Document:

REGISTRATION
RIGHTS AGREEMENT

     

    REGISTRATION RIGHTS AGREEMENT
(this "Agreement"),
dated as of June 18, 2009, by and among A-Power Energy Generation Systems, Ltd.,
a company incorporated under the laws of the British Virgin Islands, with
headquarters located at No. 44 Jingxing Road, Tiexi District, Shenyang, Liaoning
Province, China 110021(the "Company"), and the investors
listed on the Schedule of Buyers attached hereto (each, a "Buyer" and collectively, the
"Buyers").

     

    WHEREAS:

     

    A.           In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the "Securities Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to each Buyer
(i) senior convertible notes (the "Notes") which will, among
other things, be convertible into the Company's common shares, par value $0.0001
per share (the "Common
Shares") (as converted, collectively, the "Conversion Shares") and (ii)
warrants (the "Warrants"), to purchase Common
Shares (collectively, the "Warrant Shares").

     

    B.           The
Notes bear interest and require the payment of "Make-Whole Amounts (as defined
in the Notes) upon conversion, each of which, at the option of the Company,
subject to certain conditions, may be paid in Common Shares (the "Interest Shares" and
"Make-Whole Shares", respectively).

     

    C.           In
connection with the Securities Purchase Agreement, the Company, Mr. Jinxiang Lu
("Mr. Lu") and the
Collateral Agent (as defined in the Securities Purchase Agreement), are
executing and delivering a Put Agreement to each Buyer (each a "Put Agreement" and,
collectively, the "Put
Agreements").  Upon the terms and subject to the conditions of
the Put Agreements, ("Mr.
Lu") may deliver to the Buyers Common Shares of the Company held by him
(collectively, the "Exchange
Shares").

     

    D.           In
accordance with the terms of the Securities 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 each of the Buyers hereby agree as
follows:

     

    1.           Definitions.

     

    Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following
meanings:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a)           "Additional Effective Date"
means the date the Additional Registration Statement is declared effective by
the SEC.

     

    (b)           "Additional Effectiveness
Deadline" means the date which is fifteen (15) calendar days after the
earlier of the Additional Filing Date and the Additional Filing Deadline or in
the event that the Registration Statement is subject to a full review by the
SEC, forty-five (45) calendar days after the earlier of the Additional Filing
Date and the Additional Filing Deadline.

     

    (c)           "Additional Filing Date" means
the date on which the Additional Registration Statement is filed with the
SEC.

     

    (d)           "Additional Filing Deadline"
means if Cutback Shares are required to be included in the Additional
Registration Statement, the later of (i) the date sixty (60) days after the date
substantially all of the Registrable Securities registered under the immediately
preceding Registration Statement are sold and (ii) the date six (6) months from
the Initial Effective Date or the last Additional Effective Date, as
applicable.

     

    (e)           "Additional Registrable
Securities" means, (i) any Cutback Shares not previously included on a
Registration Statement and (ii) any capital stock of the Company issued or
issuable with respect to the Notes, the Conversion Shares, the Warrant Shares,
the Warrants, the Exchange Shares or the Cutback Shares, as applicable, as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise, without regard to any limitations on conversion of the
Notes, exercise of the Put Agreements or exercise of the Warrants.

     

    (f)           "Additional Registration
Statement" means a registration statement or registration statements of
the Company filed under the 1933 Act covering any Additional Registrable
Securities.

     

    (g)           "Additional Required Registration
Amount" means (I) any Cutback Shares not previously included on a
Registration Statement, all subject to adjustment as provided in Section 2(g) or
(II) such other amount as may be required by the staff of the SEC pursuant to
Rule 415.

     

    (h)           "Business Day" means any day
other than Saturday, Sunday or any other day on which commercial banks in the
City of New York or Hong Kong are authorized or required by law to remain
closed.

     

    (i)           "Closing Date" shall have the
meaning set forth in the Securities Purchase Agreement.

     

    (j)           "Cutback Shares" means any of
the Initial Required Registration Amount or the Additional Required Registration
Amount (without regard to clause (II) in the definition thereof) of Registrable
Securities not included in all Registration Statements previously declared
effective hereunder as a result of a limitation on the maximum number of Common
Shares of the Company permitted to be registered by the staff of the SEC
pursuant to Rule 415.  For the purpose of determining the Cutback
Shares, in order to determine any applicable Required Registration Amount,
unless an Investor gives written notice to the Company to the contrary with
respect to the allocation of its Cutback Shares, first the Interest Shares shall
be excluded on a pro rata basis until all of the Interest Shares have been
excluded, second, the Make-Whole Shares shall be excluded on a pro rata basis
until all of the Make-Whole Shares have been excluded, third, the Warrant Shares
shall be excluded on a pro rata basis until all of the Warrant Shares have been
excluded and, fourth, the Conversion Shares shall be excluded on a pro rata
basis until all of the Conversion Shares have been excluded.

    
      
         

      

      
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    (k)          "Effective Date" means the
Initial Effective Date, the Investor Demand Effective Date and the Additional
Effective Date, as applicable.

     

    (l)           "Effectiveness Deadline" means
the Initial Effectiveness Deadline, the Investor Demand Effectiveness Deadline
and the Additional Effectiveness Deadline, as applicable.

     

     

    (m)         "Filing Deadline" means the
Initial Filing Deadline, the Investor Demand Effectiveness Deadline and the
Additional Filing Deadline, as applicable.

     

    (n)          "Initial Effective Date" means
the date that the Initial Registration Statement has been declared effective by
the SEC.

     

    (o)          "Initial Effectiveness
Deadline" means the date (i) in the event that the Initial Registration
Statement is not subject to a full review by the SEC, forty-five (45) calendar
days after the earlier of (I) the Initial Filing Date and (II) the Initial
Filing Deadline or (ii) in the event that the Initial Registration Statement is
subject to a full review by the SEC, ninety (90) calendar days after the earlier
of (I) the Initial Filing Date and (II) the Initial Filing
Deadline.

     

    (p)          "Initial Filing Date" means the
date on which the Initial Registration Statement is filed with the
SEC.

     

    (q)          "Initial Filing Deadline" means
the date which is thirty (30) calendar days after the earlier of (i) the date
the Shareholder Approval (as defined in the Securities Purchase Agreement) is
obtained and (ii) the Shareholder Approval Deadline (as defined in the
Securities Purchase Agreement).

     

    (r)           "Initial Registrable
Securities" means (I) if the Company obtains the Shareholder Approval on
or prior to the Shareholder Approval Deadline (i) the Conversion Shares issued
or issuable upon conversion of the Notes, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants and (iii) any capital stock of the
Company issued or issuable, with respect to the Notes, the Conversion Shares,
the Warrant Shares or the Warrants as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on conversion of the Notes, exercise of the Put
Agreements or exercise of the Warrants and (II) if the Company does not obtain
the Shareholder Approval on or prior to the Shareholder Approval Deadline,
7,000,000 Common Shares held by Mr. Lu (collectively, the "Lu Shares").

    
      
         

      

      
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    (s)          "Initial Registration
Statement" means a registration statement or registration statements of
the Company filed under the 1933 Act covering the Initial Registrable
Securities.

     

    (t)           "Initial Required Registration
Amount" means (I) if the Company obtains the Shareholder Approval on or
prior to the Shareholder Approval Deadline 130% of the sum of (i) the maximum
number of Conversion Shares issued and issuable pursuant to the Notes as of the
Trading Day immediately preceding the applicable date of determination and (ii)
the maximum number of Warrant Shares issued and issuable pursuant to the
Warrants as of the Trading Day immediately preceding the applicable date of
determination, all subject to adjustment as provided in Section 2(g), without
regard to any limitations on conversion of the Notes, exercise of the Put
Agreements or exercises of the Warrants and (II) if the Company does not obtain
the Shareholder Approval on or prior to the Shareholder Approval Deadline the
aggregate number of Lu Shares.

     

    (u)          "Investor" means a Buyer or 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.

     

    (v)          "Investor Demand" means a
written request by an Investor to the Company that the Company prepare and file
an Investor Demand Registration Statement to register Investor Demand
Registrable Securities.

     

    (w)         "Investor Demand Effective
Date" means the date that the Investor Demand Registration Statement has
been declared effective by the SEC.

     

    (x)           "Investor Demand Effectiveness
Deadline" means the date (i) in the event that the Investor Demand
Registration Statement is not subject to a full review by the SEC, forty-five
(45) calendar days after the earlier of (I) the Investor Demand Filing Date and
(II) the Investor Demand Filing Deadline or (ii) in the event that the Investor
Demand Registration Statement is subject to a full review by the SEC, ninety
(90) calendar days after the earlier of (I) the Investor Demand Filing Date and
(II) the Investor Demand Filing Deadline.

     

    (y)          "Investor Demand Filing Date"
means the date on which the Investor Demand Registration Statement is filed with
the SEC.

     

    (z)           "Investor Demand Filing
Deadline" means the date which is thirty (30) calendar days after the
date of the applicable Investor Demand.

