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): May 5, 1997 (April 18, 1997)
GreenMan Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-13776 71-0724248
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
7 Kimball Lane, Building A, Lynnfield, Massachusetts 01940
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 224-2411
(Former name or former address, if changed since last report)
Total number of pages: 3
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Item 2. Acquisition or Disposition of Assets
On April 18, 1997, GreenMan Technologies, Inc. (the "Company")
announced that it had signed a letter of intent with Browning Ferris Industries,
Inc. ("BFI") of Houston, Texas to purchase all of the issued and outstanding
stock of BFI's tire recycling subsidiaries located in Jackson, Georgia and
Savage, Minnesota and to purchase certain tire processing related assets at
BFI's Asuza, California facility (hereinafter the purchase of the stock and
assets is referred to as the "Acquisition"). The letter of intent also granted
the Company an exclusive option to purchase BFI's Ford Heights, Illinois tire
recycling assets.
Upon the closing of the Acquisition, of which there can be no
assurance, the Company will pay BFI the sum of $4,850,000 in cash plus an amount
equal to the accounts receivable and inventory as shown on the balance sheets of
the three operations. The Company has already paid $100,000 to BFI as a good
faith deposit against the purchase price and will pay an additional $550,000
upon signing of the definitive Purchase and Sale Agreement. The Closing, which
is subject to legal and financial due diligence by the Company is expected to
occur in June 1997.
Item 5. Other Events
On April 21, 1997, (the "First Closing") and April 30, 1997 (the
"Second Closing"), in reliance upon the transaction exemption afforded by
Regulation D ("Regulation D") as promulgated by the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, GreenMan Technologies,
Inc. (the "Company") completed the sale of its Convertible Notes due October
1998 (the "Notes") in the aggregate principal amount of $1,500,000.
The Notes are convertible, at any time commencing 60 days after the
date of issuance and on or before one year from the date of issuance, into
shares of the Company's common stock, $.01 par value per share (the "Common
Stock"), at a conversion price per share equal to seventy percent (70%) of the
average of the closing bid prices of the Common Stock as reported by NASDAQ on
the five trading days immediately preceding the date on which such Note is
converted into Common Stock, provided however, that the conversion price per
share shall be no greater than seventy (70%) of the average of the closing bid
prices of Common Stock as reported by NASDAQ on the five trading days
immediately preceding the date of issuance of the Notes. Upon conversion of the
Notes, the Holder will also receive 400 shares of Common Stock for each $10,000
of principal converted in payment of any and all interest on the Note.
In connection with the sale of the Notes, the Company issued to each
purchaser a warrant to purchase one share of Common Stock for every $5.00 of
principal of Notes purchased by such investor (the "Warrants"). In the First
Closing, the Company issued Warrants to purchase an aggregate of 210,000 shares
exercisable at $1.00 per Warrant and in the Second Closing, the Company issued
Warrants to purchase an aggregate of 90,000 shares exercisable at $.96875 per
warrant. Each Warrant expires two years from the date of issuance thereof.
H.J. Meyers & Co., Inc. acted as placement agent (the "Placement
Agent") in the sale of the Notes and the Warrants and received an aggregate
placement fee equal to $150,000. In addition, the Placement Agent received an
aggregate of $45,000 as a non-accountable expense allowance. Warrants to
purchase 150,000 shares exercisable at $.96875 were also issued to the Placement
Agent and its designees.
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Pursuant to the terms of the Securities Purchase Agreement and the
Registration Rights Agreement between the Company and each of the purchasers,
the Company has agreed to register the Common Stock issuable upon conversion of
the Notes and exercise of the Warrants on a Form S-3 registration statement on
or before May 10, 1997.
Exhibits
The following exhibits are filed herewith:
10.1 Form of Securities Purchase Agreement between the Company and
the Investors
10.2 Form of Registration Rights Agreement between the Company and
the Investors
10.3 Form of Convertible Note due October 1998
10.4 Form of Common Stock Purchase Warrant
SIGNATURES
Pursuant to the requirements of the Securities and 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.
By: /s/ Joseph E. Levangie
Joseph E. Levangie
Chief Financial Officer
Date: May 5, 1997
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EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the "Agreement"), dated as of _________,
1997, is entered into by and between _______________________________, (the
"Purchaser") and GreenMan Technologies, Inc., (the "Company"). This is the
Agreement referred to as the "Purchase Agreement" in the Registration Rights
Agreement (as defined in Section 6(b) hereof).
The parties hereto agree as follows:
1. Purchase and Sale of Convertible Notes. Upon the basis of the
representations and warranties, and subject to the terms and conditions, set
forth in this Agreement, the Company covenants and agrees to sell to the
Purchaser on the Closing Date, at a purchase price of $_______ (the "Purchase
Price"), (i) a convertible note in registered form in a principal amount of
$_______ and substantially in the form of Exhibit A hereto (the "Note"), such
Note convertible at the option of the holder thereof into a number of Note
Shares determined pursuant to Article 3 of the Note according to the terms and
conditions set forth in the Note, and (ii) a warrant to purchase ______ shares
of the Company's Common Stock, $.01 par value per share (the "Common Stock") in
substantially the form of Exhibit B hereto (the "Warrant") , and upon the basis
of the representations and warranties, and subject to the terms and conditions
set forth in this Agreement, the Purchaser covenants and agrees to purchase from
the Company on the Closing Date the Note and the Warrant at the Purchase Price.
All capitalized terms not otherwise defined herein shall have the meanings
attributed to them in the Note and the Warrant.
2. Closing. The closing of the purchase and sale of the Note pursuant
to Section 1 hereof shall take place on ________, 1997 at the offices of Morse,
Zelnick, Rose & Lander LLP, located at 450 Park Avenue, Suite 902, New York, New
York 10022 or at such other date, time and place as the Purchaser and the
Company may agree upon in writing, or at such other time at which the Escrow
Agent shall have received all documents and instructions as it shall it its sole
judgment deem necessary and appropriate to consummate the transactions
contemplated hereby (such time and date for the closing, the "Closing Date").
The duly executed Note and Warrant to be purchased by the Purchaser shall be
delivered by, or on behalf of, the Company at the closing against payment of the
Purchase Price therefor in immediately available funds by, or on behalf of, the
Purchaser to the attorney trust account of Morse, Zelnick, Rose & Lander, LLP,
(the "Escrow Agent") (Chase Manhattan Bank, Account No. 967086639, ABA Routing
Number 021000021). The Escrow Agent shall receive from the Purchaser and the
Company written instructions of the Purchaser and the Company in substantially
the form of Exhibit C hereto (the "Closing Instructions"), instructing the
Escrow Agent with
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respect the closing and settlement procedures. Commencing on the second business
day after delivery to the Escrow Agent of the Purchase Price, the Purchaser, if
the Company is not ready, willing and able to consummate the transaction in
accordance with the terms of the Closing Instructions, may terminate the
proposed transaction by notice to the Company and the Escrow Agent, whereupon
the Escrow Agent shall redeliver the Purchase Price to the Purchaser as soon as
practicable in accordance with the written instructions of the Purchaser.
3. Representations. Warranties and Covenants of the Purchaser. The
Purchaser understands, and represents and warrants to, and agrees with, the
Company, that:
(a) The Note, the Note Shares, the Warrant and the shares issuable
upon exercise of the Warrant (the "Warrant Shares") (hereinafter, the Note, the
Note Shares, the Warrant and the Warrant Shares are collectively referred to as
the "Securities") have not been and, unless registered under the Securities Act
of 1933, as amended (the "Securities Act"), in accordance with the Registration
Rights Agreement (as defined in Section 6(b)), will not be registered under the
Securities Act, or any other applicable securities law, and, accordingly, may
not be offered, sold, transferred, pledged, hypothecated or otherwise disposed
of ("Transferred") unless registered under the Securities Act or Transferred in
a transaction exempt from registration under the Securities Act and any other
applicable securities law;
(b) The Purchaser is an "accredited investor" within the meaning
of Rule 501(a) under the Securities Act (an "Accredited Investor"), and is
acquiring or will acquire the Securities for its own account. The Purchaser has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Securities.
The Purchaser is aware that it may be required to bear the economic risk of an
investment in the Securities for an indefinite period, and it is able to bear
such risk for an indefinite period;
(c) The Purchaser is acquiring or will acquire the Securities for
its own account for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution thereof. The Purchaser agrees to
offer, sell or otherwise transfer the Securities only (i) in accordance with the
terms of this Agreement, the Note and the Warrant, as applicable, and (ii)
pursuant to registration under the Securities Act or an exemption from
registration under the Securities Act and any other applicable securities law;
and
(d) The Purchaser acknowledges that the Company and others will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and further agrees that if any of the
acknowledgments, representations and agreements deemed to have been made by the
Purchaser by its
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acquisition of the Securities are no longer accurate, it shall promptly notify
the Company.
(e) The Company has furnished or made available to the Purchaser a
full and complete set of its most recent definitive proxy statement in
connection with its 1996 Special meeting of stockholders, its Annual Report on
Form 10-KSB for its most recently completed fiscal year, its Form 10-QSB's for
each of its fiscal quarters since the end of its most recently completed fiscal
year and any Form 8-K's filed during its current fiscal year (collectively, the
"SEC Documents"), which the Company has filed pursuant to the Securities
Exchange Act of 1934, as amended.
4. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Purchaser that:
(a) The Company has been duly incorporated and is validly existing
as a corporation under the laws of Delaware.
(b) This Agreement and the Registration Rights Agreement (as
defined in Section 6(b)) have been duly authorized, executed and delivered by
the Company and constitute valid and binding agreements, enforceable in
accordance with their respective terms, and the Company has full corporate power
and authority necessary to enter into such agreements and to perform its
obligations thereunder.
(c) No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company
or any of its affiliates is required for execution of this Agreement or the
Registration Rights Agreement (as defined in Section 6(b)) and the performance
of its obligations under such agreements, including, without limitation, the
issuance and sale of the Securities (except for the registration of the Note
Shares and the Warrant Shares under the Securities Act pursuant to the
Registration Rights Agreement as defined in Section 6(b)).
