Document:

EX-10.5

 Exhibit 10.5 
 EXECUTION VERSION 
 FIRST AMENDMENT TO 

SALE AND SERVICING AGREEMENT 
 This Amendment to Sale and Servicing Agreement, dated as of January 9, 2017 (this “Amendment”), is by and among Santander Drive Auto Receivables LLC, as seller (the
“Seller”), and Santander Consumer USA Inc. (“SC”), as servicer (in such capacity, the “Servicer”). 
 WHEREAS, Santander Drive Auto Receivables Trust 2014-3, as issuer (the “Issuer”), the Seller, the Servicer, and U.S. Bank National Association, as indenture trustee (the
“Indenture Trustee”) are parties to that certain Sale and Servicing Agreement, dated as of June 18, 2014 (the “Sale and Servicing Agreement”); 

WHEREAS, pursuant to Section 9.1(a) of the Sale and Servicing Agreement, the Seller and the Servicer may amend the Sale and
Servicing Agreement without the consent of the Indenture Trustee, any Noteholder, the Issuer, the Owner Trustee or any other Person if specified conditions are met; 
 WHEREAS, the Seller and the Servicer hereto desire to amend the Sale and Servicing Agreement in certain respects as set forth herein; 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows: 
 SECTION 1. Definitions. Capitalized terms used in this Amendment and not otherwise defined herein
shall have the meanings assigned thereto in the Sale and Servicing Agreement, as amended hereby. 
 SECTION 2.
Amendments. The Sale and Servicing Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, hereby amended as follows: 

(a) The definition of “Non-Investment Grade Notes” in Appendix A of the Sale and Servicing Agreement is hereby amended and
restated in full to read as follows: 
 “‘Non-Investment Grade Notes’ means the Class E
Notes; provided, however, that Class E Notes shall be deemed to not be “Non-Investment Grade Notes” as of any date of determination for purposes of Sections 2.16(c) of the Indenture, clauses (x), (xi), (xii), (xiii) and
(xiv) of Section 2.16(d) of the Indenture (and the introductory language of such provision as the context may require) and Section 2.16(h) of the Indenture so long as such Class E Notes are not Restricted Notes on such date.”

  

					
		  		  	 First Amendment to

Sale and Servicing Agreement

 (b) The definition of “Restricted Notes” in Appendix A of the Sale and Servicing
Agreement is hereby amended and restated in full to read as follows: 
 “‘Restricted
Notes’ means any Notes (i) that were beneficially owned by the Issuer or the single beneficial owner of the Issuer for United States federal income tax purposes as of the Closing Date and (ii) for which no Debt-For-Tax Opinion has
been rendered with respect to such Notes at any time after the Closing Date.” 
 SECTION 3. Conditions to
Effectiveness. This Amendment shall become effective on the date hereof, subject to the satisfaction of the following conditions precedent: 
 (a) Each of the Seller and the Servicer shall have received a copy of this Amendment, duly executed by each of the parties hereto; 
 (b) The Seller or the Servicer shall have delivered to the Indenture Trustee an Opinion of Counsel of the Seller or Servicer, respectively, to the effect that this Amendment will not materially and
adversely affect the interests of the Noteholders; 
 (c) The Seller or the Servicer shall have delivered to the Indenture
Trustee and the Owner Trustee an Opinion of Counsel of the Seller or Servicer, respectively, to the effect that execution of this Amendment is authorized or permitted by the Sale and Servicing Agreement and that all conditions precedent to the
delivery and execution have been satisfied; and 
 (d) The Seller or the Servicer shall have delivered to the Indenture Trustee
an Officer’s Certificate of the Seller or Servicer to the effect that this Amendment will not materially and adversely affect the interests of the Certificateholders. 
 SECTION 4. Miscellaneous. The Sale and Servicing Agreement, as amended hereby, remains in full force and effect. Any reference to the Sale and Servicing Agreement from and after the date
hereof shall be deemed to refer to the Sale and Servicing Agreement as amended hereby, unless otherwise expressly stated. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Executed counterparts of this Amendment may be delivered by facsimile, which shall be effective as delivery
of a manually executed signature page. This Amendment shall be governed by and construed in accordance with the internal, substantive laws of the State of New York without reference to the rules thereof relating to conflicts of law, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. 