     

    (aa)        "Investor Demand Registrable
Securities" means (i) any Exchange Shares delivered to an Investor
pursuant to the terms of the Put Agreements that were not delivered pursuant to
an effective registration statement and (ii) any capital stock of the Company
issued or issuable with respect to the Exchange Shares as a result of any stock
split, stock dividend, recapitalization, exchange or similar event or
otherwise.

    
      
         

      

      
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    (bb)       "Investor Demand Registration
Statement" means a registration statement or registration statements of
the Company filed under the 1933 Act covering the Investor Demand Registrable
Securities.

     

    (cc)        "Investor Demand Required Registration
Amount" has the meaning set forth in Section 2(c).

     

    (dd)       "Person" means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

     

    (ee)        "register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415, and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

     

    (ff)         "Registrable Securities" means
the Initial Registrable Securities, the Investor Demand Registrable Securities
and the Additional Registrable Securities.  Registrable Securities
shall cease to be Registrable Securities upon the earlier of a sale of
Registrable Securities pursuant to an effective Registration Statement or the
exemption provided by Rule 144 under the 1933 Act and the first day on which the
applicable Registrable Securities may be sold by the Investors without
restriction pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933
Act.

     

     

    (gg)       "Registration Statement" means
the Initial Registration Statement, the Investor Demand Registration Statement
and the Additional Registration Statement, as applicable.

     

    (hh)       "Required Holders" means the
holders of at least a majority of the Registrable Securities but excluding any
Registrable Securities beneficially owned, directly or indirectly, by Mr. Lu (or
any of his family members, affiliates or agents), the Company or any of its
Subsidiaries.

     

    (ii)          "Required Registration Amount"
means either the Initial Required Registration Amount, the Investor Demand
Required Registration Amount or the Additional Required Registration Amount, as
applicable.

     

    (jj)          "Rule 415" means Rule 415
promulgated under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.

     

     

    (kk)        "SEC" means the United States
Securities and Exchange Commission.

     

    (ll)           "Trading Day" means any day on
which the Common Shares are traded on the Principal Market, or, if the Principal
Market (as defined in the Securities Purchase Agreement)is not the principal
trading market for the Common Shares, then on the principal securities exchange
or securities market on which the Common Shares are then traded; provided that
"Trading Day" shall not include any day on which the Common Shares are scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Shares are suspended from trading during the final hour of trading on
such exchange or market (or if such exchange or market does not designate in
advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time).

    
      
         

      

      
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    2.           Registration.

     

    (a)           Initial Mandatory
Registration.  The Company shall prepare, and, as soon as
practicable but in no event later than the Initial Filing Deadline, file with
the SEC the Initial Registration Statement on Form F-3 covering the resale of
all of the Initial Registrable Securities.  In the event that Form F-3
is unavailable for such a registration, the Company shall use such other form as
is available for such a registration on another appropriate form reasonably
acceptable to the Required Holders, subject to the provisions of Section
2(f).  The Initial Registration Statement prepared pursuant hereto
shall register for resale at least the number of Common Shares equal to the
Initial Required Registration Amount determined as of the date the Initial
Registration Statement is initially filed with the SEC, subject to adjustment as
provided in Section 2(g).  In addition to the Initial Registrable
Securities, the Initial Registration Statement may cover such number of Interest
Shares and Make-Whole Shares as the Company determines to include
therein.  The Initial Registration Statement shall contain (except if
otherwise directed by the Required Holders) the "Plan of Distribution"
section in substantially the form attached hereto as Exhibit B and, other
than pursuant to the registration of the Lu Shares, the "Selling Shareholders"
section in substantially the form attached hereto as Exhibit B, unless
otherwise required by the SEC. The Company shall use its reasonable best efforts
to have the Initial Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the Initial Effectiveness
Deadline.  The Company shall use reasonable best efforts to file with
the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to
be used in connection with sales pursuant to such Initial Registration Statement
by 9:30 am on the Business Day following the Effective Date, but in any case no
later than the deadline required by Rule 424.

     

    (b)           Additional Mandatory
Registrations.  The Company shall prepare, and, as soon as
practicable but in no event later than the Additional Filing Deadline, file with
the SEC an Additional Registration Statement on Form F-3 covering the resale of
all of the Additional Registrable Securities not previously registered on an
Additional Registration Statement hereunder.  To the extent the staff
of the SEC does not permit the Additional Required Registration Amount to be
registered on an Additional Registration Statement, the Company shall file
Additional Registration Statements successively trying to register on each such
Additional Registration Statement the maximum number of remaining Additional
Registrable Securities until the Additional Required Registration Amount has
been registered with the SEC.  In addition to the Additional
Registrable Securities, the Additional Registration Statement may cover such
number of Interest Shares and Make-Whole Shares as the Company determines to
include therein.  In the event that Form F-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration on another appropriate form reasonably acceptable to the Required
Holders, subject to the provisions of Section 2(f).  Each Additional
Registration Statement prepared pursuant hereto shall register for resale at
least that number of Common Shares equal to the Additional Required Registration
Amount determined as of the date such Additional Registration Statement is
initially filed with the SEC, subject
to adjustment as provided in Section 2(g).  Each Additional
Registration Statement shall contain (except if otherwise directed by the
Required Holders) the "Plan of Distribution"
section in substantially the form attached hereto as Exhibit B and, other
than pursuant to the registration of the Lu Shares, the "Selling Shareholders"
section in substantially the form attached hereto as Exhibit B, unless
otherwise required by the SEC.  The Company shall use reasonable best
efforts to have each Additional Registration Statement declared effective by the
SEC as soon as practicable, but in no event later than the Additional
Effectiveness Deadline.  The Company shall use reasonable best efforts
to file with the SEC in accordance with Rule 424 under the 1933 Act the final
prospectus to be used in connection with sales pursuant to such Additional
Registration Statement by 9:30 am on the Business Day following the Effective
Date, but in any case no later than the deadline required by Rule
424.

    
      
         

      

      
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    (c)           Investor Demand
Registration. If the Initial Registrable Securities covered by the
Initial Registration Statement are the Lu Shares pursuant to clause (II) of the
definition of Initial Registrable Securities and such Lu Shares were transferred
without an effective registration statement and are not eligible for sale
without restriction and without the need for registration under any applicable
federal or state securities laws by an Investor, an Investor successively may
deliver to the Company an Investor Demand requesting that the Company prepare
and file with the SEC an Investor Demand Registration Statement to register any
Investor Demand Registrable Securities until the earlier of the date of when (x)
all Investor Demand Registrable Securities have been registered on Investor
Demand Registration Statements and (y) all Investor Demand Registrable
Securities not previously registered on an Investor Demand Registration
Statement may be sold by the Investors without restriction pursuant to Rule 144
and without the requirement to be in compliance with Rule 144(c)(1) (or any
successor thereto) promulgated under the 1933 Act.  Upon receipt of an
Investor Demand, the Company shall (x) promptly send a copy of such Investor
Demand to all other Investors and (y) prepare and as soon as practicable but in
no event later than the Investor Demand Filing Deadline, file with the SEC such
Investor Demand Registration Statement on Form F-3 covering the resale of the
number of Investor Demand Registrable Securities set forth on the Investor
Demand and in any additional Investor Demand received at least five (5) Business
Days prior to the applicable Investor Demand Filing Deadline (the "Investor Demand Required Registration
Amount").  In the event that Form F-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration on another appropriate form reasonably acceptable to the Required
Holders, subject to the provisions of Section 2(f).  The Investor
Demand Registration Statement prepared pursuant hereto shall register for resale
at least the number of Common Shares equal to the Investor Demand Required
Registration Amount determined as of date the Investor Demand Registration
Statement is initially filed with the SEC, subject to the provisions of Section
2(g).  The Investor Demand Registration Statement shall contain
(except if otherwise directed by the Required Holders) the "Selling Shareholders"
and "Plan of
Distribution" sections in substantially the form attached hereto as Exhibit
B.  The Company shall use its reasonable best efforts to have
the Investor Demand Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the Investor Demand Effectiveness
Deadline.  The Company shall use reasonable best efforts to file with
the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to
be used in connection with sales pursuant to such Investor Demand Registration
Statement by 9:30 am on the Business Day following the Effective Date, but in
any case no later than the deadline required by Rule 424.