(d) Neither the sale of the Note and Warrant pursuant to this
Agreement, nor the performance of its obligations under this Agreement, the
Note, the Warrant or the Registration Rights Agreement by the Company will:
(i) violate, conflict with, result in a breach of, or
constitute a default (or an event which with the giving of notice or the lapse
of time or both would be reasonably likely to constitute a default) under (A)
the certificate of incorporation or by-laws of the Company, (B) any decree,
judgment, order, law, treaty, rule, regulation or determination applicable to
the Company of any court, governmental agency or body, or arbitrator having
jurisdiction over the Company or over the properties or assets of the Company,
or (C) the terms of any bond, debenture, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan, indenture,
lease, mortgage, deed of trust or other instrument to
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which the Company is a party, by which the Company is bound, or to which any of
the properties of the Company is subject; or
(ii) result in the creation or imposition of any lien, claim or
other encumbrance upon any of the assets of the Company.
(e) The Note and Warrant, when issued and delivered pursuant to
this Agreement, will have been duly authorized, executed, issued and delivered
and will constitute a legal, valid, binding and enforceable obligation of the
Company.
(f) The Note Shares and Warrant Shares, when issued, (i) will be
free and clear of any security interests, liens, claims or other encumbrances,
(ii) will be duly and validly authorized and issued, (iii) will be fully paid
and nonassessable, (iv) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any securities of the
Company, and (v) will not subject the holders thereof to personal liability by
reason of being such holders.
(g) Except as set forth in the SEC Documents, there is no pending
or, to the best knowledge of the Company, threatened action, suit, proceeding or
investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company or any of its subsidiaries or affiliates
that would materially affect the results of operations of the Company or the
execution by the Company of, or the performance by the Company of its
obligations under, this Agreement, the Note, the Warrant or the Registration
Rights Agreement.
(h) The Company, any person representing the Company, and, to the
best knowledge of the Company, any other person selling or offering to sell the
Securities in connection with the transaction contemplated by this Agreement,
have not made, at any time, any oral communication in connection with the offer
or sale of the Securities which contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading.
(i) Assuming the accuracy of, and compliance with, the
representations, warranties and covenants of the Purchaser in this Agreement,
the sale of the Securities pursuant to this Agreement, the Note and the Warrant
has been made in accordance with the provisions and requirements of Section 4(2)
under the Securities Act ("Section 4(2)") and any applicable state law.
(j) None of the Company, any affiliate of the Company, or any
person acting on behalf of the Company or any such affiliate has engaged, or
will engage, in any general solicitation or general advertising with respect to
the Note and the Warrant.
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(k) The Company is duly qualified as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a material adverse
effect on the Company and its subsidiaries taken as a whole. The Company has
registered its Common Stock pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the Common Stock is listed and
trades on the Nasdaq Small Cap Market. The Company has not received any notices
for the delisting of the Common Stock. The Company has filed all materials
required to be filed pursuant to all reporting obligations under either Section
13(a) or 15(d) of the Exchange Act for the twelve (12) months immediately
preceding the offer or sale of the Notes and Warrants, and has received no
notice, either oral or written, with respect to the continued eligibility for
such listing. The Company has timely made all filings required under the
Exchange Act during the twelve month period preceding the date hereof and is
eligible to use Form S-3 to register the Note Shares and Warrant Shares.
(l) The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Notes and Warrants and issuance of
the Note Shares and the Warrant Shares as required by the United States laws and
the regulations or any domestic securities exchange or trading market.
(m) Since May 31, 1996, there has been no material adverse
development in the assets, liabilities, business properties, operations,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole, except as disclosed in the filings of the Company with the
SEC.
(n) None of the filings of the Company with the SEC since June 1,
1996 contained, at the time they were filed, any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company has since June 1, 1996 timely
filed all requisite forms, reports and exhibits thereto with the SEC.
(o) There is no known fact to the Company or any subsidiary (other
than general economic conditions generally known to the public) that has not
been disclosed in writing to the Purchaser that (i) could reasonably be expected
to have a material adverse effect on the condition (financial or otherwise) or
in the earnings, business affairs, business prospects, properties or assets of
the Company or any subsidiary, or (ii) could reasonably be expected to
materially and adversely affect the ability of the Company or any subsidiary to
perform its obligations pursuant to this Agreement.
5. Covenants of the Company. The Company covenants and agrees with the
Purchaser:
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(a) to comply with all requirements of Section 4(2) with respect
to the issuance and sale of the Securities including but not limited to the
filing of a Form D with the Securities and Exchange Commission;
(b) to notify the Purchaser promptly if at any time during the
period beginning on the date of this Agreement and ending on the Closing Date
(i) any event shall have occurred as a result of which any oral communication
made by the Company, any person representing the Company, or, to the best
knowledge of the Company, by any other person in connection with the
transactions contemplated by this Agreement would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or (ii) there is any public disclosure of material
information regarding the Company or its financial condition or results of
operation;
(c) to cause the Note Shares and Warrant Shares to be, when
converted and exercised in accordance with the terms of the Note and the
Warrant, upon delivery, fully paid, nonassessable, free of preemptive rights and
free from all taxes, liens, charges, security interests or other encumbrances;
and
(d) have at all times authorized and reserved for issuance, free
from preemptive rights, a sufficient number of shares of Common Stock to yield a
number of Note Shares and Warrant Shares sufficient to satisfy the conversion
rights of the Purchaser pursuant to the terms and conditions of the Note and the
Warrant.
(e) use its best efforts to maintain the listing of the Common
Stock on Nasdaq Small Cap Market.
6. Conditions Precedent to the Purchaser's Obligations. The obligations
of the Purchaser hereunder are subject to the performance by the Company of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent:
(a) The representations and warranties made by the Company in this
Agreement shall, unless waived by the Purchaser, be true and correct in all
material respects as of the date hereof and at the Closing Date, with the same
force and effect as if they had been made on and as of the Closing Date.
(b) The Company and the Purchaser shall have entered into a
Registration Rights Agreement (the "Registration Rights Agreement") in a form
satisfactory to the Purchaser.
(c) The Company will provide an opinion or opinions of counsel in
substantially the form of Exhibit D hereto.
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(d) None of the following shall have occurred: (i) any general
suspension of trading in, or limitation on prices listed for, the Common Stock
on the NASDAQ, (ii) a declaration of a banking moratorium or any suspension of
payments in respect to banks in the United States, (iii) a commencement of a
war, armed hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) in the case of the foregoing
existing at the date of this Agreement, a material acceleration or worsening
thereof, (v) at any time up to and including the day before the Closing Date,
the Company's Common Stock shall trade on the NASDAQ at a price below $.75 per
share, or (vi) any limitation by the federal or state authorities on the
extension of credit by lending institutions that materially and adversely
affects the Purchaser.
7. Conditions Precedent to the Company's Obligations. The obligations
of the Company hereunder are subject to the performance by the Purchaser of its
obligations hereunder and to the satisfaction of the condition precedent that
the representations and warranties made by the Purchaser in this Agreement
shall, unless waived by the Company, be true and correct in all material
respects as of the date hereof and at the Closing Date, with the same force and
effect as if they had been made on and as of the Closing Date.
8. Transfer of Securities.
(a) Securities Act Legend. Each certificate evidencing the Note,
the Note Shares, the Warrant, the Warrant Shares and any certificates issued
upon transfer or exchange of the Note, the Note Shares, the Warrant or the
Warrant Shares shall be stamped or imprinted with a legend substantially as
follows:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
STATE; AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION FROM,
THE REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
(b) Securities Act Compliance. Each holder (a "Holder") of a
certificate evidencing the Note, the Note Shares, the Warrant or the Warrant
Shares which bears the restrictive legend set forth in Section 8(a) above (the
"Restricted Securities"), and who proposes to Transfer (as defined in Section
3(a) of this Agreement) any Restricted Securities, shall give written notice to
the Company of such Holder's intention to effect such Transfer. Each such notice
shall describe the manner and circumstances of the proposed sale or other
disposition in sufficient detail and may be accompanied by an opinion of legal
counsel to the Holder. Promptly upon receipt of such notice, the Company shall
present a copy thereof (together with any
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accompanying opinion of legal counsel to the Holder) to its legal counsel, and
the following provisions shall apply:
(i) If, in the opinion of legal counsel to such Holder,
satisfactory in form and substance to the Company and its legal counsel, or if
such notice was not accompanied by an opinion of legal counsel to the Holder,
then, if, in the opinion of legal counsel to the Company, the proposed sale or
other disposition may be effected without registering the Restricted Securities
involved under the Securities Act or under state securities laws, such Holder
shall be entitled to Transfer such Restricted Securities in accordance with the
terms of the notice delivered to the Company. The Company will advise the
Holder, within five (5) business days after submission of such notice, whether
such Holder is entitled to so Transfer the Restricted Securities. If the Holder
is entitled to so Transfer, he shall submit the stock certificate or
certificates evidencing the Restricted Securities to be Transferred to the
Company in proper form for Transfer and accompanied by appropriate instruments
of Transfer. Restricted Securities thus Transferred (and each of the
certificates evidencing any untransferred balance of the Securities not so
transferred) shall bear the restrictive legend set forth in Section 8(a),
unless, in the opinion of both such legal counsel (or legal counsel to the
Company if the Holder did not present an opinion of its legal counsel), such
legend is not required by the applicable provisions of the Securities Act or
state securities laws; and
(ii) If in the reasonable opinion of either of such legal
counsel (or legal counsel to the Company if the Holder did not present an
opinion of its legal counsel), the proposed Transfer cannot be effected without
registering the Securities involved under the Securities Act or state securities
laws, such Holder shall not offer to Transfer or Transfer such Restricted
Securities unless and until such Restricted Securities have been registered
under the Securities Act or state securities laws for such purpose or an
exemption from such registration becomes available pursuant to Section 8(b)(i)
above. The Company has obligated itself to register the Note Shares and the
Warrant Shares pursuant to the terms of the Registration Rights Agreement, a
copy of which is attached hereto and made a part hereof.
9. Fees and Expenses. Each of the Purchaser and the Company agrees to
pay its own expenses incident to the performance of its obligations hereunder,
including, but not limited to, the fees, expenses and disbursements of such
party's counsel.
10. Survival of the Representations. Warranties. etc. The respective
agreements, representations, warranties, indemnities and other statements made
by or on behalf of the Company and the Purchaser, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling or under common control
with, such party and will survive delivery of any payment for the Securities.