[Signatures follow] 

  

					
		  	2	  	 First Amendment to

Sale and Servicing Agreement

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written. 
  

			
	SANTANDER DRIVE AUTO RECEIVABLES LLC, as Seller
		
	By:	 	 /s/ Corey Henry

	Name:	 	Corey Henry
	Title:	 	Vice President
	
	 SANTANDER CONSUMER USA INC.,
 as Servicer

		
	By:	 	 /s/ Mark McCastlain

	Name:	 	Mark McCastlain
	Title:	 	Vice President

  

					
		  	S-1	  	 First Amendment to

Sale and Servicing Agreement

 U.S. Bank National Association, a national banking association, not in its individual
capacity but solely as Indenture Trustee, hereby consents to this Amendment in accordance with Section 9.1(d) of the Sale and Servicing Agreement. 

 

			
	 U.S. BANK NATIONAL ASSOCIATION, as
 Indenture Trustee

		
	By:	 	 /s/ Jessica J. Elliot

	Name:	 	Jessica J. Elliot
	Title:	 	Vice President

  

					
		  	S-2	  	 First Amendment to

Sale and Servicing AgreementExhibit
10.88

 

NEITHER
THIS WARRANT NOR ANY SECURITIES THAT MAY BE ISSUED UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS WARRANT HAS BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO ITS DISTRIBUTION OR RESALE, AND THIS WARRANT AND ANY SUCH SECURITIES MAY NOT BE
SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR THIS WARRANT OR SUCH SECURITIES UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED.

 

American
Power Group Corporation

 

Common
Stock Purchase Warrant

 

	Warrant
    – ______	 January
    8, 2016

 

American
Power Group Corporation, a Delaware corporation with a principal place of business of 7 Kimball Lane Building A, Lynnfield, Massachusetts
01940 (the “Company”), hereby certifies that, subject to the terms and conditions set forth herein, ____________
or its permitted assigns (the “Holder”), is entitled to purchase up to that number of shares (the “Warrant
Shares”) of the Company’s Common Stock, $.01 par value per share (“Common Stock”), as is determined
pursuant to Section 1(b) below, at the Exercise Price (as defined below) at any time or from time to time after the date hereof
and prior to 5:00 p.m. (Boston, Massachusetts time), on the Expiration Date (as
defined below). This Warrant is one of a series of warrants (together, the “Warrants”) issued pursuant to that
certain Securities Purchase Agreement dated as of January 8, 2016 among the Company and the original holders of the Warrants (the
“Purchase Agreement”).

 

1.
Exercise of Warrant.

 

(a)
Exercise Price. The price per share of Common Stock for which this Warrant is exercisable (as adjusted pursuant to the
terms of this Warrant, the “Exercise Price”) is $0.10 per share.

 

(b)
Right to Exercise.

 

(i)
Subject to clause (iii) of this Section 1(b), this Warrant shall be exercisable at any time, in the aggregate, for not more than
__________ Warrant Shares; provided, however, that, prior to the satisfaction of the Exercise Condition, this Warrant shall
not be exercisable, in the aggregate for more than __________ Warrant Shares (the Warrant Shares referred to in this proviso,
the “Contingent Warrant Shares”). Subject to the foregoing, this Warrant may be exercised in whole or in part
by the Holder at any time thereafter until the Expiration Date. Any exercise or attempted exercise of this Warrant in excess of
the limits set forth in this Section shall be null and void.

 

    	 

    	 

    

 

(ii)
For purposes of this Section 1(b), “Exercise Condition” shall mean the filing under the Delaware General Corporation
Law of a certificate of amendment to the Company’s Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware increasing the number of authorized shares of Common Stock from 200,000,000 to 350,000,000 shares.

 

(iii)
[For inclusion in warrants issued other than to Arrow, LLC and its affiliates:] Notwithstanding the provisions of clause
(i) of this Section 1(b), in the event that the holders of a majority of the Warrants (measured with reference to the number of
Warrant Shares issuable from time to time upon the exercise of all Warrants) (the “Majority Holders”) exercise
their Warrants in whole or in part, then the Holder of this Warrant shall exercise a pro rata portion of this Warrant.
In the event that the Holder does not exercise this Warrant as required by the preceding sentence within 10 days after written
notice of such exercise by the Majority Holders, this Warrant shall immediately terminate and shall thereafter be null and void.