    
      
         

      

      
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    (d)           Allocation of Registrable
Securities.  The initial number of Registrable Securities
included in any Registration Statement and any increase or decrease in the
number of Registrable Securities included therein shall be allocated pro rata
among the Investors based on the number of Registrable Securities held by each
Investor at the time the Registration Statement covering such initial number of
Registrable Securities or increase or decrease thereof is declared effective by
the SEC.  In the event that an Investor sells or otherwise transfers
any of such Investor's Registrable Securities, each transferee that becomes an
Investor shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in such Registration Statement for such
transferor.  Any Common Shares included in a Registration Statement
and which remain allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities then
held by such Investors which are covered by such Registration
Statement.  Except for (i) up to 1,000,000 Common Shares held by the
parties (other than the Company) to the Registration Rights Agreement among the
Company (as successor to Chardan China Acquisition Corp. III) and Li Zhang,
Kerry Propper, Jiangnan Huang, Chardan Capital Partners and SUJG, Inc. and their
permitted transferees and assigns under such agreement and (ii) up to 750,000
Common Shares issued or issuable upon exercise of the Unit Purchase Option
issued by Chardan China Acquisition Corp. III to EarlyBirdCapital, Inc. and upon
exercise of the warrants included in the Units issued or issuable upon exercise
of such option (the "Other
Registrable Securities"), the Company shall not include any securities
other than Registrable Securities on any Registration Statement without the
prior written consent of the Required Holders; provided, however, before any
Registrable Securities may be excluded from a Registration Statement as a result
of a limitation on the maximum number of Common Shares permitted to be
registered by the Company on such Registration Statement by the staff of the SEC
pursuant to Rule 415, the Company shall first exclude all Other Registrable
Securities included on such Registration Statement.

    

    (e)           Legal
Counsel.  Subject to Section 5 hereof, the Required Holders
shall have the right to select one legal counsel to review and oversee any
registration pursuant to this Section 2 ("Legal Counsel"), which shall
be Schulte Roth & Zabel LLP or such other counsel as thereafter designated
by the Required Holders.  The Company and Legal Counsel shall
reasonably cooperate with each other in performing the Company's obligations
under this Agreement.

     

    (f)           Ineligibility for Form
F-3.  In the event that Form F-3 is not available for the
registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Required Holders and (ii)
undertake to register the Registrable Securities on Form F-3 as soon as such
form is available, provided that the Company shall use its reasonable best
efforts to maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form F-3 covering the
Registrable Securities has been declared effective by the SEC.

    
      
         

      

      
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    (g)           Sufficient Number of Shares
Registered.  In the event the number of shares available under
a Registration Statement filed pursuant to Section 2(a), Section 2(b) or Section
2(c) is insufficient to cover all of the Registrable Securities required to be
covered by such Registration Statement or an Investor's allocated portion of the
Registrable Securities pursuant to Section 2(d), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the Trading Day immediately preceding the
date of the filing of such amendment or new Registration Statement, in each
case, as soon as practicable, but in any event not later than fifteen (15) days
after the necessity therefor arises.  The Company shall use its
reasonable best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.  For purposes of the foregoing provision, the number of
shares available under a Registration Statement shall be deemed "insufficient to
cover all of the Registrable Securities" if at any time the number of Common
Shares available for resale under the Registration Statement is less than the
product determined by multiplying (i) the Required Registration Amount as of
such time by (ii) 0.90.  The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on the conversion of
the Notes or exercise of the Warrants and such calculation shall assume that the
Notes are then convertible into Common Shares at the then prevailing Conversion
Rate (as defined in the Notes), the Warrants are then exercisable for Common
Shares at the then prevailing Exercise Price (as defined in the Warrants)
assuming the outstanding principal amount of the Notes remains outstanding
through the scheduled Maturity Date (as defined in the Notes) and assuming no
conversions or redemptions of the Notes prior to the scheduled Maturity
Date.

    

    (h)           Effect of Failure to File
and Obtain and Maintain Effectiveness of Registration
Statement.  If (i) a Registration Statement covering all of the
Registrable Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the applicable Filing Deadline (a "Filing Failure") or (B) not
declared effective by the SEC on or before the applicable Effectiveness
Deadline, (an "Effectiveness
Failure") or
(ii) on any day after the applicable Effective Date sales of all of the
Registrable Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period (as defined in
Section 3(r)) pursuant to such Registration Statement or otherwise (including,
without limitation, because of the suspension of trading or any other limitation
imposed by an Eligible Market, a failure to keep such Registration Statement
effective, a failure to disclose such information as is necessary for sales to
be made pursuant to such Registration Statement, a failure to register a
sufficient number of Common Shares or a failure to maintain the listing of the
Common Stock) (a "Maintenance
Failure") then, as partial relief for the damages to any holder by reason
of any such delay in or reduction of its ability to sell the underlying Common
Shares (which remedy shall not be exclusive of any other remedies available at
law or in equity, including, without limitation, specific performance), (A) the
Company shall pay to each holder of Registrable Securities relating to such
Registration Statement an amount in cash equal to one and one-half percent
(1.5%) of the aggregate Purchase Price (as such term is defined in the
Securities Purchase Agreement) of such Investor's Registrable Securities
included in such Registration Statement on each of the following dates: (i) the
day of a Filing Failure; (ii) the day of an Effectiveness Failure; (iii) the
initial day of a Maintenance Failure; (iv) on the thirtieth day after the date
of a Filing Failure and every thirtieth day thereafter (pro rated for periods
totaling less than thirty days) until such Filing Failure is cured; (v) on the
thirtieth day after the date of an Effectiveness Failure and every thirtieth day
thereafter (pro rated for periods totaling less than thirty days) until such
Effectiveness Failure is cured; and (vi) on the thirtieth day after the date of
a Maintenance Failure and every thirtieth day thereafter (pro rated for periods
totaling less than thirty days) until such Maintenance Failure is
cured.  The payments to which a holder shall be entitled pursuant to
this Section 2(h) are referred to herein as "Registration Delay
Payments."  Registration Delay Payments shall be paid within
three (3) Business Days of the earlier of (I) the dates set forth above and (II)
the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured.  In the event the Company fails
to make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of one and one-half percent (1.5%) per
month (prorated for partial months) until paid in full.  In no event
shall aggregate payments of the Registration Delay Payments exceed 9% of the
Purchase Price (as defined in the Securities Purchase
Agreement).

    
      
         

      

      
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    3.           Related
Obligations.

    

    At such
time as the Company is obligated to file a Registration Statement with the SEC
pursuant to Section 2(a), 2(b), 2(c), 2(e) or 2(g), the Company will 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 promptly prepare and file with the SEC a Registration Statement
with respect to the Registrable Securities and use its reasonable best efforts
to cause such Registration Statement relating to the Registrable Securities to
become effective as soon as reasonably practicable after such filing (but in no
event later than the Effectiveness Deadline).  The Company shall keep
each Registration Statement effective pursuant to Rule 415 at all times until
the earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act or
(ii) the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the "Registration
Period").  The Company shall ensure that each 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 the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.  The term
"reasonable best efforts" shall mean, among other things, that the Company shall
submit to the SEC, within three (3) Business Days after the later of the date
that (i) the Company learns that no review of a particular Registration
Statement will be made by the staff of the SEC or that the staff has no further
comments on a particular Registration Statement, as the case may be, and (ii)
the approval of Legal Counsel pursuant to Section 3(c) (which approval is
promptly sought), a request for acceleration of effectiveness of such
Registration Statement to a time and date not later than two (2) Business Days
after the submission of such request.  The Company shall respond in
writing to comments made by the SEC in respect of a Registration Statement as
soon as practicable, but in no event later than fifteen (15) days after the
receipt of comments by or notice from the SEC that an amendment is required in
order for a Registration Statement to be declared effective.

    
      
         

      

      
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    (b)           The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a 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 such 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 such 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.  In the case of amendments and
supplements to a Registration Statement which are required to be filed pursuant
to this Agreement (including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 20-F or Form 6-K or any analogous report under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
have incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

    

    (c)           The
Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least five (5) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 20-F, Current Reports on Form 6-K and any
similar or successor reports) within a reasonable number of days prior to their
filing with the SEC, and (B) not file any Registration Statement or amendment or
supplement thereto in a form to which Legal Counsel reasonably
objects.  The Company shall not submit a request for acceleration of
the effectiveness of a Registration Statement or any amendment or supplement
thereto without the prior approval of Legal Counsel, which consent shall not be
unreasonably withheld.  The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) unless the following are filed with the SEC through EDGAR and
are available to the public through the EDGAR system promptly after the same is
prepared and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Registration Statement, one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto.  The Company shall reasonably
cooperate with Legal Counsel in performing the Company's obligations pursuant to
this Section 3.

    

    (d)           The
Company shall furnish to each Investor whose Registrable Securities are included
in any Registration Statement, without charge, (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, if requested by an
Investor, all exhibits and each preliminary prospectus, (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 such Investor may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.

    
      
         

      

      
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    (e)           The
Company shall use its reasonable best efforts to (i) register and qualify,
unless an exemption from registration and qualification applies, the resale by
Investors of the Registrable Securities covered by a Registration Statement
under such other securities or "blue sky" laws of all applicable jurisdictions
in the United States, (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(e), (y) subject itself 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 Legal Counsel and
each 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.

