SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 15, 1997 (June 30, 1997)
GREENMAN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13776 71-0724248
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7 Kimball Lane
Building A
Lynnfield, Massachusetts 01450
(Address of principal executive offices, including zip code)
(617) 224-2411
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On June 30, 1997, GreenMan Acquisition Corp. ("GAC"), a wholly-owned
subsidiary of GreenMan Technologies, Inc., ("GMTI" or the "Registrant") acquired
all of the capital stock of each of (i) BFI Tire Recyclers of Minnesota, Inc.
("BTM"), a wholly-owned subsidiary of Browning-Ferris Industries of Minnesota,
Inc. ("BFIM") and (ii) BFI Tire Recyclers of Georgia, Inc. ("BTG"), a
wholly-owned subsidiary of Browning-Ferris Industries of Georgia, Inc. ("BFIG").
BFIG and BFIM are both wholly-owned subsidiaries of Browning Ferris Industries,
Inc. ("BFI"). The acquisition was made pursuant to that certain Purchase and
Sale Agreement, dated as of June 30, 1997, by and among GMTI, GAC, BFI, BFIM and
BFIG and included in this Report as Exhibit 2. Further information about the
acquisition reported hereby may be found in the Registrant's press release of
July 7, 1997, included as Exhibit 99 to this Report.
In consideration for the capital stock of BTM and BTG, GAC paid BFI
$5,408,830, which amount was determined, (a) as to $3,600,000 of such amount, by
negotiation among the parties and (b) as to the balance, by the value of BTG's
and BTM's working capital. Of such consideration, $650,000 was paid from
proceeds of the private placement in April 1997 of Convertible Notes due October
1998 and Common Stock Purchase Warrants and $4,758,830 was financed by a
short-term loan from BFI to GAC, which loan must be repaid by September 30,
1997. The repayment of such loan is guaranteed by GMTI and is secured by all of
BTM's assets, all of BTG's assets and by a pledge by GAC of all of the capital
stock of BTG and BTM. The Registrant expects to refinance such loan prior to its
maturity.
Item 7. Financial Statements and Exhibits
(a) Financial Statements and Exhibits
As of the date of filing of this Current Report on 8-K, it is
impracticable for the Registrant to provide the financial statements required by
this Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, such financial
statements shall be filed by amendment to this Form 8-K no later than 60 days
after the date hereof.
(b) Pro Forma Financial Information
As of the date of filing of this Current Report on 8-K, it is
impracticable for the Company to provide the pro forma financial information
required by this Item 7(b). In accordance with Item 7(b)(2) of Form 8-K, such
financial statements shall be filed by amendment to this Form 8-K no later than
60 days after the date hereof.
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(c) Exhibits
Exhibit 2 Purchase and Sale Agreement, dated as of June 30,
1997, by and among GreenMan Technologies, Inc.
("GMTI"), GreenMan Acquisition Corp. ("GAC"),
Browning Ferris Industries, Inc. ("BFI"),
Browning-Ferris Industries of Minnesota, Inc.
("BFIM") and Browning-Ferris Industries of Georgia
("BFIG").
Exhibit 10(a) Promissory Note dated as of June 30, 1997 made by
GAC to BFIM and BFIG.
Exhibit 10(b) Noncompetition, Nonsolicitation and
Confidentiality Agreement, dated as of June 30, 1997,
by and among GMTI, GAC, BFI, BFIM and BFIG.
Exhibit 10(c) Security Agreement, dated as of June 30, 1997, by
and between BFI Tire Recyclers of Georgia, Inc. and
BFIG.
Exhibit 10(d) Security Agreement, dated as of June 30, 1997, by and
between BFI Tire Recyclers of Minnesota, Inc. and
BFIM.
Exhibit 10(e) Pledge Agreement, dated as of June 30, 1997, by and
among GAC, BFIM and BFIG.
Exhibit 10(f) Guaranty Agreement, dated as of June 30, 1997 by and
among GMTI, BFIM and BFIG.
Exhibit 99 Press Release, dated July 7, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREENMAN TECHNOLOGIES, INC.
(Registrant)
By: /s/ Maurice E. Needham
Maurice E. Needham
Chief Executive Officer
Date: July 15, 1997
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PURCHASE AND SALE AGREEMENT
BY AND AMONG
GREENMAN TECHNOLOGIES, INC.,
GREENMAN ACQUISITION CORP.
BROWNING FERRIS INDUSTRIES, INC.
BROWNING-FERRIS INDUSTRIES OF MINNESOTA, INC.
AND
BROWNING-FERRIS INDUSTRIES OF GEORGIA, INC.
Dated as of June 30, 1997
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
1. The Stock Purchase..............................................................................1
1.01 Consummation of the Stock Purchase. .........................................1
1.02 Excluded Assets...............................................................1
1.03 Purchase Price and Payment....................................................2
1.04 The Closing...................................................................2
1.05 Post-Closing Adjustment.......................................................2
1.06 Accounts Receivable...........................................................2
2. Representations of Sellers......................................................................3
2.01 Organization..................................................................3
2.02 Capitalization................................................................3
2.03 Authorization.................................................................3
2.04 Financial Data................................................................4
2.05 Absence of Undisclosed Liabilities............................................4
2.06 Litigation....................................................................5
2.07 Insurance.....................................................................5
2.08 Leases; Real Estate...........................................................5
2.09 Title to Assets...............................................................6
2.10 Inventory. ..................................................................6
2.11 Accounts Receivable...........................................................7
2.12 Tax Matters...................................................................7
2.13 Books and Records.............................................................8
2.14 Contracts and Commitments.....................................................8
2.15 Compliance with Agreements and Laws..........................................10
2.16 Employee Relations...........................................................10
2.17 Absence of Certain Changes or Events.........................................11
2.18 Customers....................................................................12
2.19 Suppliers....................................................................13
2.20 Prepayments and Deposits.....................................................13
2.21 Indebtedness to and from Officers, Directors
and Stockholders............................................................13
2.22 Banking Facilities...........................................................13
2.23 Powers of Attorney and Suretyships...........................................13
2.24 Regulatory Approvals.........................................................14
2.25 Disclosure...................................................................14
2.26 Disposal Sites Used..........................................................14
2.27 Employee Benefit Plans.......................................................14
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3. Representations of GreenMan...........................................................15
3.01 Organization and Authority...................................................15
3.02 Authorization................................................................15
3.03 Regulatory Approvals.........................................................16
3.04 Financial Statements.........................................................16
3.05 Disclosure...................................................................16
4. Access to Information; Public Announcements; Consents..........................................17
4.01 Access to Management, Properties and Records. ..............................17
4.02 Confidentiality..............................................................17
4.03 Public Announcements.........................................................18
4.04 Consents.....................................................................18
5. Pre-Closing Covenants of Sellers...............................................................18
5.01 Conduct of Business. ......................................................18
5.02 Absence of Material Changes..................................................18
5.03 Communications with Customers and Suppliers..................................20
5.04 Compliance with Laws.........................................................20
5.05 Continuing Obligation to Inform..............................................20
5.06 Exclusive Dealing............................................................20
5.07 Reports, Taxes...............................................................21
6. Conditions to Obligations of GreenMan..........................................................21
6.01 Continued Truth of Representations and Warranties of
Sellers; Compliance with Covenants and Obligations...........................21
6.02 Performance by BFI...........................................................21
6.03 Corporate Proceedings........................................................21
6.04 Governmental Approvals.......................................................21
6.05 Consent of Third Parties.....................................................21
6.06 Adverse Proceedings. .......................................................22
6.07 Opinions of Counsel. .......................................................22
6.08 Update.......................................................................22
6.09 Non-Competition Agreement....................................................22
6.10 Resignations. ..............................................................22
6.11 Indebtedness.................................................................22
6.12 Ford Heights Option..........................................................22
6.13 Permit Side Letter...........................................................22
6.14 Closing Deliveries...........................................................22
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7. Conditions to Obligations of Sellers...........................................................23
7.01 Continued Truth of Representations and Warranties
of GMTI and GAC; Compliance with Covenants
and Obligations..............................................................23
7.02 Corporate/Stockholder Proceedings............................................23
7.03 Governmental Approvals.......................................................23
7.04 Consents of Third Parties....................................................24
7.05 Adverse Proceedings..........................................................24
7.06 Opinion of Counsel...........................................................24
7.07 Closing Deliveries. ........................................................24
7.08 Security Interest............................................................24
7.09 Ford Heights Option..........................................................25
7.10 Guaranty.....................................................................25
8. Indemnification................................................................................25
8.01 By GreenMan..................................................................25
8.02 By Sellers...................................................................25
8.03 Claims for Indemnification...................................................26
8.04 Defense by the Indemnifying Party............................................27
8.05 Payment of Indemnification Obligation........................................27
8.06 Survival of Representations; Claims for Indemnification......................28
8.07 Claims.......................................................................28
9. Dispute Resolution.............................................................................28
9.01 General......................................................................28
9.02 Consent of the Parties.......................................................28
9.03 Arbitration..................................................................28
10. Termination of Agreement.......................................................................29
10.01 Termination by Lapse of Time.................................................29
10.02 Termination by Agreement of the Parties. ...................................29
10.03 Termination by Reason of Breach..............................................29
11. Post Closing...................................................................................30
11.01 BFI Name and Logos...........................................................30
11.02 Access to Records and Properties; Assistance.................................30
11.03 Waiver of Applicable Waiting Periods.........................................30
11.04 Severance....................................................................30
11.05 Termination of Benefit Plan Coverage.........................................31
11.06 Financial Assurance..........................................................31
11.07 Tax and Allocation Matters...................................................31
11.08 Ford Heights Cages...........................................................31
12. Brokers........................................................................................31
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12.01 For BFI......................................................................31
12.02 For GreenMan.................................................................31
13. Notices........................................................................................32
14. Successors and Assigns.........................................................................33
15. Entire Agreement; Amendments; Attachments......................................................33
16. Severability...................................................................................33
17. Investigation of the Parties...................................................................33
18. Expenses.......................................................................................34
19. Governing Law..................................................................................34
20. Section Headings...............................................................................34
21. Counterparts...................................................................................34
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made this 30th
day of June, 1997 by and among GreenMan Technologies, Inc., a Delaware
corporation with its principal place of business at 7 Kimball Lane, Building A,
Lynnfield, Massachusetts 01940 ("GMTI"), GreenMan Acquisition Corp., a Delaware
corporation with its principal place of business at 7 Kimball Lane, Building A,
Lynnfield, Massachusetts 01940 ("GAC" and, together with GMTI, "GreenMan"),
Browning Ferris Industries, Inc., a Delaware corporation with its principal
place of business at 757 North Eldridge, Houston, Texas 77079 ("BFI"),
Browning-Ferris Industries of Minnesota, Inc., a Minnesota corporation ("BFIM")
and Browning-Ferris Industries of Georgia, Inc., a Georgia corporation ("BFIG").
BFI, BFIM and BFIG are referred to herein, collectively, as the "Sellers."
Preliminary Statement
WHEREAS, GAC desires to purchase and BFIM desires to sell all of the
issued and outstanding stock of BFI Tire Recyclers of Minnesota, Inc., a
Minnesota corporation, ("BTM") and BFIG desires to sell all of the issued and
outstanding stock of BFI Tire Recyclers of Georgia, Inc., a Georgia corporation
("BTG");
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The Stock Purchase
1.01 Consummation of the Stock Purchase. At the closing (as
hereinafter defined), the date thereof being referred to herein as the "Closing
Date", BFIM and BFIG, respectively shall deliver to GAC certificates
representing all of the issued and outstanding shares of capital stock of BTM
and BTG (the "Stock") owned by each of them. Such certificates shall be duly
endorsed in blank for transfer or with stock powers attached and duly executed
in blank, together with all such other documents as may be required to effect a
valid transfer to GAC of all the Stock.
1.02 Excluded Assets. As of the Closing Date neither of BTM or
BTG (collectively, the "Facilities" and each, individually, a "Facility") shall
have any ownership or possessory interests in, (i) the use of the name
"Browning-Ferris" or any name similar or related thereto, (ii) any trade marks
or other intellectual property of BFI, including any rights to personal computer
or mainframe software which arise solely by virtue of BTM's and BTG's
affiliation with Sellers (including without limitation all BFI corporate
software systems) but excluding all other rights to personal computer or
mainframe software, (iii) cash, or (iv) any claims for property damage, personal
injury, business interruption or other losses suffered as a result of a fire
occuring on or about December 5, 1993 at BTG's premises in Jackson, Georgia.
<PAGE>
1.03 Purchase Price and Payment. The purchase price (the
"Purchase Price") for the Stock shall be a sum equal to (a) Three Million Five
Hundred Thousand Dollars ($3,600,000) plus (b) an amount equal to Final Working
Capital (as hereafter defined). The Purchase Price shall be paid as follows:
(i) the sum of $650,000 has previously been
paid to BFI and BFI hereby acknowledges the receipt thereof; and
(ii) the sum of $2,950,000 plus the
Estimated Working Capital (as hereafter defined) will be paid at the closing by
delivery to BFI of a promissory note of GAC payable to the order of BFI (the
"Note"), said Note to be substantially in the form attached hereto as Exhibit A.
1.04 The Closing. The Closing shall take place at the offices
of Sullivan & Worcester LLP, One Post Office Square, at 9:00 a.m. Eastern
Daylight Savings Time, on June 27, 1997, or at such other place, time or date as
may be mutually agreed upon in writing by the parties hereto.
1.05 Post-Closing Adjustment.
(a) On the Closing Date, BFI shall provide GreenMan
(1) an estimate ("Estimated Working Capital"), as of the Closing Date, of the
sum of (i) all Accounts Receivable, (ii) the book value of the spare parts and
any other inventory of the Facilities ("Inventory") and (iii) all deposits and
prepaid items of the Facilities and (2) a schedule of the items included in the
Estimated Working Capital;
(b) Within forty-five (45) days after the Closing
Date, BFI shall deliver to GreenMan a final schedule and calculation ("Final
Working Capital") of all Accounts Receivable and Inventory as of the Closing
Date; and
(c) Within ten (10) days thereafter, Sellers shall
deliver to GreenMan immediately available funds in the amount by which the Final
Working Capital is less than the Estimated Working Capital or GreenMan shall
deliver to BFI a second promissory note in substantially the form of the Note
attached hereto as Exhibit A in the amount by which the Final Working Capital
exceeds the Estimated Working Capital.
1.06 Accounts Receivable. As used herein, "Accounts
Receivable" shall mean the sum of:
(a) all accounts receivable of the Facilities,
excluding amounts due the Facilities by GMTI and excluding any portion of such
accounts receivable due solely on account of services for which the Facilities
will provide services after the Closing, discounted by seven percent (7%); plus
(b) accounts receivable due BTG by GMTI.
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2. Representations of Sellers
The Sellers represent and warrant to GAC and GMTI that:
2.01 Organization. BFI, BFIM, BFIG, BTM and BTG are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware, Minnesota, Georgia, Minnesota and Georgia,
respectively, and have all requisite corporate power and authority to own or
lease its respective properties, to carry on their respective businesses as now
being conducted, to execute and deliver this Agreement and the agreements
contemplated herein , and to consummate the transactions contemplated hereby and
thereby. Each of BTM and BTG is duly qualified to do business and in good
standing in all jurisdictions in which its ownership of property or the
character of its business requires such qualification except where failure to be
so qualified or to be in such good standing would not have a material adverse
effect on the business, properties or finances of the BTM and BTG, taken as a
whole. A true and complete list of such jurisdictions is set forth in Schedule
2.01. Certified copies of the Certificate of Incorporation and By-laws of BTM
and BTG, as amended to date, have been previously delivered to GreenMan, are
complete and correct, and no amendments have been made thereto or have been
authorized since the date thereof.
2.02 Capitalization.
On the date hereof, the authorized capital stock (hereinafter the
"Capital Stock"), the number of shares of each class that are issued and
outstanding (including treasury shares), and the number of shares of each class
that are reserved for issuance with respect to BTM and BTG shall be as set forth
on Schedule 2.02 hereto. All such issued and outstanding shares of Capital Stock
have been and on the Closing Date will be duly and validly issued and are, or
will be on such date, fully paid and non-assessable. Except as set forth in
Schedule 2.02 attached hereto, there are not outstanding (i) any options,
warrants or other rights to purchase any Capital Stock; (ii) any securities
convertible into or exchangeable for shares of such stock; or (iii) any other
commitments of any kind for the issuance of additional shares of Capital Stock
or options, warrants or other securities of the Facilities. On the Closing Date,
there will not be outstanding (i) any options, warrants or other rights to
purchase any Capital Stock; (ii) any securities convertible into or exchangeable
for shares of such stock; or (iii) any other commitments of any kind for the
issuance of additional shares of capital stock or options, warrants or other
securities of BTM and BTG.
2.03 Authorization. The execution and delivery by the Sellers
of this Agreement and the agreements provided for herein, and the consummation
by the Sellers of all transactions contemplated hereunder and thereunder by the
Sellers, have been duly authorized by all requisite shareholder, director and
other corporate action. This Agreement has been duly executed by the Sellers.
This Agreement and all other agreements and written obligations entered into and
undertaken in connection with the Stock Purchase and all other transactions
contemplated hereby to which the Sellers are parties constitute the valid and
legally binding obligations of the Sellers enforceable against them in
accordance with their respective terms, except as enforcement may be limited by
applicable equitable principles or by bankruptcy, insolvency, reorganization,
moratorium or similar laws effecting creditors' rights generally, and
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by the exercise of judicial discretion. The execution, delivery and performance
by the Sellers of this Agreement and the agreements provided for herein, and the
consummation by the Sellers of the Stock Purchase and all other transactions
contemplated hereby and thereby, will not, with or without the giving of notice
or the passage of time or both, (a) violate the provisions of any law, rule or
regulation applicable to the Sellers or the Facilities; (b) violate the
provisions of the respective Certificates of Incorporation or By-laws of the
Sellers or the Facilities; or (c) violate any judgment, decree, order or award
of any court, governmental body or arbitrator by which the Sellers or the
Facilities or any of their assets or properties are bound; or (d) conflict with
or result in the breach or termination of any term or provision of, or
constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets of the
Facilities pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which any of the Sellers are parties or by which the
BTM or BTG or their assets is or may be bound. Schedule 2.03 attached hereto
sets forth a true, correct and complete list of all consents and approvals of
third parties that are required in connection with the consummation by the
Sellers of the Stock Purchase and the performance by the Sellers of their
obligations under this Agreement. Notwithstanding the foregoing or any
provisions of this Agreement to the contrary, Sellers make no representation or
warranty, and expressly disclaim any representation or warranty, with respect to
whether the consent of any government entity or third party is required with
respect to any Permit in connection with the continued operations of the
Facilities after consummation of the transactions contemplated by this
Agreement.
2.04 Financial Data.
Attached hereto as Schedule 2.04 is certain financial information
("Financial Data") provided previously by BFI to GreenMan with respect to each
Facility. Such Financial Data is true, complete and accurate in all material
respects and was prepared in accordance with generally accepted accounting
principles (except for the absence of footnote disclosure and for other
differences from generally accepted accounting principles described on Schedule
2.04) applied on a consistent basis, and the Financial Data fairly represents
the financial information set forth therein, in accordance with generally
accepted accounting principles for the periods indicated and has been compiled
consistent with past practice from the internal accounting records of the
respective Facilities without audit. The Financial Data does not constitute any
warranty with respect to future results of operations of any of the Facilities.
The internal accounting records of the Facilities from which such Financial Data
has been compiled has been maintained on a consistent basis in all material
respects by Sellers. The date of Financial Data is referred to herein as a
"Financial Data Date."
2.05 Absence of Undisclosed Liabilities. Except as and to the
extent (a) reflected and reserved against in the Current Balance Sheet, (b) set
forth on Schedule 2.05 attached hereto, or (c) incurred in the ordinary course
of business after the date of the Current Balance Sheet and not material in
amount, either individually or in the aggregate, to the best of Sellers'
knowledge, each of the Facilities has no liability or obligation, secured or
unsecured, whether accrued, absolute, contingent, unasserted or otherwise, which
is material to the condition (financial or otherwise) of the assets, properties,
business or prospects of the Facilities. For purposes of this Subsection 2.05,
"material" means, with regard to any specific liability or
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obligation, any amount in excess of $25,000 and with regard to all such
liabilities and obligations in the aggregate, any amount in excess of $50,000.
2.06 Litigation. Except as set forth on Schedule 2.06 attached
hereto (a) there is no action, suit or proceeding to which any of the Facilities
is a party pending or, to the best knowledge of the Sellers, threatened before
any court or governmental agency, authority, body or arbitrator; (b) none of the
Facilities has not been permanently or temporarily enjoined by any order,
judgment or decree of any court or any governmental agency, authority or body
from engaging in or continuing any conduct or practice in connection with the
business, assets, or properties of the Facilities; and (c) there is not in
existence on the date hereof any order, judgment or decree of any court,
tribunal or agency enjoining or requiring any of the Facilities to take any
action of any kind with respect to its business, assets or properties.
2.07 Insurance. Schedule 2.07 attached hereto sets forth a
true, correct and complete list of all fire, theft, casualty, general liability,
workers compensation, business interruption, product liability, automobile and
other insurance policies maintained by each Facility and of all life insurance
policies maintained by each Facility on the lives of any of its employees,
specifying the type of coverage, the amount of coverage, the premium, the
insurer and the expiration date of each such policy (collectively, the
"Insurance Policies"). True, correct and complete copies of all Insurance
Policies have been previously delivered by the Sellers to GreenMan. The
Insurance Policies are in full force and effect. All premiums due on the
Insurance Policies or renewals thereof have been paid through the Closing Date,
and there is no default by any of the Facilities under the Insurance Policies
nor any default by any other party to the Insurance Policies that is known by
any of the Facilities. To the best of Sellers' knowledge, there are no
outstanding recommendations by any issuer of the Insurance Policies or by any
Board of Fire Underwriters or other similar body exercising similar functions or
by any governmental authority exercising similar functions which requires or
recommends any changes in the conduct of the business of, or any repairs or
other work to be done on or with respect to any of the properties or assets of,
the Facilities.