 

[For
inclusion in warrants issued to Arrow, LLC and its affiliates]: Notwithstanding the provisions of clause (i) of this Section
1(b), in the event that the holders of a majority of the Warrants (measured with reference to the number of Warrant Shares issuable
from time to time upon the exercise of all Warrants) (the “Majority Holders”) exercise their Warrants in whole
or in part, and any holder or holders of any other Warrant or Warrants breaches the obligations, as set forth in such other Warrants,
to exercise a pro rata portion of such Warrant or Warrants within 10 days after written notice of such exercise by the
Majority Holders (“Failed Warrants”), then the number of Warrant Shares for which this Warrant shall be exercisable
in the aggregate shall be increased by the number of shares of Common Stock which equals (A) the total number of shares of Common
Stock for which the Failed Warrants had been exercisable immediately prior to such breach, multiplied by (B) a fraction of which
the numerator shall be the number of Warrant Shares for which this Warrant was exercisable immediately prior to such breach and
of which the denominator shall be the number of Warrant Shares for which all Warrants held by the Majority Holders were exercisable
immediately prior to such breach.

 

(c)
Mechanics of Exercise. This Warrant may be exercised by the Holder by surrender to the Company of this Warrant, with the
attached form of notice of exercise (a “Notice of Exercise”) duly executed by such Holder, accompanied by payment,
by certified or bank check payable to the order of the Company or by wire transfer to the Company’s account, in an amount
equal to the aggregate Exercise Price payable hereunder for the number of Warrant Shares for which this Warrant is being exercised.

 

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2.
Delivery of Certificates; Fractional Shares.

 

(a)
Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its
Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and
either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) the shares are eligible for resale by the Holder pursuant to Rule 144, and otherwise by physical delivery
to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of
(A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the
aggregate Exercise Price as set forth above (such date, the “Warrant Share Delivery Date”). The Warrant Shares
shall be deemed to have been issued, and Holder or any other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the
Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(f) prior to the issuance
of such shares, having been paid.

 

(b)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called
for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

(c)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to Section 2(a) by the Warrant Share Delivery Date, then, the Holder will have the right
to rescind such exercise.

 

(d)
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing
the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount,
if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

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(e)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

(f)
Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may
be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto.

 

(g)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.

 

3.
Certain Adjustments.

 

(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

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(b)
Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders
of Common Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights
or warrants to subscribe for or purchase any security other than the Common Stock, then in each such case the Exercise Price shall
be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date
mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at
such record date of the portion of such assets or evidence of indebtedness or rights or warrants so distributed applicable to
one outstanding share of the Common Stock as determined by the Company’s Board of Directors in good faith. In either case
the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness
so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any
such distribution is made and shall become effective immediately after the record date mentioned above.

 

(c)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, the number of
shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental
Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock
in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary in this Warrant from the date hereof until the Expiration Date, in the event
of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule
13e-3 under the Securities Exchange Act of 1934, as amended, or (3) a Fundamental Transaction involving a Person not traded on
a national securities exchange, including, but not limited to, the Nasdaq Global Select Market, the Nasdaq Global Market, or the
Nasdaq Capital Market, the Company or any Successor Entity (as defined below) shall, at the Holder’s request, delivered
at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant
from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value.

 

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(d)
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions
of this Section 3(d) pursuant to a written agreement in form and substance reasonably satisfactory to the Holder and approved
by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this
Warrant, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of
this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form
and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had
been named as the Company herein.

 

(e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

(f)
Notices to Holder.

 

(i)
Adjustment to Exercise Price. Whenever the [number of Warrant Shares for which this Warrant may be exercised is adjusted
pursuant to Section 1(b) and/or]1 the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly mail to the Holder a notice setting forth the [number of Warrant Shares for which this Warrant may be exercised
and/or the] Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. For
purposes of clarification, the Holder shall be entitled to the benefit of any adjustment to the Exercise Price hereunder regardless
of whether the Holder accurately refers to the adjusted Exercise Price in the Notice of Exercise.

 

(ii)
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed
to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior
to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder
shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of
the event triggering such notice except as may otherwise be expressly set forth herein.