    

    (f)           The
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event, as
a result of which the prospectus included in a Registration Statement, as then
in effect, includes an untrue statement of a material fact or omission to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3(r), promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver one (1) copies of such supplement or
amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request).  The Company
shall also promptly notify Legal Counsel and each Investor who holds Registrable
Securities being sold which has provided in writing to the Company a facsimile
number or mailing address for notices 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 Legal Counsel and each
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 a
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.  The Company shall use
reasonable best efforts to file with the SEC in accordance with Rule 424 under
the 1933 Act the final prospectus to be used in connection with sales pursuant
to such Registration Statement by 9:30 am on the Business Day following the
Effective Date, but in any case no later than the deadline required by Rule
424.

    
      
         

      

      
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    (g)           The
Company shall use its reasonable best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement, or
the suspension of the qualification of any of the 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 practicable
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold which has provided in writing to the Company a facsimile
number or mailing address for notices 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.

    

    (h)           If
any Investor is required under applicable securities laws or otherwise to be
described in the Registration Statement as an underwriter, at the reasonable
request of such Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of the Registration Statement and thereafter from time
to time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors, and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the Investors.

    

    (i)           If
any Investor is required under applicable securities laws or otherwise to be
described in the Registration Statement as an underwriter, the Company shall
make available for inspection by (i) such Investor, (ii) Legal Counsel and (iii)
one firm of accountants or other agents retained by the Investors (collectively,
the "Inspectors"), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall be
reasonably deemed necessary by each Inspector, and cause the Company's officers,
directors and employees to supply all information which any Inspector may
reasonably request; provided, however, that each Inspector shall agree to hold
in strict confidence and shall not make any disclosure (except to an Investor)
or use of any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
Agreement.  Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential.  Nothing herein (or in any other confidentiality
agreement between the Company and any Investor) shall be deemed to limit the
Investors' ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.

    
      
         

      

      
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    (j)           The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement.  The Company agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor's expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.

    

    (k)           The
Company shall use its reasonable best efforts either to (i) cause all of the
Registrable Securities covered by a Registration Statement 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 (iii) if,
despite the Company's reasonable best efforts, the Company is unsuccessful in
satisfying the preceding clause (i), to secure the inclusion for quotation on,
The New York Stock Exchange, The NASDAQ Capital Market, NASDAQ Global Market or
NYSE Amex for such Registrable Securities and, without limiting the generality
of the foregoing, to use its reasonable best efforts to arrange for at least two
market makers to register with the Financial Industry Regulatory Authority, Inc.
("FINRA") as such with
respect to such Registrable Securities.  The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(k).

    

    (l)           The
Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the Investors may reasonably request and registered in such names as the
Investors may request.

    

    (m)           If
requested by an Investor, the Company shall as soon as practicable (i)
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) make all required filings of such prospectus supplement or post-effective
amendment after being 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 relating to the sale or distribution of
Registrable Securities if reasonably requested by an Investor holding any
Registrable Securities.

    

    (n)           The
Company shall use its reasonable best efforts to cause the Registrable
Securities covered by a 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.

    
      
         

      

      
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    (o)           The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the applicable Effective Date of a Registration
Statement.

     

    (p)           The
Company shall otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.

    

    (q)           Within
two (2) Business Days after a Registration Statement which covers 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 Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit
A.

    

    (r)           Notwithstanding
anything to the contrary herein, at any time after the Effective Date, the
Company may delay the disclosure of material, non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company and its counsel, in the best
interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a "Grace
Period"); provided, that the Company shall promptly (i) notify the
Investors in writing of the existence of material, non-public information giving
rise to a Grace Period (provided that in each notice the Company will not
disclose the content of such material, non-public information to the Investors)
and the date on which the Grace Period will begin, and (ii) notify the Investors
in writing of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed ten (10) consecutive days and during any three
hundred sixty five (365) day period such Grace Periods shall not exceed an
aggregate of forty (40) days and the first day of any Grace Period must be at
least five (5) Trading Days after the last day of any prior Grace Period (each,
an "Allowable Grace
Period").  For purposes of determining the length of a Grace
Period above, the Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) and shall end on and include the
later of the date the Investors receive the notice referred to in clause (ii)
and the date referred to in such notice.  The provisions of Section
3(g) hereof shall not be applicable during the period of any Allowable Grace
Period.  Upon expiration of the Grace Period, the Company shall again
be bound by the first sentence of Section 3(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer
applicable.  Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended Common Shares to a
transferee of an Investor in accordance with the terms of the Securities
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 the notice of a Grace Period and for which the Investor
has not yet settled.

    
      
         

      

      
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    (s)           Neither
the Company nor any Subsidiary or affiliate thereof shall identify any Buyer as
an underwriter without its prior written consent in any public disclosure or
filing with the SEC, the Principal Market (as defined in the Securities Purchase
Agreement) or any Eligible Market and any Buyer being deemed an underwriter by
the SEC shall not relieve the Company of any obligations it has under this
Agreement or any other Transaction Document (as defined in the Securities
Purchase Agreement); provided, however, that the
foregoing shall not prohibit the Company from including the disclosure found in
the "Plan of Distribution" section attached hereto as Exhibit B in the
Registration Statement.  In addition, and notwithstanding anything to
the contrary contained herein, if the Company has received a comment by the SEC
requiring an Investor to be named as an underwriter in the Registration
Statement (which notwithstanding the reasonable best efforts of the Company is
not withdrawn by the SEC) and such Investor elects in writing not to be named as
a selling stockholder in the Registration Statement, the Investor shall not be
entitled to any Registration Delay Payments with respect to such Registration
Statement.

    

    4.           Obligations of the
Investors.

    

    (a)           At
least five (5) Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor if such Investor elects
to have any of such Investor's Registrable Securities included in such
Registration Statement.  It shall be a condition precedent to the
obligations of the Company to complete any registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such 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, and such other
information, if any, as shall be reasonably required to effect and maintain the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

    

    (b)           Each
Investor, by such Investor's acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.

    

    (c)           Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f) or if the Investor receives a notice from the Company that a
Grace Period is in effect, such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of copies of
the supplemented or amended prospectus as contemplated by Section 3(g) or the
first sentence of 3(f) or receipt of notice that no supplement or amendment is
required.  Notwithstanding anything to the contrary, the Company shall
cause its transfer agent to deliver unlegended Common Shares to a transferee of
an Investor in accordance with the terms of the Securities 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(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.

    
      
         

      

      
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    (d)           Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

    

    5.           Expenses of
Registration.

    

    All
reasonable expenses, other than underwriting discounts and 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.  The Company
shall also reimburse the Investors for the fees and disbursements of Legal
Counsel in connection with registration, filing or qualification pursuant to
Sections 2 and 3 of this Agreement which amount shall be limited to $20,000 for
each such registration, filing or qualification.

    

    6.           Indemnification.

    

    In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:

    

    (a)           To
the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
partners, members, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable 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 a 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 any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or 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 or (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 a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations").  Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, 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
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to
Section 3(d); and (ii) 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 or
delayed.  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 Investors
pursuant to Section 9.

    
      
         

      

      
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    (b)           In
connection with any Registration Statement in which an Investor is
participating, each such 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 and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, 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 furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject
to Section 6(c), such Investor will reimburse the Indemnified Party for any
legal or other expenses reasonably incurred by an Indemnified Party 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 such Investor, which consent shall not be unreasonably
withheld or delayed; 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 such 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 Investors
pursuant to Section 9.

    
      
         

      

      
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    (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 counsel with the fees and expenses of not
more than one counsel for all such Indemnified Person or Indemnified Party to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnified 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.  In the case of an Indemnified Person,
legal counsel referred to in the immediately preceding sentence shall be
selected by the Investors holding at least a majority in interest of the
Registrable Securities included in the Registration Statement to which the Claim
relates.  The Indemnified Party or Indemnified Person shall cooperate
reasonably 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 prior written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent.  No indemnifying party shall, without the prior written
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 and such settlement shall not include any
admission as to fault on the part of the Indemnified Party.  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 reasonably detailed and itemized 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.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    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
Person involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution from any
Person involved in such sale 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 amount of net proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

    

    8.           Reports Under the 1934
Act.

    

    With a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may
at any time permit the Investors to sell securities of the Company to the public
without registration ("Rule
144"), the Company agrees 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 each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the 1934
Act, (ii) unless the following are filed with the SEC through EDGAR and are
available to the public through the EDGAR system, a copy of the most recent
annual or quarterly report (if the Company files quarterly reports) 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 Investors to
sell such securities pursuant to Rule 144 without registration.

    

    9.           Assignment of Registration
Rights.

    

    The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of such Investor's Registrable
Securities if:  (i) the Investor agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to assume and be bound by all of the provisions contained herein; and
(v) such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    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 Required
Holders.  Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.  No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Registrable Securities.  No consideration shall
be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.

    

    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 such record
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 Business 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:

    

    A-Power
Energy Generation Systems, Ltd.