2.08 Leases; Real Estate.
(a) Schedule 2.08 attached hereto sets forth a true,
correct and complete list as of the date hereof of all leases of real property
to which each of BTM or BTG is a party (collectively, the "Leases"). True,
correct and complete copies of all Leases and all amendments, modifications and
supplemental agreements thereto have previously been delivered by the Sellers to
GreenMan. The Leases are in full force and effect, are, to the best of Sellers'
actual knowledge, binding and enforceable against each of the parties thereto in
accordance with their respective terms, except as may be limited by the laws of
bankruptcy and general principals of equity and, except as set forth on Schedule
2.08, have not been modified or amended since the date of delivery to GreenMan.
Sellers, BTM and BTG have not received any written notice from any party to any
Lease claiming that a Facility is in default thereunder and that such default
remains uncured. Except as set forth on Schedule 2.08, there has not occurred
any event which would constitute a material breach of or material default in the
performance of any covenant, agreement or condition contained in any Lease by
Sellers, BTM or BTG, nor has there occurred any event which with the passage of
time or the giving of notice or both would constitute such a
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material breach or material default by Sellers, BTM or BTG. None of the
Facilities is obligated to pay any leasing or brokerage commission (which is not
disclosed on Schedule 2.08 attached hereto) relating to any Lease and, except as
set forth on Schedule 2.08, currently has no obligation to pay any leasing or
brokerage commission upon the renewal of any Lease. Except as set forth on
Schedule 2.08, no obligations relating to construction, alteration or other
leasehold improvement work with respect to any of the Leases remains
outstanding.
(b) Except as shown on Schedule 2.08, there are no
actual or currently existing potential material environmental hazards on real
property (the "Properties") at any time owned, leased or operated by any of the
Facilities.
2.09 Title to Assets.
(a) Each of the Facilities has good and marketable
title to all of its properties and assets, real, personal and mixed, including
those reflected in the Financial Data Date, free and clear of any security
interests, mortgages, pledges, liens, encumbrances, restrictions, or charges,
except for (i) those described on Schedule 2.09(a) attached hereto and made part
hereof, (ii) liens shown on the Current Balance Sheet or the Notes thereto as
securing specified liabilities set forth therein, with respect to which no
material default exists (except for defaults cured prior to the declaration of
default thereon), and (iii) minor imperfections of title and encumbrances, if
any, which are not substantial in character, amount, or extent, do not detract
from the value of the properties subject thereto, or interfere with the use of
the properties for the purposes for which they are presently used, or otherwise
impair the Facilities' operations, and have arisen only in the ordinary course
of business
(b) Schedule 2.09(b) contains a true and complete
list and legal description of each parcel of real property owned by the
Facilities and a general description of each building situated thereon. The
Seller has heretofore furnished to GreenMan true and complete copies of all
deeds, other instruments of title and policies of title insurance indicating and
describing the ownership of such real property, as well as copies of any surveys
or environmental reports relating thereto.
2.10 Inventory. Schedule 2.10 attached hereto sets forth a
true, correct and complete list of the Inventory as of the date hereof. The
Inventory consists of items of a quality and quantity which are usable or
saleable in the ordinary course of the business conducted by the Facilities. The
value of all items of obsolete materials and of materials of below standard
quality have been written down to realizable market value and the values at
which such inventory is carried reflect the normal inventory valuation policy of
the Facilities of stating inventory at the lower of cost or market value on a
first in first out (FIFO) basis in accordance with GAAP.
2.11 Accounts Receivable. Schedule 2.11 attached hereto sets
forth a true, correct and complete list of the accounts receivable of the
Facilities as of a date not more than five business days prior to the Closing
Date (the "Accounts Receivable"), including the aging thereof. All Accounts
Receivable arose out of the sales of inventory or services in the ordinary
course of business.
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2.12 Tax Matters. The Facilities are not subject to any
federal, state, local or foreign tax liablity of any kind whatsoever for any
periods prior to the Closing or any assessment, interest, penalty or deficiency
relating thereto. There are no tax liens (other than for ad-valorem and similar
taxes which are not past due) or taxes on any of the assets of the Facilities.
2.13 Books and Records. The general ledgers and books of
account of each Facility, and all other books and records of each Facility are
in all material respects complete and correct and have been maintained in
accordance with good business practice and in accordance with all applicable
procedures required by laws and regulations.
2.14 Contracts and Commitments.
(a) Schedule 2.14 attached hereto contains a true,
complete and correct list of all written, and a description of all oral,
contracts and agreements of the types listed below (collectively, the
"Contracts"):
(i) all loan agreements, indentures,
mortgages and guaranties to which a Facility is a party or by which a Facility
or any of its property is bound;
(ii) all pledges, conditional sale or title
retention agreements, security agreements, obligations relating to equipment,
personal property leases and lease purchase agreements to which a Facility is a
party or by which a Facility or any of its property is bound;
(iii) all contracts, agreements, commitments
and purchase orders to which a Facility is a party or by which a Facility or any
of its property is bound and which (A) involve payments or receipts by a
facility of more than $25,000 in the case of any single contract, agreement,
commitment or purchase order under which full performance (including payment)
has not been rendered by all parties thereto or (B) which may materially
adversely affect the condition (financial or otherwise) or the properties,
assets, business or prospects of each Facility;
(iv) all collective bargaining agreements,
employment and consulting agreements, executive compensation plans, bonus plans,
deferred compensation agreements, pension plans, retirement plans, employee
stock option or stock purchase plans and group life, health and accident
insurance and other employee benefit plans, agreements, arrangements or
commitments to which a Facility is a party or by which a Facility or any of its
property is bound;
(v) all agency, distributor, sales
representative, franchise or similar agreements to which a Facility is a party
or by which a Facility or any of its property is bound;
(vi) all contracts or agreements between a
Facility and any affiliate thereof (as such term is defined in the Securities
Act of 1933, as amended, and the rules
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and regulations promulgated thereunder) (each, an "Affiliate"), including, but
not limited to, any of BFI, BFIM, BFIG or their Affiliates;
(vii) all leases for personal property,
whether operating, capital or otherwise, under which a Facility is lessor or
lessee;
(viii) all contracts or agreements relating
to past disposal of waste by each Facility (whether or not hazardous);
(ix) all contracts, agreements or other
arrangements imposing a non-competition or non-solicitation obligation on a
Facility;
(x) all confidentiality or proprietary
information agreements with respect to the confidential information of a
Facility or any third party to which a Facility is a party in any capacity; and
(xi) any other material agreements or
contracts entered into by a Facility.
(b) Except as set forth on Schedule 2.14:
(i) each Contract is a valid and binding
agreement of the respective Facility, enforceable against such Facility in
accordance with its terms, and Sellers do not have any knowledge that any
Contract is not a valid and binding agreement of the other parties thereto;
(ii) Each Facility has fulfilled all
material obligations required pursuant to the Contracts to have been performed
by each Facility on its part prior to the date hereof, and Sellers have no
reason to believe that each Facility will not be able to fulfill, when due, all
of its obligations under all material Contracts which remain to be performed
after the date hereof;
(iii) No Facility is in breach of or in
default under any material Contract, and no event has occurred which with the
passage of time or giving of notice or both would constitute such a default,
result in a loss of rights under the Contracts or result in the creation of any
lien, charge or encumbrance, thereunder or pursuant thereto;
(iv) to the best knowledge of Sellers, there
is no existing breach or default by any other party to any material Contract,
and no event has occurred which with the passage of time or giving of notice or
both would constitute a default by such other party, result in a loss of rights
or result in the creation of any lien, charge or encumbrance thereunder or
pursuant thereto;
(v) there are not and, since March 31, 1997
have not been, any claims of a non-routine nature by customers of any Facility
under any warranties, whether express or implied;
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(vi) No Facility is restricted by any
Contract from carrying on its business anywhere in the world; and
(c) Except as set forth on Schedules 2.04 or 2.14,
the continuation, validity and effectiveness of each Contract will not be
affected by the Stock Purchase or other transaction contemplated hereby.
(d) True, correct and complete copies of all
Contracts have previously been delivered by Sellers to GreenMan.
(e) For purposes of this Section 2.14 and elsewhere
in this Agreement, the term "material Contract" means any contract which has a
value, either in terms of products to be sold, services to be performed or
otherwise, in excess of $25,000.
2.15 Compliance with Agreements and Laws. Each Facility has
all requisite licenses, permits and certificates, including environmental,
health and safety permits, from federal, state and local authorities necessary
to conduct its business and own and operate its assets (collectively, the
"Permits"), except where a failure to hold a Permit does not have a material
adverse effect on an Facility. Schedule 2.15 attached hereto sets forth a true,
correct and complete list of all such Permits, copies of which have previously
been delivered by Sellers to GreenMan. To the best knowledge of Sellers, there
is no material violation by any Facility of any law, regulation or ordinance
(including, without limitation, laws, regulations or ordinances relating to
building, zoning, environmental, disposal of hazardous substances, land use, air
pollution or similar matters) applicable to it or its properties.
2.16 Employee Relations.
(a) To the best knowledge of Sellers, each of the
Facilities is in material compliance with all federal, state and municipal laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practice, and there are no arrears in the payment of wages or social security
taxes (other than amounts accrued in the regular and ordinary course of business
since the last regular payment of such wages and taxes).
(b) Except as set forth on Schedule 2.16 attached
hereto:
(i) none of the employees of each of the
Facilities is represented by any labor union;
(ii) there is no unfair labor practice
complaint against any of the Facilities pending before the National Labor
Relations Board or any state or local agency;
(iii) there is no pending labor strike or
other material labor trouble affecting any of the Facilities (including, without
limitation, any organizational drive);
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(iv) there is no material labor grievance
pending against any of the Facilities;
(v) there is no pending representation
question respecting the employees of any of the Facilities;
(vi) there are no pending arbitration
proceedings arising out of or under any collective bargaining agreement to which
any of the Facilities is a party, or any basis for which a claim may be made
under any collective bargaining agreement to which any of the Facilities is a
party; and
(vii) None of the Facilities has any
continuing obligation for health, life, medical insurance or other similar
fringe benefits to any former employee thereof;
(c) Sellers have previously delivered a true, correct
and complete list of the current payroll of each of the Facilities, including
the job title and salary or wage rates of each employee, showing separately for
each such person who received an annual salary in excess of $25,000 the amounts
paid or payable as salary and bonus payments for the fiscal year ended September
30, 1996.
(d) For purposes of this Subsection 2.16, the term
"employee" shall be construed to include sales agents and other independent
contractors who spend a majority of their working time on the business of any of
the Facilities.
2.17 Absence of Certain Changes or Events.
(a) Except as set forth on Schedule 2.17 attached
hereto, since the Financial Data Dates relating to each Facility, the respective
Facility has not entered into any transaction which is not in the usual and
ordinary course of business without limiting the generality of the foregoing,
has not:
(i) incurred any obligation or liability for
borrowed money;
(ii) discharged or satisfied any lien or
encumbrance or paid any obligation or liability other than current liabilities
reflected in the Current Balance Sheet;
(iii) mortgaged, pledged or subjected to
lien, charge or other encumbrance any of its properties or assets;
(iv) sold or purchased, assigned or
transferred any of its tangible assets or cancelled any debts or claims, except
for inventory sold and raw materials and supplies purchased in the ordinary
course of business;
(v) made any material amendment to or
termination of any material Contract or done any act or omitted to do any act
which would cause the breach of any material Contract;
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(vi) suffered any losses of personal or real
property, whether insured or uninsured, and whether or not in the control of a
Facility in excess of $25,000 in the aggregate, or waived any rights of any
value;
(vii) authorized any declaration or payment
of dividends or distributions or paid any such dividends or distributions, or
authorized any transfer of assets of any kind whatsoever to the Sellers or any
other party with respect to any shares of capital stock;
(viii) received notice of any litigation,
warranty claim or products liability claim;
(ix) engaged any new employee for a salary
in excess of $25,000 per annum:
(x) made, or committed to make, any material
changes in the compensation payable to any officer, director, employee or agent
of a Facility, or any bonus payment or similar arrangements made to or with any
of such officers, directors, employees or agents;
(xi) made any material alteration in the
manner of keeping the books, accounts or records of a Facility, or in the
accounting practices therein reflected, including, without limitation, any
changes in the method of calculating reserves for doubtful accounts or sales
returns; or (xii) suffered any material adverse change in the results of
operations, condition (financial or otherwise), assets, liabilities (whether
absolute, accrued, contingent or otherwise) or business of a Facility.
(b) Sellers have no knowledge of any existing or
threatened occurrence, event or development which, as far as can now be
reasonably foreseen, is likely to have a material adverse effect on the
business, properties, assets, condition (financial or otherwise) or prospects of
the Facilities; provided, however that no representation or warranty is made
with respect to general business, economic or technological conditions or
developments which may affect any Facility.
2.18 Customers. Schedule 2.18 attached hereto sets forth a
true, correct and complete list of the names and addresses of each customer of
each Facility which accounted for more than 5% of the revenues of each Facility
(a) in the fiscal year ended September 30, 1996 and (b) for the first six months
of the fiscal year ending September 30, 1997. Except as set forth on Schedule
2.18 attached hereto, none of Sellers or Facilities have received notification
that any of Facilities' customers intends to discontinue its relationship with a
Facility.
2.19 Suppliers. Schedule 2.19 attached hereto sets forth a
true, correct and complete list of the names and addresses of each of the
suppliers of each Facility which accounted for a dollar volume of purchases by
each facility in excess of $25,000 for (x) the fiscal year ended September 30,
1996 and (y) the first six months of the fiscal year ending September
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30, 1997. Except as set forth on Schedule 2.19 attached hereto, no Facility is
more than 60 days past due in any trade accounts payable or other payments owing
to any supplier to a Facility.
2.20 Prepayments and Deposits. Schedule 2.20 attached hereto
sets forth all customers of the Facilities from whom prepayments and deposits
have been received by each Facility as of the date hereof, for products to be
shipped, or services to be performed, after the Closing Date.
2.21 Indebtedness to and from Officers, Directors and
Stockholders. Except as set forth on Schedule 2.21 attached hereto, neither BTM
or BTG is indebted, directly or indirectly, to any person who is an officer,
director or stockholder of BTM or BTG or any Affiliate thereof or any such
person in any amount whatsoever other than for salaries for services rendered or
reimbursable business expenses, all of which have been reflected on the books
and records of BTM or BTG previously delivered to GreenMan, and no such officer,
director, stockholder or Affiliate is indebted to BTM or BTG except for advances
made to employees of BTM or BTG in the ordinary course of business to meet
reimbursable business expenses anticipated to be incurred by such obligor.
2.22 Banking Facilities. Schedule 2.22 attached hereto sets
forth a true, correct and complete list of:
(a) each bank, savings and loan or similar financial
institution in which any of the Facilities has an account or safety deposit box
and the numbers of the accounts or safety deposit boxes maintained by any of the
Facilities thereat; and
(b) the names of all persons authorized to draw on
each such account or to have access to any such safety deposit box facility,
together with a description of the authority (and conditions thereof, if any) of
each such person with respect thereto.
2.23 Powers of Attorney and Suretyships. Except as set forth
on Schedule 2.23 attached hereto, each of BTM and BTG has no general or special
powers of attorney outstanding (whether as grantor or grantee thereof), nor does
it have any obligation or liability (whether actual, accrued, accruing,
continent or otherwise) as guarantor, surety, co-signer, endorser, co-maker,
indemnitor or otherwise in respect of the obligation of any person, corporation,
joint venture, association, organization or other entity, except as endorser or
maker of checks or letters of credit, respectively, endorsed or made in the
ordinary course of business.
2.24 Regulatory Approvals. All consents, approvals,
authorizations or other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by the Facilities and which are necessary
for the execution and delivery by the Sellers of this Agreement or any documents
to be executed and delivered by the Sellers in connection herewith are set forth
on Schedule 2.24 attached hereto and have been, or prior to the Closing Date
will be, obtained and satisfied. Notwithstanding the foregoing or any provisions
of this Agreement to the contrary, Sellers make no representation or warranty,
and expressly disclaim any representation or warranty, with respect to whether
the consent of any government entity or third
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<PAGE>
party is required with respect to any Permit in connection with the continued
operations of the Facilities after consummation of the transactions contemplated
by this Agreement.
2.25 Disclosure. The information concerning the Facilities set
forth in this Agreement, the Exhibits and Schedules attached hereto and any
document, statement or certificate furnished or to be furnished to GreenMan
pursuant hereto or in connection herewith, does not and on the Closing Date will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated herein or therein or necessary to make the statements
and facts contained herein or therein, in light of the circumstances in which
they are made, not false and misleading. Copies of all documents heretofore or
hereafter delivered or made available to GreenMan pursuant to this Agreement
were or will be complete and accurate copies of such documents.
2.26 Disposal Sites Used. Schedule 2.26 lists the name and
address of all solid waste landfills or transfer stations to which (i) to the
best of Sellers' knowledge, the Facilities (excluding any companies or
businesses acquired by the Facilities) transported material amounts of municipal
solid waste in connection with the operation of its business, or (ii) any
company or business acquired by the Facilities has transported material amounts
of municipal solid waste to the extent any such company or business has provided
records of any such transportation to the Sellers, BTM or BTG. Schedule 2.26
also states whether any listed facility is, to the best of Sellers' knowledge,
currently being remediated or currently scheduled to undergo remediation under
the Comprehensive Environmental Response, Compensation and Liability Act or
comparable state law.
2.27 Employee Benefit Plans. Schedule 2.27 sets forth a
complete list of all pension, profit sharing, retirement, deferred compensation,
welfare, insurance, disability, bonus, vacation pay, severance pay and similar
plans, programs or arrangements, including without limitation all employee
benefit plans, as defined in Section 3 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), (the "Plans") maintained by the
Facilities. None of the Facilities maintain or contribute to any "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA, and none of the Facilities have
incurred any material liability under Sections 4062, 4063 or 4201 of ERISA. Each
Plan maintained by a Facility which is intended to be qualified under either
Section 401(a) or 501(c)(9) of the Internal Revenue Code of 1986, as amended
(the "Code"), is so qualified. Each Plan has been administered in all material
respects in accordance with the terms of such Plan and the provisions of any and
all statutes, orders or governmental rules or regulations, including without
limitation ERISA and the Code, and to the knowledge of the Sellers nothing has
been done or omitted to be done with respect to any Plan that would result in
any material liability on the part of the Facility under Title I of ERISA or
Section 4975 of the Code. All reports required to be filed with respect to all
Plans, including without limitation annual reports on Form 5500, have been
timely filed except where the failure to so file would not have a material
adverse effect on the business, properties or finances of the Facilities. No
"reportable event" as defined at Section 4043 of ERISA, other than any such
event for which the thirty-day notice period has been waived, has occurred with
respect to any pension plan subject to Title IV of ERISA. With respect to all
pension plans subject to Title IV of ERISA, such plans have no unfunded benefit
liabilities, all contributions to such plans under the minimum funding
requirements of Section 412 of the Code have been made and all premium
13
<PAGE>
payments to the Pension Benefit Guaranty Corporation with respect to such plans
have been made. All claims for welfare benefits incurred by employees on or
before the Closing Date are or will be fully covered by third-party insurance
policies or programs. Except for continuation of health coverage to the extent
required under Section 4980B of the Code or as otherwise set forth in this
Agreement, there are no obligations under any welfare plan providing benefits
after termination of employment.
3. Representations of GreenMan
GMTI and GAC, jointly and severally, represent and warrant to BFI as
follows:
3.01 Organization and Authority. GMTI and GAC are each
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware, and have all requisite corporate power and
authority to own their respective properties, to carry on their respective
businesses as now being conducted, to execute and deliver this Agreement and the
agreements contemplated herein, and to consummate the transactions contemplated
hereby and thereby. GMTI is duly qualified to do business and in good standing
in all jurisdictions in which its ownership of property or the character of its
business requires such qualification, except where failure to be so qualified or
to be in such good standing would have a material adverse effect on the
business, properties or finances of GMTI, taken as a whole. Certified copies of
the Certificates of Incorporation and Bylaws of GMTI and GAC, as amended to
date, have been previously delivered to BFI, are complete and correct, and no
amendments have been made thereto or have been authorized since the date
thereof. GAC has conducted no business or operations prior to the date hereof
except in connection with the transactions contemplated by this Agreement.
3.02 Authorization. The execution and delivery of this
Agreement by GMTI and GAC, and the agreements provided for herein, and the
consummation by GMTI and GAC of all transactions contemplated hereby, have been
duly authorized by all requisite corporate action. This Agreement has been duly
executed by GMTI and GAC. This Agreement and all such other agreements and
written obligations entered into and undertaken in connection with the
transactions contemplated hereby constitute the valid and legally binding
obligations of GMTI and GAC, enforceable against GMTI and GAC respectively, in
accordance with their respective terms, except as enforcement may be limited by
applicable equitable principles or by bankruptcy, insolvency, reorganization,
moratorium or similar laws effecting creditors' rights generally, and by the
exercise of judicial discretion. The execution, delivery and performance of this
Agreement and the agreements provided for herein, and the consummation by GMTI
and GAC of the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the passage of time or both, (a) violate the
provisions of any law, rule or regulation applicable to GMTI or GAC; (b) violate
the provisions of GMTI's or GAC's Certificate of Incorporation or By-laws; (c)
violate any judgment, decree, order or award of any court, governmental body or
arbitrator by which GMTI or any of its assets or properties are bound or (d)
conflict with or result in the breach or termination of any term or provision
of, or constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets of
GMTI and GAC pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which GMTI or GAC is a party or by
14
<PAGE>
which GMTI or GAC or their respective assets is or may be bound. Schedule 3.02
attached hereto sets forth a true, correct and complete list of all consents and
approvals of third parties that are required in connection with the consummation
by GMTI or GAC of the Stock Purchase and the performance by GMTI and GAC of
their respective obligations under this Agreement.