 

 

1
For inclusion in warrants issued to Arrow, LLC and its affiliates.

 

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4.
No Impairment. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities, or any other action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant. Without limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of stock receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable shares of stock upon exercise of this Warrant from time to time, and (iii) will not transfer
all or substantially all of its properties and assets to any other Person or consolidate into or merge with or into any other
Person (if the Company is not the surviving entity), unless such other Person expressly agrees in writing (naming the registered
Holder hereof, as such, as an intended third-party beneficiary) to assume and satisfy all of the Company’s obligations under
this Warrant.

 

5.
Transfers.

 

(a)
Unregistered Security. The Holder acknowledges that this Warrant and the Warrant Shares have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise in the absence of
(i) an effective registration statement under the Act as to this Warrant or such Warrant Shares, as the case may be, and registration
or qualification of this Warrant or such Warrant Shares, as the case may be, under any applicable U.S. federal or state securities
law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not
required. Each certificate or other instrument for Warrant Shares issued upon the exercise of this Warrant shall bear a legend
substantially to the foregoing effect.

 

(b)
Transfer of Warrant. Neither this Warrant, nor any rights of the Holder hereunder, may be transferred or assigned, whether
by operation of law or otherwise, without prior notice in writing to the Company. The Company may condition any such transfer
or assignment on the prior receipt from the proposed transferee or assignee of a written representation that such transferee or
assignee is an “accredited investor,” as such term is defined in Regulation D as promulgated under the Securities
Act and the written agreement that such transferee or assignee will bound by all of the terms of this Warrant. Any such transfer
or assignment, or attempted transfer or assignment, in violation of this Warrant shall be null and void.

 

(c)
Warrant Register. The Company will maintain a register containing the names and address of the Holder of the Warrant. Any
Holder may change such Holder’s address as shown on the warrant register by written notice to the Company requesting such
change.

 

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6.
Authorized Shares.

 

(a)
Reservation of Shares. The Company covenants that, subject to the satisfaction of the Exercise Condition, during the period
the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under
this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued
as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such
Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes,
liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

 

(b)
No Impairment. Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including,
without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform
its obligations under this Warrant.

 

(c)
Authorizations or Exemptions. Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

    	8

    	 

    

 

7.
Certain Definitions. As used in this Warrant, the following terms shall have the following meanings:

 

“Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s
request pursuant to Section 3(c), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of
the Common Stock during the period beginning on the Trading Day immediately preceding the earliest to occur of (x) the public
disclosure of the applicable Fundamental Transaction (as defined below), (y) the consummation of the applicable Fundamental Transaction
and (z) the date on which the Holder first became aware of the applicable Fundamental Transaction and ending on the Trading Day
of the Holder’s request pursuant to Section 3(c) and (2) the sum of the price per share being offered in cash in the applicable
Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction
(if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section
3(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining
term of this Warrant as of the date of the Holder’s request pursuant to Section 3(c) and (2) the remaining term of this
Warrant as of the date of consummation of the applicable Fundamental Transaction or as of the date of the Holder’s request
pursuant to Section 3(c) if such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv)
a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the
HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the
earliest to occur of (x) the public disclosure of the applicable Fundamental Transaction, (y) the consummation of the applicable
Fundamental Transaction and (z) the date on which the Holder first became aware of the applicable Fundamental Transaction.

 

“Bloomberg”
means Bloomberg, L.P.

 

“Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Trading Market,
as reported by Bloomberg, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing
trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
the Trading Market is not the principal securities exchange or trading market for such security, the last trade price of such
security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc.
(formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then the fair value
of such security will be determined by an independent, reputable appraiser selected in good faith by the Company and reasonably
acceptable to the Majority Holders. The fees and expenses of such appraiser shall be borne by the Company. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period.

 

    	9

    	 

    

 

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

 

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

 

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

 

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

 

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

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

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Company and reasonably acceptable to the Majority Holders, the fees and expenses of which shall be paid by the Company.

 

8.
Termination; Expiration Date. This Warrant shall terminate on [the earlier of] January 8, 2021 [the breach of Section 1.2(b)(iii)
hereof]2 (the “Expiration Date”); provided, however, that (a) if the Closing Condition has
not been satisfied prior January 8, 2017, then the Expiration Date shall be extended, with respect to the Contingent Warrant Shares
only, until January 8, 2022; and (b) if the Closing Condition has not been satisfied prior January 8, 2018, then the Expiration
Date shall be extended, with respect to all of the Warrant Shares, until January 8, 2026.