    No. 44
Jingxing Road

    Tiexi
District

    Shenyang,
Liaoning Province, China 110021

    
      	 	
              Telephone:

            	
              86-24-85617888

            

    

    
      	 	
              Facsimile:

            	
              86-24-85830606

            

    

    
      	 	
              Attention:

            	
              John
      Lin

            

    

    
      	 	
              Email:

            	
              john@apowerenergy.com

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    With a
copy (for informational purposes only) to:

    

    Baker
& McKenzie LLP

    1114
Avenue of the Americas

    New York,
New York 10036

    
      	  	
              Telephone: 

            	
              (212)
      626-4965

            

    

    
      	 	
              Facsimile: 

            	
              (212)
      310-1802

            

    

    
      	 	
              Attention: 

            	
              Omer
      Ozden, Esq.

            

    

    Email:        Omer.Ozden@BAKERNET.com

    

    If to the
Transfer Agent:

     

    Continental
Stock Transfer & Trust Company

    17
Battery Place

    New York,
New York 10004

    
      	 	
              Telephone: 

            	
              212-509-4000

            

    

    
      	 	
              Facsimile: 

            	
              212-616-7615

            

    

    
      	 	
              Attention:

            	
              Account
      Administration: A-Power Energy Generation Systems, Ltd. 

            

    

    

    If to
Legal Counsel:

     

    Schulte
Roth & Zabel LLP

    919 Third
Avenue

    New York,
New York  10022

    
      	 	
              Telephone:

            	
              (212)
      756-2000

            

    

    
      	 	
              Facsimile:

            	
              (212)
      593-5955

            

    

    
      	 	
              Attention:

            	
              Eleazer
      Klein, Esq.

            

    

    
       

      If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers
attached hereto, with copies to such Buyer's representatives as set forth on the
Schedule of Buyers, or to 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 five (5) days prior to the
effectiveness of such change.  Written confirmation of receipt (A)
given by the recipient of such 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 courier or overnight courier
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.

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

       

      (d)           All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, 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.  The Company hereby appoints C T
Corporation System, with offices at 111 Eighth Avenue, New York, New York 10011,
as its agent for service of process in New York.  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)           If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

       

      (f)           This
Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein 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, the other Transaction Documents and the
instruments referenced herein and therein supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

       

      (g)           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.

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

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

       

      (i)           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.

       

      (j)      
     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
any 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.

       

      (k)           All
consents and other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this Agreement,
by the Required Holders.

       

      (l)     
      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.

       

      (m)          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.

       

      (n)           The
obligations of each Investor hereunder are several and not joint with the
obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other
Investor.  Nothing contained herein, and no action taken by any
Investor pursuant hereto, shall be deemed to constitute the Investors as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investors are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated
herein.

       

      (o)           Unless
otherwise indicated, all dollar amounts referred to in this Agreement are in
United States Dollars.  All amounts owing under this Agreement shall
be paid in US dollars.  All amounts denominated in other currencies
shall be converted in the US dollar equivalent amount in accordance with the
Exchange Rate on the date of calculation.  "Exchange Rate" means, in
relation to any amount of currency to be converted into US dollars pursuant to
this Agreement, the US dollar exchange rate as published in The Wall Street
Journal on the relevant date of calculation.

       

      (p)           Judgment
Currency.

       

      (i)       
    If for the purpose of obtaining or enforcing judgment
against the Company in any court in any jurisdiction it becomes necessary to
convert into any other currency (such other currency being hereinafter in this
Section 11(p) referred to as the "Judgment Currency") an amount due in US
Dollars under this Agreement, the conversion shall be made at the Exchange Rate
prevailing on the Business Day immediately preceding:

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

      a.           the
date of actual payment of the amount due, in the case of any proceeding in the
courts of New York or in the courts of any other jurisdiction that will give
effect to such conversion being made on such date: or

       

      b.           the
date on which the foreign court determines, in the case of any proceeding in the
courts of any other jurisdiction (the date as of which such conversion is made
pursuant to this Section being hereinafter referred to as the "Judgment
Conversion Date").

       

      (ii)           If
in the case of any proceeding in the court of any jurisdiction referred to in
Section 11(p)(i)(b) above, there is a change in the Exchange Rate prevailing
between the Judgment Conversion Date and the date of actual payment of the
amount due, the applicable party shall pay such adjusted amount as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of US Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date.

       

      (iii)          Any
amount due from the Company under this provision shall be due as a separate debt
and shall not be affected by judgment being obtained for any other amounts due
under or in respect of this Agreement.

       

      * * * * *
*

       

      [Signature
Page Follows]

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

      

      
        
          
            
              	 
      	
                      COMPANY:

                    
	 
      	 
      
	 
      	
                      A-POWER
      ENERGY GENERATION

                    
	 
      	
                      SYSTEMS,
      LTD.

                    
	 	 
	 
      	
                      By:

                    	
                      /s/ Jinxiang Lu

                    
	 
      	 
      	
                      Name:
      Jinxiang Lu

                    
	 
      	 
      	
                      Title:  Chief
      Executive Officer

                    

            

          

        

      

       

      
        [Signature
Page to Registration Rights Agreement]

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

      

      
        
          
            
              	 
      	
                      BUYERS:

                    
	 
      	 
      
	 
      	
                      HUDSON BAY FUND, LP

                    
	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Yoav Roth

                    
	 
      	 
      	
                      Name: HUDSON BAY CAPITAL

                    
	 
      	 
      	
                      MANAGEMENT LP / BY: YOAV ROTH

                    
	 
      	 
      	
                      Title:INVESTMENT MANAGER /

                    
	 
      	 
      	
                      AUTHORIZED SIGNATORY

                    

            

          

        

      

       

      
        [Signature
Page to Registration Rights Agreement]

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

       

      
        
          	 
      	
                  BUYERS:

                
	 
      	 
      
	 
      	
                  By:

                	
                  /s/ Yoav Roth

                
	 
      	 
      	
                  Name: HUDSON BAY CAPITAL

                
	 
      	 
      	
                  MANAGEMENT LP / BY: YOAV ROTH

                
	 
      	 
      	
                  Title:INVESTMENT MANAGER /

                
	 
      	 
      	
                  AUTHORIZED SIGNATORY

                

        

      

    

     

    
      [Signature
Page to Registration Rights Agreement]

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

    

    
      
        
          	 
      	
                  BUYERS:

                
	 
      	 
      
	 
      	
                  RCG PB, LTD

                
	 	 
	 
      	
                  By:

                	
                  /s/ Owen Littman

                
	 
      	 
      	
                  Name: Owen Littman

                
	 
      	 
      	
                  Title: Authorized Signatory

                

        

      

    

     

    
      [Signature
Page to Registration Rights Agreement]

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

    

    
      
        	 
      	
                BUYERS:

              
	 
      	 
      
	 
      	
                RAMIUS ENTERPRISE MASTER FUND LTD

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Owen Littman

              
	 
      	 
      	
                Name: Owen Littman

              
	 
      	 
      	
                Title: Authorized Signatory

              

      

    

     

    
      [Signature
Page to Registration Rights Agreement]

       

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

    

    
      
        	 
      	
                BUYERS:

              
	 
      	 
      
	 
      	
                IROQUOIS MASTER FUND LTD.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Joshua Silverman

              
	 
      	 
      	
                Name: Joshua Silverman

              
	 
      	 
      	
                Title: Authorized Signatory

              

      

    

     

    
      [Signature
Page to Registration Rights Agreement]

    

     

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.

    

    
      
        	 
      	
                BUYERS:

              
	 
      	 
      
	 
      	
                CAPITAL
      VENTURES INTERNATIONAL

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Martin Robinger

              
	 
      	 
      	
                Name:
      Martin Robinger

              
	 
      	 
      	
                Title:
      Investment Manager

              

      

    

     

    
      [Signature
Page to Registration Rights Agreement]

       

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
OF BUYERS

    

    
      
        	
                Buyer

              	 	
                Buyer
      Address

                and Facsimile Number

              	 	
                Buyer's
      Representative's Address

                and Facsimile Number

              
	 
      	 
      	 
      	 
      	 
      
	
                Hudson
      Bay Fund, LP

              	 
      	
                120
      Broadway, 40th Floor

                New
      York, New York 10271

                Attention:
      Yoav Roth

                George
      Antonopolous

                Facsimile:  646-214-7946

                Telephone:
      212-571-1244

                Residence:
      Cayman Islands

                E-mail:
      investments@hudsonbaycapital.com

                operations@hudsonbaycapital.com

              	 
      	
                Schulte
      Roth & Zabel LLP

                919
      Third Avenue

                New
      York, NY 10022

                Attn:  Eleazer
      Klein, Esq.

                Facsimile:  (212)
      593-5955

                Telephone:  (212)
      756-2000

              
	
                Hudson
      Bay Overseas Fund, Ltd.

              	 
      	
                120
      Broadway, 40th Floor

                New
      York, New York 10271

                Attention:
      Yoav Roth

                George
      Antonopolous

                Facsimile:  646-214-7946

                Telephone:
      212-571-1244

                Residence:
      Cayman Islands

                E-mail:
      investments@hudsonbaycapital.com

                operations@hudsonbaycapital.com

              	 
      	
                Schulte
      Roth & Zabel LLP

                919
      Third Avenue

                New
      York, NY 10022

                Attn:  Eleazer
      Klein, Esq.