3.03 Regulatory Approvals. All consents, approvals,
authorizations and other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by GMTI, GAC or GCI and which are necessary
for the consummation of the transactions contemplated by this Agreement have
been, or will be prior to the Closing Date, obtained and satisfied.
3.04 Financial Statements.
(a) GMTI has previously delivered to BFI (i) its
audited balance sheet as of May 31, 1996 and the related statements of income,
stockholders' equity, cash flow and supplementary schedules of GMTI for the
fiscal year then ended, (collectively, "GreenMan 1996 Financial Statements") and
(ii) its unaudited February 28, 1997 balance sheet and the related statements of
income, stockholders' equity, cash flow and supplementary schedules for the
nine-month period then ended, (collectively, the "GreenMan Current Financial
Statements"). The GreenMan 1996 Financial Statements and the GreenMan Current
Financial Statements (collectively, the "GreenMan Financial Statements") have
been prepared in accordance with GAAP applied consistently with past practice,
subject to normal year-end adjustments and the absence of footnotes, and are
accompanied by a certificate of the Chief Financial Officer of GMTI to the
effect that the GreenMan Current Financial Statements were prepared in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes and other related information required by GAAP.
(b) The GreenMan Financial Statements fairly present
in all material respects, as of their respective dates, the financial condition,
retained earnings, assets and liabilities of GMTI and the results of operations
of GMTI's business for the periods indicated.
3.05 Disclosure. The information concerning GreenMan set forth
in this Agreement, the Exhibits and Schedules attached hereto and any document,
statement or certificate furnished or to be furnished to the Sellers pursuant
hereto or in connection herewith, does not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein or necessary to make the statements and facts contained
herein or therein, in light of the circumstances in which they are made, not
false and misleading. Copies of all documents heretofore or hereafter delivered
or made available to the Sellers pursuant to this Agreement were or will be
complete and accurate copies of such documents.
4. Access to Information; Public Announcements; Consents
4.01 Access to Management, Properties and Records. From the
date of this Agreement until the Closing Date, the Sellers shall afford the
officers, attorneys, accountants and other authorized representatives of
GreenMan free and full access upon reasonable advance
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notice and during normal business hours to all management personnel, offices,
properties, books and records of the Facilities, so that GreenMan may have full
opportunity to make such investigation as it shall desire to make of the
management, business, properties and affairs of the Facilities, and GreenMan
shall be permitted to make abstracts from, or copies of, all such books and
records. The Sellers shall furnish to GreenMan and/or authorized representatives
designated by GreenMan such financial and operating data and other information
as to the business of the Facilities as GreenMan shall reasonably request.
4.02 Confidentiality.
(a) The Sellers have furnished and will continue to
furnish GreenMan with certain information which is non-public, confidential or
proprietary in nature. All information furnished to GreenMan, its directors,
officers, employees, agents or representatives, including, without limitation,
attorneys, accountants, consultants, potential lenders, investors and financial
advisors (collectively, "Representatives") by the Sellers or any of their
representatives, and all analyses, compilations, data, studies or other
documents prepared by GreenMan or its representatives containing or based in
whole or in part on any such furnished information or reflecting GreenMan's
review of, or interest in, BFI and the Facilities is hereinafter referred to as
"BFI Information." "BFI Information" shall not include any information publicly
available through no fault of Sellers. GreenMan hereby agrees to use the BFI
Information solely in connection with the consummation of the transactions
contemplated by this Agreement and to transmit the BFI Information only to those
employees and representatives of GreenMan who need to know the BFI Information,
except as may otherwise be required by operation of applicable law. If the
Closing does not occur, the BFI Information, and all copies thereof will be
returned by GreenMan, its directors, officers, and employees (but not its other
representatives), without retaining any copies thereof, to Sellers.
(b) GreenMan has furnished and will continue to
furnish the Sellers with certain information which is non-public, confidential
or proprietary in nature. All information furnished to the Sellers, their
directors, officers, employees, agents or representatives, including, without
limitation, attorneys, accountants, consultants, potential lenders, investors
and financial advisors (collectively, "Representatives") by GreenMan or any of
its representatives, and all analyses, compilations, data, studies or other
documents prepared by the Sellers or their representatives containing or based
in whole or in part on any such furnished information or reflecting BFI's review
of, or interest in, GreenMan is hereinafter referred to as "GreenMan
Information." "GreenMan Information" shall not include any information publicly
available through no fault of the Sellers. Sellers hereby agree to use the
GreenMan Information solely in connection with the consummation of the
transactions contemplated by this Agreement and to transmit the GreenMan
Information only to those representatives of Sellers who need to know the
GreenMan Information, except as may otherwise be required by operation of
applicable law. If the Closing does not occur, the GreenMan Information, and all
copies thereof will be returned by Sellers, their directors, officers, and
employees (but not its other representatives), without retaining any copies
thereof, to GreenMan.
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4.03 Public Announcements. The parties agree that prior to the
Closing Date any and all public pronouncements or other public communications
concerning this Agreement, and the timing, manner and content of such
disclosures, shall be subject to the mutual agreement of BFI and GreenMan.
4.04 Consents. Sellers and GreenMan shall each use their
respective commercially reasonable efforts, to be deemed to not include the
renegotiation of any Permit terms or the financial terms of any Contract or
Lease, in obtaining any requisite governmental or third party consents or
authorizations to the consummation of the respective transactions contemplated
by this Agreement.
5. Pre-Closing Covenants of Sellers
From and after the date hereof and until the Closing Date:
5.01 Conduct of Business. Sellers shall carry on the business
of the Facilities diligently and substantially in the same manner as heretofore
and shall not make or institute any materially new methods of manufacture,
purchase, sale, shipment or delivery, lease, management, accounting or
operation, and shall not ship or deliver any quantity of products in excess of
normal shipment or delivery levels, except as agreed to in writing by GMTI,
which agreement shall not be unreasonably withheld. All of the property of the
Facilities shall be used, operated, repaired and maintained in a normal business
manner consistent with past practice.
5.02 Absence of Material Changes. Without the prior written
consent of GreenMan, which agreement shall not be unreasonably withheld, Sellers
shall not cause or permit any of the Facilities to:
(a) take any action to amend their Articles of
Incorporation or By- Laws;
(b) issue any stock, bonds or other corporate
securities or grant any option or issue any warrant to purchase or subscribe for
any of such securities or issue any securities convertible into such securities;
(c) incur any obligation or liability (absolute or
contingent), except current liabilities incurred and obligations under contracts
entered into in the ordinary course of business;
(d) declare or make any payment or distribution to
the stockholders of the Facilities with respect to its stock or purchase or
redeem any shares of its capital stock;
(e) mortgage, pledge, or subject to any lien, charge
or any other encumbrance any of its assets or properties;
(f) sell, assign, or transfer any of its assets,
except for inventory sold in the ordinary course of business, at a normal profit
margin;
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(g) cancel any debts or claims, except in the
ordinary course of business;
(h) merge or consolidate with or into any corporation
or other entity;
(i) make, accrue or become liable for any bonus,
profit sharing or incentive payment, except for accruals under existing plans
and agreements, if any, or increase the rate of compensation payable or to
become payable by it to any of its officers, directors or employees except in
the ordinary course of business;
(j) make any election or give any consent under the
Code or the tax statutes of any state or other jurisdiction or make any
termination, revocation or cancellation of any such election or any consent or
compromise or settle any claim for past or present tax due;
(k) waive any rights of material value;
(l) modify, amend, alter or terminate any executory
contract of material value or which is material in amount;
(m) take or permit any act or omission constituting a
breach or default under any material contract or agreement by which it or its
properties are bound;
(n) fail to use reasonable commercials efforts to (i)
preserve the possession and control of its assets, (ii) retain its present
officers and key employees, (iii) preserve the relationships of consumers,
suppliers and others having business relations with it, and (iv) preserve the
business existing on the date hereof until the Closing Date;
(o) fail to operate its business and maintain its
books, accounts and records in the customary manner and in the ordinary and
regular course of business and maintain in good repair their business premises,
fixtures, machinery, furniture and equipment;
(p) enter into any lease, contract, agreement or
understanding, other than those entered into in the ordinary course of business
calling for payments which in the aggregate do not exceed $25,000 for each such
lease, contract, agreement or understanding;
(q) engage any new employee for a salary in excess of
$25,000 per annum;
(r) materially alter the terms, status or funding
condition of any Employee Plan; or
(s) commit or agree to do any of the foregoing in the
future.
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5.03 Communications with Customers and Suppliers.
(a) Unless instructed otherwise by GreenMan in
writing, the Facilities will continue to accept customer orders in the ordinary
course of business and consistent with past practice for all products offered by
the Facilities but expected to be shipped after the Closing Date.
(b) the Facilities and GreenMan will cooperate in
communications with suppliers and customers to accomplish the Stock Purchase on
the Closing Date.
5.04 Compliance with Laws. The Facilities will comply in all
material respects with all laws and regulations which are applicable to them or
to the conduct of their business and will perform and comply in all material
respects with all Contracts.
5.05 Continuing Obligation to Inform. From the date hereof
through and including the Closing Date, the Sellers will deliver or cause to be
delivered to GreenMan supplemental information concerning events subsequent to
the date hereof which would render any statement, representation or warranty in
this Agreement or any information contained in any Schedule attached hereto
inaccurate, misleading or incomplete in any material respect; provided, that
except as specified in Subsection 6.08 hereof, none of such supplemental
information shall constitute an amendment of any statement, representation or
warranty in this Agreement or any Schedule, Exhibit or document furnished
pursuant hereto.
5.06 Exclusive Dealing. Sellers will not from the date hereof
through the Closing Date, directly or indirectly, through any officer, director,
agent or otherwise, (a) solicit, initiate or encourage submission of proposals
or offers from any person relating to an acquisition or purchase of all or a
material portion of the assets of or an equity interest in the Facilities or any
merger, consolidation or business combination with the Facilities, (b)
participate in any discussions or negotiations regarding, or furnish to any
other person, any non-public information with respect to or otherwise cooperate
in any way with, or assist or participate in, facilitate or encourage, any
effort or attempt by any other person to do or seek any of the foregoing, or (c)
withdraw their intention to sell the Facilities. Sellers agree to promptly
notify GreenMan of any such proposal or offer, or any inquiry or contact with
respect thereto received by Sellers.
5.07 Reports, Taxes. Sellers will duly and timely file all
reports or returns required to be filed with federal, state, local and foreign
authorities and will promptly pay all federal, state, local and foreign taxes,
assessments and governmental charges levied or assessed upon them or any of
their properties (unless contesting such in good faith and adequate provision
has been made therefor).
6. Conditions to Obligations of GreenMan
The obligations of GreenMan under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions precedent, each of
which may be waived in writing in the sole discretion of GreenMan:
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6.01 Continued Truth of Representations and Warranties of
Sellers; Compliance with Covenants and Obligations. The representations and
warranties of the Sellers shall be true in all material respects on and as of
the Closing Date as though such representations and warranties were made on and
as of such date, except for any changes permitted by the terms hereof or
consented to in writing by GreenMan. Sellers shall have performed and complied
in all material respects with all terms, conditions, covenants, obligations,
agreements and restrictions required by this Agreement to be performed or
complied with by each of them prior to or at the Closing Date.
6.02 Performance by BFI. At the Closing, the Sellers shall
have delivered to GreenMan certificates signed by a duly authorized officer of
each of them, respectively, as to its compliance with Subsection 6.01 hereof.
6.03 Corporate Proceedings. All corporate, and other
proceedings required to be taken on the part of the Sellers to authorize and
carry out this Agreement shall have been taken.
6.04 Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation of the Stock Purchase, and the consummation of
the transactions contemplated by this Agreement and the operation of the
business of the Facilities by GreenMan shall have consented to, authorized,
permitted or approved such transactions.
6.05 Consent of Third Parties. Sellers shall have received all
requisite consents and approvals of all third parties whose consent or approval
is required in order for Sellers to consummate the transactions contemplated by
this Agreement, including without limitation, those set forth on Schedule 2.04
attached hereto.
6.06 Adverse Proceedings. No action or proceeding by or before
any court or other governmental body shall have been instituted or threatened by
any governmental body or person whatsoever which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this Agreement or which
might affect the right of GreenMan to own or operate the business of the
Facilities after the Closing.
6.07 Opinions of Counsel. GreenMan shall have received the
opinion of Edward C. Norwood, counsel to the Sellers, dated as of the Closing
Date, in substantially the form attached hereto as Exhibit B.
6.08 Update. Sellers shall have provided GreenMan with a true,
correct and complete list and amount, as of the last business day immediately
preceding the Closing Date, of the Contracts.
6.09 Non-Competition Agreement. On or prior to the Closing
Date, GreenMan, on the one hand and Sellers, on the other hand, shall have
entered into a non-compete agreement, in substantially the form attached hereto
as Exhibit C, providing in general
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for Sellers and their Affiliates not to engage in the business of the Facilities
in the area set forth in the agreement for a period of three (3) years after the
Closing Date.
6.10 Resignations. Sellers shall have, on or prior to the
Closing Date, delivered to GreenMan resignations from the officers and directors
of the Facilities set forth on Schedule 6.10 attached hereto.
6.11 Indebtedness. BFI will eliminate all of the fixed
liabilities of BTM and BTG (including trade payables, tax obligations, accrued
expenses and intercompany payables) existing as of the Closing Date except for
outstanding obligations not yet due under the curb and gutter capital
improvement assessment to which BTM is subject .
6.12 Ford Heights Option. BFI shall have, on or prior to the
Closing Date, caused to be executed and delivered to GMTI an exclusive Option
Agreement relating to BFI's Ford Heights, Illinois facility in substantially the
form of Exhibit D attached hereto.
6.13 Permit Side Letter. Sellers shall have, on or prior to
the Closing Date, delivered to GreenMan a Permit Side Letter in substantially
the form of Exhibit E attached hereto.
6.14 Closing Deliveries. GreenMan shall have received at or
prior to the Closing such documents, instruments or certificates as GreenMan may
reasonably request including, without limitation:
(a) such certificates of Sellers' officers and such
other documents evidencing satisfaction of the conditions specified in this
Section 6 as GreenMan shall reasonably request;
(b) certificates of the Secretary of State of the
States of Delaware, Minnesota and Georgia, as applicable, as to the legal
existence and good standing (including tax) of BFIM, BFIG, BTM and BTG;
(c) certificates of the Secretaries of the Sellers
attesting to the incumbency of the Sellers' officers, the authenticity of the
resolutions authorizing the transactions contemplated by this Agreement and the
authenticity and continuing validity of the charter documents delivered pursuant
to Subsection 2.01;
(d) where required by each of the applicable Leases,
estoppel certificates from each lessor from whom Sellers or Facilities leases
real or personal property consenting to the Stock Purchase and the other
transactions contemplated hereby, and representing that there are no outstanding
claims against Sellers or Facilities under such Leases;
(e) such other documents, instruments or certificates
as may be reasonably requested by GreenMan or its counsel.
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7. Conditions to Obligations of Sellers
The obligations of the Sellers under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions precedent, each of
which may be waived in writing by the Sellers:
7.01 Continued Truth of Representations and Warranties of GMTI
and GAC; Compliance with Covenants and Obligations. The representations and
warranties of GMTI and GAC in this Agreement shall be true in all material
respects on and as of the Closing Date as though such representations and
warranties were made on and as of such date, except for any changes consented to
in writing by the Sellers. GMTI and GAC shall have performed and complied in all
material respects with all terms, conditions, covenants, obligations, agreements
and restrictions required by this Agreement to be performed or complied with by
it prior to or at the Closing Date.
7.02 Corporate/Stockholder Proceedings. All corporate,
stockholder and other proceedings required to be taken on the part of GMTI and
GAC to authorize the Stock Purchase and carry out this Agreement shall have been
taken.
7.03 Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation of the Stock Purchase, and the consummation of
the transactions contemplated by this Agreement shall have consented to,
authorized, permitted or approved such transactions.
7.04 Consents of Third Parties. GMTI and GAC shall have
received all requisite consents and approvals of all third parties whose consent
or approval is required in order for GMTI and GAC to consummate the transactions
contemplated by this Agreement.
7.05 Adverse Proceedings. No action or proceeding by or before
any court or other governmental body shall have been instituted or threatened by
any governmental body or person whatsoever which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this Agreement or which
might affect the right of the Sellers to transfer the Stock.
7.06 Opinion of Counsel. Sellers shall have received an
opinion of Sullivan & Worcester LLP, counsel to GreenMan, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit F.
7.07 Closing Deliveries. Sellers shall have received at or
prior to the Closing such documents, instruments or certificates as Sellers may
reasonably request, including, without limitation:
(a) such certificates of each of GMTI's and GAC's
Chief Executive Officer and such other documents evidencing satisfaction of the
conditions specified in this Section 7;
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(b) certificates of the Secretary of State of the
State of Delaware as to the legal existence and good standing of GMTI and GAC;
and
(c) certificates of the Secretaries of GMTI and GAC
attesting to the incumbency of the officers of GMTI and GAC, respectively, the
authenticity of the resolutions authorizing the transactions contemplated by
this Agreement, and the authenticity and continuing validity of the charter
documents delivered pursuant to Subsection 3.01.
(d) such other documents, instrument or certificates
as may be reasonably requested by Seller or its counsel.
7.08 Security Interest. GAC shall have executed and delivered
to BFI a Pledge Agreement substantially in the form of Exhibit G hereto and
shall have granted BFI a security interest in the Stock pursuant to such Pledge
Agreement. BTM and BTG each shall have executed and delivered to BFI a Security
Agreement substantially in the form of Exhibit H hereto and each shall have
granted BFI a security interest in all of their assets pursuant to such Security
Agreements.
7.09 Guaranty. GMTI shall have executed and delivered to BFI a
Guaranty substantially in the form of Exhibit I hereto.
8. Indemnification
8.01 By GreenMan. GreenMan hereby covenants and agrees that it
will indemnify and hold harmless Sellers, their Affiliates and each of their
respective officers, directors and employees from and against all claims,
damages, losses, liabilities, costs and expenses (including, without limitation,
settlement costs and any legal, accounting or other expenses for investigating
or defending any actions or threatened actions) (collectively, "Losses") in
connection with each and all of the following:
(a) any misrepresentation or breach of any
representation or warranty made by GMTI or GAC in this Agreement;
(b) any breach of any covenant, agreement or
obligation of GMTI or GAC contained in this Agreement or any other agreement,
instrument or document contemplated by this Agreement; and
(c) any misrepresentation contained in any statement,
certificate or schedule furnished by GMTI or GAC pursuant to this Agreement or
in connection with the transactions contemplated by this Agreement.
(d) GreenMan's, or any of their Affiliates'
operation, at the Facilities following the Closing Date.
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8.02 By Sellers. Sellers covenant and agree that they will
indemnify and hold harmless GreenMan, their Affiliates, and each of their
respective officers, directors and employees, from and against all Losses in
connection with each and all of the following:
(a) any misrepresentation or breach of any
representation or warranty made by Sellers in this Agreement;
(b) any breach of any covenant, agreement or
obligation of Sellers contained in this Agreement or any other agreement,
instrument or document contemplated by this Agreement;
(c) any misrepresentation contained in any statement,
certificate or schedule furnished by Sellers pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement;
(d) the Facilities' businesses or operations on or
prior to the Closing Date;
(e) any and all liabilities of the Facilities related
to any borrowed money indebtedness of the Facilities in excess of the
indebtedness described in Section 6.11 hereof existing as of the Closing Date.
(f) any tax liabilities or obligations of the
Facilities relating to any period prior to the Closing Date;
(g) any claims against, or liabilities or obligations
of, the Facilities by or to officers, directors, or affiliates relating to the
Facilities' business or operation prior to the Closing Date;
(h) any welfare benefits not fully covered by
third-party insurance policies or programs relating to claims incurred by
present or former employees of the Facilities on or before the Closing Date.
8.03 Claims for Indemnification. Whenever any claim shall
arise for indemnification under this Section 8, GreenMan on the one hand or
Sellers, on the other hand, as the case may be (the party or parties seeking
such indemnification, the "Indemnified Party"), shall promptly notify the other
party or parties hereto (the "Indemnifying Party") in writing (the
"Indemnification Notice") of the claim and, when known, the facts constituting
the basis for such claim (including all relevant documentation). In the event of
any such claim for indemnification hereunder resulting from or in connection
with any claim or legal proceedings by a third party (a "Third Party Claim"),
the Indemnification Notice shall specify, if known, the amount or an estimate of
the amount of the liability arising therefrom. In the event that any claim for
indemnification involves a matter other than a Third Party Claim, the
Indemnifying Party shall have sixty (60) days from receipt of the
Indemnification Notice to object to such claim by delivery of a written notice
of such objection to the Indemnified Party specifying in reasonable detail the
basis for such objection. Failure to timely to so object shall constitute a
final and
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binding acceptance of the Claim for Indemnification by the Indemnifying Party
and the claim shall be paid in accordance with Section 8.05 hereof. If an
objection is timely interposed by the Indemnifying Party and the dispute is not
resolved within twenty (20) business days from the date (such period is
hereinafter referred to as the "Negotiation Period") the Indemnified Party
receives such objection, such dispute shall be resolved by arbitration in
accordance with the provisions of Section 9 hereof. The Indemnified Party shall
not settle or compromise any claim by a third party for which it is entitled to
indemnification hereunder without the prior written consent, which shall not be
unreasonably withheld or delayed, of the Indemnifying Party; provided, however,
that if suit shall have been instituted against the Indemnified Party and the
Indemnifying Party shall not have taken control of such suit within ten (10)
days after notification thereof, the Indemnified Party shall have the right to
settle or compromise such claim upon giving notice to the Indemnifying Party as
provided in Subsection 8.04.