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11. Notices. All notices, requests and other communications hereunder
must be in writing and delivered to the parties at the following addresses or
facsimile numbers:
If to the Purchaser, to:
Telecopy:
If to the Company, to:
GreenMan Technologies Inc.
7 Kimball Lane
Building A
Lynnfield, MA 01940
Attention: Charles E. Coppa
Telecopy: (617) 224-0114
with copy to:
Sullivan & Worcester, LLP
One Post Office Square
Boston, MA 02109
Attn.: John A. Piccione, Esq.
Telecopy: (617) 338-2880
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail or reputable courier service in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
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number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
12. Third Party Beneficiary. Any permitted transferee of any part of
the Securities shall be a third party beneficiary of the Company's obligations
under this Agreement, the Note, the Warrant and the Registration Rights
Agreement. Such erson shall have all the rights of a third party beneficiary
with respect to the enforcement against the Company of any provision of this
Agreement, the Note, the Warrant and the Registration Rights Agreement.
13. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts and
it is not necessary that signatures of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and the
same agreement.
(b) This Agreement shall inure to the benefit of and be binding
upon the parties hereto, their respective successors and permitted assigns.
(c) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to
conflicts of laws principles). With respect to any suit, action or proceedings
relating to this Agreement, each of the Company and the Purchaser irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in the City
of New York and hereby waives to the fullest extent permitted by applicable law
any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. Subject to applicable law, the Company agrees that final
judgment against it in any legal action or proceeding arising out of or relating
to this Agreement, the Note or the Warrant shall be conclusive and may be
enforced in any other jurisdiction within or outside the United States by suit
on the judgment, a certified copy of which judgment shall be conclusive evidence
thereof and the amount of its indebtedness, or by such other means provided by
law.
(d) The headings of the sections of this document have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
(e) The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid, illegal or unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Agreement in any
jurisdiction.
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(f) This Agreement, including the schedules and exhibits hereto,
constitutes the sole and entire agreement of the parties with respect to the
subject matter hereof.
14. Time of Essence. Time shall be of the essence in this Agreement.
15. Escrow Agent. The Escrow Agent shall not be liable for any action
taken or omitted by it in good faith and its liability hereunder shall be
limited to liability for gross negligence or willful misconduct on its part. The
Company and the Purchaser agree to save harmless, indemnify and defend the
Escrow Agent for, from and against any loss, damage, liability, judgment, cost
and expense whatsoever, by reason of, or on account of, any misrepresentation
made to it or its status or activities as Escrow Agent under this Agreement
except for any loss, damage, liability, judgment, cost or expense resulting from
gross negligence or willful misconduct on the part of the Escrow Agent.
The Escrow Agent shall not be responsible for any failure or inability
of any of the parties to perform or comply with the provisions of this
Agreement, or the agreements delivered in connection herewith.
In the performance of its duties hereunder, the Escrow Agent shall be
entitled to rely in good faith upon any document (including facsimile
transmitted copies of documents), instrument or signature believed by it in good
faith to be genuine and to be signed by any party hereto or an authorized
officer or agent thereof, and shall not be required to investigate the truth or
accuracy of any statement contained in any such document or instrument. The
Escrow Agent may assume in good faith that any person purporting to give any
notice in accordance with the provisions hereof has been duly authorized to do
so.
Each party hereto acknowledges that (a) the Escrow Agent is not acting
as legal counsel to such party in any manner or respect in connection with the
transactions contemplated by this Agreement, and (b) the Escrow Agent is serving
as an accommodation to the parties hereto. Each party further acknowledges that
the Escrow Agent has acted, and acts, as legal counsel in certain matters to
H.J. Meyers & Co., Inc. ("Meyers") Each party hereto waives all claims in the
nature of conflict of interest against the Escrow Agent and further agrees that
in the event of any dispute which arises hereunder, or otherwise between a party
and Meyers, the Escrow Agent shall be free to represent Meyers.
It is understood and further agreed that the Escrow Agent shall:
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<PAGE>
(a) be under no duty to enforce payment of any subscription that is to
be paid to and held by it hereunder;
(b) promptly notify the Purchaser and the Company of any discrepancy
between the amounts set forth on any statement delivered by the Purchaser and/or
the Company and the sum or sums delivered to it therewith;
(c) be under no duty to accept funds, checks, drafts or instruments for
the payment of money from anyone other than the Company or the Purchaser, or to
give any receipt therefor except to the Company or the Purchaser, with a copy in
each case to the Company;
(d) be protected in acting upon any notice, request, certificate,
approval, consent or other paper reasonably believed by it to be genuine and to
be signed by the proper party or parties (including, but not limited to, copies
of documents transmitted by facsimile);
(e) be permitted to consult with counsel of its choice, and shall not
be liable for any action taken, suffered, or omitted by it in accordance with
the advice of such counsel; provided, however, that nothing in this subsection
(e), nor any action taken by the Escrow Agent, or suffered or omitted by it in
accordance with the advice of any counsel, shall relieve the Escrow Agent from
liability for any claims that are occasioned by its gross negligence or willful
misconduct;
(f) not be bound by any modification, amendment, termination,
cancellation, or recission of this Agreement, unless the same shall be in
writing and signed by it;
(g) be entitled to refrain from taking any action other than to keep
all property held in escrow if it (i) shall be uncertain concerning its duties
or rights hereunder, or (ii) shall have received claims or demands from any
party, or (iii) shall have received instructions from the Purchaser and/or the
Company which, in the Escrow Agent's opinion, are in conflict with any of the
provisions of this Agreement, until it shall have received a final judgment by a
court of competent jurisdiction;
(h) have no liability for following the instructions herein or
expressly provided for herein, or the written instructions given by the
Purchaser and/or the Company; and
(i) have the right, at any time, to resign hereunder by giving written
notice of its resignation to all other parties hereto at least three (3)
business days prior to the date specified for such resignation to take effect,
and upon the effective date of such resignation all cash and other payments and
all other property then held by the Escrow Agent hereunder shall be delivered by
it to such person as may be designated in writing by the other parties executing
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<PAGE>
this Agreement, whereupon the Escrow Agent's obligations hereunder shall cease
and terminate. If no such person has been designated by such date, all
obligations of the Escrow Agent hereunder shall, nevertheless, cease and
terminate. The Escrow Agent's sole responsibility thereafter shall be to keep
safely all property then held by it and to deliver the same to a person
designated by the other parties executing this Agreement or in accordance with
the directions of a final order or judgment of a court of competent
jurisdiction.
16. Right of First Refusal. For a period of twelve (12) months
following the Closing, the Purchaser shall have a five (5) day right of first
refusal (together with any other purchasers in this offering to the extent of
their original investment in this Note) to purchase any debt or equity
securities of the Company which the Company proposes to issue in a private
placement transaction (excluding sales to employees).
17. Shorting Position. The Purchaser has no existing short position
with respect to the Common Stock and agrees not to enter into any short sales or
other hedging transactions with respect to the Common Stock at any time during
the first sixty (60) days after the closing of this Agreement. Purchaser further
agrees that, at all times after the execution of this Agreement by the Purchaser
and prior to conversion of all principal amount of the Notes acquired by
Purchaser, it will keep its purchase of the Note and Warrant confidential,
except as required by law and except as necessary in the ordinary course of
Purchaser's business.
18. Delivery of Stock. The Company will permit the Purchaser to
exercise its right to convert the Note and exercise the Warrant by telecopying
an executed and completed Conversion Notice or Notice of Exercise, as the case
may be, to the Company and delivering within three business days thereafter, the
original Conversion Notice and Note or Notice of Exercise and Warrant by express
courier. Each date on which a Conversion Notice or Notice of Exercise is
telecopied to and received by the Company in accordance with the provisions
hereof shall be deemed a conversion date. The Company will transmit the
certificates representing the Note Shares or Warrant Shares and the newly issued
Note representing the amount of the Note which remains unconverted, or the newly
issued Warrant representing that portion of the Warrant that is not exercised,
to the Purchaser via express courier within three business days after receipt by
the Company of the original Conversion Notice and the Note or the Notice of
Exercise and the Warrant.
19. Liquidated Damages for Failure to Deliver. The Company understands
that a delay beyond the deadline for delivery, specified in paragraph 18, could
result in economic loss to the Purchaser. As compensation to the Purchaser for
such loss, the Company agrees to pay late payments to the Purchaser for the late
issuance of shares issuable at conversion of the Note or exercise of the
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<PAGE>
Warrant in accordance with the following schedule (where "No. Business Days
Late" is defined as the number of business days beyond three business days after
receipt by the Company of the original Conversion Notice and the Note or the
original Notice of Exercise and the Warrant, together with immediately available
funds for the entire purchase of the Warrant Shares:
No. Business Days Late Late Payment for Each $10,000 of
Note Principal Amount
Being Converted
1 $50.00
2 $100.00
3 $150.00
4 $200.00
5 $250.00
6 $300.00
7 $350.00
8 $400.00
9 $450.00
10 $500.00
>10 $500.00 + $100.00 for each Business
Day Late Beyond 10 Days
The Company shall make any payments incurred under this Section in
immediately available funds upon demand. Nothing herein shall limit a
Purchaser's right to pursue actual damages for the Company's failure to issue
and deliver Note Shares or Warrant Shares to the Purchaser. Furthermore, in
addition to any other remedy which may be available to the Purchaser, in the
event that the Company fails for any reason to effect delivery of Note Shares or
Warrant Shares within five business days after the Delivery Date, the Purchaser
will be entitled to revoke the relevant Conversion Notice or Notice of Exercise
by delivering a notice to such effect to the Company whereupon the Company and
the Purchaser shall each be restored to their respective positions immediately
prior to such Conversion Notice or Notice of Exercise.