                Facsimile:  (212)
      593-5955

                Telephone:  (212)
      756-2000

              
	 
      	 
      	 
      	 
      	 
      
	
                RCG
      PB, Ltd

              	 
      	
                c/o
      Ramius LLC

                599
      Lexington Avenue, 20th Floor

                New
      York, NY 10022

                Attention:  Jeffrey
      Smith

                Owen
      Littman

                Facsimile:  (212)
      201-4802

                (212)
      845-7986

                Telephone:
      (212) 845-7955

                (212)
      201-4841

                Residence:  Cayman
      Islands

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Ramius
      Enterprise Master Fund Ltd

              	 
      	
                c/o
      Ramius LLC

                599
      Lexington Avenue, 20th Floor

                New
      York, NY 10022

                Attention:  Jeffrey
      Smith

                Owen
      Littman

                Facsimile:  (212)
      201-4802

                (212)
      845-7986

                Telephone:
      (212) 845-7955

                (212)
      201-4841

                Residence:  Cayman
      Islands

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Iroquois
      Master Fund Ltd.

              	
                  

              	
                c/o
      Iroquois Capital

                641
      Lexington Avenue, 26th Floor

                New
      York, NY 10022

                Attention:
      Joshua Silverman

                Telephone:   212-974-3070

                Facsimile:  212-207-3452

                Email:
      jsilverman@icfund.com

                Residence:  Cayman
      Islands

              	
                  

              	 
      

      

    

     

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

     

    FORM
OF NOTICE OF EFFECTIVENESS

    OF
REGISTRATION STATEMENT

    

    
      Continental
Stock Transfer & Trust Company

    

    17
Battery Place

    New York,
New York 10004

    Attention:  Account
Administration: A-Power Energy Generation Systems, Ltd.

     

    Re:           A-Power Energy Generation
Systems, Ltd.

     

    Ladies
and Gentlemen:

     

    [We
are][I am] counsel to A-Power Energy Generation Systems, Ltd., a company
incorporated under the laws of the British Virgin Islands (the "Company"), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of June 18, 2009 (the "Securities Purchase Agreement"), entered
into by and among the Company and the buyers named therein (collectively, the
"Holders") pursuant to
which the Company issued to the Holders senior convertible notes (the "Notes") which shall be
convertible into the Company's common shares, par value $0.0001 per share (the
"Common Shares") and
warrants exercisable for Common Shares (the "Warrants").  Pursuant
to the Securities Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Holders (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the resale of the Registrable Securities (as defined in the
Registration Rights Agreement), including the Common Shares issuable upon
conversion of the Notes, the Common Shares issuable as interest on the Notes,
the Common Shares issuable upon exercise of the Warrants, the Common Shares held
by Mr. Jinxiang Lu and the Common Shares, if any, to be delivered pursuant to
the Put Agreements (as defined in the Registration Rights Agreement), under the
Securities Act of 1933, as amended (the "1933 Act").  In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 2009, the Company filed a Registration Statement
on Form F-3 (File No. 333-_____________) (the "Registration Statement") with
the Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities which names each of the Holders as a selling shareholder
thereunder.

     

    In
connection with the foregoing, [we][I] advise you that a member of the SEC's
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and
[we][I] have no knowledge, after telephonic inquiry of a member of the SEC's
staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC
and the Registrable Securities are available for resale under the 1933 Act
pursuant to the Registration Statement.

     

    This
letter shall serve as our standing instruction to you that the Common Shares are
freely transferable by the Holders pursuant to the Registration
Statement.  You need not require further letters from us to effect any
future legend-free issuance or reissuance of Common Shares to the Holders as
contemplated by the Company's Irrevocable Transfer Agent Instructions dated June
19, 2009.

    

    
      
        
          
            	 
      	
                    Very
      truly yours,

                  
	 	 
	 
      	
                    [ISSUER'S COUNSEL]

                  
	 	 
	 
      	
                    By:

                  	
                        

                  	 
      

          

        

      

    

     

    CC:           [LIST NAMES OF HOLDERS]

    

    
      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

    SELLING
SHAREHOLDERS

     

    The
common shares being offered by the selling shareholders are those [previously
issued to the selling shareholders] [issuable to the selling shareholders upon
conversion of the convertible notes[, as interest pursuant to the terms of the
convertible notes] and upon exercise of the warrants].  For additional
information regarding the issuance of the convertible notes and warrants, see
"Private Placement of Convertible Notes and Warrants" above.  We are
registering the common shares in order to permit the selling shareholders to
offer the shares for resale from time to time.  Except for the
ownership of the common shares, the convertible notes and the warrants issued
pursuant to the Securities Purchase Agreement, the selling shareholders have not
had any material relationship with us within the past three years.

     

    The table
below lists the selling shareholders and other information regarding the
beneficial ownership of the common shares by each of the selling
shareholders.  The second column lists the number of common shares
beneficially owned by each selling shareholder, based on its ownership of the
convertible notes and warrants, as of ________, 2009.

     

    The third
column lists the common shares being offered by this prospectus by the selling
shareholders.

     

    In
accordance with the terms of a registration rights agreement with the selling
shareholders, this prospectus generally covers the resale of [at least 130% of
the sum of (i) the maximum number of common shares issuable upon conversion of
the convertible notes as of the Trading Day immediately preceding the date the
registration statement is initially filed with the SEC and (ii) the maximum
number of common shares issuable upon exercise of the related warrants as of the
Trading Day immediately preceding the date the registration statement is
initially filed with the SEC.  Because the conversion price of the
convertible notes and the exercise price of the warrants may be adjusted, the
number of shares that will actually be issued may be more or less than the
number of shares being offered by this prospectus][the number of common shares
the selling shareholders requested that we register].  The fourth
column assumes the sale of all of the shares offered by the selling shareholders
pursuant to this prospectus.

     

    Under the
terms of the convertible notes and the warrants, a selling shareholder may not
convert the convertible notes or exercise the warrants to the extent such
conversion or exercise would cause such selling shareholder, together with its
affiliates, to beneficially own a number of common shares which would exceed
4.99% of our then outstanding common shares following such conversion or
exercise, excluding for purposes of such determination common shares issuable
upon conversion of the convertible notes which have not been converted and upon
exercise of the warrants which have not been exercised.  The number of
shares in the second column reflects this limitation.  The selling
shareholders may sell all, some or none of their shares in this
offering.  See "Plan of Distribution."

    

    
      
        
           

        

        
          Annex
I-1

          
            

          

        

        
           

        

      

    

     

    
      	
              Name of Selling shareholder

            	 
      	
              Number of Common shares

              Owned Prior to Offering

            	 
      	
              Maximum Number of

              Common shares to
      be Sold

              Pursuant to this Prospectus

            	 
      	
              Number of Common

              shares Owned After

              Offering

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Hudson
      Bay Fund LP  (1)

            	 
      	 
      	 
      	 
      	 
      	
              0

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Hudson
      Bay Overseas Fund Ltd. (2)

            	 
      	 
      	 
      	 
      	 
      	
              0

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Capital
      Ventures International (3)

            	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              RCG
      PB, Ltd (4)

            	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Ramius
      Enterprise Master Fund Ltd (5)

            	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              Iroquois
      Master Fund Ltd. (6)

            	
                

            	 
      	
                

            	 
      	
                

            	 
      

    

     

    (1)
Sander Gerber shares voting and investment power over these securities. Sander
Gerber disclaims beneficial ownership over the securities held by Hudson Bay
Fund LP. The selling shareholder acquired the securities offered for its own
account in the ordinary course of business, and at the time it acquired the
securities, it had no agreements, plans or understandings, directly or
indirectly to distribute the securities.

     

    (2)
Sander Gerber shares voting and investment power over these securities. Sander
Gerber disclaims beneficial ownership over the securities held by Hudson Bay
Overseas Fund LTD. The selling shareholder acquired the securities offered for
its own account in the ordinary course of business, and at the time it acquired
the securities, it had no agreements, plans or understandings, directly or
indirectly to distribute the securities.

     

    (3)
Ramius Advisors, LLC (“Ramius Advisors”) is the investment adviser of RCG PB,
Ltd (“RCG PB”) and consequently has voting control and investment discretion
over securities held by RCG PB.  Ramius Advisors disclaims beneficial
ownership of these securities.  Ramius LLC ("Ramius") is the sole
managing member of Ramius Advisors and may be considered the beneficial owner of
any securities deemed to be beneficially owned by Ramius
Advisors.  Ramius disclaims beneficial ownership of these
securities.  C4S & Co., L.L.C. (“C4S”) is the managing member of
Ramius and may be considered the beneficial owner of any securities deemed to be
beneficially owned by Ramius.  C4S disclaims beneficial ownership of
these securities.  Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss
and Jeffrey M. Solomon are the sole managing members of C4S and may be
considered beneficial owners of any securities deemed to be beneficially owned
by C4S.  Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial
ownership of these securities.