8.04 Defense by the Indemnifying Party.
(a) In connection with any claim which may give rise
to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person other than the Indemnified Party, the Indemnifying Party,
at his sole cost and expense may, upon written notice to the Indemnified Party,
assume the defense of any such claim or legal proceeding if the Indemnifying
Party acknowledges to the Indemnified Party in writing the obligation of the
Indemnifying Party to indemnify the Indemnified Party with respect to all
elements of such claim. If the Indemnifying Party assumes the defense of any
such claim or legal proceeding, the Indemnifying Party shall select counsel
reasonably acceptable to the Indemnified Party to conduct the defense of such
claims or legal proceedings and at the sole cost and expense of the Indemnifying
Party shall take all steps necessary in the defense or settlement thereof. The
Indemnifying Party shall not consent to a settlement of, or the entry of any
judgment arising from, any such claim or legal proceeding, without the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed). The Indemnified Party shall be entitled to
participate in (but not control) the defense of any such action, with its own
counsel and at its own expense. If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom within ten (10) days
after the date such claim is made: (a) the Indemnified Party may defend against
such claim or litigation in such manner as it may deem appropriate, including,
but not limited to, settling such claim or litigation, after giving notice of
the same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate, and (b) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its counsel
and at its own expense. If the Indemnifying Party thereafter seeks to question
the manner in which the Indemnified Party defended such third party claim or the
amount or nature of any such settlement, the Indemnifying Party shall have the
burden to prove by a preponderance of the evidence that the Indemnified Party
did not defend or settle such third party claim in a reasonably prudent manner.
(b) The Indemnifying Party and Indemnified Party
shall cooperate with each other in all reasonable respects in connection with
the defense of any Third Party Claim, including making available records
relating to such claim and furnishing employees of the Indemnified Party as may
be reasonably necessary for the preparation of the defense of any such Third
Party Claim or for testimony as witnesses in any proceeding relating to such
claim.
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8.05 Payment of Indemnification Obligation. Notwithstanding
anything to the contrary in this Section 8 or elsewhere in this Agreement,
neither Indemnified Party shall be entitled to receive, and neither Indemnifying
Party shall be obligated to pay, (i) any amounts under this Section 8 unless and
until the aggregate amount of all claims for indemnification by an Indemnified
Party under this Section 8 exceeds five percent (5%) of the amount paid by
GreenMan to BFI (the "Floor") or (ii) any amounts in excess of the Purchase
Price, except that any claims by GreenMan for Losses resulting from a breach of
Section 2.12 hereof ("Tax Claims") shall not be subject to the limits set forth
in this sentence. The parties hereto agree that (i) once the aggregate amount of
claims, exclusive of Tax Claims, by any Indemnified Party exceeds the Floor, the
Indemnified Party shall be entitled to indemnity only for the amount of such
claims in excess of the Floor and (ii) the Indemnified Party shall be entitled
to indemnity for the entire amount of any Tax Claims.
8.06 Right of Offset. GreenMan may offset any amounts owing to
BFI under Section 1.03 hereof by the amount of any Losses described in Section
8.02 hereof.
8.07 Survival of Representations; Claims for Indemnification.
Except as specifically and expressly otherwise provided herein, all
representations, warranties and covenants made by Sellers and GreenMan in this
Agreement, or in any instrument or document furnished in connection with this
Agreement or the transactions contemplated hereby, shall survive the Closing and
any investigation at any time made by or on behalf of the Indemnified Party
until three years from the Closing (the "Expiration Date"). All such
representations, warranties and covenants shall expire on the Expiration Date,
except for claims, if any, (a) properly asserted in writing prior to such
Expiration Date identified as a claim for indemnification pursuant to this
Section 8, or (b) which are based upon fraud of Sellers or GreenMan, which shall
survive until finally resolved and satisfied in full.
8.08 Claims. Any claim by any party to this Agreement for any
breach of the representations, warranties, and covenants set forth in this
Agreement shall be subject to the limitations prescribed by this Article 8.
9. Dispute Resolution
9.01 General. In the event that any dispute should arise
between the parties hereto with respect to any matter covered by this Agreement,
the parties hereto shall resolve such dispute in accordance with the procedures
set forth in this Section 9.
9.02 Consent of the Parties. In the event of any dispute
between the parties with respect to any matter covered by this Agreement, the
parties shall first use their best efforts to resolve such dispute among
themselves. If the parties are unable to resolve the dispute within 30 calendar
days after the commencement of efforts to resolve the dispute, the dispute will
be submitted to arbitration in accordance with Subsection 9.03 hereof.
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9.03 Arbitration.
(a) Either GreenMan, on the one hand, or Sellers, on
the other hand, may submit any matter referred to in Subsection 9.02 hereof to
arbitration by notifying the other party hereto, in writing, of such dispute.
Within 10 days after receipt of such notice, GreenMan and Sellers shall
designate in writing one arbitrator to resolve the dispute; provided, that if
the parties hereto cannot agree on an arbitrator within such 10-day period, the
arbitrator shall be selected by the American Arbitration Association. The
arbitrator so designated shall not be an employee, consultant, contractor,
officer, director or stockholder of any party hereto or any affiliate of any
party to this Agreement.
(b) Within 15 days after the designation of the
arbitrator, the arbitrator, GreenMan and Sellers shall meet, at which time
GreenMan and Sellers shall be required to set forth in writing all disputed
issues and a proposed ruling on each such issue.
(c) The arbitrator shall set a date for a hearing(s),
which shall be no later than 30 days after the submission of written proposals
pursuant to paragraph (b) above, to discuss each of the issues identified by
GreenMan, as the case may be, and Sellers. Each such party shall have the right
to be represented by counsel. The arbitration shall be governed by the rules of
the American Arbitration Association; provided, that the arbitrator shall have
sole discretion with regard to the admissibility of evidence.
(d) The arbitrator shall use his or her best efforts
to rule on each disputed issue within 30 days after the completion of the
hearings described in paragraph (c) above. The determination of the arbitrator
as to the resolution of any dispute shall be binding and conclusive upon all
parties hereto. All rulings of the arbitrator shall be in writing and shall be
delivered to the parties hereto and the Escrow Agents.
(e) The prevailing party in any arbitration shall be
entitled to an award of reasonable attorneys' fees incurred in connection with
the arbitration. The non-prevailing party shall pay such fees, together with the
fees of the arbitrator and the costs and expenses of the arbitration.
(f) Any arbitration pursuant to this Subsection 9.03
shall be conducted in Boston, Massachusetts. Any arbitration award may be
entered in and enforced by any court having jurisdiction thereover and the
parties hereby consent and commit themselves to the jurisdiction of the courts
of the Commonwealth of Massachusetts for purposes of the enforcement of any
arbitration award.
10. Termination of Agreement
10.01 Termination by Lapse of Time. This Agreement shall
terminate at 5:00 p.m., Boston Time, on July 18, 1997, if the transactions
contemplated hereby have not been consummated, unless such date is extended by
the written consent of BFI and GreenMan.
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10.02 Termination by Agreement of the Parties. This Agreement
may be terminated by the mutual written agreement of the parties hereto. In the
event of such termination by agreement, GreenMan shall have no further
obligation or liability to Sellers under this Agreement, and Sellers shall have
no further obligation or liability to GreenMan under this Agreement.
10.03 Termination by Reason of Breach. This Agreement may be
terminated by BFI, if at any time prior to the Closing there shall occur a
material breach of any of the representations, warranties or covenants of
GreenMan or the failure by GreenMan to perform in all material respects any
condition or obligation hereunder, and may be terminated by GreenMan, if at any
time prior to the Closing there shall occur a material breach of any of the
representations, warranties or covenants of the Sellers or the failure of the
Sellers to perform in all material respects any condition or obligation
hereunder. If the Agreement is terminated due to a material breach by the
Sellers, then all sums paid to date by GreenMan to the Sellers shall be returned
to GreenMan by BFI within ten (10) days of the breach. If the Agreement is
terminated due to a material breach by GreenMan, then all sums paid to date by
GreenMan to BFI shall be retained by BFI as liquidated damages and said sums
shall be the Seller's sole and exclusive remedy against GreenMan hereunder.
11. Post Closing.
11.01 BFI Name and Logos. As soon as practicable (but in any
event within ninety (90) days) after the Closing Date, GreenMan, at its expense,
shall (i) remove all BFI names and logos from all assets of the Facilities and
(ii) take all steps necessary to remove the "BFI" from the corporate names of
BTM and BTG. Nothing in this Agreement shall constitute a license or
authorization for GreenMan to use in any manner any name, logo or mark owned by
or licensed to BFI and its affiliates.
11.02 Access to Records and Properties; Assistance. For a
period of seven (7) years following the Closing, GreenMan will afford to BFI
reasonable access to the financial and tax records of the BTM and BTG as well as
the properties related to the Facilities' business to (i) complete any financial
statements or audits thereof or tax returns, (ii) defend any tax disputes or
claims or responds to any requests in connection with any tax audits, (iii)
comply with any legal request or order, (iv) defend any disputes, claims,
prosecution or litigation or (v) for any other reasonable purpose. For a period
of thirty (30) days following the Closing Date, GreenMan shall make available
those Hired Employees (defined below) accounting and other office personnel for
purposes of assisting BFI in bringing the Facilities' monthly accounting records
to a close.
11.03 Waiver of Applicable Waiting Periods. GreenMan shall
waive the waiting periods for the benefit plans of GreenMan, including without
limitation medical, dental, disability, vacation and pension plans, with respect
to any employees (such employees "Hired Employees') of any of the Facilities
employed by GreenMan at or following the Closing Date; provided that such waiver
is permitted under such plans. Any such employees shall be eligible for coverage
in accordance with, and subject to, the other provisions of such plans. GreenMan
shall further apply such respective employees' years of service with any BFI
affiliate for
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purposes of calculating benefits under all of GreenMan's benefit plans; provided
that such application is permitted under such plans.
11.04 Severance. If any Hired Employee shall cease to be
employed by GreenMan or any of their respective affiliates, other than
terminated for "cause", within the first 90 days after the Closing Date, then
Sellers shall be responsible for any and all severance payments and other
termination benefits to which such Hired Employee would have been entitled under
BFI's employee benefit and severance plans in effect prior to the Closing Date.
11.05 Termination of Benefit Plan Coverage. Sellers will
terminate the Facilities' participation in all employee benefit plans of Sellers
or their affiliates on the Closing Dates.
11.06 Financial Assurance. On or before sixty (60) days
following the Closing Date, GreenMan shall submit such instruments of financial
assurance required by the respective regulatory agencies to effect the full and
effective release of those instruments of financial assurance on file or in
place by BFI, BFIM, BFIG, or any of their respective Affiliates (excluding BTM
and BTG) relating to the Facilities.
11.07 Tax and Allocation Matters. BFI and GMTI agree to make
(and cause their respective affiliates to make) all necessary filings and
elections under Section 338(h)(10) of the Internal Revenue Code with respect to
the sale of the Stock. BFI will file the completed IRS form 8023 on behalf of
the parties and BFI will provide a copy to GMTI. BFI and GMTI (i) agree to
allocate the Purchase Price among the assets of BTM and BTG in accordance with
Schedule 11.07, (ii) will have provided their respective taxpayer identification
numbers on Schedule 11.07, (iii) will file IRS Forms 8594 and any other required
modifications thereto or other tax reporting forms consistently with the agreed
allocation, (iv) will not file any return with a tax authority or take a
position in any proceeding before any taxing authority that is inconsistent with
such allocation, and (v) upon notice of the allocation being disputed by any
taxing authority, will promptly notify the other party of such dispute and the
resolution thereof. BFI, at its expense, will prepare and file all federal and
state tax returns for BTM and BTG for the current period up to the Closing Date.
GMTI, at its expense, will prepare and file all federal and state tax returns
for BTM and BTG for periods after the Closing Date.
11.08 Ford Heights Cages. For so long as the Option Agreement
relating to the Ford Heights facility is in effect, Sellers and their affiliates
shall continue to permit the use, without charge, by BTM and BTG of the tire
cages located thereat in the manner currently used.
12. Brokers
12.01 For BFI. BFI represents and warrants that no person,
firm or corporation has acted in the capacity of broker or finder on its behalf
to bring about the negotiation of this Agreement. BFI agrees to indemnify and
hold harmless GreenMan against any claims or liabilities asserted against it by
any person acting or claiming to act as a broker for BFI.
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12.02 For GreenMan. GreenMan represents and warrants that no
person, firm or corporation has acted in the capacity of broker or finder on its
behalf to bring about the negotiation of this Agreement. GreenMan agrees to
indemnify and hold harmless BFI against any claims or liabilities asserted
against any of them by any person acting or claiming to act as a broker or
finder on behalf of GreenMan.
13. Notices
Any notices or other communications required or permitted hereunder
shall be sufficiently given if delivered personally or sent by telex, federal
express, registered or certified mail, postage prepaid, addressed as follows or
to such other address of which the parties may have given notice:
To GreenMan or GAC:
GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Attn: Maurice E. Needham
Telephone: (617) 224-2411
Telecopy: (617) 224-0014
With a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attn: John A. Piccione, Esq.
Telephone: (617) 338-2800
Telecopy: (617) 338-2880
To BFI:
Browning Ferris Industries, Inc.
P.O. Box 3151
Houston, Texas 77253
Attn: Secretary
Telephone:
Telecopy:
30
<PAGE>
With a copy to:
Browning Ferris Industries, Inc.
P.O. Box 3151
Houston, Texas 77753
Attn: John A. Hale, Jr., Esq.
Telephone: (281) 870-7138
Telecopy: (281) 870-7825
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally, or (b) three
business days after being sent, if sent by registered or certified mail, postage
prepaid and properly addressed as set forth above.
14. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
GreenMan, on the one hand, and Sellers, on the other hand, may not assign their
respective obligations hereunder without the prior written consent of the other
party; provided, however, that GreenMan may assign this Agreement, and its
rights and obligations hereunder, to a subsidiary or affiliate of GreenMan. Any
assignment in contravention of this provision shall be void.
15. Entire Agreement; Amendments; Attachments
(a) This Agreement, all Schedules and Exhibits
hereto, and all agreements and instruments to be delivered by the parties
pursuant hereto represent the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and supersede all prior
oral and written and all contemporaneous oral negotiations, commitments and
understandings between such parties. GMTI and BFI, by the consent of their
respective presidents, may amend or modify this Agreement, in such manner as may
be agreed upon, by a written instrument executed by GMTI and BFI.
(b) If the provisions of any Schedule or Exhibit to
this Agreement are inconsistent with the provisions of this Agreement, the
provisions of the Agreement shall prevail. The Exhibits and Schedules attached
hereto or to be attached hereafter are hereby incorporated as integral parts of
this Agreement.
16. Severability
Any provision of this Agreement which is invalid, illegal or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability, without affecting in any way
the remaining provisions hereof in such jurisdiction or rendering that or any
other provision of this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
31
<PAGE>
17. Investigation of the Parties
All representations and warranties contained herein which are made to the
best knowledge of a party shall require that such party make reasonable
investigation and inquiry with respect thereto to ascertain the correctness and
validity thereof.
18. Expenses
Except as otherwise expressly provided herein, GreenMan, on the one hand,
the Sellers, on the other hand, will pay all fees and expenses (including,
without limitation, legal and accounting fees and expenses) incurred by them in
connection with the transactions contemplated hereby (collectively, "Transaction
Expenses"). In no event will any of the fees or expenses incurred in connection
with this transaction by BFI, including, without limitation, the fees and
expenses of counsel to BFI, be billed to or paid by the Facilities.
19. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
20. Section Headings
The section headings are for the convenience of the parties and in no way
alter, modify, amend, limit, or restrict the contractual obligations of the
parties.
21. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which shall be one and the same
document.
32
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as an instrument under seal on and as of the date first above written.
(Corporate Seal) GREENMAN TECHNOLOGIES, INC.
ATTEST:
Joseph E. Levangie By: /s/ Maurice E. Needham
Secretary Maurice E. Needham,
Chief Executive officer
(Corporate Seal) GREENMAN ACQUISITION CORP.
ATTEST:
John A. Piccione By: /s/ Maurice E. Needham
Secretary Maurice E. Needham,
Chief Executive Officer
(Corporate Seal) BROWNING FERRIS INDUSTRIES, INC.
ATTEST:
/s/ Eileen B. Schuler By: /s/ Gerald K. Burger
Assistant Secretary Vice President
(Corporate Seal) BROWNING-FERRIS INDUSTRIES OF
MINNESOTA, INC.
ATTEST:
/s/ Eileen B. Schuler By: /s/ Gerald K. Burger
Assistant Secretary Vice President
(Corporate Seal) BROWNING-FERRIS INDUSTRIES OF
GEORGIA, INC.
ATTEST:
/s/ Eileen B. Schuler By: /s/ Gerald K. Burger
Assistant Secretary Vice President
33
GREENMAN ACQUISITION CORP.
Promissory Note
$4,758,830 Lynnfield, Massachusetts
June 30, 1997
FOR VALUE RECEIVED, the undersigned GREENMAN ACQUISITION CORP., a
Delaware corporation ("Maker"), hereby promises to pay to BROWNING-FERRIS
INDUSTRIES OF MINNESOTA, INC. a Minnesota corporation ("BFIM"), and BROWNING-
FERRIS INDUSTRIES OF GEORGIA, INC., a Georgia corporation ("BGM" and jointly
with BFIM, the "Payees"), the principal amount of Four Million Seven Hundred
Fifty-Eight Thousand Eight Hundred Thirty Dollars ($4,758,830) on September 30,
1997 (the "Maturity Date"), or so much thereof as may remain unpaid hereunder on
the Maturity Date, together with interest on the unpaid balance of such
principal amount from the date hereof at a variable rate which at all times
shall equal the prime rate, as published in the Wall Street Journal from time to
time, plus two percentage points.
Payments of principal and interest hereon shall be made in lawful money
of the United States of America to the holder hereof at Browning Ferris
Industries, Inc.,757 N. Eldridge Street, Houston, Texas 77079, or at such other
place as such holder may direct in writing to Maker.
This Note may be prepaid at Maker's election in whole or in part, at
any time and from time to time, without premium or penalty, but together with
payment of all interest accrued and unpaid to the date of such prepayment on the
principal amount so prepaid.
This Note is made pursuant to and subject to the terms of the Purchase
and Sale Agreement dated as of the date hereof between, inter alia, the Maker
and the Payees (the "Purchase Agreement"). In addition, this Note is entitled to
the benefits of, including the security described in, (i) a pledge agreement
dated as of the date hereof (the "Pledge Agreement") between the Maker and the
Payees, and (ii) security agreements, each dated as of the date hereof (the
"Security Agreements"), between BFIM and BFI Tire Recyclers of Minnesota, Inc.,
and BGIM and of Georgia, Inc., respectively. Neither the foregoing references to
the Purchase Agreement, the Pledge Agreement and the Security Agreements nor any
provision thereof shall affect or impair the obligation of the undersigned to
pay the principal of and interest on this Note as herein provided.
This Note and all accrued and unpaid interest hereon shall at the
holder's election become immediately due and payable, without notice or demand,
upon the occurrence of any of the following with respect to Maker or any
endorser or guarantor hereof: the admission in writing of its inability to pay
its debts as they become due, or the appointment of a receiver for any
substantial part of the property of the Maker, an assignment for the benefit of
creditors by the
<PAGE>
Maker, or the commencement of any proceedings under bankruptcy or insolvency
laws by or against the Maker.
The parties hereto, including the Maker and all endorsers of this Note,
hereby waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance or enforcement
of this Note. No delay or omission on the part of the holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder, and a waiver of any such right on any one occasion shall
not be construed as a bar to or waiver of any such right on any future occasion.
If this Note is not paid when due, whether on the Maturity Date or by
acceleration, or if action is taken to collect amounts due on this Note through
a bankruptcy, probate or other court, whether before or after maturity, Maker
agrees to pay all costs of collection, including without limitation reasonable
attorney's fees.
This Note is made and delivered as a sealed instrument under and shall
be governed by the laws (other than the law governing conflict of law matters)
of The Commonwealth of Massachusetts.
GREENMAN ACQUISITION CORP.
By: /s/ Maurice E. Needham
Title: President
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This NONCOMPETITION, NONSOLICITATION AND CONFIDENTIALITY AGREEMENT
(this "Agreement"), dated as of June 30, 1997, by and among GreenMan
Technologies, Inc., a Delaware corporation ("GTI"), GreenMan Acquisition Corp.,
a Delaware corporation ("GAC" and, together with GTI, the "Buyers"), and
Browning Ferris Industries, Inc., a Delaware corporation ("BFI"),
Browning-Ferris Industries of Minnesota, Inc., a Minnesota corporation ("BFIM")
and Browning-Ferris Industries of Georgia, Inc., a Georgia corporation ("BFIG")
(BFIG together with BFI and BFIM, the "Sellers").
RECITALS
A. Buyers and Sellers are parties to a Purchase and Sale Agreement,
dated as of June 30, 1997 (the "Purchase Agreement"), pursuant to which GAC will
acquire all the issued and outstanding capital stock of BFI Tire Recyclers of
Minnesota, Inc., a Minnesota corporation ("BTM"), and BFI Tire Recyclers of
Georgia, Inc., a Georgia corporation ("BTG").