20. Non-delivery of the Note Shares or Warrant Shares. If, within ten
(10) business days of the date after receipt by the Company of the original
Conversion Notice and the original Note or the Notice of Exercise and the
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<PAGE>
Warrant, as the case may be, the Company shall fail to (i) issue the Note Shares
or Warrant Shares, and (ii) deliver to the Purchaser the Note Shares or Warrant
Shares, for any reason other than failure by the Purchaser to comply with its
obligations hereunder, then the Company shall:
(a) hold the Purchaser harmless against any loss, claim or damage
arising from or as a result of such failure by the Company (including, without
limitation, any such loss, claim or damage resulting from an obligation to
resell the Note Shares or Warrant Shares); and
(b) reimburse the Purchaser for all of its out-of-pocket expenses
reasonably incurred, including fees and disbursements of its counsel, incurred
by the Purchaser in connection with this Agreement and the transactions
contemplated herein; provided however, that the Company shall then have no
further liability to the Purchaser except as provided for in this Section 20.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer(s) of each party hereto as of the date
first above written.
GreenMan Technologies, Inc.
------------------------------------
Name:
Title:
-------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
CONVERTIBLE NOTE
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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
___________, 1997 by and among GreenMan Technologies, Inc. a Delaware
corporation, with headquarters located at 7 Kimball Lane, Building A, Lynfield,
MA 01940 (the "Company"), and the undersigned parties (together with affiliates,
the "Initial Investors").
WHEREAS:
A. In connection with the Securities Purchase Agreement of even date
herewith by and between the Company and the Initial Investors (the "Securities
Purchase Agreement"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Initial Investors
Convertible Notes (the "Notes") and Warrants (the "Warrants") that are
convertible and exercisable into shares (the "Securities") of the Company's
common stock (the "Common Stock"), upon the terms and subject to the limitations
and conditions set forth in the Notes and the Warrants; and
B. To induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investors" means the Initial Investors and any
transferees or assignees who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
<PAGE>
(ii) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
(iii) "Registrable Securities" means the Securities issued or
issuable upon conversion of the Note or exercise of the Warrant, any shares of
capital stock issued or issuable as a dividend on or in exchange for or
otherwise with respect to any of such Securities.
(iv) "Registration Statement" means a registration statement
of the Company under the 1933 Act.
(b) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
(a) Mandatory Registration. The Company shall within ten (10)
after the Closing Date under the Securities Purchase Agreement (the "Closing
Date") file with the SEC a Registration Statement on Form S-3 (or, if Form S-3
is not then available, on such form of Registration Statement as is then
available to effect a registration of the Registrable Securities, subject to the
consent of the Initial Investors (as determined pursuant to Section l0 hereof),
which consent will not be unreasonably withheld) covering the resale of the
Registrable Securities, which Registration Statement, to the extent allowable
under the 1933 Act and the Rules promulgated thereunder (including Rule 416),
shall state that such Registration Statement also covers such indeterminate
number of additional shares of Common Stock as may become issuable upon
conversion of the Notes and the exercise of the Warrants (i) to prevent dilution
resulting from stock splits, stock dividends or similar transactions or (ii) by
reason of changes in the number of Securities issued or issuable upon conversion
of the Notes in accordance with the terms of the Notes and/or changes in the
number of Securities issued or issuable upon exercise of the Warrants. The
Company shall use its best efforts to cause such registration to become and
remain effective (including the taking of such steps as are necessary to obtain
the removal of any stop orders); provided, that the Investors shall furnish the
Company with such appropriate information in connection therewith as the Company
shall reasonably request in writing. The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided to (and subject to the approval of) the
Initial Investors and its counsel prior to its filing or other submission.
(b) Liquidated Damages. The Company shall use its best efforts to
obtain effectiveness of the Registration Statement as soon as practicable. If
(i) the
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Registration Statement(s) covering the Registrable Securities required to be
filed by the Company pursuant to Section 2(a) hereof is not declared effective
by the SEC within sixty (60) days after the Closing Date of the sale of the
Notes and the Warrants (other than by reason of any act or failure to act in a
timely manner by the Investors or Investors' counsel), or if, after the
Registration Statement has been declared effective by the SEC, sales cannot be
made pursuant to the Registration Statement (by reason of stop order, or the
Company's failure to update the Registration Statement), or (ii) the Common
Stock is not listed or included for quotation on the NASDAQ National Market
System (the "NASDAQ-NMS"), NASDAQ Small Cap, the New York Stock Exchange (the
"NYSE") or the American Stock Exchange (the "AMEX"), then the Company will make
payments to the Investors in such amounts and at such times as shall be
determined pursuant to this Section 2(b) as partial relief for the damages to
the Investors by reason of any such delay in or reduction of their ability to
sell the Registrable Securities (which remedy shall not be exclusive of any
other remedies available at law or in equity). The Company shall pay to each
holder of Registrable Securities an amount equal to the aggregate "Purchase
Price" (as defined below) of the Notes held by such Investors (including,
without limitation, Notes that have been converted into Securities then held by
such Investors) (the "Aggregate Share Price") multiplied by two and one-half
hundredths (.025) times the sum of: (i) the number of months (prorated for
partial months) after the end of such 60-day period and prior to the date the
Registration Statement is declared effective by the SEC, provided, however, that
there shall be excluded from such period any delays which are solely
attributable to changes required by the Investors in the Registration Statement
with respect to information relating to the Investors, including, without
limitation, changes to the plan of distribution, or to the failure of the
Investors to conduct their review of the registration statement pursuant to
Section 2(a) above in a reasonably prompt manner; (ii) the number of months
(prorated for partial months) that sales cannot be made pursuant to the
Registration Statement after the Registration Statement has been declared
effective; and (iii) the number of months (prorated for partial months) that the
Common Stock is not listed or included for quotation on the NASDAQ-NMS, NASDAQ
Small Cap, NYSE or AMEX after the Registration Statement has been declared
effective. (For example, if the Registration Statement becomes effective one (1)
month after the end of such 60-day period, the Company would pay $25,000 for
each $1,000,000 of Aggregate Share Price and would continue to pay $25,000 for
each $1,000,000 of Aggregate Share Price until the Registration Statement
becomes effective.) Such amounts shall be paid in cash or, at each Investor's
option (but subject to the limitations contained in Section 3.1 of the Note),
may be convertible into Common Stock at the "Conversion Price" (as defined in
the Note). Any shares of Common Stock issued upon conversion of such amounts
shall be Registrable Securities. If the Company desires to convert the amounts
due hereunder into Registrable Securities it shall so notify the Investor in
writing within three (3) business days of the date on which such amounts are
first payable in cash and such amounts shall be so convertible (pursuant to the
mechanics set forth in the Note), beginning on the last day upon which the cash
amount would otherwise be due in accordance with the following sentence.
Payments of cash pursuant hereto shall be made within ten (10) days after the
end of each period that gives rise to such obligation,
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<PAGE>
provided that, if any such period extends for more than thirty (30) days,
interim payments shall be-made for each such thirty (30) day period. The term
"Purchase Price" means the purchase price paid by the Investors for the Note.
Upon agreement of both the Purchaser and the Company, any liquidated damages due
under the provisions of this subparagraph may be paid in shares of Common Stock,
registered as if such stock were Note Shares, and valued at the Conversion
Price, as such term is defined in Section 3.1 of the Note.
(c) Piggy-Back Registrations. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company shall
file with the SEC a Registration Statement relating to (i) a firm underwritten
offering for its own account or the account of others under the 1933 Act of any
of its equity securities or (ii) any other offering for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option or other employee
benefit plans) at a time when the Registration Statement contemplated by Section
l(a) hereof is not effective, the Company shall send to each Investor who is
entitled to registration rights under this Section 2(c) written notice of such
determination and, if within fifteen (15) days after the effective date of such
notice, such Investor shall so request in writing, the Company shall include in
such Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock that may be included in the Registration Statement because, in such
underwriter(s)' judgment, marketing or other factors dictate such limitation is
necessary to facilitate public distribution, then the Company shall be obligated
to include in such Registration Statement only such limited portion of the
Registrable Securities with respect to which such Investor has requested
inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities, in proportion to the number of Registrable
Securities sought to be included by such Investors; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or are not
entitled to pro rata inclusion with the Registrable Securities; and provided,
further, however, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of
their securities in such Registration Statement by reason of demand registration
rights. No right to registration of Registrable Securities under this Section
2(c) shall be construed to limit any registration required under Section 2(a)
hereof. If an offering in connection with which an Investor is entitled to
registration under this Section 2(c) is an underwritten offering, then each
Investor whose Registrable Securities are included in such Registration
Statement shall, unless otherwise agreed by the Company, offer and
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<PAGE>
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering.
(d) Eligibility for Form S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of the
sale by the Initial Investors and any other Investor of the Registrable
Securities and the Company shall file all reports required to be filed by the
Company with the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
(a) The Company shall within ten (10) days after the Closing Date
prepare and file promptly with SEC, a Registration Statement with respect to the
number of Registrable Securities provided in Section 2(a), and thereafter use
its best efforts to cause such Registration Statement relating to Registrable
Securities to become effective as soon as possible after such filing, and keep
the Registration Statement effective pursuant to Rule 415 at all times until
such date as is the earlier of (i) the date on which all of the Registrable
Securities have been sold by the Investors and (ii) the date on which all of the
Registrable Securities that had not been sold by the Investors (in the opinion
of counsel to the Initial Investors) may be immediately sold without
registration (the "Registration Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein and all documents incorporated by reference therein) shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading. The Company shall furnish to the Investor copies of reasonably
complete drafts of all such documents proposed to be filed (including exhibits,
if any), and any such Investor shall have the opportunity to object, within two
(2) business days, to any information pertaining solely to such Investor that is
contained therein and the company will make the corrections reasonably requested
by such Investor with respect to such information prior to filing any such
Registration Statement or amendment.
(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement. In the event the number of
shares available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the
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<PAGE>
Registrable Securities issued or issuable upon - conversion of the Notes and
exercise of the Warrants, the Company shall amend the Registration Statement, or
file a new Registration Statement (on the short form available therefore, if
applicable), or both, so as to cover all of the Registrable Securities, in each
case, as soon as practicable, but in any event within thirty (30) days after the
necessity therefor arises (based on the market price of the Common Stock and
other relevant factors on which the Company reasonably elects to rely). The
Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof.
(c) The Company shall furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a), each letter written by or on behalf of the Company to the
SEC or the staff of the SEC, and each material item of correspondence from the
SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion thereof which contains information for which
the Company has sought confidential treatment), and (ii) such number of copies
of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor.