 

 

2
For inclusion in warrants issued other than to Arrow, LLC and its affiliates.

 

    	10

    	 

    

 

9.
Exchange of Warrants. Upon the surrender by the Holder of this Warrant, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 5 hereof, issue and deliver to or upon the order
of such Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of such Holder or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered.

 

10.
Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety
if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

 

11.
No Rights as Stockholder. Until the exercise of this Warrant, the Holder of this Warrant shall not have or exercise any
rights by virtue hereof as a stockholder of the Company.

 

12.
Captions. The captions of sections or subsections of this Warrant are for reference only and will not affect the interpretation
or construction of this Warrant.

 

13.
Equitable Relief. The Company hereby acknowledges that any breach by it of its obligations under this Warrant would
cause substantial and irreparable damage to the registered Holder hereof, and that money damages would be an inadequate remedy
therefor, and accordingly, acknowledges and agrees that, in addition to any other rights and remedies to which the registered
Holder hereof may be entitled in respect of any breach of such obligations, such Holder will be entitled to an injunction, specific
performance, and/or other equitable relief to prevent the breach of such obligations.

 

14.
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies. Without limiting any
other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

15.
Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

 

    	11

    	 

    

 

16.
Amendments; Waivers. Any of the terms and conditions of this Warrant may be changed or amended, and any right of the Holder
of this Warrant may be waived, with the written consent of the Company and the Majority Holders (with or without the specific
consent of the Holder); provided, however, that (a) any such change, amendment or waiver shall apply equitably to all of
the Warrants and (b) the Exercise Price of this Warrant shall not be changed or amended (expect as otherwise provided in Section
3) without the written consent of either (i) the Holder or (ii) the holders of 75% of the Warrants (measured with reference to
the number of Warrant Shares issuable from time to time upon the exercise of all Warrants) (with or without the specific consent
of the Holder).

 

17.
Reservation of Rights. No failure or other delay by the registered Holder hereof exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege.

 

18.
Governing Law; Venue; Waiver of Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement. IN ANY ACTION, SUIT, OR PROCEEDING
IN ANY JURISDICTION BROUGHT BY ANY HOLDER OR THE COMPANY AGAINST THE OTHER, SUCH HOLDER AND THE COMPANY EACH KNOWINGLY AND INTENTIONALLY,
TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY. 

 

[Remainder
of page intentionally left blank.]

 

    	12

    	 

    

 

IN
WITNESS WHEREOF, the Company has executed and delivered this Warrant, under seal, on the day and year first above written.

 

	 	AMERICAN
    POWER GROUP CORPORATION
	 	 	 
	 	By:	 
	 	 	Charles
    E. Coppa
	 	 	Chief
    Financial Officer

 

    	13

    	 

    

 

American
Power Group Corporation

 

Common
Stock Purchase Warrant

(Warrant
_______)

Notice
of Exercise

 

o:
american power group corporation

 

(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)
The undersigned hereby represents and warrants to the Company that the undersigned is an “Accredited Investor,” as
that term is defined in the Securities Purchase Agreement, on the date hereof.

 

(3)
Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name
as is specified below:

 

	 	 	 

 

The
Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

	 	 	 
	 	 	 
	 	 	 

 

[SIGNATURE
OF HOLDER]

 

Name
of Investing Entity: ______________________________________________________________

Signature
of Authorized Signatory of Investing Entity:________________________________________

Name
of Authorized Signatory: __________________________________________________________

Title
of Authorized Signatory: ___________________________________________________________

Date:
_______________________________________________________________________________

 

    	14

    	 

    

 

American
Power Group Corporation

 

Common
Stock Purchase Warrant

(Warrant
_______)

Assignment
Form

 

(To
assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated:
______________, _______

 

	 	Holder’s
    Signature:	 	 
	 	 	 	 
	 	Holder’s
    Address:	 	 
	 	 	 	 
	 	 	 	 

 

Signature
Guaranteed: ___________________________________________

 

NOTE:
The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration
or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those
acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

    	15

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