B. Buyers are unwilling to enter into and consummate the transactions
contemplated by the Purchase Agreement without assurances of a nature as
provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and in consideration of Buyers'
proceeding with the consummation of the transactions contemplated by the
Purchase Agreement, the parties hereto do hereby covenant and agree as follows:
1. Noncompetition Agreement.
Each Seller agrees and warrants that, for a period of three (3) years
from the date hereof, it will not, within the states and provinces listed on
Exhibit A attached hereto, directly or indirectly own, sponsor, operate, join,
control or participate in, or be connected as a partner, officer, director,
employee, consultant, adviser, sponsor or otherwise with, or permit its or his
name to be used in connection with, any business engaged in the collecting,
processing, treating, recovering, transporting, shredding, marketing, brokering,
reselling, disposal or recycling of tires or the sale and marketing of products
obtained from such processing (except such collecting and transporting of tires
as may be incidental to the collecting and transporting of nonhazardous solid
waste generally); provided, however, that nothing herein shall prevent the
Sellers and their affiliates from engaging in such businesses in the State of
Illinois as are required to fulfill their contractual obligations under those
contracts and other agreements listed on Exhibit B attached hereto.
2. Nonsolicitation Agreement.
Each Seller agrees and covenants that it will not, unless acting with
the Buyers' express written consent, directly or indirectly, for a period of
three (3) years from the date hereof, actively solicit or endeavor to entice
away any dealer, distributor, sales representative, officer or employee of
either Buyer, including without limitation those former employees of BTM or BTG
hired by the Buyer following the Closing under the Purchase Agreement.
<PAGE>
If at any time any of the foregoing agreements or covenants shall be
deemed invalid or unenforceable by the laws of the jurisdiction wherein it is to
be enforced, by reason of being vague or unreasonable as to duration, or
geographic scope, or scope of activities restricted, or for any other reason,
such agreements or covenants shall be considered divisible as to such portion
and shall become and be immediately amended and reformed to include only such
agreements or covenants as are enforceable by the court or other body having
jurisdiction of this Agreement; and the parties agree that such agreements or
covenants, as so amended and reformed, shall be valid and binding as though the
invalid or unenforceable portion had not been included herein.
3. Confidentiality Agreement.
Each Seller agrees and warrants that, for a period of three (3) years
from the date hereof, it will not, unless acting with the Buyers' express prior
written consent, directly or indirectly, at any time divulge, furnish, or make
accessible to anyone, or appropriate to its own use, or to the use of any third
party, any knowledge or information with respect to secret, confidential or
proprietary methods, processes, formulae, designs, equipment, plans, projects,
material, information, business, operations, techniques or customer lists of BTM
or BTG; provided, however, that the foregoing restriction shall not apply to
information that (i) is in the public domain or becomes part of the public
domain through no fault of any Seller, (ii) is used by Sellers in businesses
other than businesses in which BTM and BTG are engaged, or (iii) such Seller is
required to disclose by order of a court of competent jurisdiction in any legal
proceeding, provided that such Seller shall notify Buyer before so disclosing
such information.
4. Remedies.
Each Seller acknowledges that Buyers do not have an adequate remedy at
law in the event that any Seller breaches any of the foregoing provision of this
Agreement and agrees that Buyers, in addition to any other available rights and
remedies, whether existing under this Agreement or at law or in equity, shall be
entitled to injunctive relief and specific performance to the extent permitted
by law.
5. Waivers and Further Agreements.
Any waiver of any terms and conditions of this Agreement shall not
operate as a waiver of any other breach of such terms or conditions or any other
term or condition, nor shall any failure to enforce any provision hereof operate
as a waiver of such provision or of any other provision hereof; provided,
however, that no such waiver, unless it, by its own terms, explicitly provides
to the contrary, shall be construed to effect a continuing waiver of the
provision being waived, and no such waiver in any instance shall constitute a
waiver in any other instance or for any other purpose or impair the rights of
the party against whom such waiver is claimed in all other instances or for all
other purposes to require full compliance with such provision. Each of the
parties hereto agrees to execute all such further instruments and documents and
to take
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<PAGE>
all such further action as the other parties may reasonably require in order to
effectuate the terms and purpose of this Agreement.
6. Amendments; Entire Agreement.
This Agreement may not be amended, nor shall any waiver, change,
modification, consent or discharge be effected, except by an instrument in
writing executed by or on behalf of the party or parties against whom
enforcement of any amendment, waiver, change, modification, consent or discharge
is sought. The parties hereto agree that this Agreement and all other agreements
of even date or approximate even date herewith constitute the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings among them as to such subject matter; and
there are no restrictions, agreements, arrangements, oral or written, between
the parties relating to the subject matter hereof that are not fully expressed
or referred to herein.
7. Severability.
If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be inoperative or unenforceable as applied to any
particular case in any jurisdiction or jurisdictions, or in all jurisdictions or
in all cases, because of the conflict of any provision with any constitution or
state or rule of public policy or for any other reason, such circumstance shall
not have the effect of rendering the provision or provisions in question,
invalid, inoperative or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative or unenforceable provision
had never been contained herein and such provision reformed so that it would be
valid, operative and unenforceable to the maximum extent permitted in such
jurisdiction or in such case.
8. Notices.
Any notices or other communications required or permitted hereunder
shall be sufficiently given if delivered personally or sent by telex, federal
express, registered or certified mail, postage prepaid, addressed as follows or
to such other address of which the parties may have given notice:
To either Buyer, at:
GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Attention: Maurice E. Needham
Telephone: (617) 224-2411
Telecopy: (617) 224-0014
-3-
<PAGE>
With a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: John A. Piccione, Esq.
Telephone: (617) 338-2800
Telecopy: (617) 338-2880
To any Seller, at:
Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: Secretary
Telephone: (281) 870-8100
Telecopy: (281) 870-7825
With a copy to:
Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: John A. Hale, Jr., Esq.
Telephone: (281) 870-7138
Telecopy: (281) 870-7825
Unless otherwise specified herein, such notices or other communications shall be
deemed received (i) on the date delivered, if delivered personally, or (ii)
three business days after being sent, if sent by registered or certified mail,
postage prepaid and properly addressed as set forth above.
9. Successors and Assigns.
This Agreement shall not be assignable by any Seller. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and is not intended and shall not be
construed to create in any rights in or to be enforceable by any third person.
10. Counterparts.
This Agreement may be executed in two or more counterparts (none of
which need be executed by all the parties), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument, and in pleading or proving any provision of this Agreement it shall
not be necessary to produce more than one such counterpart.
-4-
<PAGE>
11. Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
12. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law questions)
of the State of Delaware.
13. Massachusetts Courts.
Any action to enforce, arising out of, or relating in any way to, any
of the provision of this Agreement may be brought and proscribed in such court
or courts located in The Commonwealth of Massachusetts as is provided by law;
and the parties consent to the jurisdiction of said court or courts located in
The Commonwealth of Massachusetts, and to service or process by first-class,
registered or certified mail, or by any other manner provided by law.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as a sealed instrument as of the date first above written.
GREENMAN TECHNOLOGIES, INC.
By: /s/ Maurice E. Needham
Title: Chief Executive Officer
GREENMAN ACQUISITION CORP.
By: /s/ Maurice E. Needham
Title: President
BROWNING FERRIS INDUSTRIES, INC.
By: /s/ Gerald K. Burger
Title: Vice President
BROWNING-FERRIS INDUSTRIES
OF MINNESOTA, INC.
By: /s/ Gerald K. Burger
Title: Vice President
BROWNING-FERRIS INDUSTRIES
OF GEORGIA, INC.
By: /s/ Gerald K. Burger
Title: Vice President
-6-
<PAGE>
Exhibit A
Alabama
Arkansas Tennessee
Florida Texas
Georgia Virginia
Illinois Wisconsin
Indiana Manitoba
Iowa Saskatchewan
Kentucky
Louisiana
Maryland
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
North Carolina
North Dakota
Ohio
South Carolina
South Dakota
-7-
<PAGE>
Exhibit B
Fuel Stockpile Management Agreement dated as of April 15, 1995 by and between
CGE Ford Heights, L.L.C. ("CGE") and Browning-Ferris Industries of Illinois,
Inc. ("BFII").
First Amended and Restated Tire Supply Agreement dated March 22, 1994 by and
between CGE and BFII
Tire Recycling Waste Disposal Agreement Dated September 13, 1995, by and between
CGE Fulton, LLC and BFII
Fuel Stockpile Management Agreement Dated September 13, 1995, by and between CGE
Fulton, LLC and BFII
-8-
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement"), dated as of June 30, 1997,
by and between BFI Tire Recyclers of Georgia, Inc., a Georgia corporation with a
principal place of business at 138B Sherrel Avenue, Jackson, Georgia 30233 (the
"Company"), and Browning- Ferris Industries of Georgia, Inc., a Georgia
corporation (the "Secured Party").
RECITALS
A. Pursuant to a Purchase and Sale Agreement dated as of June 30, 1997
(the "Purchase Agreement") by and among GreenMan Technologies, Inc., a Delaware
corporation ("GTI"), GreenMan Acquisition Corp., a Delaware corporation ("GAC"),
Browning Ferris Industries, Inc., a Delaware corporation, the Secured Party and
Browning-Ferris Industries of Minnesota, Inc., GAC has purchased all the issued
and outstanding capital stock of the Company.
B. Pursuant to the Purchase Agreement, GAC has delivered to the Secured
Party the Note (as defined in the Purchase Agreement) and is to deliver the
Final Working Capital Note (as defined in the Purchase Agreement and, together
with the Note, the "Notes").
C. The Secured Party has required as a condition to the consummation of
the transactions contemplated by the Purchase Agreement, and in order to secure
the prompt and complete payment, observance and performance all of GAC's
obligations and liabilities under the Notes (all such obligations and
liabilities being hereinafter referred to collectively as the "Obligations"),
that the Company execute and deliver this Agreement and enter into the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises, of the Secured Party
proceeding with the consummation of the transactions contemplated by the
Purchase Agreement, and of other valuable consideration, the receipt and
adequacy whereof are hereby acknowledged, the parties hereto, intending to be
legally bound, do covenant and agree as follows:
1. Definitions. All capitalized terms used herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings assigned to them below or in the Purchase Agreement (unless otherwise
defined). Except as otherwise defined, terms defined in the Uniform Commercial
Code shall have the meanings set forth therein.
"Accounts" means all rights of the Company to payment for goods sold or
leased or for services rendered, all sums of money or other proceeds due or
becoming due thereon, all notes, bills, drafts, acceptances, instruments,
documents and other debts, obligations and liabilities, in whatever form, owing
to the Company with respect thereto, all guaranties and security therefor, and
the Company's rights pertaining to and interest in such goods, including the
right of stoppage in transit, replevin or reclamation; all chattel paper; all
amounts due from Affiliates
<PAGE>
of the Company; all insurance proceeds; all other rights and claims to the
payment of money, under contracts or otherwise; and all other property
constituting "accounts" as such term is defined in the Uniform Commercial Code.
"Collateral" means all real and personal property of the Company of
every kind and description, tangible and intangible, whether now owned or
existing or hereafter arising or acquired, including without limitation all
Accounts, Equipment, General Intangibles, Inventory and Securities, together
with all goods, instruments, documents of title, policies and certificates of
insurance, securities, chattel paper, deposit accounts, cash or other property
owned by the Company or in which the Company has an interest that are now or may
hereafter be in the possession, custody or control of the Secured Party or its
participants or assigns for any purpose; any and all additions, substitutions,
replacements and accessions thereto; all books and records (including computer
programs, printouts and other computer materials and records) and all Proceeds
and products of any of the foregoing.
"Default" means any default in the payment or performance of
obligations under either of the Notes or this Agreement.
"Encumbrance" means any mortgage, pledge, security interest, lien or
other charge or encumbrance of any kind or nature (including, without
limitation, the lien or retained security title of a conditional vendor) upon or
with respect to any property.
"Equipment" means all machinery, equipment and fixtures, furniture,
furnishings, trade fixtures, specialty tools and parts, motor vehicles and
materials handling equipment of the Company, together with the Company's
interest in, and right to, any and all manuals, computer programs, data bases
and other materials relating to the use, operation or structure of any of the
foregoing; and all other property constituting "equipment" as such term is
defined in the Uniform Commercial Code.
"General Intangibles" means all rights with respect to trademarks,
service marks, trade names, trade styles, patents, copyrights, mask works, trade
secrets information, other proprietary rights and rights to prevent others from
doing acts that constitute unfair competition with the Company or
misappropriation of its property, including without limitation any sums (net of
expenses) that the Company may receive arising out of any claim for infringement
of its rights in any of the foregoing, and all rights of the Company under
contracts to enjoy performance by others or to be entitled to enjoy rights
granted by others, including without limitation any licenses; all obligations
and indebtedness of any kind (other than Accounts) owing to the Company from
whatever source arising; all contract rights; all rights of the Company as a
bailor; all tax refunds; all right, title and interest of the Company in and to
all documents, books, records, files and other information (on whatever medium
recorded, and including without limitation computer programs, tapes, discs,
punch cards, data processing software and related property and rights)
maintained by the Company that reflect the conduct of the Company's business,
such as financial records, marketing and sales records, research and development
records, and design, engineering and manufacturing records; all rights under
-2-
<PAGE>
service bureau service contracts; all computer data and the concepts and ideas
on which said data is based; all developmental ideas and concepts, papers,
plans, schematics, drawings, blueprints, sketches and documents; all data bases;
all customer lists; and all other property constituting "general intangibles" as
such term is defined in the Uniform Commercial Code.
"Inventory" means all goods, merchandise and other personal property
(including warehouse receipts and other negotiable and non-negotiable documents
of title covering any such property) of the Company that are held for sale,
lease or other disposition, or are to be furnished under contracts of service,
or for display or demonstration, or leased or consigned, or that are raw
materials, piece goods, work-in-process, finished goods or supplies or other
materials used or consumed or to be used or consumed in the Company's business,
whether in transit or in the possession of the Company or another, including
without limitation all goods covered by purchase orders and contracts with
suppliers and all goods billed and held by suppliers and goods located on the
premises of any carriers, forwarding agents, truckers, warehousemen, vendors,
selling agents or other third parties; all proprietary rights, patents, plans,
drawings, diagrams, schematics, assembly and display materials relating to any
of the foregoing; and all other property constituting "inventory" as such term
is defined in the Uniform Commercial Code.
"Permitted Encumbrances" means the following:
(i) Encumbrances in favor of the Secured Party to secure
Obligations;
(ii) Encumbrances existing as of the date of this
Agreement and disclosed in Section 2.09 of the
Purchase Agreement and Schedule 2.09 thereto;
(iii) Encumbrances securing indebtedness for the purchase
price of capital assets, provided that (i) each such
Encumbrance is given solely to secure the purchase
price of such property, does not extend to any other
property and is given at the time of acquisition of
the property, and (ii) the indebtedness secured
thereby does not exceed the lesser of the cost of
such property or its fair market value at the time of
acquisition;
(iv) liens for taxes, fees, assessments and other
governmental charges to the extent that payment of
the same may be postponed or is not required;
(v) landlords' and lessors' liens in respect of rent not
in default or liens in respect of pledges or deposits
under workmen's compensation, unemployment insurance,
social security laws, or similar legislation or in
connection with appeal and similar bonds incidental
to litigation; mechanics', warehouseman's, laborers'
and materialmen's and similar liens, if the
obligations secured by such liens are not then
delinquent; liens securing the performance of bids,
tenders, contracts (other than for the payment of
money); and liens securing statutory obligations or
surety, indemnity, performance, or other similar
bonds incidental to the conduct of
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<PAGE>
the Company's business in the ordinary course and
that do not in the aggregate materially detract from
the value of the Collateral or materially impair the
use thereof in the operation of its business;
(vi) judgment liens securing judgments that (i) are not
fully covered by insurance, and (ii) shall not have
been in existence for a period longer than 10 days
after the creation thereof or, if a stay of execution
shall have been obtained, for a period longer than 10
days after the expiration of such stay;
(vii) rights of lessors under capital leases;
(viii) easements, rights of way, restrictions and other
similar charges or Encumbrances relating to real
property and not interfering in a material way with
the ordinary conduct of the Company's business; and
(ix) liens constituting a renewal, extension or
replacement of any Permitted Encumbrance.
"Proceeds" means all proceeds of and all other profits, rentals and
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, any
Collateral, including, without limitation, all claims of the Company against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral, and any condemnation or requisition payments with respect to
any Collateral, in each case whether now existing or hereafter arising.
"Securities" means all of the securities and instruments of the
Company, including without limitation all stocks, bonds, Treasury bills,
certificates of deposit and mutual or money market fund shares; and all sums due
or to become due on any of the foregoing, and all securities, instruments or
other property purchased or acquired as a result of the investment and
reinvestment thereof as hereinafter provided.
"Security Interest" means the security interest and liens granted
pursuant to Section 2 hereof, as well as all other security interests created or
assigned as additional security for the Obligations pursuant to this Agreement.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect in the State of Georgia.
2. Security Interest and Collateral.
2.1 Grant. To secure the payment and performance of the Obligations,
the Company hereby assigns and pledges to the Secured Party all of its rights,
title and interest in, and grants to the Secured Party a continuing security
interest in, the Collateral.
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2.2 Continued Priority of Security Interest. The Company represents
that the Security Interest is a valid, perfect security interest, enforceable
against the Company, securing the Obligations, subject to prior security
interests in the Collateral that may have been granted by the Company before the
date of this Agreement. The Company shall ensure that the Security Interest
shall at all times be a valid and (except with respect to the Collateral
consisting of cash or bank deposits and any other Collateral, a security
interest in which may be perfected only by possession) perfected security
interest, enforceable against the Company, securing the Obligations in
accordance with the terms of this Agreement, and the Collateral shall not at any
time be subject to any Liens that are prior to, on a parity with or junior to
the Security Interest other than Permitted Encumbrances.
2.3 Filing; Notification; Refiling, etc.
(a) The Company shall, at its sole cost and expense, take all
action which may be reasonably required by the Secured Party in order to defend
the Security Interests and assure that the Security Interests will at all times
comply with the provisions of Section 2.2 or in order to enable the Secured
Party to exercise or enforce its rights hereunder, including, but not limited
to, (i) delivering to the Secured Party, endorsed or accompanied by such
instruments of assignment or transfer as the Secured Party may reasonably
specify, and stamping and marking in such manner as the Secured Party may
reasonably specify, any and all chattel paper, instruments, letters and advices
of credit and documents evidencing or forming a part of the Collateral, and (ii)
executing and delivering such financing statements, pledges, designations,
mortgages, hypothecations, notices and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party, relating to the
creation, validity, perfection, maintenance or continuation of the Security
Interest under the Uniform Commercial Code or other laws of any jurisdiction in
which the Collateral or any part thereof is located and of such other states as
the Secured Party may from time to time reasonably request. The Company shall
mark its books and records as may be necessary or appropriate to evidence,
protect or perfect the Security Interest.
(b) The Company shall, at its sole cost and expense, from time
to time (i) upon the request of the Secured Party, take whatever steps are
reasonably required by the Secured Party in order to perfect the Security
Interest with respect to that portion of the Collateral as to which the Security
Interest was not perfected by the filing of Uniform Commercial Code financing
statements, and (ii) use its diligent best efforts to obtain all necessary
consents to the transfer of any contract, license, franchise, approval or other
agreement which is not transferable without such consents.
(c) In the event that any rerecording or refiling (or the
filing of any statement of continuation or assignment of any financing
statement) or any remortgage, repledge or reassignment, or any confirmatory
assignment, or any other action, is required or desirable at any time to protect
and preserve and maintain the Security Interest, the Company shall, at its
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sole cost and expense, cause the same to be done or taken at such time and in
such manner as may be reasonably required by the Secured Party.
(d) Anything to the contrary herein notwithstanding, the
Secured Party hereby acknowledges that mortgages with respect to the real
property owned by the Company shall not be prepared and filed until the Secured
Party specifically so requests in writing to the Company. Upon receipt of such
written request from the Secured Party, the Company shall promptly prepare and
file such mortgages.
2.4 Appointment as Attorney and Agent for the Company with Respect to
Security Interest. The Company hereby irrevocably appoints the Secured Party as
its lawful attorney and agent, with full power of substitution, to execute and
deliver, on behalf of and in the name of such Company, such financing
statements, assignments, mortgages, notices, pledges and other documents and
agreements, and to take such other action (including any contemplated by Section
2.1, 2.2 or 2.3), as the Secured Party may reasonably deem necessary for the
purpose of the creation, perfection, maintenance or continuation of the Security
Interest, under any applicable law, and the Secured Party is hereby authorized
to file on behalf of and in the name of the Company, at the Company's expense,
such financing statements, assignments, mortgages, notices, pledges and other
documents and agreements in any appropriate governmental office. The right is
expressly granted to the Secured Party in its discretion, in those jurisdictions
where the same is permitted, to file one or more financing statements under the
Uniform Commercial Code signed only by the Secured Party, naming the Company as
debtor and naming the Secured Party as secured party and indicating therein the
types, or describing the items, of the Collateral.
2.5 Disposition of Collateral. So long as any of the Obligations of the
Company is outstanding and unpaid and unless the Secured Party shall have
otherwise consented in writing, the Company shall not sell, assign, transfer or
otherwise dispose of any Collateral to anyone other than the Secured Party,
provided, however, that, notwithstanding the foregoing, so long as no Default
shall have occurred and be continuing, (i) Inventory may be sold in the ordinary
course of business and (ii) Equipment and Inventory that is, in the reasonable
judgment of the Company, obsolete or no longer useful in the conduct of the
Company's business may be sold or disposed of. The inclusion of "proceeds" of
the Collateral under the Security Interest shall not be deemed a consent by the
Secured Party to any sale or other disposition of any part or all of the
Collateral.