(d) The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Investors who hold a majority in interest of the Registrable
Securities being offered reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (b) subject itself
to general taxation in any such jurisdiction, (c) file a general consent to
service of process in any such jurisdiction, (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its charter
or bylaws, which in each case the Board of Directors of the Company determines
to be contrary to the best interests of the Company and its stockholders.
(e) As promptly as practicable after becoming aware of such event,
the Company shall notify each Investor of the happening of any event, of which
the
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<PAGE>
Company has knowledge, as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request.
(f) The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, and, if such an order is issued, to obtain the withdrawal of such
order at the earliest possible moment and to notify each Investor who holds
Registrable Securities being sold (or, in the event of an underwritten offering,
the managing underwriters) of the issuance of such order and the resolution
thereof.
(g) The Company shall permit a single firm of counsel designated
by the Initial Investors to review the Registration Statement and all amendments
and supplements thereto a reasonable period of time prior to their filing with
the SEC, and not file any document in a form to which such counsel reasonably
objects. Any period of review shall be added to the time in which registration
is required to be filed and effective, as appropriate. The cost and expenses of
such counsel shall be borne exclusively by the Initial Investors.
(h) The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of the Registration Statement.
(i) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow the Investor, at its expense, to undertake
appropriate action to- prevent disclosure of, or to obtain a protective order
for, such information.
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(j) The Company shall use its best efforts either to (i) cause all
the Registrable Securities covered by the Registration Statement to be listed on
the NYSE or the AMEX or another national securities exchange and on each
additional national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure the designation and quotation, of all the Registrable Securities
covered by the Registration Statement on the NASDAQ- NMS or, if not eligible for
the NASDAQ-NMS on the NASDAQ Small Cap.
(k) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(l) The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and-registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request.
(m) The Company shall use its best efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable each holder thereof to consummate disposition of Registrable
Securities.
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.
(b) Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's
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election to exclude all of such Investor's Registrable Securities from the
Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e) or
3(f), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) or 3(f) and, if so directed by
the Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
(d) No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the
Company pursuant to Section 5 below.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees and
the fees and disbursements of counsel for the Company shall be borne exclusively
by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) each Investor who holds such Registrable
Securities, and (ii) the directors, officers, partners, employees, agents and
each person who control any Investor within the meaning of the 1933 Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), if any, (each, an
"Indemnified Person"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, "Claims") to which any of them may become
subject insofar as such Claims arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or the
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omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to the restrictions set forth in Section
6(c) with respect to the number of legal counsel, the Company shall reimburse
the Investors and each such underwriter or controlling person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; and (iii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees severally and not jointly
to indemnify, hold harmless and defend, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of its directors, each of
its officers who signs the Registration Statement, each person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act, and any
other stockholder selling securities pursuant to the Registration Statement or
any of its directors or officers or any person who controls such stockholder or
underwriter within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "Indemnified Party"), against any Claim
to which any of them may become subject, under the 1933 Act, the 1934 Act
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or otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and subject to Section 6(c) such Investor
will-reimburse any legal or other expenses (promptly as such expenses are
incurred and are due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable under this
Agreement (including this Section 6(b) and Section 7) for only that amount as
does not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The indemnifying party shall pay for only one separate legal counsel
for the Indemnified Persons or the Indemnified Parties, as applicable, and such
legal counsel shall be selected by Investors holding a majority-in-interest of
the Registrable Securities included in the Registration Statement to which the
Claim relates (with the approval of the Initial Investor if it holds Registrable
Securities included in such Registration Statement), if the Investors are
entitled to indemnification hereunder, or the Company, if the Company is
entitled to indemnification hereunder, as applicable. The failure to deliver
written notice to the indemnifying party within a
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reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
actually prejudiced in its ability to defend such action. The indemnification
required by this Section 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 1 l(f) of the 1933 Act) shall
be entitled to contribution from any seller of Registrable Securities who was
not guilty of such fraudulent misrepresentation, and (iii) contribution
(together with any indemnification or other obligations under this Agreement) by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
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<PAGE>
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to have the Company register Registrable Securities pursuant
to this Agreement shall be automatically assignable by the Investors to any
transferee of all or any portion of Registrable Securities if (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, simultaneously therewith furnished
with written notice of (a) the name and address of such transferee or assignee,
and (b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws, (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence, the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein, (v) such transfer
shall have been made in accordance with the applicable requirements of the
Securities Purchase Agreement, and (vi) such transferee shall be an "accredited
investor" as that term defined in Rule 501 of Regulation D promulgated under the
1933 Act.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended, supplemented or modified
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by written instrument
(which may be executed in any number of counterparts) duly executed by or on
behalf of each of the Company and persons owning sixty-six and two-thirds
percent (66 2/3%) or more of the Registrable Securities. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be
in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission or
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other means) or sent by certified mail, return receipt requested, properly
addressed and with proper postage pre-paid,
(i) if to the Company:
GreenMan Technologies Inc.
7 Kimball Lane
Building A
Lynnfield, MA 01940
Attention: Charles E. Coppa
with copy to:
Sullivan & Worcester, LLP
One Post Office Square
Boston, MA 02109
Attn.: John A. Piccione, Esq.
if to the Initial Investors as set forth below their signatures appended hereto,
or at such other address as each such party furnishes by notice given in
accordance with this Section 11(b), and shall be effective, when personally
delivered, upon receipt and, when so sent by certified mail, four days after
deposit with the United States Postal Service.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof
(d) This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State. In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof. The parties hereto hereby submit to the exclusive
jurisdiction of the United States Federal Courts located in New York County, New
York with respect to any dispute arising under this Agreement or the
transactions contemplated hereby.
(e) This Agreement and the Securities Purchase Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement and the
Securities Purchase Agreement supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.
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<PAGE>
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made by the Investors holding
sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities
(determined as if all Notes and Warrants then outstanding had been converted
into Registrable Securities).
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
GreenMan Technologies, Inc.
By:_________________________
Name:
Its: President
INITIAL INVESTORS
By:_________________________
Name:_______________________
Its:__________________________
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EXHIBIT 10.3
THE NOTE REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE;
AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION FROM, THE REQUIREMENTS OF
SUCH ACT OR SUCH LAWS.
--------------------
CONVERTIBLE NOTE
Due __________, 1998
________, 1997 $_______
No. __
GreenMan Technologies, Inc., a Delaware corporation (hereinafter called
the "Issuer"), for value received, hereby promises to pay to the Holder (as
defined below) on __________, 1998 the principal amount of $_______ in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for public and private debts, at the principal office of the
Issuer.
This Note is one of a series of Notes in the maximum aggregate
principal amount of $1,500,000 (the "Offering") issued by the Company pursuant
to a Purchase Agreement (as defined below) dated of even date herewith, between
the Company and the Payee, a copy of which agreement is available for inspection
at the Company's principal office. Notwithstanding any provision to the contrary
contained herein, this Note is subject and entitled to certain terms,
conditions, covenants and agreements contained in the Purchase Agreement. Any
transferee or transferees of the Note, by their acceptance hereof, assume the
obligations of the Payee in the Purchase Agreement with respect to the
conditions and procedures for transfer of the Note. Reference to the Purchase
Agreement shall in no way impair the absolute and unconditional obligation of
the Company to pay both principal and interest hereon as provided herein.
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The terms defined in this Article whenever
used in this Note shall have the respective meanings hereinafter specified.
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(a) "Additional Capital Shares" shall have the meaning set
forth in Section 3. l(c).
(b) "Business Day" shall mean a day other than Saturday,
Sunday or any day on which banks located in the state of New York are authorized
or obligated to close.
(c) "Capital Shares" shall mean the Common Shares and any
other shares of any other class of common stock, whether now or hereafter
authorized, which have the right to participate in the distribution of earnings
and assets of the Issuer.
(d) "Closing Date" shall mean ________, 1997.
(e) "Common Shares" shall mean shares of the common stock, par
value $.01, of the Issuer.
(f) "Conversion Date" shall mean any day on which all or some
part of the principal amount of this Note is converted into Note Shares in
accordance with the terms of this Note, provided that a Conversion Date must be
a Business Day.
(g) "Conversion Notice" shall have the meaning set forth in
Section 3.2.
(h) "Conversion Price" shall have the meaning set forth in
Section 3. 1.
(i) "Conversion Ratio" shall have the meaning set forth in
Section 3.1.
(j) "Current Market Price" per Common Share on any date herein
specified shall be deemed to be the last trade price on such day on the National
Association of Securities Dealers Automated Quotations Small Capitalization
system ("NASDAQ").
(k) "Default Interest Rate" shall be equal to 14% per annum.
(1) "Event of Default" shall have the meaning set forth in
Section 6.1.
(m) "Holder" shall mean _______________________________,
acting in its capacity as agent for certain non-U.S. persons or any person to
which this Note is subsequently transferred in accordance with the terms
provided herein.
(n) "Issuer" shall mean GreenMan Technologies, Inc., a
Delaware corporation, and any successor corporation by merger, consolidation,
sale or exchange of all or substantially all of the Issuer's assets, or
otherwise.
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<PAGE>
(o) "Market Disruption Event" shall mean any event that
results in a material suspension or limitation of trading of Common Shares on
the NASDAQ (or, if the Common Shares are not listed for trading on the NASDAQ,
the principal trading market for the Common Shares as determined by the Holder
in its reasonable discretion).
(p) "Maximum Rate" shall have the meaning set forth in Section
6.3.
(q) "Note" shall mean this Convertible Note or such other
Convertible Note or Notes exchanged therefor as provided in Section 2.1.
(r) "Notes" shall mean the Convertible Note issued pursuant to
the Purchase Agreement and such other Convertible Note or Notes exchanged
therefor as provided in Section 2.1.
(s) "Note Shares" when used with reference to the securities
issuable upon conversion of this Note, shall mean all Common Shares now or
hereafter Outstanding and securities of any other class into which the Note
Shares shall hereafter have been changed, whether now or hereafter created.
(t) "Outstanding" when used with reference to Common Shares or
Capital Shares (collectively, "Shares"), shall mean, at any date as of which the
number of such Shares is to be determined, all issued and outstanding Shares,
and shall include all such Shares issuable in respect of outstanding scrip or
any certificates representing fractional interests in such Shares; provided,
however, that "Outstanding" shall not mean any such Shares then directly or
indirectly owned or held by or for the account of the Issuer or any Subsidiary.