    

    
      
        
           

        

        
          Annex
I-2

          
            

          

        

        
           

        

      

    

    

    (4)
Ramius Advisors, LLC (“Ramius Advisors”) is the investment adviser of Ramius
Enterprise Master Fund Ltd (“Enterprise”) and consequently has voting control
and investment discretion over securities held by Enterprise.  Ramius
Advisors disclaims beneficial ownership of these securities.  Ramius
LLC ("Ramius") is the sole managing member of Ramius Advisors and may be
considered the beneficial owner of any securities deemed to be beneficially
owned by Ramius Advisors.  Ramius disclaims beneficial ownership of
these securities.  C4S & Co., L.L.C. (“C4S”) is the managing
member of Ramius and may be considered the beneficial owner of any securities
deemed to be beneficially owned by Ramius.  C4S disclaims beneficial
ownership of these securities.  Peter A. Cohen, Morgan B. Stark,
Thomas W. Strauss and Jeffrey M. Solomon are the sole managing members of C4S
and may be considered beneficial owners of any securities deemed to be
beneficially owned by C4S.  Messrs. Cohen, Stark, Strauss and Solomon
disclaim beneficial ownership of these securities.

     

    (6)

    

    
      
        
           

        

        
          Annex
I-3

          
            

          

        

        
           

        

      

    

    

    PLAN
OF DISTRIBUTION

     

    We are
registering the common shares [previously issued to the selling shareholders]
[issuable upon conversion of the convertible notes[, as interest pursuant to the
terms of the convertible notes] and upon exercise of the warrants] to permit the
resale of these common shares by the holders of the common shares from time to
time after the date of this prospectus.  We will not receive any of
the proceeds from the sale by the selling shareholders of the common
shares.  We will bear all fees and expenses incident to our obligation
to register the common shares.

     

    The
selling shareholders may sell all or a portion of the common shares beneficially
owned by them and offered hereby from time to time directly or through one or
more underwriters, broker-dealers or agents.  If the common shares are
sold through underwriters or broker-dealers, the selling shareholders will be
responsible for underwriting discounts or commissions or agent's
commissions.  The common shares may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated
prices.  These sales may be effected in transactions, which may
involve crosses or block transactions,

     

    
      	
               
      

            	
              ·

            	
              on
      any national securities exchange or quotation service on which the
      securities may be listed or quoted at the time of
  sale;

            

    

     

    
      	
               
      

            	
              ·

            	
              in
      the over-the-counter market;

            

    

     

    
      	
               
      

            	
              ·

            	
              in
      transactions otherwise than on these exchanges or systems or in the
      over-the-counter market;

            

    

     

    
      	
               
      

            	
              ·

            	
              through
      the writing of options, whether such options are listed on an options
      exchange or otherwise;

            

    

     

    
      	
               
      

            	
              ·

            	
              ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;

            

    

     

    
      	
               
      

            	
              ·

            	
              block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

            

    

     

    
      	
               
      

            	
              ·

            	
              purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

            

    

     

    
      	
               
      

            	
              ·

            	
              an
      exchange distribution in accordance with the rules of the applicable
      exchange;

            

    

     

    
      	
               
      

            	
              ·

            	
              privately
      negotiated transactions;

            

    

     

    
      	
               
      

            	
              ·

            	
              short
      sales;

            

    

     

    
      	
               
      

            	
              ·

            	
              sales
      pursuant to Rule 144;

            

    

     

    
      
        
           

        

        
          Annex
I-4

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              ·

            	
              broker-dealers
      may agree with the selling securityholders to sell a specified number of
      such shares at a stipulated price per
share;

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      combination of any such methods of sale;
and

            

    

     

    
      	
               
      

            	
              ·

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

     

    If the
selling shareholders effect such transactions by selling common shares to or
through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholders or commissions from
purchasers of the common shares for whom they may act as agent or to whom they
may sell as principal (which discounts, concessions or commissions as to
particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved).  In connection with
sales of the common shares or otherwise, the selling shareholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the common shares in the course of hedging in positions they
assume.  The selling shareholders may also sell common shares short
and deliver common shares covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short
sales.  The selling shareholders may also loan or pledge common shares
to broker-dealers that in turn may sell such shares.

     

    The
selling shareholders may pledge or grant a security interest in some or all of
the convertible notes, warrants or common shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the common shares from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling shareholders to include the pledgee, transferee
or other successors in interest as selling shareholders under this
prospectus.  The selling shareholders also may transfer and donate the
common shares in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

     

    The
selling shareholders and any broker-dealer participating in the distribution of
the common shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions allowed
to, any such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act.  At the time a particular offering
of the common shares is made, a prospectus supplement, if required, will be
distributed which will set forth the aggregate amount of common shares being
offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.

     

    Under the
securities laws of some states, the common shares may be sold in such states
only through registered or licensed brokers or dealers.  In addition,
in some states the common shares may not be sold unless such shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.

    

    
      
        
           

        

        
          Annex
I-5

          
            

          

        

        
           

        

      

    

    

    There can
be no assurance that any selling shareholder will sell any or all of the common
shares registered pursuant to the registration statement, of which this
prospectus forms a part.

     

    The
selling shareholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the common shares by the selling shareholders and
any other participating person.  Regulation M may also restrict the
ability of any person engaged in the distribution of the common shares to engage
in market-making activities with respect to the common shares.  All of
the foregoing may affect the marketability of the common shares and the ability
of any person or entity to engage in market-making activities with respect to
the common shares.

     

    We will
pay all expenses of the registration of the common shares pursuant to the
registration rights agreement, estimated to be $[     ]
in total, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or "blue sky" laws;
provided, however, that a selling shareholder will pay all underwriting
discounts and selling commissions, if any.  We will indemnify the
selling shareholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling shareholders will be entitled to contribution.  We may be
indemnified by the selling shareholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling shareholder specifically for use in
this prospectus, in accordance with the related registration rights agreement,
or we may be entitled to contribution.

     

    Once sold
under the registration statement, of which this prospectus forms a part, the
common shares will be freely tradable in the hands of persons other than our
affiliates.

    

    
      
        
           

        

        
          Annex
I-6EXECUTION
COPY

    

    VOTING
AGREEMENT

     

    VOTING
AGREEMENT, dated as of June 19, 2009 (this "Agreement"), by and among
A-Power Energy Generation Systems, Ltd., a company incorporated under the laws
of the British Virgin Islands (the "Company"), and the
stockholders listed on the signature pages hereto under the heading "Stockholders" (each, a "Stockholder" and collectively,
the "Stockholders").

     

    WHEREAS, the Company and certain
investors (each, an "Investor", and collectively, the "Investors") have entered into a Securities
Purchase Agreement, dated as of June 18, 2009 (the "Securities Purchase
Agreement"), pursuant to
which, among other things, the Company has agreed to issue and sell to the
Investors and the Investors have agreed to purchase, (i) senior convertible
notes (the "Notes") which will, among other things, be
convertible into the Company's common shares, par value $0.0001 per share (the
"Common
Shares") and (ii) warrants
(the "Warrants"), which will be exercisable to
purchase Common Shares;

     

    WHEREAS,
as of the date hereof, the Stockholders own collectively 11,994,666 Common
Shares, which represent in the aggregate approximately 35.58%of the total issued
and outstanding capital stock of the Company; and

     

    WHEREAS,
as a condition to the willingness of the Investors to enter into the Securities
Purchase Agreement and to consummate the transactions contemplated thereby
(collectively, the "Transaction"), the Investors
have required that each Stockholder agrees, and in order to induce the Investors
to enter into the Securities Purchase Agreement, each Stockholder has agreed, to
enter into this Agreement with respect to all the Common Shares now owned and
which may hereafter be acquired by the Stockholders and any other securities, if
any, which such Stockholder is currently entitled to vote, or after the date
hereof, becomes entitled to vote, at any meeting of stockholders of the Company
(the "Other
Securities").

     

    NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:

     

    ARTICLE
I

     

    VOTING AGREEMENT OF THE
STOCKHOLDER

     

    SECTION
1.01.   Voting
Agreement.  Subject to the last sentence of this
Section 1.01, each Stockholder hereby agrees that at any meeting of the
stockholders of the Company, however called, and in any action by written
consent of the Company's stockholders, each of the Stockholders shall vote the
Common Shares and the Other Securities:  (a) in favor of the
Shareholder Approval (as defined in the Securities Purchase Agreement) as
described in Section 4(r) of the Securities Purchase Agreement; (b) against any
proposal or any other corporate action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Securities Purchase Agreement or which could
result in any of the conditions to the Company's obligations under the
Securities Purchase Agreement not being fulfilled and (c) in favor of an
increase in the authorized number of Common Shares if at any time the number of
Common Shares authorized and reserved for issuance is not sufficient to meet the
Required Reserved Amount (as defined in the Securities Purchase
Agreement).  Each Stockholder acknowledges receipt and review of a
copy of the Securities Purchase Agreement and the other Transaction Documents
(as defined in the Securities Purchase Agreement).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
II

     

    REPRESENTATIONS AND
WARRANTIES OF THE STOCKHOLDER

     

    Each
Stockholder hereby represents and warrants, severally but not jointly, to each
of the Investors as follows:

     

    SECTION
2.01.   Authority Relative to This
Agreement.  Each Stockholder has all necessary legal capacity,
power and authority to execute and deliver this Agreement, to perform his or its
obligations hereunder and to consummate the transactions contemplated
hereby.  This Agreement has been duly executed and delivered by such
Stockholder and constitutes a legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except (a) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
now or hereafter in effect relating to, or affecting generally the enforcement
of creditors' and other obligees' rights, (b) where the remedy of specific
performance or other forms of equitable relief may be subject to certain
equitable defenses and principles and to the discretion of the court before
which the proceeding may be brought, and (c) where rights to indemnity and
contribution thereunder may be limited by applicable law and public
policy.