2.6 Location of Collateral; Change of Name, etc. The Company
represents, warrants and covenants that:
(a) The Company's chief executive office and principal place
of business, and the books and relating to the Collateral of the Company, are
located at 138B Sherrel Avenue, Jackson, Georgia 30233. The Company will not
move its chief executive offices, principal places of business or the books and
records specified in this subsection (a), or change its name or identity,
without giving the Secured Party sixty days' prior notice thereof.
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(b) The present corporate name of the Company is as set forth
on the signature page hereto. Following the closing under the Purchase
Agreement, the Company shall change its name to "GreenMan Technologies of
Georgia, Inc.," and the Company shall not thereafter change such name, conduct
its business in any name other than such name or take title to any Collateral in
any name other than such name while this Security Agreement remains in effect
until (i) it shall have given to the Secured Party not less than 60 days' prior
written notice of its intention to do so, setting forth such name or names and
providing such other information in connection therewith as the Secured Party
may reasonably request, and (ii) with respect to such new name or names, it
shall have take such action as the Secured Party may reasonably request
(including, without limitation, all action required by Section 2.3 hereof), to
maintain the Security Interest granted hereby in full force and effect.
(c) The Equipment and Inventory included in the Collateral are
located at the addresses set forth on the schedule attached hereto as Schedule
A. The Equipment and Inventory will be kept solely at the locations referred to
on Schedule A and will not be moved (except to another location listed on the
Schedule A), sold or otherwise disposed of except to the extent expressly
permitted hereunder. None of the Inventory is stored with or in the possession
of any bailee, consignee, warehouseman, or other similar person. The Company
shall not establish any new location until (i) it shall have given to the
Secured Party not less than 60 days' prior written notice of its intention so to
do, clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request, and (ii) with
respect to such new location, it shall have taken such action, reasonably
satisfactory to the Secured Party (including, without limitation, all action
required by Section 2.3 hereof), to maintain the Security Interest granted
hereby at all times fully perfected and in full force and effect. The Collateral
shall be insured at all times against all expected risks to which such
Collateral may be exposed, including without limitation fire and extended
coverage.
2.7 Notice to Account Debtors; Possession of Collateral. If there shall
occur and be continuing for in excess of ten (10) days without being waived or
cured any Default, the Secured Party may do any or all of the following:
(a) The Secured Party may (i) notify, or request the Company
to notify, in writing any account debtor or other obligor with respect to any of
the Collateral to make payment to the Secured Party, or any agent or designee of
the Secured Party, at such address as may be specified by the Secured Party, or
(ii) direct the Company to hold all payments which it receives with respect to
any of the Collateral in trust for the Secured Party, and the Company shall so
hold such funds without commingling them with other funds of the Company and
shall, in accordance with the directions of the Secured Party, either (A)
deliver the same to the Secured Party, or any agent or designee of the Secured
Party, immediately upon receipt by the Company in the identical form received,
together with any necessary endorsements, or (B) immediately deposit them in a
separate account maintained with or by any agent or designee of the Secured
Party, in which only such payments and other proceeds of Collateral shall be
deposited. When any notice to make payments directly to the Secured Party or any
such agent or designee shall have been given pursuant to clause (i) above, the
Company shall no longer
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have any right to collect the affected Collateral. If notwithstanding the giving
of any notice, any account debtor or other obligor shall make payment to the
Company the Company shall hold all such payments it receives in trust for the
Secured Party without commingling the same with other funds of the Company and
shall deliver the same to the Secured Party or any such agent or designee,
immediately upon receipt by the Company in the identical form received, together
with any necessary endorsements. The Company shall not, without the Secured
Party's consent, grant any extension of time for payment with respect to the
Collateral, compromise, compound or settle the same for less than the full
amount thereof, release wholly or partly any person liable for the payment
thereof, or allow any credit or discount whatsoever thereon. In its own name or
in the name of the Company or the Secured Party, the Secured Party may demand,
sue for, collect or receive any of the Collateral or any payment in respect
thereof. The Secured Party may settle or adjust disputes and claims directly
with account debtors and other obligors of the Company for amounts and on terms
which the Secured Party considers advisable and may endorse the Company's name
on any checks, notes, acceptances, drafts or other forms of payment or security
that may come into the Secured Party's possession. Nothing herein contained
shall be construed as requiring or obligating the Secured Party or any such
agent or designee, to make any demand, or to make an inquiry as to the nature of
sufficiency of any payment received by it or to present or file any claim or
notice or take any action with respect to any Collateral or the monies due or to
become due thereunder or to take any steps necessary to preserve any rights
against prior parties. Neither the Secured Party nor its agent or designee shall
have any liability to the Company for actions taken in good faith pursuant to
this Section.
(b) The Secured Party may, but shall not be obligated to,
deliver any amounts received from, or deposited by, the Company pursuant to
paragraph (a) above to the Company for use by the Company in the ordinary course
of its business, but the security interest in any such proceeds delivered to the
Company shall continue and shall not be affected by such delivery and the
Company shall not commingle any proceeds so delivered with any of its other
funds.
(c) The Secured Party may at any time and from time to time,
with or without judicial process or the aid or assistance of others: enter upon
any premises in which Collateral may be located and, without resistance or
interference by the Company, take physical possession of any items of Collateral
and maintain such possession on the Company's premises or move the same or any
part thereof to such other places as the Secured Party shall choose without
being liable to the Company on account of any losses, damage or depreciation
that may occur as a result thereof so long as the Secured Party shall act
reasonably and in good faith; dispose of all or any part of the Collateral on
any premises of the Company; require the Company to assemble and make available
to the Secured Party at the expense of the Company all or any part of the
Collateral at any place and time designated by the Secured Party; or remove all
or any part of the Collateral from any premises in which any part may be located
for the purpose of effecting sale or other disposition thereof.
2.8 Additional Rights. In addition to all other rights and remedies
granted to the Secured Party hereunder and by operation of law or otherwise and
not in derogation of any such rights, the Secured Party may without presentment,
demand, protest or other notice of any kind,
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all of which are hereby expressly waived, exercise all of the remedies of a
secured party under the Uniform Commercial Code of as enacted in any applicable
jurisdiction in which any Collateral may be located. In addition, the Company
agrees that without the same having the effect of releasing any or all of the
Collateral or otherwise prejudicing any rights of the Secured Party hereunder,
the Secured Party may (a) grant extensions, renewals or indulgences with respect
to the Obligations; (b) take or release other property as security for the
Obligations, and may release any obligor or other person primarily or
secondarily liable for any of the Obligations; and (c) (i) sell or cause to be
sold such of the Collateral as it may in its sole discretion deem desirable
without being required simultaneously or later similarly to sell or dispose of
the balance of the Collateral or any other property or other security at the
time available to it and without being required to resort to any guaranty or any
other security or sources of reimbursement which may at the time be available to
it; and (ii) apply to the Obligations the proceeds of the Collateral or any
portion thereof, or any amount received on account of the Collateral or any
portion thereof, by the exercise of any right permitted hereunder, without
resorting to and without regard to any guaranty, other security or sources of
reimbursement which may at the time be available to it.
Without limiting the generality of the foregoing or anything else in
this Agreement, the Secured Party may buy any part or all of the Collateral at
any public sale and if any part or all of the Collateral is of a type
customarily sold in a recognized market or is of the type which is the subject
of widely-distributed standard price quotations, the Secured Party may, in its
sole and absolute discretion, buy at private sale and may make payments therefor
by any means including without limitation cancellation of indebtedness secured
thereby. The Company recognizes that the Secured Party may be unable to effect a
public sale of certain of the Collateral by reason of certain prohibitions
contained in federal and state securities laws, or in other applicable laws, to
which such Collateral may be subject but may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers. The Company
agrees that any such private sales may be at prices and other terms less
favorable to the seller than if sold at public sales and that such private sales
shall be deemed to have been made in a commercially reasonable manner. The
Secured Party shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit the issuer of any
securities constituting a part thereof to register such securities for public
sale under the said federal or state securities laws or other applicable law,
even if the issuer would agree to do so.
2.9 Application of Proceeds. All proceeds from each sale of, or other
realization upon, all or any part of the Collateral of the Company, including
without limiting the foregoing all amounts paid to or deposited with the Secured
Party pursuant to Section 2.7(a), shall be applied or paid over as follows:
(i) first, to the payment of all reasonable costs and
expenses incurred in connection with such sale or other
realization, including reasonable attorneys' fees;
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(ii) second, to the payment of the Obligations (with the
Company remaining liable for any deficiency); and
(iii) third, the balance (if any) of such proceeds from the
sale of, or other realization upon, all or any part of
the Collateral of the Company shall be paid to the
Company, subject to any duty imposed by law or otherwise
to the holder of any subordinate lien in the Collateral
known to the Secured Party or subject to the direction
of a court of competent jurisdiction.
3. Miscellaneous.
3.1 Notices.
Any notice, request or other communication required or desired to be served,
given or delivered under this Pledge shall be in writing and shall be deemed to
have been validly served, given or delivered five (5) days after deposit in the
United States mails, registered or certified mail, with proper postage prepaid
and addressed to the party to be notified as follows:
If to the Company: c/o GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Attention: Maurice E. Needham
Telephone: (617) 224-2411
Telecopy: (617) 224-0014
With a copy to: Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: John A. Piccione, Esq.
Telephone: (617) 338-2800
Telecopy: (617) 338-2880
If to the Secured Party: Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: Secretary
Telephone: (281) 870-8100
Telecopy: (281) 870-7825
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With a copy to: Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: John A. Hale, Jr., Esq.
Telephone: (281) 870-7138
Telecopy: (281) 870-7825
or to such other address as either party may hereafter designate for itself by
written notice to the other party in the manner herein prescribed.
3.2 Waivers. The rights and remedies of the Secured Party under this
Agreement shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have, now or hereafter existing at law or in equity or by
statute or otherwise, and no failure or delay by the Secured Party in exercising
any right shall operate as a waiver of such right, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right. Any term, covenant, agreement or
condition of this Agreement may be amended with the written consent of the
Company and the Secured Party or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or prospectively)
in writing by the Secured Party, and in any such event the failure to observe,
perform or discharge any such covenant, condition or obligation (whether such
amendment is executed or such consent or waiver is given before or after such
failure) shall not be construed as a breach of such covenant, condition or
obligation or a default hereunder.
3.3 Specific Performance. The Company recognizes that the rights of the
Secured Party hereunder are unique and, accordingly, the Secured Party shall, in
addition to such other remedies as may be available to it at law or in equity,
have the right to enforce its rights hereunder by actions for injunctive relief
and specific performance to the extent permitted by law. The Company hereby
waives any requirement for security or the posting of any bond in connection
with any temporary or permanent award of injunctive, mandatory or other
equitable relief. This agreement is not intended to limit or abridge any rights
of the Secured Party which may exist apart from this agreement.
3.4 Assignment. All the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Secured Party.
3.5 Defeasance. This Security Agreement shall terminate upon the
payment and performance of the Obligations in full; provided that, if at any
time any payment made in respect of the Obligations shall be recovered or
rescinded by or on behalf of the Company or must be otherwise restored or
returned, whether upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Company's obligations under this Agreement shall
continue to
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be effective or be reinstated, as the case may be, and shall continue as though
such payment had not been made.
3.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
3.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws (other than the laws governing conflict of law matters)
of The Commonwealth of Massachusetts except to the extent that matters of title,
or creation, perfection and priority of the security interests created hereby,
or procedural issues of foreclosures are required to be governed by the laws of
the state in which the collateral, or part thereof, is located.
3.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
3.9 Number. Whenever used herein, the singular number shall include the
plural and the plural shall include the singular.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
BFI TIRE RECYCLERS OF GEORGIA,
INC.
By: /s/ Robert D. Maust
Title: President
BROWNING-FERRIS INDUSTRIES
OF GEORGIA, INC.
By: /s/ Gerald K. Burger
Title: Vice President
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Schedule A to Security Agreement
Location of Collateral
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement"), dated as of June 30, 1997,
by and between BFI Tire Recyclers of Minnesota, Inc., a Minnesota corporation
with a principal place of business at 12498 Wyoming Avenue, Savage, Minnesota
55378 (the "Company"), and Browning-Ferris Industries of Minnesota, Inc., a
Minnesota corporation (the "Secured Party").
RECITALS
A. Pursuant to a Purchase and Sale Agreement dated as of June 30, 1997
(the "Purchase Agreement") by and among GreenMan Technologies, Inc., a Delaware
corporation ("GTI"), GreenMan Acquisition Corp., a Delaware corporation ("GAC"),
Browning Ferris Industries, Inc., a Delaware corporation, the Secured Party and
Browning-Ferris Industries of Georgia, Inc., GAC has purchased all the issued
and outstanding capital stock of the Company.
B. Pursuant to the Purchase Agreement, GAC has delivered to the Secured
Party the Note (as defined in the Purchase Agreement) and is to deliver the
Final Working Capital Note (as defined in the Purchase Agreement and, together
with the Note, the "Notes").
C. The Secured Party has required as a condition to the consummation of
the transactions contemplated by the Purchase Agreement, and in order to secure
the prompt and complete payment, observance and performance all of GAC's
obligations and liabilities under the Notes (all such obligations and
liabilities being hereinafter referred to collectively as the "Obligations"),
that the Company execute and deliver this Agreement and enter into the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises, of the Secured Party
proceeding with the consummation of the transactions contemplated by the
Purchase Agreement, and of other valuable consideration, the receipt and
adequacy whereof are hereby acknowledged, the parties hereto, intending to be
legally bound, do covenant and agree as follows:
1. Definitions. All capitalized terms used herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings assigned to them below or in the Purchase Agreement (unless otherwise
defined). Except as otherwise defined, terms defined in the Uniform Commercial
Code shall have the meanings set forth therein.
"Accounts" means all rights of the Company to payment for goods sold or
leased or for services rendered, all sums of money or other proceeds due or
becoming due thereon, all notes, bills, drafts, acceptances, instruments,
documents and other debts, obligations and liabilities, in whatever form, owing
to the Company with respect thereto, all guaranties and security therefor, and
the Company's rights pertaining to and interest in such goods, including the
right of stoppage in transit, replevin or reclamation; all chattel paper; all
amounts due from Affiliates of the Company; all insurance proceeds; all other
rights and claims to the payment of money,
<PAGE>
under contracts or otherwise; and all other property constituting "accounts" as
such term is defined in the Uniform Commercial Code.
"Collateral" means all real and personal property of the Company of
every kind and description, tangible and intangible, whether now owned or
existing or hereafter arising or acquired, including without limitation all
Accounts, Equipment, General Intangibles, Inventory and Securities, together
with all goods, instruments, documents of title, policies and certificates of
insurance, securities, chattel paper, deposit accounts, cash or other property
owned by the Company or in which the Company has an interest that are now or may
hereafter be in the possession, custody or control of the Secured Party or its
participants or assigns for any purpose; any and all additions, substitutions,
replacements and accessions thereto; all books and records (including computer
programs, printouts and other computer materials and records) and all Proceeds
and products of any of the foregoing.
"Default" means any default in the payment or performance of
obligations under either of the Notes or this Agreement.
"Encumbrance" means any mortgage, pledge, security interest, lien or
other charge or encumbrance of any kind or nature (including, without
limitation, the lien or retained security title of a conditional vendor) upon or
with respect to any property.
"Equipment" means all machinery, equipment and fixtures, furniture,
furnishings, trade fixtures, specialty tools and parts, motor vehicles and
materials handling equipment of the Company, together with the Company's
interest in, and right to, any and all manuals, computer programs, data bases
and other materials relating to the use, operation or structure of any of the
foregoing; and all other property constituting "equipment" as such term is
defined in the Uniform Commercial Code.
"General Intangibles" means all rights with respect to trademarks,
service marks, trade names, trade styles, patents, copyrights, mask works, trade
secrets information, other proprietary rights and rights to prevent others from
doing acts that constitute unfair competition with the Company or
misappropriation of its property, including without limitation any sums (net of
expenses) that the Company may receive arising out of any claim for infringement
of its rights in any of the foregoing, and all rights of the Company under
contracts to enjoy performance by others or to be entitled to enjoy rights
granted by others, including without limitation any licenses; all obligations
and indebtedness of any kind (other than Accounts) owing to the Company from
whatever source arising; all contract rights; all rights of the Company as a
bailor; all tax refunds; all right, title and interest of the Company in and to
all documents, books, records, files and other information (on whatever medium
recorded, and including without limitation computer programs, tapes, discs,
punch cards, data processing software and related property and rights)
maintained by the Company that reflect the conduct of the Company's business,
such as financial records, marketing and sales records, research and development
records, and design, engineering and manufacturing records; all rights under
service bureau service contracts; all computer data and the concepts and ideas
on which said data
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is based; all developmental ideas and concepts, papers, plans, schematics,
drawings, blueprints, sketches and documents; all data bases; all customer
lists; and all other property constituting "general intangibles" as such term is
defined in the Uniform Commercial Code.
"Inventory" means all goods, merchandise and other personal property
(including warehouse receipts and other negotiable and non-negotiable documents
of title covering any such property) of the Company that are held for sale,
lease or other disposition, or are to be furnished under contracts of service,
or for display or demonstration, or leased or consigned, or that are raw
materials, piece goods, work-in-process, finished goods or supplies or other
materials used or consumed or to be used or consumed in the Company's business,
whether in transit or in the possession of the Company or another, including
without limitation all goods covered by purchase orders and contracts with
suppliers and all goods billed and held by suppliers and goods located on the
premises of any carriers, forwarding agents, truckers, warehousemen, vendors,
selling agents or other third parties; all proprietary rights, patents, plans,
drawings, diagrams, schematics, assembly and display materials relating to any
of the foregoing; and all other property constituting "inventory" as such term
is defined in the Uniform Commercial Code.
"Permitted Encumbrances" means the following:
(i) Encumbrances in favor of the Secured Party to secure
Obligations;
(ii) Encumbrances existing as of the date of this Agreement
and disclosed in Section 2.09 of the Purchase Agreement
and Schedule 2.09 thereto;
(iii) Encumbrances securing indebtedness for the purchase
price of capital assets, provided that (i) each such
Encumbrance is given solely to secure the purchase price
of such property, does not extend to any other property
and is given at the time of acquisition of the property,
and (ii) the indebtedness secured thereby does not
exceed the lesser of the cost of such property or its
fair market value at the time of acquisition;
(iv) liens for taxes, fees, assessments and other
governmental charges to the extent that payment of the
same may be postponed or is not required;
(v) landlords' and lessors' liens in respect of rent not in
default or liens in respect of pledges or deposits under
workmen's compensation, unemployment insurance, social
security laws, or similar legislation or in connection
with appeal and similar bonds incidental to litigation;
mechanics', warehouseman's, laborers' and materialmen's
and similar liens, if the obligations secured by such
liens are not then delinquent; liens securing the
performance of bids, tenders, contracts (other than for
the payment of money); and liens securing statutory
obligations or surety, indemnity, performance, or other
similar bonds incidental to the conduct of the Company's
business in the ordinary course and that do not in the
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aggregate materially detract from the value of the
Collateral or materially impair the use thereof in the
operation of its business;
(vi) judgment liens securing judgments that (i) are not fully
covered by insurance, and (ii) shall not have been in
existence for a period longer than 10 days after the
creation thereof or, if a stay of execution shall have
been obtained, for a period longer than 10 days after
the expiration of such stay;
(vii) rights of lessors under capital leases;
viii) easements, rights of way, restrictions and other similar
charges or Encumbrances relating to real property and
not interfering in a material way with the ordinary
conduct of the Company's business; and
(ix) liens constituting a renewal, extension or replacement
of any Permitted Encumbrance.
"Proceeds" means all proceeds of and all other profits, rentals and
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, any
Collateral, including, without limitation, all claims of the Company against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral, and any condemnation or requisition payments with respect to
any Collateral, in each case whether now existing or hereafter arising.
"Securities" means all of the securities and instruments of the
Company, including without limitation all stocks, bonds, Treasury bills,
certificates of deposit and mutual or money market fund shares; and all sums due
or to become due on any of the foregoing, and all securities, instruments or
other property purchased or acquired as a result of the investment and
reinvestment thereof as hereinafter provided.
"Security Interest" means the security interest and liens granted
pursuant to Section 2 hereof, as well as all other security interests created or
assigned as additional security for the Obligations pursuant to this Agreement.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect in the State of Minnesota.
2. Security Interest and Collateral.
2.1 Grant. To secure the payment and performance of the Obligations,
the Company hereby assigns and pledges to the Secured Party all of its rights,
title and interest in, and grants to the Secured Party a continuing security
interest in, the Collateral.
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2.2 Continued Priority of Security Interest. The Company represents
that the Security Interest is a valid, perfect security interest, enforceable
against the Company, securing the Obligations, subject to prior security
interests in the Collateral that may have been granted by the Company before the
date of this Agreement. The Company shall ensure that the Security Interest
shall at all times be a valid and (except with respect to the Collateral
consisting of cash or bank deposits and any other Collateral, a security
interest in which may be perfected only by possession) perfected security
interest, enforceable against the Company, securing the Obligations in
accordance with the terms of this Agreement, and the Collateral shall not at any
time be subject to any Liens that are prior to, on a parity with or junior to
the Security Interest other than Permitted Encumbrances.
2.3 Filing; Notification; Refiling, etc.
(a) The Company shall, at its sole cost and expense, take all
action which may be reasonably required by the Secured Party in order to defend
the Security Interests and assure that the Security Interests will at all times
comply with the provisions of Section 2.2 or in order to enable the Secured
Party to exercise or enforce its rights hereunder, including, but not limited
to, (i) delivering to the Secured Party, endorsed or accompanied by such
instruments of assignment or transfer as the Secured Party may reasonably
specify, and stamping and marking in such manner as the Secured Party may
reasonably specify, any and all chattel paper, instruments, letters and advices
of credit and documents evidencing or forming a part of the Collateral, and (ii)
executing and delivering such financing statements, pledges, designations,
mortgages, hypothecations, notices and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party, relating to the
creation, validity, perfection, maintenance or continuation of the Security
Interest under the Uniform Commercial Code or other laws of any jurisdiction in
which the Collateral or any part thereof is located and of such other states as
the Secured Party may from time to time reasonably request. The Company shall
mark its books and records as may be necessary or appropriate to evidence,
protect or perfect the Security Interest.