(u) "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
(v) "Purchase Agreement" means the Securities Purchase
Agreement, dated _________ 1997, between the Issuer and
_______________________________, acting in its capacity as agent for certain
non-U.S. persons.
(w) "Registration Rights Agreement" shall have the meaning set
forth in Section 6(b) of the Purchase Agreement. This is the Note referred to as
the Note in the Registration Rights Agreement.
(x) "SEC" shall mean the United States Securities and Exchange
Commission.
(y) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the SEC thereunder, all as in effect
at the time.
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<PAGE>
(z) "Subsidiary" shall mean any entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are owned
directly or indirectly by the Issuer.
(aa) "Trading Day" shall mean any day on which trades of
securities listed thereon are reported by the NASDAQ (or, if the Common Shares
are not listed for trading on the NASDAQ, the principal trading market for the
Common Shares) and on which no Market Disruption Event has occurred.
(bb) "Valuation Event" shall have the meaning set forth in
Section 3.1.
(cc) "Valuation Period" shall have the meaning set forth in
Section 3.1. All references to "cash" or "$" herein shall mean currency of the
United States of America.
(dd) "Warrant" shall mean the Common Stock Purchase Warrant
issued pursuant to the Purchase Agreement and any other Common Stock Purchase
Warrant exchanged therefor.
ARTICLE 2
EXCHANGES AND TRANSFER; REDEMPTION
SECTION 2.1 Exchange and Registration of Transfer of Notes. The Holder
may, at its option, surrender this Note at the office of the Issuer and receive
in exchange therefor a Note or Notes, each in the denomination of $10,000.00 or
an integral multiple of $10,000.00 in excess thereof, dated as of the date of
this Note, and, subject to Section 4.1, payable to such Person, or order, as may
be designated by such Holder. The aggregate principal amount of such Note or
Notes exchanged in accordance with this Section 2.1 shall equal the aggregate
unpaid principal amount of this Note as of the date of such surrender; provided,
however, that upon such exchange there shall be filed with the Issuer the name
and address for all purposes hereof of the Holder or Holders of the Note or
Notes delivered in such exchange. This Note, when presented for registration of
transfer or for exchange, conversion or payment, shall (if so required by the
Issuer) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Issuer duly executed by, the
Holder or its attorney duly authorized in writing.
SECTION 2.2 Loss. Theft. Destruction of Note. Upon receipt of evidence
satisfactory to the Issuer of the loss, theft, destruction or mutilation of this
Note and, in the case of any such loss, theft or destruction, upon receipt of
indemnity or security reasonably satisfactory to the Issuer, or, in the case of
any such mutilation, upon surrender and cancellation of this Note, the Issuer
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<PAGE>
will make and deliver, in lieu of such lost, stolen, destroyed or mutilated
Note, a new Note of like tenor and unpaid principal amount dated as of the date
hereof. This Note shall be held and owned upon the express condition that the
provisions of this Section 2.2 are exclusive with respect to the replacement of
a mutilated, destroyed, lost or stolen Note and shall preclude any and all other
rights and remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement of negotiable
instruments or other securities without their surrender.
SECTION 2.3 Who Deemed Absolute Owner. The Issuer may deem the person
in whose name this Note shall be registered upon the registry books of the
Issuer to be, and may treat it as, the absolute owner of this Note (whether or
not this Note shall be overdue) for the purpose of receiving payment of or on
account of the principal of this Note, for the conversion of this Note and for
all other purposes, and the Issuer shall not be affected by any notice to the
contrary. All such payments and such conversion shall be valid and effectual to
satisfy and discharge the liability upon this Note to the extent of the sum or
sums so paid or the conversion so made.
ARTICLE 3
CONVERSION OF NOTE
SECTION 3.1 Conversion: Conversion Price. At the option of the Holder,
at any time from the sixtieth (60th) day following the date of issuance of this
Note until this Note is paid in full, this Note may be converted, either in
whole or in part up to the principal amount hereof (or in case some portion of
this Note shall have been called for redemption prior to such date, then at the
portion that is not so called), at the conversion price the ("Conversion Price")
equal to seventy percent (70%) (the "Conversion Ratio") of the average closing
bid price of the Common Stock on the five Trading Days immediately preceding the
relevant Conversion Date (the "Valuation Period"), (but in no event shall such
amount be (a) in excess of 70% of the average closing bid price of the Common
Stock on the five Trading Days immediately preceding the issuance date of this
Note), plus 400 shares of Common Stock for each $10,000 principal amount of this
Note converted. Notwithstanding anything to the contrary contained herein, in no
event shall the Holder be entitled to convert this Note into any Note Shares
when the result of such conversion would entitle the Holder to receive that
number of shares of the Issuer's Common Stock of which the sum of (xx) the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of this Note) and (yy)
the number of shares of Common Stock issuable upon conversion of this Note,
would result in beneficial ownership by the Holder and its affiliates of more
than 4.9% of the outstanding shares of Common Stock. For the purposes of this
provision, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13 D
and G thereunder, except as otherwise provided in clause (xx) of this provision.
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SECTION 3.2 Exercise of Conversion Privilege. In order to exercise the
conversion privilege, either in whole or in part, the Holder shall surrender
this Note to the Issuer during usual business hours at its principal office and
shall give written notice to the Issuer in the form attached hereto in Annex I
(the "Conversion Notice") at said office that the Holder elects to convert this
Note. The Holder may exercise its right to convert this Note by telecopying an
executed and completed Conversion Notice. The Issuer shall convert the Note and
issue the Note Shares effective as of the time requested by the Holder in the
Conversion Notice so long as such time is after the date on which the Conversion
Notice is given. The Conversion Notice shall also state the name or names (with
address) of the persons who are to become the holders of the Note Shares in
connection with such conversion. Upon surrender for conversion, this Note shall
be accompanied by a proper assignment hereof to the Issuer or in blank. As
promptly as practicable after the receipt of the original Conversion Notice and
this Note as aforesaid, but in any event no more than three (3) Business Days
after the Issuer's receipt of such Conversion Notice and this Note, the Issuer
shall (i) issue the Note Shares issuable upon such conversion in accordance with
the provisions of this Article 3, and (ii) deliver to the Holder (X) a
certificate or certificate(s) representing the number of Note Shares to which
the Holder is entitled by virtue of such conversion, and (Y) cash, as provided
in Section 3.3, in respect of any fraction of a Note Share issuable upon such
conversion. Such conversion shall be deemed to have been effected at the time at
which the Conversion Notice indicates so long as this Note shall have been
surrendered as aforesaid at such time, and at such time the rights of the Holder
as holder of this Note shall cease and the person and persons in whose name or
names the Note Shares shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the Note Shares represented
thereby. The Conversion Notice shall constitute a contract between the Holder
and the Issuer, whereby the Holder shall be deemed to subscribe for the number
of Note Shares that it will be entitled to receive upon such conversion and, in
payment and satisfaction of such subscription (and for any cash adjustment to
which it is entitled pursuant to Section 3.4), to surrender this Note and to
release the Issuer from all liability thereon.
SECTION 3.3 Fractional Shares. No fractional Note Shares or scrip
representing fractional Note Shares shall be issued upon conversion of this
Note. Instead of any fractional Note Shares that would otherwise be issuable
upon conversion of this Note, the Issuer shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the greater of the
Current Market Price per Common Share at the close of business on the Business
Day that next precedes the day of conversion or the Conversion Price in effect
at the time of conversion. No payment or adjustment shall be made upon any
conversion on account of any distribution on the Note Shares issued upon such
conversion.
SECTION 3.4 Reclassification, Consolidation, Merger or Mandatory Share
Exchange. At any time while this Note remains outstanding and unexpired, in case
of any reclassification or change of Outstanding Common Shares issuable upon
conversion of this Note (other than a change in par value, or from par value to
no par value per share, or from no par value per share to par value or as a
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result of a subdivision or combination of outstanding securities issuable upon
conversion of this Note) or in case of any consolidation, merger or mandatory
share exchange of the Issuer with or into another corporation (other than a
merger or mandatory share exchange with another corporation in which the Issuer
is a continuing corporation and which does not result in any reclassification or
change, other than a change in par value, or from par value to no par value per
share, or from no par value per share to par value, or as a result of a
subdivision or combination of Outstanding Common Shares upon conversion of this
Note), or in the case of any sale or transfer to another corporation of the
property of the Issuer as an entirety or substantially as an entirety, the
Issuer, or such successor or purchasing corporation, as the case may be, shall,
without payment of any additional consideration therefore, execute a new Note
providing that the Holder shall have the right to convert such new Note (upon
terms and conditions not less favorable to the Holder than those then applicable
to this Note) and to receive upon such exercise, in lieu of each Common Share
theretofore issuable upon conversion of this Note, the kind and amount of shares
of stock, other securities, money or property receivable upon such
reclassification, change, consolidation, merger, mandatory share exchange, sale
or transfer by the holder of one Common Share issuable upon conversion of this
Note had this Note been converted immediately prior to such reclassification,
change, consolidation, merger, mandatory share exchange or sale or transfer. The
provisions of this Section 3.4 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, mandatory share exchanges
and sales and transfers.
SECTION 3.5 Adjustments to Conversion Ratio. For so long as this Note
is outstanding, if the Issuer (i) issues and sells pursuant to an exemption from
registration under the Securities Act (A) Common Shares at a purchase price
representing a percentage of the Current Market Price of the Common Shares on
the date of issuance thereof that is lower than 70%, (B) warrants or options
with a strike price representing a percentage of the Current Market Price of the
Common Shares on the date of issuance of the warrants or options that is lower
than 70%, or (C) convertible or exchangeable securities with a right to exchange
at lower than 70% of the Current Market Price of the Common Shares on the date
of issuance or conversion, as applicable, of such convertible or exchangeable
securities; and (ii) grants the right to the purchaser(s) thereof to demand that
the Issuer register under the Securities Act such Common Shares issued or the
Common Shares for which such warrants or options may be exercised or such
convertible or exchangeable securities may be converted or exchanged, then the
Conversion Ratio shall be reduced to equal the lowest of any such lower
percentages.