     

    SECTION
2.02.    No
Conflict.  (a)  The execution and delivery of this
Agreement by such Stockholder does not, and the performance of this Agreement by
such Stockholder shall not, (i) conflict with or violate any federal, state or
local law, statute, ordinance, rule, regulation, order, judgment or decree
applicable to such Stockholder or by which the Common Shares or the Other
Securities owned by such Stockholder are bound or affected or (ii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the Common Shares or the Other
Securities owned by such Stockholder pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Stockholder is a party or by which such
Stockholder or the Common Shares or Other Securities owned by such Stockholder
are bound.

     

    (b)           The
execution and delivery of this Agreement by such Stockholder does not, and the
performance of this Agreement by such Stockholder shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental entity by such Stockholder, other than the filing of an
amendment to the Schedule 13D previously filed by Jinxiang Lu.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    SECTION
2.03.   Title to the
Stock.  As of the date hereof, each Stockholder is the owner of
the number of Common Shares set forth opposite its name on Appendix A attached
hereto, entitled to vote, without restriction, on all matters brought before
holders of capital stock of the Company, which Common Shares represent on the
date hereof the percentage of the outstanding stock and voting power of the
Company set forth on such Appendix.  Such Common Shares are all the
securities of the Company owned, either of record or beneficially, by such
Stockholder.  Such Common Shares are owned free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on such Stockholder's voting rights, charges and other
encumbrances of any nature whatsoever, other than restrictions on transfer
arising under the Securities Act of 1933, as amended.  No Stockholder
has appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Common Shares or Other Securities owned by such
Stockholder.

     

    ARTICLE
III

     

    COVENANTS

     

    SECTION
3.01.   No Disposition or
Encumbrance of Stock.  Each Stockholder hereby covenants and
agrees that, until the Shareholder Approval has been obtained, except as
contemplated by this Agreement, the Lock-Up Agreements, the Put Agreements and the Pledge Agreement (as each
such term is defined in the Securities Purchase Agreement), such
Stockholder shall not offer or agree to sell, transfer, tender, assign,
hypothecate or otherwise dispose of, grant a proxy or power of attorney with
respect to, or create or permit to exist any security interest, lien, claim,
pledge, option, right of first refusal, agreement, limitation on such
Stockholder's voting rights, charge or other encumbrance of any nature
whatsoever ("Encumbrance") with respect to
the Common Shares or Other Securities, directly or indirectly, initiate, solicit
or encourage any person to take actions which could reasonably be expected to
lead to the occurrence of any of the foregoing; provided, however, that any
such Stockholder may assign, sell or transfer any Common Shares or Other
Securities provided that any such recipient of the Common Shares or Other
Securities has delivered to the Company and each Investor a written agreement in
a form reasonably satisfactory to the Investors that the recipient shall be
bound by, and the Common Shares and/or Other Securities so transferred, assigned
or sold shall remain subject to this Agreement; and, provided, further, that
such shareholder may grant a proxy or power of attorney in connection with a
stockholders meeting to vote in accordance with Section 1.01
hereof.

     

    SECTION
3.02.   Company
Cooperation.  The Company hereby covenants and agrees that it
will not, and such Stockholder irrevocably and unconditionally acknowledges and
agrees that the Company will not (and waives any rights against the Company in
relation thereto), recognize any Encumbrance or agreement on any of the Common
Shares or Other Securities subject to this Agreement unless the provisions of
Section 3.01 have been complied with.

     

    ARTICLE
IV

     

    MISCELLANEOUS

     

    SECTION
4.01.   Further
Assurances.  Each Stockholder will execute and deliver such
further documents and instruments and take all further action as may be
reasonably necessary in order to consummate the transactions contemplated
hereby.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    SECTION
4.02.   Specific
Performance.  The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that any Investor (without being joined by
any other Investor) shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or in equity.  Any
Investor shall be entitled to its reasonable attorneys' fees in any action
brought to enforce this Agreement in which it is the prevailing
party.

     

    SECTION
4.03.   Entire
Agreement.  This Agreement constitutes the entire agreement
among the Company and the Stockholders with respect to the subject matter hereof
and supersedes all prior agreements and understandings, both written and oral,
among the Company and the Stockholders with respect to the subject matter
hereof.

     

    SECTION
4.04.    Amendment.  The
provisions of this Agreement may not be amended or waived, nor may this
Agreement be terminated by the Company other than pursuant to the provisions of
Section 4.07.

     

    SECTION
4.05.   Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of this Agreement is not affected in
any manner materially adverse to any party.  Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent
possible.

     

    SECTION
4.06.   Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.  The parties hereby
agree that all actions or proceedings arising directly or indirectly from or in
connection with this Agreement shall be litigated only in the Supreme Court of
the State of New York or the United States District Court for the Southern
District of New York located in New York County, New York.  The
parties consent to the jurisdiction and venue of the foregoing courts and
consent that any process or notice of motion or other application to any of said
courts or a judge thereof may be served inside or outside the State of New York
or the Southern District of New York by registered mail, return receipt
requested, directed to the party being served at its address set forth on the
signature pages to this Agreement (and service so made shall be deemed complete
three (3) days after the same has been posted as aforesaid) or by personal
service or in such other manner as may be permissible under the rules of said
courts.  Each of the Company and each Stockholder irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action, or
proceeding brought in such a court and any claim that suit, action, or
proceeding has been brought in an inconvenient forum.  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 WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    SECTION
4.07.    Termination.  This
Agreement shall terminate immediately when the Notes and Warrants cease to be
outstanding.

     

    [Signature
Page Follows]

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, each Stockholder and the Company has duly executed this
Agreement.

     

    
      
        
          	 
      	
                   
      THE COMPANY:

                
	 
      	 
      
	 
      	
                   
      A-POWER ENERGY GENERATION 

                   
      SYSTEMS, LTD.

                
	 
      	 
      
	 
      	
                  By:

                	
                   
      /s/ Jinxiang Lu

                
	 
      	 
      	
                   
      Name:  Jinxiang Lu

                
	 
      	 
      	
                   
      Title: Chief Executive
Officer

                

        

      

    

    

    
      
        
          
            	
                    Dated:
      June 19, 2009

                  	 
      
	 
      	
                    Address:

                  	
                    No.
      44 Jingxing Road

                    Tiexi District, Shenyang

                    Liaoning
      Province 110021

                    China

                  

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                   
      STOCKHOLDERS:

                
	 
      	 
      
	 
      	
                   
      /s/ Jinxiang Lu

                
	 
      	
                   
      Jinxiang Lu

                

        

      

    

    

    
      
        
          
            
              	
                      Dated:  June
      19, 2009

                    	 
      
	 
      	
                      Address:

                    	
                      c/o
      A-Power Energy Generation

                      Systems,
      Ltd.

                    
	 
      	 
      	
                      No.
      44 Jingxing Road

                      Tiexi District, Shenyang

                    
	 
      	 
      	
                      Liaoning
      Province 110021

                      China

                    

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                   
      STOCKHOLDERS:

                
	 
      	 
      
	 
      	
                   
      /s/ John S. Lin

                
	 
      	
                   
      John S. Lin

                

        

      

    

    

    
      
        
          
            	
                    Dated:  June
      19, 2009

                  	 
      
	 
      	
                    Address:

                  	
                    c/o
      A-Power Energy Generation 

                    Systems,
      Ltd.

                  
	 
      	 
      	
                    No.
      44 Jingxing Road

                    Tiexi District, Shenyang

                    Liaoning
      Province 110021

                    China

                  

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
A

     

    
      
        
          
            
              
                
                  
                    	
                            Stockholder

                          	 	
                            Common Stock 

                            Owned

                          	 	 	
                            Percentage of Stock

                            Outstanding

                          	 	 	
                            Voting Percentage 

                            of Stock

                            Outstanding

                          	 
	 	 	 	 	 	 	 	 	 	 
	
                            Jinxiang Lu

                          	 	 	10,386,333	 	 	 	30.81	%	 	 	30.81	%
	
                            John S. Lin

                          	 	 	1,608,333	 	 	 	4.77	%	 	 	4.77	%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]