(b) The Company shall, at its sole cost and expense, from time
to time (i) upon the request of the Secured Party, take whatever steps are
reasonably required by the Secured Party in order to perfect the Security
Interest with respect to that portion of the Collateral as to which the Security
Interest was not perfected by the filing of Uniform Commercial Code financing
statements, and (ii) use its diligent best efforts to obtain all necessary
consents to the transfer of any contract, license, franchise, approval or other
agreement which is not transferable without such consents.
(c) In the event that any rerecording or refiling (or the
filing of any statement of continuation or assignment of any financing
statement) or any remortgage, repledge or reassignment, or any confirmatory
assignment, or any other action, is required or desirable at any time to protect
and preserve and maintain the Security Interest, the Company shall, at its sole
cost and expense, cause the same to be done or taken at such time and in such
manner as may be reasonably required by the Secured Party.
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(d) Anything to the contrary herein notwithstanding, the
Secured Party hereby acknowledges that mortgages with respect to the real
property owned by the Company shall not be prepared and filed until the Secured
Party specifically so requests in writing to the Company. Upon receipt of such
written request from the Secured Party, the Company shall promptly prepare and
file such mortgages.
2.4 Appointment as Attorney and Agent for the Company with Respect to
Security Interest. The Company hereby irrevocably appoints the Secured Party as
its lawful attorney and agent, with full power of substitution, to execute and
deliver, on behalf of and in the name of such Company, such financing
statements, assignments, mortgages, notices, pledges and other documents and
agreements, and to take such other action (including any contemplated by Section
2.1, 2.2 or 2.3), as the Secured Party may reasonably deem necessary for the
purpose of the creation, perfection, maintenance or continuation of the Security
Interest, under any applicable law, and the Secured Party is hereby authorized
to file on behalf of and in the name of the Company, at the Company's expense,
such financing statements, assignments, mortgages, notices, pledges and other
documents and agreements in any appropriate governmental office. The right is
expressly granted to the Secured Party in its discretion, in those jurisdictions
where the same is permitted, to file one or more financing statements under the
Uniform Commercial Code signed only by the Secured Party, naming the Company as
debtor and naming the Secured Party as secured party and indicating therein the
types, or describing the items, of the Collateral.
2.5 Disposition of Collateral. So long as any of the Obligations of the
Company is outstanding and unpaid and unless the Secured Party shall have
otherwise consented in writing, the Company shall not sell, assign, transfer or
otherwise dispose of any Collateral to anyone other than the Secured Party,
provided, however, that, notwithstanding the foregoing, so long as no Default
shall have occurred and be continuing, (i) Inventory may be sold in the ordinary
course of business and (ii) Equipment and Inventory that is, in the reasonable
judgment of the Company, obsolete or no longer useful in the conduct of the
Company's business may be sold or disposed of. The inclusion of "proceeds" of
the Collateral under the Security Interest shall not be deemed a consent by the
Secured Party to any sale or other disposition of any part or all of the
Collateral.
2.6 Location of Collateral; Change of Name, etc. The Company
represents, warrants and covenants that:
(a) The Company's chief executive office and principal place
of business, and the books and relating to the Collateral of the Company, are
located at 12498 Wyoming Avenue South, Savage, Minnesota 55378. The Company will
not move its chief executive offices, principal places of business or the books
and records specified in this subsection (a), or change its name or identity,
without giving the Secured Party sixty days' prior notice thereof.
(b) The present corporate name of the Company is as set forth
on the signature page hereto. Following the closing under the Purchase
Agreement, the Company shall change its name to "GreenMan Technologies of
Minnesota, Inc.," and the Company shall not thereafter
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<PAGE>
change such name, conduct its business in any name other than such name or take
title to any Collateral in any name other than such name while this Security
Agreement remains in effect until (i) it shall have given to the Secured Party
not less than 60 days' prior written notice of its intention to do so, setting
forth such name or names and providing such other information in connection
therewith as the Secured Party may reasonably request, and (ii) with respect to
such new name or names, it shall have take such action as the Secured Party may
reasonably request (including, without limitation, all action required by
Section 2.3 hereof), to maintain the Security Interest granted hereby in full
force and effect.
(c) The Equipment and Inventory included in the Collateral are
located at the addresses set forth on the schedule attached hereto as Schedule
A. The Equipment and Inventory will be kept solely at the locations referred to
on Schedule A and will not be moved (except to another location listed on the
Schedule A), sold or otherwise disposed of except to the extent expressly
permitted hereunder. None of the Inventory is stored with or in the possession
of any bailee, consignee, warehouseman, or other similar person. The Company
shall not establish any new location until (i) it shall have given to the
Secured Party not less than 60 days' prior written notice of its intention so to
do, clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request, and (ii) with
respect to such new location, it shall have taken such action, reasonably
satisfactory to the Secured Party (including, without limitation, all action
required by Section 2.3 hereof), to maintain the Security Interest granted
hereby at all times fully perfected and in full force and effect. The Collateral
shall be insured at all times against all expected risks to which such
Collateral may be exposed, including without limitation fire and extended
coverage.
2.7 Notice to Account Debtors; Possession of Collateral. If there shall
occur and be continuing for in excess of ten (10) days without being waived or
cured any Default, the Secured Party may do any or all of the following:
(a) The Secured Party may (i) notify, or request the Company
to notify, in writing any account debtor or other obligor with respect to any of
the Collateral to make payment to the Secured Party, or any agent or designee of
the Secured Party, at such address as may be specified by the Secured Party, or
(ii) direct the Company to hold all payments which it receives with respect to
any of the Collateral in trust for the Secured Party, and the Company shall so
hold such funds without commingling them with other funds of the Company and
shall, in accordance with the directions of the Secured Party, either (A)
deliver the same to the Secured Party, or any agent or designee of the Secured
Party, immediately upon receipt by the Company in the identical form received,
together with any necessary endorsements, or (B) immediately deposit them in a
separate account maintained with or by any agent or designee of the Secured
Party, in which only such payments and other proceeds of Collateral shall be
deposited. When any notice to make payments directly to the Secured Party or any
such agent or designee shall have been given pursuant to clause (i) above, the
Company shall no longer have any right to collect the affected Collateral. If
notwithstanding the giving of any notice, any account debtor or other obligor
shall make payment to the Company the Company shall hold all such payments it
receives in trust for the Secured Party without commingling the same with
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<PAGE>
other funds of the Company and shall deliver the same to the Secured Party or
any such agent or designee, immediately upon receipt by the Company in the
identical form received, together with any necessary endorsements. The Company
shall not, without the Secured Party's consent, grant any extension of time for
payment with respect to the Collateral, compromise, compound or settle the same
for less than the full amount thereof, release wholly or partly any person
liable for the payment thereof, or allow any credit or discount whatsoever
thereon. In its own name or in the name of the Company or the Secured Party, the
Secured Party may demand, sue for, collect or receive any of the Collateral or
any payment in respect thereof. The Secured Party may settle or adjust disputes
and claims directly with account debtors and other obligors of the Company for
amounts and on terms which the Secured Party considers advisable and may endorse
the Company's name on any checks, notes, acceptances, drafts or other forms of
payment or security that may come into the Secured Party's possession. Nothing
herein contained shall be construed as requiring or obligating the Secured Party
or any such agent or designee, to make any demand, or to make an inquiry as to
the nature of sufficiency of any payment received by it or to present or file
any claim or notice or take any action with respect to any Collateral or the
monies due or to become due thereunder or to take any steps necessary to
preserve any rights against prior parties. Neither the Secured Party nor its
agent or designee shall have any liability to the Company for actions taken in
good faith pursuant to this Section.
(b) The Secured Party may, but shall not be obligated to,
deliver any amounts received from, or deposited by, the Company pursuant to
paragraph (a) above to the Company for use by the Company in the ordinary course
of its business, but the security interest in any such proceeds delivered to the
Company shall continue and shall not be affected by such delivery and the
Company shall not commingle any proceeds so delivered with any of its other
funds.
(c) The Secured Party may at any time and from time to time,
with or without judicial process or the aid or assistance of others: enter upon
any premises in which Collateral may be located and, without resistance or
interference by the Company, take physical possession of any items of Collateral
and maintain such possession on the Company's premises or move the same or any
part thereof to such other places as the Secured Party shall choose without
being liable to the Company on account of any losses, damage or depreciation
that may occur as a result thereof so long as the Secured Party shall act
reasonably and in good faith; dispose of all or any part of the Collateral on
any premises of the Company; require the Company to assemble and make available
to the Secured Party at the expense of the Company all or any part of the
Collateral at any place and time designated by the Secured Party; or remove all
or any part of the Collateral from any premises in which any part may be located
for the purpose of effecting sale or other disposition thereof.
2.8 Additional Rights. In addition to all other rights and remedies
granted to the Secured Party hereunder and by operation of law or otherwise and
not in derogation of any such rights, the Secured Party may without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived, exercise all of the remedies of a secured party under the Uniform
Commercial Code of as enacted in any applicable jurisdiction in which any
Collateral may be located. In addition, the Company agrees that without the same
having the
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<PAGE>
effect of releasing any or all of the Collateral or otherwise prejudicing any
rights of the Secured Party hereunder, the Secured Party may (a) grant
extensions, renewals or indulgences with respect to the Obligations; (b) take or
release other property as security for the Obligations, and may release any
obligor or other person primarily or secondarily liable for any of the
Obligations; and (c) (i) sell or cause to be sold such of the Collateral as it
may in its sole discretion deem desirable without being required simultaneously
or later similarly to sell or dispose of the balance of the Collateral or any
other property or other security at the time available to it and without being
required to resort to any guaranty or any other security or sources of
reimbursement which may at the time be available to it; and (ii) apply to the
Obligations the proceeds of the Collateral or any portion thereof, or any amount
received on account of the Collateral or any portion thereof, by the exercise of
any right permitted hereunder, without resorting to and without regard to any
guaranty, other security or sources of reimbursement which may at the time be
available to it.
Without limiting the generality of the foregoing or anything else in
this Agreement, the Secured Party may buy any part or all of the Collateral at
any public sale and if any part or all of the Collateral is of a type
customarily sold in a recognized market or is of the type which is the subject
of widely-distributed standard price quotations, the Secured Party may, in its
sole and absolute discretion, buy at private sale and may make payments therefor
by any means including without limitation cancellation of indebtedness secured
thereby. The Company recognizes that the Secured Party may be unable to effect a
public sale of certain of the Collateral by reason of certain prohibitions
contained in federal and state securities laws, or in other applicable laws, to
which such Collateral may be subject but may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers. The Company
agrees that any such private sales may be at prices and other terms less
favorable to the seller than if sold at public sales and that such private sales
shall be deemed to have been made in a commercially reasonable manner. The
Secured Party shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit the issuer of any
securities constituting a part thereof to register such securities for public
sale under the said federal or state securities laws or other applicable law,
even if the issuer would agree to do so.
2.9 Application of Proceeds. All proceeds from each sale of, or other
realization upon, all or any part of the Collateral of the Company, including
without limiting the foregoing all amounts paid to or deposited with the Secured
Party pursuant to Section 2.7(a), shall be applied or paid over as follows:
(i) first, to the payment of all reasonable costs and
expenses incurred in connection with such sale or other
realization, including reasonable attorneys' fees;
(ii) second, to the payment of the Obligations (with the
Company remaining liable for any deficiency); and
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(iii) third, the balance (if any) of such proceeds from the
sale of, or other realization upon, all or any part of
the Collateral of the Company shall be paid to the
Company, subject to any duty imposed by law or otherwise
to the holder of any subordinate lien in the Collateral
known to the Secured Party or subject to the direction
of a court of competent jurisdiction.
3. Miscellaneous.
3.1 Notices.
Any notice, request or other communication required or desired to be served,
given or delivered under this Pledge shall be in writing and shall be deemed to
have been validly served, given or delivered five (5) days after deposit in the
United States mails, registered or certified mail, with proper postage prepaid
and addressed to the party to be notified as follows:
If to the Company: c/o GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Attention: Maurice E. Needham
Telephone: (617) 224-2411
Telecopy: (617) 224-0014
With a copy to: Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: John A. Piccione, Esq.
Telephone: (617) 338-2800
Telecopy: (617) 338-2880
If to the Secured Party: Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: Secretary
Telephone: (281) 870-8100
Telecopy: (281) 870-7825
With a copy to: Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: John A. Hale, Jr., Esq.
Telephone: (281) 870-7138
Telecopy: (281) 870-7825
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<PAGE>
or to such other address as either party may hereafter designate for itself by
written notice to the other party in the manner herein prescribed.
3.2 Waivers. The rights and remedies of the Secured Party under this
Agreement shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have, now or hereafter existing at law or in equity or by
statute or otherwise, and no failure or delay by the Secured Party in exercising
any right shall operate as a waiver of such right, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right. Any term, covenant, agreement or
condition of this Agreement may be amended with the written consent of the
Company and the Secured Party or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or prospectively)
in writing by the Secured Party, and in any such event the failure to observe,
perform or discharge any such covenant, condition or obligation (whether such
amendment is executed or such consent or waiver is given before or after such
failure) shall not be construed as a breach of such covenant, condition or
obligation or a default hereunder.
3.3 Specific Performance. The Company recognizes that the rights of the
Secured Party hereunder are unique and, accordingly, the Secured Party shall, in
addition to such other remedies as may be available to it at law or in equity,
have the right to enforce its rights hereunder by actions for injunctive relief
and specific performance to the extent permitted by law. The Company hereby
waives any requirement for security or the posting of any bond in connection
with any temporary or permanent award of injunctive, mandatory or other
equitable relief. This agreement is not intended to limit or abridge any rights
of the Secured Party which may exist apart from this agreement.
3.4 Assignment. All the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Secured Party.
3.5 Defeasance. This Security Agreement shall terminate upon the
payment and performance of the Obligations in full; provided that, if at any
time any payment made in respect of the Obligations shall be recovered or
rescinded by or on behalf of the Company or must be otherwise restored or
returned, whether upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Company's obligations under this Agreement shall
continue to be effective or be reinstated, as the case may be, and shall
continue as though such payment had not been made.
3.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
3.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws (other than the laws governing conflict of law matters)
of The
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Commonwealth of Massachusetts except to the extent that matters of title, or
creation, perfection and priority of the security interests created hereby, or
procedural issues of foreclosures are required to be governed by the laws of the
state in which the collateral, or part thereof, is located.
3.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
3.9 Number. Whenever used herein, the singular number shall include the
plural and the plural shall include the singular.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
BFI TIRE RECYCLERS OF MINNESOTA,
INC.
By: /s/ Robert D. Maust
Title: President
BROWNING-FERRIS INDUSTRIES
OF MINNESOTA, INC.
By: /s/ Gerald K. Burger
Title: Vice President
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Schedule A to Security Agreement
Location of Collateral
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Pledge") is entered into as of the 30th
day of June, 1997 by GreenMan Acquisition Corp., a Delaware corporation
("Pledgor") in favor of Browning-Ferris Industries of Minnesota, Inc., a
Minnesota corporation, and Browning-Ferris Industries of Georgia, Inc., a
Georgia corporation (collectively, "Pledgee").
WITNESSETH:
A Pursuant to a Purchase and Sale Agreement dated as of June 30, 1997
(the "Purchase Agreement") by and among GreenMan Technologies, Inc., Browning
Ferris Industries, Inc., Pledgor and Pledgee, Pledgor has acquired from Pledgee
all the issued and outstanding capital stock of BFI Tire Recyclers of Minnesota,
Inc., a Minnesota corporation ("BTM"), and BFI Tire Recyclers of Georgia, Inc.,
a Georgia corporation ("BTG").
B. Pursuant to the Purchase Agreement, Pledgor has delivered to Pledgee
the Note (as defined in the Purchase Agreement) and is to deliver the Final
Working Capital Note (as defined in the Purchase Agreement and, together with
the Note, the "Notes").
C. Pledgee has required as a condition to the consummation of the
transactions contemplated by the Purchase Agreement, and in order to secure the
prompt and complete payment, observance and performance of Pledgor's obligations
under the Agreement and all of Pledgor's obligations and liabilities under the
Notes (all such obligations and liabilities being hereinafter referred to
collectively as the "Obligations"), that Pledgor execute and deliver this Pledge
to Pledgee.
NOW, THEREFORE, for and in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms used herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings assigned to them below or in the Purchase Agreement (unless otherwise
defined):
"Collateral" means the Pledged Shares (as hereinafter defined) and any
other property at any time, whether now or hereafter, pledged with Pledgee
hereunder (whether described herein or not) and all income therefrom, increases
therein; proceeds thereof and replacements and substitutions therefor.
"Default" means Pledgor's failure to observe or perform any obligations
under this Pledge or to pay any and all amounts due under the Notes.
"Pledged Shares" means all shares of the capital stock of BTM or BTG
now or at any time or times hereafter owned by Pledgor.
<PAGE>
2. Grant of Security Interest. As security for the complete payment,
observance and performance of the Obligations, Pledgor hereby grants to Pledgee,
a security interest in the Collateral. Certificates representing all of the
Pledged Shares, accompanied by stock powers duly executed in blank by Pledgor,
have been delivered to Pledgee by Pledgor.
In case Pledgor shall acquire, by purchase, stock dividend, stock
split, distribution of capital or otherwise, any additional securities of any
class of securities of BTM or BTG or any securities exchangeable for or
convertible into any class of securities of BTM or BTG, Pledgor shall forthwith
pledge and deliver such additional or other securities to Pledgee under this
Pledge, accompanied by stock powers and/or assignments duly executed in blank by
or on behalf of Pledgor.
3. Representations, Warranties and Covenants of Pledgor. Pledgor
represents and warrants that (a) the Pledged Shares have, to the best of
Pledgor's knowledge, been validly and legally issued and are fully paid and
nonassessable; (b) Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Shares, subject to no pledges, liens,
charges, options, restrictions or other encumbrances known to Pledgor other than
(1) the lien of this Pledge and (2) restrictions imposed by applicable
securities laws; (c) Pledgor has the corporate power and authority to enter into
this Pledge; (d) pursuant to this Pledge, and so long as Pledgee retains
possession of the Collateral, the Pledgee has and at all times will have a
valid, prior and perfected security interest in the Collateral in accordance
with the terms hereof; (e) neither this Pledge, nor the pledge of the Pledged
Shares hereunder, will violate any agreement or commitment to which Pledgor is a
party or by which Pledgor or any of its property is bound or affected; and (f)
this Pledge is the valid and binding obligation of the Pledgor, enforceable in
accordance with its terms except as enforceability is subject to applicable
bankruptcy, reorganization, moratorium, fraudulent conveyance, insolvency and
similar laws and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
3.1 General Covenants. Pledgor covenants that it will:
(a) not sell, assign, exchange or otherwise dispose of any
Collateral or any interest therein;
(b) not grant, create or permit to exist any lien, security
interest or other charge or encumbrance upon or with respect to any of the
Collateral, other than the security interests therein created hereby or
specified in Section 3 above;
(c) not take or fail to take any action that would impair the
value of any of the Collateral; and
(d) pay or cause to be paid when due all taxes, assessments
and governmental charges, if any, levied or assumed or imposed upon or with
respect to any of the Collateral.
4. Liquidation, Recapitalization, Etc. In case any distribution of
capital or stock dividend shall be made on or in respect of any of the Pledged
Shares, or any money or property
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<PAGE>
shall be distributed upon or with respect to any of the Pledged Shares, pursuant
to a recapitalization or reclassification of the capital of BTM or BTG or
pursuant to a reorganization or liquidation or dissolution of BTM or BTG, the
money or property so distributed shall be delivered to Pledgee to be held by it
as part of the Pledged Shares and as security for the Obligations. All sums of
money and property, if any, paid or distributed in respect of the Pledged
Shares, upon such a liquidation, dissolution, reorganization, recapitalization
or reclassification, which are received by Pledgor shall, until paid or
delivered to Pledgee, be held in trust for Pledgee as part of the Collateral and
as security for the Obligations.
5. Dividends, Voting, Etc., Prior to Maturity. Unless and until a
Default shall have occurred and be continuing, and until notice of such Default
has been given by Pledgee, Pledgor shall be entitled to receive all regular cash
dividends paid in respect of the Pledged Shares, to vote the Pledged Shares and
to give consents, waivers and ratifications in respect of the Pledged Shares;
provided, however, that no vote shall be cast, or consent, waiver or
ratification given or action taken that would be inconsistent with or violate
any provisions of any of the Notes or of this Pledge,. Until the occurrence and
continuance of a Default, Pledgee shall pay over to Pledgor, forthwith upon
receipt, all regular cash dividends paid on the Pledged Shares, and shall
execute and deliver to Pledgor such proxies or other documents in writing as may
be necessary to enable Pledgor to exercise the foregoing rights. All such rights
of Pledgor to receive regular cash dividends on the Pledged Shares, to vote and
give consents, waivers and ratifications shall cease forthwith in case a Default
shall have occurred and be continuing, without any notice (except as provided in
this Section 5) or demand by Pledgee to Pledgor.