ARTICLE 4
STATUS; RESTRICTIONS ON TRANSFER
SECTION 4.1 Status of Note. Subject to Section 4.2 below, this Note is
a direct, general and unconditional obligation of the Issuer ranking pari passu
with all other unsecured indebtedness of the Issuer, and constitutes a valid and
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legally binding obligation of the Issuer, enforceable in accordance with its
terms subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other similar laws of general applicability relating to or affecting creditors'
rights and to general principals of equity.
SECTION 4.2 Restrictions on Transfer. This Note, and any Note Shares
issued according to the terms hereof, have not been and will not be registered
under the United States Securities Act. This Note and any Note Shares may not be
offered or sold, directly or indirectly, except pursuant to registration under
the Act, an available exemption therefrom, or pursuant to Regulation S.
ARTICLE 5
COVENANTS
The Issuer covenants and agrees that so long as this Note shall be
outstanding:
SECTION 5.1 Payment of Note. The Issuer will punctually, according to
the terms hereof, (a) pay or cause to be paid the principal of this Note and (b)
issue Note Shares upon conversion.
SECTION 5.2 Notice of Default. If any one or more events occur that
constitute or, with the giving of notice or the lapse of time or both, would
constitute an Event of Default or if the Holder shall demand payment or take any
other action permitted upon the occurrence of any such Event of Default, the
Issuer will forthwith give notice to the Holder, specifying the nature and
status of the Event of Default or other event or of such demand or action, as
the case may be.
SECTION 5.3 Sufficient Authorized Common Shares. (i) So long as the
Current Market Price of the Common Shares is greater than or equal to 90% of the
Current Market Price on the date hereof, the Issuer shall at all times have
authorized and reserved for issuance, free from preemptive rights, a sufficient
number of Common Shares to yield a number of Note Shares sufficient to satisfy
the conversion rights of the Purchaser pursuant to the terms and conditions
hereof; and
(ii) at any time when the Current Market Price of the Common
Shares is less than 90% of such Current Market Price on the date hereof, the
Issuer shall continue to reserve the number of shares of Common Stock required
by clause (i) above and in addition (including, without limitation, by
authorizing increases in its capital) to have at all times authorized and
reserved for issuance, free from preemptive rights, a sufficient number of
Common Shares that will yield a number of Note Shares sufficient to satisfy the
conversion rights of the Purchaser pursuant to the terms and conditions hereof
and required by the drop in the market price of the Common Stock below 90% of
such market price on the date hereof.
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SECTION 5.4 Insurance. The Issuer will carry and maintain in full force
and effect at all times with insurers the Issuer reasonably believes to be
financially sound and reputable such insurance in such amounts as is customary
in the respective industries of the Issuer and its Subsidiaries.
SECTION 5.5 Payment of Obligations. The Issuer will pay and discharge
at or before maturity, all its respective material obligations and liabilities,
including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and will maintain in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.
SECTION 5.6 Compliance with Laws. The Issuer will comply in all
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.7 Inspection of Property, Books and Records. The Issuer will
keep proper books of record and account in which full, true and correct entries
shall be made of all dealings and transactions in relation to its business and
activities and will permit representatives of the Holder at the Holder's expense
to visit and inspect any of its respective properties, to examine and make
abstracts from any of its respective books and records and to discuss its
respective affairs, finances and accounts with its respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
ARTICLE 6
REMEDIES
SECTION 6.1 Events of Default. "Event of Default" wherever used herein
means any one of the following events:
(a) default in the due and punctual payment of the principal
of on, or any other amount owing in respect of, this Note when and as the same
shall become due and payable, and continuance of such default for a period of
thirty (30) calendar days; or
(b) substantial failure in the performance or observance of
Section 5.5 of this Note and the continuance of such default for a period of
thirty (30) calendar days; or
(c) default in the performance or observance of any covenant
or agreement of the Issuer in this Note (other than a covenant or agreement a
default in the performance of which is specifically provided for elsewhere in
this Section), and the continuance of such default for a period of thirty (30)
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calendar days after there has been given to the Issuer by a Holder a written
notice specifying such default and requiring it to be remedied; or
(d) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Issuer or any Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Issuer under the
Bankruptcy Code or any other applicable Federal or state law, or appointing a
receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Issuer or of any substantial part of its property, or ordering
the winding-up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 30 calendar days; or
(e) the institution by the Issuer or any Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other applicable Federal or state law,
or the consent by it to the filing of any such petition or to the appointment of
a receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Issuer or of any substantial part of its property, or
(f) the Issuer shall fail to issue and deliver the Note Shares
within three (3) Business Days of its receipt of the original Note and the
original Conversion Notice in accordance with Section 3.2; or
(g) any principal of other indebtedness of the Issuer or any
Subsidiary, exceeding $500,000 is not repaid on its original maturity date or
becomes due and payable by reason of default before its original maturity date;
or
(h) (i) the Issuer or any Subsidiary is unable to pay its
debts as they fall due, stops, suspends, or threatens in writing to stop or
suspend payment of all or any material part of its debts (other than debts
contested in good faith by appropriate proceedings), begins negotiations or
takes any proceeding or other step with a view to readjustment, rescheduling or
deferral of all of its indebtedness (or any material part thereof) that it will
or might otherwise be unable to pay when due or seeks the appointment of a
statutory manager or proposes in writing or makes a general assignment or an
arrangement or composition with or for the benefit of its creditors or any group
or class thereof or a moratorium or statutory management is agreed or declared
in respect of or affecting all or any material part of the indebtedness of the
Issuer or any of its wholly owned subsidiaries, or (ii) the Issuer ceases or
threatens in writing to cease to carry on all or any material part of the
business carried on by the Issuer and its Subsidiaries taken as a whole and as a
result of such cessation or threat of cessation, the Issuer will not be able to
perform or comply with its payment obligations under this Note; or
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(i) on or after the date hereof, a final judgment or final
judgments for the payment of money shall have been entered by any court or
courts of competent jurisdiction against the Issuer and remains undischarged for
a period (during which execution shall be effectively stayed) of 30 days,
provided that the aggregate amount of all such judgments at any time outstanding
(to the extent not paid or to be paid, as evidenced by a written communication
to that effect from the applicable insurer, by insurance) exceeds $500,000; or
(j) it becomes unlawful for the Issuer to perform or comply
with its obligations under this Note, the Purchase Agreement, the Warrant or the
Registration Rights Agreement.
SECTION 6.2 Acceleration of Maturity: Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case any
Holder may declare the principal of this Note to be due and payable immediately,
by a notice in writing to the Issuer, and upon any such declaration the
principal of this Note shall become immediately due and payable.
SECTION 6.3 Default Interest Rate.
(a) If any portion of the principal of the Note shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise)
such principal of the Note that is due and owing but not paid shall, without
limiting the Holder's rights under this Note or under the Purchase Agreement,
bear interest at the Default Interest Rate until paid in full.
(b) Notwithstanding anything herein or in the Purchase
Agreement to the contrary, if at any time the applicable interest rate as
provided for herein shall exceed the maximum lawful rate which may be contracted
for, charged, taken or received by the Lender in accordance with applicable laws
of the State of New York (the "Maximum Rate"), the rate of interest applicable
to the Note shall be limited to the Maximum Rate.
SECTION 6.4 Remedies Not Waived. No course of dealing between the
Issuer and the Holder or any delay in exercising any rights hereunder shall
operate as a waiver by the Holder.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 Register. (a) The Issuer shall keep at its principal office
a register in which the Issuer shall provide for the registration of this Note.
Upon any transfer of this Note in accordance with Article 2 and 4 hereof, the
Issuer shall register such transfer on the Note register.
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(b) The Issuer may deem the person in whose name this Note shall be
registered upon the registry books of the Issuer to be, and may treat it as, the
absolute owner of this Note (whether or not this Note shall be overdue) for the
purpose of receiving payment of principal of this Note, for the conversion of
this Note and for all other purposes, and the Issuer shall not be affected by
any notice to the contrary. All such payments and such conversions shall be
valid and effective to satisfy and discharge the liability upon this Note to the
extent of the sum or sums so paid or the conversion or conversions so made.
SECTION 7.2 Withholding. To the extent required by applicable law, the
Issuer may withhold amounts for or on account of any taxes imposed or levied by
or on behalf of any taxing authority in the United States having jurisdiction
over the Issuer from any payments made pursuant to this Note.
SECTION 7.3 Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS PRINCIPLES). WITH RESPECT TO ANY SUIT, ACTION OR
PROCEEDINGS RELATING TO THIS NOTE, THE ISSUER IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK AND HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SUBJECT TO APPLICABLE LAW, THE ISSUER AGREES THAT FINAL
JUDGMENT AGAINST IT IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS NOTE SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION
WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A CERTIFIED COPY OF
WHICH JUDGMENT SHALL BE CONCLUSIVE EVIDENCE THEREOF AND THE AMOUNT OF ITS
INDEBTEDNESS, OR BY SUCH OTHER MEANS PROVIDED BY LAW.
SECTION 7.4 Headings. The headings of the Articles and Sections of this
Note are inserted for convenience only and do not constitute a part of this
Note.
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IN WITNESS WHEREOF, the Issuer has caused this Note to be signed by its
duly authorized officer under its corporate seal, attested by its duly
authorized officer, on the date of this Note.
GreenMan Technologies, Inc.
By:_________________________________
Name: Joseph E. Levangie
Title: Chief Financial Officer
Attest
By:____________________________
Name: John A. Piccione
Title: Assistant Secretary
[Corporate Seal]
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ANNEX I TO THE NOTE
[FORM OF CONVERSION NOTICE]
TO _____________________:
The undersigned owner of the Convertible Note, dated April , 1997,
issued by GreenMan Technologies, Inc. (the "Note") hereby irrevocably exercises
the option to convert $______________ of the principal amount of the Note into
Common Shares, par value $.01, of GreenMan Technologies, Inc. (the "Note
Shares"), in accordance with the terms of the Note. The undersigned directs that
the Note Shares issuable and certificates therefor (to the extent that
certificates evidencing Common Shares are then being issued by GreenMan
Technologies, Inc. deliverable upon the conversion, together with any check in
payment for fractional Note Shares, be issued in the name of and delivered, if
appropriate, to the undersigned unless a different name has been indicated
below.
Dated:
Signature
Fill in for registration of Note Shares:
Please print name and address
(including zip code number)
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EXHIBIT 10.4
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE; AND MAY NOT
BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OR EXCEPT IN
COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION FROM, THE REQUIREMENTS OF SUCH ACT
OR SUCH LAWS.
