.

                     To the extent any  indemnification by an indemnifying party
is  prohibited  or limited by law,  the  indemnifying  party  agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable  under  Section  6 to the  fullest  extent  permitted  by law;  provided,
however,  that:  (i) no seller of  Registrable  Securities  guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of fraudulent  misrepresentation;  and (ii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

           8. REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.

                     With  a view  to  making  available  to  the  Investor  the
benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or

<PAGE>

regulation  of the  SEC  that  may at any  time  permit  the  Investor  to  sell
securities of the Company to the public without  registration  ("RULE 144"), the
Company agrees, at the Company's sole expense, to:

                     a. make and keep  public  information  available,  as those
terms are understood and defined in Rule 144;

                     b. file with the SEC in a timely  manner  all  reports  and
other  documents  required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such  requirements and the filing of such
reports and other  documents is required for the  applicable  provisions of Rule
144; and

                     c.  furnish to the  Investor so long as the  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied with the reporting and or disclosure  provisions of
Rule 144, the 1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual
or quarterly report of the Company and such other reports and documents so filed
by the Company,  and (iii) such other information as may be reasonably requested
to permit the  Investor  to sell such  securities  pursuant  to Rule 144 without
registration.

                     d.  take such  additional  action  as is  requested  by the
Investor to enable the Investor to sell the Registerable  Securities pursuant to
Rule 144,  including,  without  limitation,  delivering all such legal opinions,
consents,  certificates,  resolutions and instructions to the Company's Transfer
Agent as may be requested from time to time by the Investor and otherwise  fully
cooperate with Investor and Investor's  broker to effect such sale of securities
pursuant to Rule 144.

                     The Company agrees that damages may be an inadequate remedy
for any breach of the terms and  provisions  of this Section 8 and that Investor
shall, whether or not it
is pursuing any remedies at law, be entitled to equitable  relief in the form of
a preliminary or permanent injunctions, without having to post any bond or other
security, upon any breach or threatened breach of any such terms or provisions.

9. ASSIGNMENT OF REGISTRATION RIGHTS.

                     The Company  shall not assign this  Agreement or any rights
or  obligations  hereunder  without the prior  written  consent of the Investor,
including  by merger or  consolidation.  The  Investor may not assign its rights
under this Agreement  without the written consent of the Company,  other than to
an  affiliate  of the  Investor  controlled  by  Steven  G.  Martin or Joshua B.
Scheinfeld.

           10. AMENDMENT OF REGISTRATION RIGHTS.

                     Provisions  of  this  Agreement  may  be  amended  and  the
observance  thereof may be waived (either generally or in a particular  instance
and either retroactively or prospectively), only with the written consent of the
Company and the Investor.

<PAGE>

           11.       MISCELLANEOUS.

                     a.  A  Person  is  deemed  to be a  holder  of  Registrable
Securities  whenever  such  Person  owns  or is  deemed  to own of  record  such
Registrable  Securities.  If  the  Company  receives  conflicting  instructions,
notices  or  elections  from  two or  more  Persons  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.

                     b. Any notices,  consents,  waivers or other communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending  party);  or (iii) one (1) Trading Day after deposit
with a nationally  recognized  overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:


           If to the Company:
                     Coach Industries Group, Inc.
                     9600 W. Sample Road, Suite 505
                     Coral Springs, Florida 33065
                     Telephone: 954-796-4200
                     Facsimile: 954-796-7600
                     Attention: _______________

           With a copy to:
                     Joseph I. Emas, Esq.
                     1224 Washington Ave
                     Miami Beach, Florida 33139
                     Telephone: 305-531-1174
                     Facsimile: 305-531-1274


           If to the Investor:
                     Fusion Capital Fund II, LLC
                     222 Merchandise Mart Plaza, Suite 9-112
                     Chicago, IL 60654
                     Telephone: 312-644-6644
                     Facsimile: 312-644-6244
                     Attention: Steven G.  Martin

or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party  three (3)  Trading  Days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (A) given by the  recipient  of such

<PAGE>

notice,   consent,   waiver  or  other   communication,   (B)   mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (C)  provided by a  nationally  recognized  overnight  delivery
service, shall be rebuttable evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

                     c.  Failure  of any party to  exercise  any right or remedy
under this Agreement or otherwise,  or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.

                     d. The  corporate  laws of the State of Nevada shall govern
all issues  concerning the relative rights of the Company and its  stockholders.
All other  questions  concerning the  construction,  validity,  enforcement  and
interpretation  of this Agreement  shall be governed by the internal laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other  jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of  Illinois.  Each party  hereby  irrevocably  submits  to the  exclusive
jurisdiction  of the state and federal courts  sitting the City of Chicago,  for
the adjudication of any dispute hereunder or in connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  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 brought in an inconvenient  forum or that the
venue of such  suit,  action  or  proceeding  is  improper.  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 to such
party at the address for such 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  manner  permitted  by law.  If any  provision  of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or  unenforceability  shall not affect the  validity  or  enforceability  of the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability  of any  provision of this  Agreement in any other  jurisdiction.
EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES NOT TO
REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT OF  THIS  AGREEMENT  OR  ANY  TRANSACTION
CONTEMPLATED HEREBY.

                     e. This Agreement,  and the Purchase  Agreement  constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof  and  thereof.  There  are  no  restrictions,   promises,  warranties  or
undertakings, other than those set forth or referred to herein and therein. This
Agreement  and  the  Purchase  Agreement  supersede  all  prior  agreements  and
understandings  among the  parties  hereto with  respect to the  subject  matter
hereof and thereof.

                     f. Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the permitted  successors  and
assigns of each of the parties hereto.

                     g. The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

<PAGE>

                     h.   This   Agreement   may  be   executed   in   identical
counterparts,  each of which shall be deemed an original  but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile  transmission  of a copy
of this  Agreement  bearing  the  signature  of the  party  so  delivering  this
Agreement.

                     i. 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.

                     j. The language used in this Agreement will be deemed to be
the language  chosen by the parties to express  their mutual intent and no rules
of strict construction will be applied against any party.

                     k.  This  Agreement  is  intended  for the  benefit  of the
parties hereto and their respective permitted successors and assigns, and is not
for the  benefit  of, nor may any  provision  hereof be  enforced  by, any other
Person.



                                   * * * * * *


<PAGE>


           IN WITNESS WHEREOF,  the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.


                                    THE COMPANY:

                                    COACH INDUSTRIES GROUP, INC.

                                    By: /s/ Francis O'Donnell
                                        -------------------------
                                    Name:  Francis O'Donnell
                                    Title: President and Chief Executive Officer


                                    BUYER:

                                    FUSION CAPITAL FUND II, LLC
                                    BY: FUSION CAPITAL PARTNERS, LLC
                                    BY: SGM HOLDINGS CORP.

                                    By: /s/ Steven G. Martin
                                        ----------------------------
                                    Name:  Steven G. Martin
                                    Title: President