6. Remedies. If a Default shall have occurred and be continuing for in
excess of ten (10) days without being waived or cured, Pledgee shall thereafter
have the following rights and remedies (to the maximum extent permitted by
applicable law) in addition to the rights and remedies of a secured party under
the Uniform Commercial Code of The Commonwealth of Massachusetts, all such
rights and remedies being cumulative, not exclusive, and enforceable
alternatively, successively or concurrently, at such time or times as Pledgee,
in its sole and absolute discretion, deems expedient:
(a) Pledgee may vote any or all shares of the Pledged Shares
(whether or not the same shall have been transferred into its name or the name
of its nominee or nominees) and give all consents, waivers and ratifications in
respect of the Pledged Shares and otherwise act with respect thereto as though
it were the outright owner thereof (Pledgor hereby irrevocably constituting and
appointing Pledgee the proxy and attorney-in-fact of Pledgor, with full power of
substitution, to do so);
(b) Pledgee may demand, sue for, collect or make any
compromise or settlement Pledgee deems suitable in respect of any Collateral
held by it hereunder;
(c) Pledgee may sell, assign or otherwise transfer any or all
of the Collateral, for cash and/or credit and upon such terms, at such place or
places and at such time or times and to such Persons as Pledgee, in its sole and
absolute discretion, deems expedient, all without demand for performance by
Pledgor or any notice or advertisement whatsoever except such as may be required
by Applicable Law; and
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<PAGE>
(d) Pledgee may cause all or any part of the Pledged Shares
held by it to be transferred into its name or the name of its nominee or
nominees.
If any of the Collateral is sold by Pledgee upon credit or for future
delivery, Pledgee shall not be liable for the failure of the purchaser to pay
for the same and in such event Pledgee may resell such Collateral.
All proceeds from each sale of, or other realization upon, all or any
part of the Collateral shall be applied or paid over as follows:
(i) first, to the payment of all reasonable costs and expenses
incurred in connection with such sale or other realization,
including reasonable attorneys' fees;
(ii) second, to the payment of the Obligations (with Pledgor
remaining liable for any deficiency); and
(iii) third, the balance (if any) of such proceeds shall be paid to
Pledgor, subject to any duty imposed by law or otherwise to
the holder of any subordinate lien in the Collateral known to
Pledgee or subject to the direction of a court of competent
jurisdiction.
Pledgee may buy any part or all of the Collateral at any public sale
and if any part or all of the Collateral is of a type customarily sold in a
recognized market or is of the type which is the subject of widely-distributed
standard price quotations, Pledgee may, in its sole and absolute discretion, buy
at private sale and may make payments therefor by any means including, without
limitation, cancellation, in whole or in part, of any of the Obligations secured
thereby. Pledgee may, in its sole and absolute discretion, apply the cash
proceeds actually received from any sale or other disposition to the reasonable
expenses of retaking, holding, preparing for sale, selling and the like, to
reasonable attorneys fees, and all legal expenses, travel and other expenses
which may be incurred by Pledgee in attempting to collect the Obligations or to
enforce this Pledge, the Purchase Agreement or any instrument executed or
required to be executed pursuant hereto or thereto or any instrument evidencing
the Obligations or in the prosecution or defense of any legal action related to
the subject matter of this Pledge, the Purchase Agreement or any instrument
executed or required to be executed pursuant hereto or thereto or any Instrument
evidencing the Obligations, and then to the Obligations with respect to
principal or interest, or both, or other fees and expenses, in such proportions
as Pledgee, in its sole and absolute discretion, shall determine; and any
surplus shall be paid to Pledgor.
Pledgor recognizes that Pledgee may be unable to effect a public sale
of the Pledged Shares or other Collateral by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, or in other applicable
laws, regulations or agreements to which such Pledged Shares or other Collateral
may be subject but may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obligated to represent
and agree among other things, to acquire such Pledged Shares or other Collateral
for their own account, for investment, and not with a view to the distribution
or resale thereof. Pledgor agrees that any
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<PAGE>
such private sales may be at prices and other terms less favorable to the seller
than if sold at public sales and agrees that any such private sales shall be
deemed to have been made in a commercially reasonable manner. Pledgee shall be
under no obligation to delay a sale of any of the Pledged Shares for the period
of time necessary to permit the issuer of such securities to register such
securities for public sale under the said Securities Act or other applicable
law, even if the issuer would agree to do so.
7. Marshalling. Pledgee shall not be required to marshal any present or
future security for (including without limitation this Pledge and the Collateral
pledged hereunder), or guaranties of, the Obligations or any of them, or to
resort to such security or guaranties in any particular order; and all of the
rights hereunder and in respect of such security and guaranties shall be
cumulative and in addition to all other rights, however existing or arising. To
the maximum extent permitted by applicable law, Pledgor hereby agrees that it
will not invoke any law relating to the marshalling of collateral that might
cause delay in or impede the enforcement of Pledgee's rights under this Pledge
or any instrument executed or required to be executed pursuant hereto or under
any other instrument evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
guaranteed, and, to the maximum extent permitted by applicable law, Pledgor
hereby irrevocably waives the benefits of all such laws.
8. Pledgor's Obligations Not Affected. The obligations of Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any bankruptcy, insolvency, arrangement, readjustment,
composition or the like of Pledgor; (b) any exercise or nonexercise, or any
waiver, by Pledgee of any right, remedy, power or privilege under or in respect
of any of the Obligations or any security therefor (including this Pledge); (c)
any amendment to or modification of any of the Obligations; (d) any amendment to
or modification of any instrument (other than this Pledge) evidencing or
securing or guaranteeing any of the Obligations; or (e) the taking of additional
security for, or any guaranty of, any of the Obligations or the release or
discharge or termination of any security or guaranty for any of the Obligations;
whether or not Pledgor shall have notice or knowledge of any of the foregoing.
9. Termination. Upon payment and performance in full of the
Obligations, this Pledge shall terminate, and Pledgor shall be entitled to the
return of such of the Collateral in the possession or control of Pledgee as has
not theretofore been disposed of pursuant to the provisions hereof, together
with any moneys and other property of Pledgor at the time held by Pledgee
hereunder.
10. Further Assurances. Pledgor will do all such acts, and will furnish
to Pledgee all such financing statements, certificates, legal opinions and other
documents and will obtain all such governmental consents and approvals and will
do or cause to be done all such other things, including without limitation the
execution and delivery of further agreements and instruments, as Pledgee may
reasonably request from time to time in order to give full effect to this Pledge
and to secure the rights of Pledgee hereunder.
11. Successors and Assigns. This Pledge shall be binding upon Pledgor
and its successors and assigns and shall inure to the benefit of Pledgee and its
successors and assigns.
-5-
<PAGE>
Pledgor's successors and assigns shall include, without limitation, any
receiver, trustee or debtor-in-possession of or for Pledgor.
12. No Waiver, Etc. No act, failure or delay by Pledgee shall
constitute a waiver of its rights and remedies hereunder or otherwise. No single
or partial waiver by the Pledgee of any default or right or remedy which it may
have shall operate a waiver of any other default, right or remedy or of the same
default, right or remedy on a future occasion. Pledgor hereby waives
presentment, notice of dishonor and protest of all instruments, included in or
evidencing any of the Obligations or the Collateral, and any and all other
notices and demands whatsoever (except as expressly provided herein).
13. Notices. Any notice, request or other communication required or
desired to be served, given or delivered under this Pledge shall be in writing
and shall be deemed to have been validly served, given or delivered five (5)
days after deposit in the United States mails, registered or certified mail,
with proper postage prepaid and addressed to the party to be notified as
follows:
If to Pledgor: c/o GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Attention: Maurice E. Needham
Telephone: (617) 224-2411
Telecopy: (617) 224-0014
With a copy to: Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: John A. Piccione, Esq.
Telephone: (617) 338-2800
Telecopy: (617) 338-2880
If to Pledgee: c/o Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: Secretary
Telephone: (281) 870-8100
Telecopy: (281) 870-7825
With a copy to: Browning Ferris Industries, Inc.
757 North Eldridge
Houston, Texas 77079
Attention: John A. Hale, Jr., Esq.
Telephone: (281) 870-7138
Telecopy: (281) 870-7825
or to such other address as either party may hereafter designate for itself by
written notice to the other party in the manner herein prescribed.
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<PAGE>
14. Paragraph Headings. The paragraph headings in this Pledge are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions of this Pledge.
15. Counterparts. This Pledge may be executed in separate counterparts,
each of which shall be an original and all of which taken together shall
constitute one and the same instrument.
16. Applicable Law. This Pledge shall be governed by and construed in
accordance with the internal laws (as distinguished from the conflicts of law
provisions) of The Commonwealth of Massachusetts. Whenever possible, each
provision of this Pledge shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Pledge shall be
held to be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge.
IN WITNESS WHEREOF, Pledgor and Pledgee have executed on the day and
year first above written.
GREENMAN ACQUISITION CORP.
By: /s/ Maurice E. Needham
Title: President
BROWNING-FERRIS INDUSTRIES OF
MINNESOTA, INC.
By: /s/ Gerald K. Burger
Title: Vice President
BROWNING-FERRIS INDUSTRIES OF
GEORGIA, INC.
By: /s/ Gerald K. Burger
Title: Vice President
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GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty") is made and entered into as
of June 30, 1997 by GreenMan Technologies, Inc., a Delaware corporation (the
"Guarantor"), in favor of Browning-Ferris Industries of Minnesota, Inc., a
Minnesota corporation ("BFIM"), and Browning-Ferris Industries of Georgia, Inc.,
a Georgia corporation ("BFIG").
RECITALS
A. Pursuant to a Purchase and Sale Agreement dated as of June 30, 1997
(the "Purchase Agreement") by and among Guarantor, GreenMan Acquisition Corp., a
Delaware corporation ("GAC"), Browning-Ferris Industries, Inc. ("BFI"), BFIM and
BFIG (collectively, BFI, BFIM and BFIG are referred to herein as the "Sellers"),
GAC has acquired all the issued and outstanding capital stock of BFI Tire
Recyclers of Minnesota, Inc., a Minnesota corporation ("BTM"), and BFI Tire
Recyclers of Georgia, Inc., a Georgia corporation ("BTG").
B. Pursuant to the Purchase Agreement and in partial payment for the
stock of BTM and BTG, GAC has delivered to BFIM and BFIG the Note (as defined in
the Purchase Agreement) and is to deliver the Final Working Capital Note (as
defined in the Purchase Agreement and, together with the Note, the "Notes").
C. The Guarantor is the owner of all the issued and outstanding capital
stock of GAC.
D. It is a condition precedent to the obligation of Sellers to enter
into the Purchase Agreement that the Guarantor execute and deliver this
Guaranty.
E. The Guarantor hereby acknowledges that in view of its equity
interest in GAC, the financial accommodations from BFIM and BFIG to GAC
contemplated by the Notes will inure to the benefit of the Guarantor.
NOW THEREFORE, in consideration of the foregoing premises and in order
to induce the Sellers to enter into the Purchase Agreement, the Guarantor hereby
agrees as follows:
1. Guaranty. The Guarantor unconditionally guarantees the full and
prompt payment and performance when due of all of GAC's payment obligations
under the Notes (the "Guaranteed Obligations"). In the event that GAC defaults
in the payment or performance when due, of any of the Guaranteed Obligations,
the Guarantor will pay, on demand, the full amount of such Guaranteed
Obligations in immediately available funds at the place provided in the Notes.
The Guarantor further agrees to pay all reasonable costs and expenses including,
without limitation, all court costs and reasonable attorneys' fees and expenses,
paid or incurred by BFI in endeavoring to collect all or any part of the
Guaranteed Obligations from, or in prosecuting any action against, the Guarantor
or any other guarantor of all or any part of the Guaranteed Obligations. This
Guaranty is a guarantee of payment and performance and not a guarantee of
collection.
2. Guaranty Absolute. The Guarantor hereby agrees that, except as
hereinafter provided, its obligations under this Guaranty shall be
unconditional, irrespective of (a) the validity or enforceability of the
Guaranteed Obligations or of any promissory note or other
<PAGE>
document evidencing all or any part of the Guaranteed Obligations, including,
without limitation, the Notes, (b) the absence of any attempt to collect the
Guaranteed Obligations from GAC or any other guarantor or other action to
enforce the same, (c) the waiver or consent by BFIM or BFIG with respect to any
provision of any instrument evidencing the Guaranteed Obligations, or any part
thereof, any other guaranty of the Guaranteed Obligations, or any other
agreement now or hereafter executed by or on behalf of GAC and delivered to BFIM
or BFIG, (d) any surrender, release or exchange of any security or collateral
for the Guaranteed Obligations, (e) failure by BFIM or BFIG to take any steps to
perfect and maintain its security interest in, or to preserve its rights to, any
security or collateral for the Guaranteed Obligations, or (g) any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor or of GAC.
3. Waiver. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of receivership or
bankruptcy of GAC, protest or notice with respect to the Guaranteed Obligations
and all demands whatsoever, and covenants that this Guaranty will not be
discharged, except by complete performance of the obligations contained herein.
Upon default by GAC in the payment and performance of the Guaranteed
Obligations, BFIM or BFIG may proceed directly and at once, without notice, and
notwithstanding any stay, enjoinment or other prevention of acceleration or
collection of the Guaranteed Obligations as against GAC or any other party,
against the Guarantor to collect and recover the full amount or any portion of
Guaranteed Obligations without first proceeding against GAC or any other person,
firm, guarantor or corporation, or against any security or collateral for the
Guaranteed Obligations. BFIM and BFIG shall have the exclusive right to
determine the application of payments and credits, if any, from the Guarantor,
GAC or from any other person, firm or corporation, on account of the Guaranteed
Obligations or of any other liability of the Guarantor to BFIM and BFIG.
4. Amendments, Extensions, Modifications, Partial Payments, Releases,
Etc. BFIM and BFIG are hereby authorized, without notice, consent or demand and
without affecting the liability of the Guarantor hereunder, to, from time to
time, (a) renew, extend, accelerate or otherwise change the time for payment of,
or other terms relating to, the Guaranteed Obligations, or otherwise modify,
amend or change the terms of any promissory note (including the Notes) or other
agreement, document or instrument now or hereafter executed by GAC or any other
guarantor of the Guaranteed Obligations and delivered to BFIM and BFIG; (b)
accept partial payments on the Guaranteed Obligations; (c) take and hold
security or collateral for the payment of the Guaranteed Obligations guaranteed
hereby, or for the payment of this Guaranty, or for the payment of any other
guaranties of the Guaranteed Obligations or other liabilities of GAC, and
exchange, enforce, waive and release any such security or collateral; (d) apply
such security or collateral and direct the order or manner of sale thereof as in
its discretion it may determine; and (e) settle, release, compromise, collect or
otherwise liquidate any or all of the Guaranteed Obligations, any other
guarantor of the Guaranteed Obligations and any security or collateral therefor
in any manner, in each case without affecting or impairing the obligations of
the Guarantor hereunder.
5. No Guaranteed Obligation to Marshal Assets; Reversal of Payments.
The Guarantor consents and agrees that BFIM and BFIG shall be under no
obligation to marshal any
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<PAGE>
assets in favor of the Guarantor or against or in payment of any or all of the
Guaranteed Obligations. The Guarantor further agrees that, to the extent that
GAC makes a payment or payments to BFIM and BFIG receive any proceeds of
collateral, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to GAC, its estate, trustee, receiver or any other party,
including, without limitation, the Guarantor, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Guaranteed Obligations or part thereof which have been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred.
6. Subrogation; Subordination. The Guarantor hereby waives all rights
of subrogation to the claims of BFIM and BFIG against GAC and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity from
GAC or any other person with respect to the Guaranteed Obligations
7. Waivers by BFIM and BFIG. No delay on the part of BFIM and BFIG in
the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by BFIM and BFIG of any right or remedy shall
preclude any further exercise thereof; nor shall any modification or waiver of
any of the provisions of this Guaranty be binding upon BFIM and BFIG, except as
expressly set forth in a writing duly signed and delivered on BFIM and BFIG's
behalf by an authorized officer or agent of BFIM and BFIG. BFIM and BFIG's
failure at any time or times hereafter to require strict performance by GAC or
the Guarantor of the Guaranteed Obligations or any of the provisions,
warranties, terms and conditions contained in any promissory note (including,
without limitation, the Notes), security agreement, agreement, guaranty,
instrument or document now or at any time or times hereafter executed by GAC or
the Guarantor and delivered to BFIM and BFIG shall not waive, affect or diminish
any right of BFIM and BFIG at any time or times hereafter to demand strict
performance thereof and such right shall not be deemed to have been waived by
any act or knowledge of BFIM and BFIG, or its respective agents, officers or
employees, unless such waiver is contained in an instrument in writing signed by
an officer or agent of BFIM and BFIG and directed to GAC specifying such waiver.
No waiver by BFIM and BFIG of any default shall operate as a waiver of any other
default or the same default on a future occasion, and no action by BFIM and BFIG
permitted hereunder shall in any way affect or impair BFIM and BFIG's rights or
the obligations of the Guarantor under this Guaranty. Any determination by a
court of competent jurisdiction of the amount of any principal and/or interest
owing by GAC to BFIM and BFIG shall be conclusive and binding on the Guarantor
irrespective of whether the Guarantor was a party to the suit or action in which
such determination was made.
8. Continuing Guaranty. The Guarantor agrees that this Guaranty shall
continue in full force and effect and may not be terminated or otherwise revoked
until the Guaranteed Obligations have been fully paid and discharged and all
financing arrangements between GAC and BFIM and BFIG have been terminated.
9. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor and upon its successors and assigns and shall inure to the benefit of
BFIM's and BFIG's successors
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<PAGE>
and assigns; all references herein to GAC and to the Guarantor shall be deemed
to include their respective successors and assigns. GAC's and the Guarantor's
successors and assigns shall include, without limitation, any receiver, trustee
or debtor-in-possession of or for GAC or the Guarantor, as the case may be.
10. Governing Law. This Guaranty shall be interpreted and the rights
and liabilities of the guarantor and the lender determined in accordance with
the internal laws (as opposed to the conflict of law provisions) of The
Commonwealth of Massachusetts.
11. Severability. Wherever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
12. Section Headings. The section headings in this Guaranty are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions of this Guaranty.
13. Execution in Counterparts. This Guaranty may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantor as of the date first above written.
GREENMAN TECHNOLOGIES, INC.
By: /s/ Maurice E. Needham
Title: Chief Executive Officer
Acknowledged and agreed to,
this 30th day of June, 1997.
BROWNING-FERRIS INDUSTRIES OF BROWNING-FERRIS INDUSTRIES OF
MINNESOTA, INC. GEORGIA, INC.
By: /s/ Gerald K. Burger By: /s/ Gerald K. Burger
Title: Vice President Title: Vice President
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GREENMAN TECHNOLOGIES COMPLETES ACQUISITION OF
BFI TIRE RECYCLING OPERATIONS
LYNNFIELD, Mass., July 7, 1997 -- GreenMan Technologies, Inc. (NASDAQ:
GMTI, BSE: GMY) announced today that it has completed the acquisition of BFI
Tire Recyclers of Minnesota, Inc. (Savage, MN) and BFI Tire Recyclers of
Georgia, Inc. (Jackson, GA) from Browning-Ferris Industries of Houston, Texas
("BFI"). These operations bring to GreenMan approximately $8 million in
profitable annual revenues and the addition of high-volume scrap tire collection
and processing capabilities.
Under the terms of the Agreement, GreenMan paid a total of
approximately $5.4 million for all of the outstanding common stock of the two
BFI tire recycling subsidiaries; while BFI retained substantially all of the
fixed liabilities of the two subsidiaries. This purchase price is subject to
reduction, within 45 days, based upon completion of a final determination of
accounts receivable and inventory as of June 30, 1997. GreenMan has paid BFI
$650,000 in cash, and the balance is in the form of a 90-day note payable. The
Company anticipates refinancing the note through traditional asset-based
financing, as this is an asset-rich transaction.
As new GreenMan subsidiaries, these businesses will operate as GreenMan
Technologies of Minnesota, Inc. and GreenMan Technologies of Georgia, Inc.; and
will continue to provide the same level of quality and service that customers of
BFI Tire Recyclers of Minnesota and Georgia have come to expect. While servicing
existing and new customers, these operations will also expand to meet the
internal raw- material needs of GreenMan's growing operations.
Maury Needham, GMTI's CEO, stated: "This acquisition establishes
GreenMan as a major player in the tire recycling industry in the United States.
The operations represent two solid, well-established businesses with seasoned
management teams, signifying a reliable and cost effective source of raw
material for the Company's operations."
Joseph Levangie, GMTI's CFO, stated: "In addition to nearly tripling
GreenMan's current revenues, this acquisition eliminates our "Take or Pay"
obligation under the pre-existing agreement with BFI Tire Recyclers of Georgia
- -- reducing costs by $24.0 million over the twenty-year term of that
arrangement."
<PAGE>
PAGE 2. PRESS RELEASE: GREENMAN TECHNOLOGIES COMPLETES ACQUISITION OF BFI
TIRE RECYCLING OPERATIONS
GreenMan Technologies, Inc. manufactures and markets "environmentally
friendly" rubber and plastic-based products for sale to consumer and industrial
end-user markets. GreenMan's products are made using the Company's GEM-Stock
materials, made from recycled plastics and rubber from tires. Through its
DuraWear subsidiary, the Company manufactures and markets wear-resistant
ceramic, polymer composite and alloy steel products for bulk material handling
systems. Through its tire recycling division comprised of GreenMan Technologies
of Minnesota, Inc. and GreenMan Technologies of Georgia, Inc., the Company
provides scrap tire collection services and markets tire chips to the Tire
Derived Fuel ("TDF") and crumb rubber markets.
With the exception of the historical information contained in this
release, the matters described herein contain forward-looking statements that
involve risk and uncertainties that may individually or mutually impact the
matters herein described, including but not limited to product acceptance,
economic, competitive, governmental, results of litigation, technological and/or
other factors, which are outside the control of the Company.
# # # # # # # # # #