Warrant No.: _____ Right to Purchase ______
Shares of Common Stock of
________, 1997 GreenMan Technologies, Inc.
VOID UNLESS EXERCISED BEFORE 5:00 P.M., EASTERN STANDARD TIME ON ________, 1999.
GreenMan Technologies, Inc.
Common Stock Purchase Warrant
GreenMan Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, ________________________________ or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company, commencing ________, 1997, at any time or from time to time before 5:00
p.m., Eastern Standard Time, on or before ________, 1999, ______ fully paid and
nonassessable shares of Common Stock, $.01 par value, of the Company, at an
exercise price per share equal to $____. Such exercise price per share as
adjusted from time to time as herein provided is referred to herein as the
"Exercise Price." The number and character of such shares of Common Stock and
the Exercise Price are subject to adjustment as provided herein. This Warrant is
issued pursuant to the terms of a Securities Purchase Agreement of even date
herewith between the Company and the Holder (the "Purchase Agreement"). This
Warrant is also the Warrant referred to in the Registration Rights Agreement of
even date herewith between the Company and the Holder (the Registration Rights
Agreement). Notwithstanding any provision to the contrary herein, this Warrant
is subject and entitled to certain terms, conditions, covenants and agreements
contained in the Purchase Agreement and the Registration Rights Agreement. Any
transferee or transferees of the Warrant, by their acceptance hereof, assume the
obligations of the Holder in the Purchase Agreement with respect to the
conditions and procedures for transfer of the Warrant.
As used herein, the following terms, unless the context otherwise
requires, have the following respective meanings:
<PAGE>
(a) The term "Company" shall include GreenMan Technologies, Inc., a
Delaware corporation, and any corporation which shall succeed or assume
the obligations of the Company hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock,
$.01 par value per share, as authorized, (b) any other capital stock of
any class or classes (however designated) of the Company, authorized on
or after such date, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingencies,
be entitled to vote for the election of a majority of directors of the
Company (even though the right so to vote has been suspended by the
happening of such a contingency), (c) any other securities into which
or for which any of the securities described in (a) or (b) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise, or the conversion
of promissory notes or other obligations of the Company.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holder of this Warrant at any time
shall be entitled to receive, or shall have received, on the exercise
of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or
in replacement of Other Securities pursuant to Sections 3 or 4 or
otherwise.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised in full by
the holder hereof by surrender of this Warrant, with the form of subscription at
the end hereof duly executed by such holder, to the Company at its principal
office, accompanied by payment, in cash, by certified or official bank check
payable to the order of the Company or by wire transfer to the Company, in the
amount obtained by multiplying (a) the number of shares of Common Stock for
which this Warrant is then exercisable by (b) the Exercise Price then in effect.
1.2 Partial Exercise. This Warrant may be exercised in part by
surrender of this Warrant in the manner and at the place provided in Section 1.1
except that the amount payable by the holder on such partial exercise shall be
the amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the subscription at the end hereof by (b) the
Exercise Price then in effect. On any such partial exercise, the Company at its
expense will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of like tenor, in the name of the holder hereof
or as such holder (upon payment by such holder of any applicable transfer taxes)
may request, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock for which such Warrant or Warrants may still be
exercised.
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2. Delivery of Stock Certificates on Exercise. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
three (3) business days after receipt of the original Notice of Exercise and the
Warrant, together with immediately available funds for that portion of the
Warrant being exercised , the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes) may direct, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such holder would otherwise be entitled,
cash equal to such fraction multiplied by the then current market value of one
full share, together with any other stock or other securities and property
(including cash, where applicable) to which such holder is entitled upon such
exercise pursuant to Section 1 or otherwise.
3. Adjustment for Reorganization, Consolidation or Merger.
3.1 Reorganization, Consolidation or Merger. In case at any
time or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or entity, or (c) transfer all
or substantially all of its properties or assets to any other person under any
plan or arrangement contemplating the dissolution of the Company, then, in each
such case, the holder of the Warrant, on the exercise hereof as provided in
Section 1 at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall receive, in lieu of the Common Stock (or Other Securities)
issuable on such exercise prior to such consummation or such effective date, the
Common Stock and Other Securities and property (including cash) to which such
holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such holder had so exercised this
Warrant, immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 4 and 5.
3.2 Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the Common Stock and Other
Securities and property receivable on the exercise of the Warrant after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may be, and shall
be binding upon the issuer of any such Common Stock or Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant.
4. Adjustments for Stock Dividends and Stock Splits. In the event that
the Company shall (i) issue additional shares of Common Stock as a dividend or
other distribution on outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock, or (iii) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
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event, the Exercise Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then prevailing Exercise Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event (calculated assuming the conversion
or exchange of all outstanding shares of convertible or exchangeable securities
of the Company that are convertible or exchangeable into, or exercisable for,
shares of Common Stock) and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such event (calculated
assuming the conversion or exchange of all outstanding shares of convertible or
exchangeable securities of the Company that are convertible or exchangeable
into, or exercisable for, shares of Common Stock), and the product so obtained
shall thereafter be the Exercise Price then in effect. The Exercise Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 4. The holder of
this Warrant shall thereafter, on the exercise hereof as provided in Section 1,
be entitled to receive that number of shares of Common Stock determined by
multiplying the number of shares of Common Stock that would otherwise (but for
the provisions of this Section 4) be issuable on such exercise, by a fraction of
which (i) the numerator is the Exercise Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (ii) the denominator is the
Exercise Price in effect on the date of such exercise.
5. Adjustment for Dividends in Other Stock, Property and
Reclassifications. In case at any time or from time to time, the holders of
Common Stock (or Other Securities) shall have received, or (on or after the
record date fixed for the determination of stockholders eligible to receive)
shall have become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or (b) other or additional stock or
other securities or property (including cash) by way of spin-off,
split-up, reclassification, recapitalization, combination of shares or
similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock-split (adjustments in respect of which, in the case
of Common Stock, are provided for in Section 4), then and in each such case the
holder of this Warrant, on the exercise hereof as provided in Section 1, shall
be entitled to receive the amount of other or additional stock and other
securities and property (including cash in the cases referred to in subdivision
(b) of this Section 5) that such holder would hold on the date of such exercise
if on the date of distribution of such other or additional stock or other
securities and property, or on the record date fixed for determining the
shareholders entitled to receive such other or additional stock or other
securities and property, such holder had been the holder of record of the number
of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date thereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
subdivision (b) of this Section 5) receivable by such holder as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 3 and 4.
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6. Notices of Record Date. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive
any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation
or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be mailed at least twenty (20) days prior to the
date specified in such notice on which any such action is to be taken.
7. Reservation of Stock Issuable on Exercise on Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrant, all shares of Common Stock (or Other Securities)
from time to time issuable on the exercise of the Warrant; the shares of Common
Stock which the holder of this Warrant shall receive upon exercise of the
Warrant will be duly authorized, validly issued, fully paid and non-assessable.
8. Exchange of Warrant. On surrender for exchange of this Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant or Warrants so surrendered.
9. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
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<PAGE>
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
10. Warrantholder Not Deemed Stockholder; Restrictions on Transfer.
This Warrant is issued upon the following terms, to all of which each holder or
owner hereof by the taking hereof consents and agrees:
(a) No holder of this Warrant shall, as such, be deemed the holder of
Common Stock that may at any time be issuable upon exercise of this
Warrant for any purpose whatsoever, nor shall anything contained herein
be construed to confer upon such holder, as such, any of the rights of
a stockholder of the Company until such holder shall have exercised the
Warrant and been issued shares of Common Stock in accordance with the
provisions hereof.
(b) The transfer of this Warrant and any shares of Common Stock
purchased pursuant to this Warrant shall be subject to the provisions
of Sections of the Purchase Agreement.
11. Notices. All notices, requests and other communications hereunder
must be in writing and delivered to the parties at the following addresses or
facsimile numbers:
If to the Purchaser, to:
Telecopy:
If to the Company, to:
GreenMan Technologies Inc.
7 Kimball Lane
Building A
Lynnfield, MA 01940
Attention: Charles E. Coppa
Telecopy: (617) 224-0114
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<PAGE>
with copy to:
Sullivan & Worcester, LLP
One Post Office Square
Boston, MA 02109
Attn.: John A. Piccione, Esq.
Telecopy: (617) 338-2880
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail or reputable courier service in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
12. Lock-Up Agreement for Public Offering. In connection with any
public offering of equity securities of the Company, the Warrantholder agrees
not to sell, pledge, transfer or otherwise dispose of, or grant any option or
purchase right with respect to, any shares of Common Stock issuable upon
exercise of this Warrant, or engage in any short sale, hedging transaction or
other derivative security transaction involving such Common Stock, for such
period of time commencing 30 days prior to the proposed effective date of such
public offering until such period of time following the offering as the Company
and the managing underwriter of such public offering deem necessary in order to
ensure a stable and orderly trading market.
13. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant and the shares of Common Stock underlying this Warrant
shall be construed and enforced in accordance with and governed by the laws of
the State of Delaware. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
14. Expiration. The right to exercise this Warrant shall expire at 5:00
p.m., Eastern Standard Time, on ________, 1999.
Dated: ________, 1997
ATTEST: GREENMAN TECHNOLOGIES, INC.
By:__________________________ By:___________________________
Title: Assistant Secretary Title: Chief Financial Officer
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NOTICE OF EXERCISE
(To be signed only on exercise of Warrant)
To GreenMan Technologies, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, ____________
shares of Common Stock of GreenMan Technologies, Inc., a Delaware corporation,
and herewith makes payment of $____________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to
_________________________, whose address is _______________________.
Dated: ___________________________________________
(Signature must conform to name of holder as specified
on the face of the Warrant)
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(Address)
<PAGE>
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of GreenMan
Technologies, Inc., a Delaware corporation, to which the within Warrant relates,
and appoints _________________________ Attorney to transfer such right on the
books of GreenMan Technologies, Inc., a Delaware corporation, with full power of
substitution in the premises.
Dated: _____________________________________________
(Signature must conform to name of holder as specified
on the face of the Warrant)
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---------------------------------------------
(Address)
Signed in the presence of:
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