U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended November 30, 1997 Commission File Number 1-13776
GreenMan Technologies, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 71-0724248
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7 Kimball Lane, Building A, Lynnfield, MA 01940
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (781) 224-2411
---------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No___
Number of shares outstanding as of January 19, 1998
Common Stock, $.01 par value, 10,821,036 shares
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GreenMan Technologies, Inc.
Form 10-QSB
Quarterly Report
November 30, 1997
Table of Contents
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Page
PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements (*)
Unaudited Condensed Consolidated Balance Sheets as of May 31, 1997 and November 30, 1997 3
Unaudited Condensed Consolidated Statements of Loss for the three and six months ended
November 30, 1996 and 1997 4
Unaudited Condensed Consolidated Statement of Changes in Stockholder's Equity for six months
ended November 30, 1997 5
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended
November 30, 1996 and 1997 6-7
Notes to Unaudited Condensed Consolidated Financial Statements 8-12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13-17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 19
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* The financial information at May 31, 1997 has been taken from audited
financial statements at that date and should be read in conjunction therewith.
All other financial statements are unaudited.
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GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets
May 31, November 30,
1997 1997
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 104,193 $ 859,794
Accounts receivable, trade, less allowance for doubtful accounts of $23,772 and
$89,760 as of May 31, 1997 and November 30, 1997 550,644 1,672,964
Inventory 553,688 712,970
Other current assets 204,155 841,586
------------ ------------
Total current assets 1,412,680 4,087,314
------------ ------------
Property, plant and equipment, at cost (Note 3):
Land 223,785 857,482
Buildings 910,400 2,481,983
Machinery and equipment 3,545,573 8,626,654
Furniture and fixtures 89,792 115,177
Motor vehicles 64,822 1,717,139
Leasehold improvements 975,116 131,538
------------ ------------
5,809,488 13,929,973
Less accumulated depreciation and amortization (888,445) (1,289,789)
------------ ------------
4,921,043 12,640,184
------------ ------------
Other assets:
Equipment deposits (Note 5) 862,711 72,711
Acquisition deposit (Note 3) 650,000 --
Deferred financing costs (Notes 6 and 7) 1,198,899 458,990
Goodwill, net 415,398 490,474
Non-competition agreement, net 155,557 97,222
Licensing fee 91,667 86,669
Investment in joint venture (Note 5) -- 400,000
Other 77,575 133,993
------------ ------------
3,451,807 1,740,059
------------ ------------
$ 9,785,530 $ 18,467,557
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Convertible note payable,related party (Note 7) $ 1,200,000 $ 1,000,000
Notes payable, related parties 58,829 52,313
Notes payable, bank, current portion 37,910 85,372
Notes payable, current portion (Note 3) -- 4,346,875
Accounts payable 815,631 1,558,907
Accrued expenses, other 1,270,682 2,225,020
Obligations under capital leases, current (Notes 3 and 8) 1,045,726 2,012,287
------------ ------------
Total current liabilities 4,428,778 11,280,774
Convertible notes payable (Note 6) 2,200,000 1,114,000
Convertible notes payable, related parties, non-current portion (Note 7) 640,000 1,026,000
Notes payable, related parties, non-current portion 24,371 --
Notes payable, bank, non-current portion 474,678 498,235
Notes payable, non-current portion (Note 3) -- 76,582
Obligations under capital leases (Notes 3 and 8) 894,238 2,932,192
------------ ------------
Total liabilities 8,662,065 16,927,783
------------ ------------
Stockholders' equity (Note 6):
Preferred stock, $1.00 par value, 1,000,000 shares authorized, no shares issued
and outstanding -- --
Common stock, $.01 par value, 20,000,000 shares authorized; 6,873,296 and
9,875,782 shares issued and outstanding at May 31, 1997 and November 30, 1997 68,733 98,758
Additional paid-in capital 11,759,665 14,228,492
Accumulated deficit (10,704,933) (12,787,476)
------------ ------------
Total stockholders' equity 1,123,465 1,539,774
------------ ------------
$ 9,785,530 $ 18,467,557
============ ============
See accompanying notes to unaudited condensed consolidated financial statements.
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3
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<TABLE>
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GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Statements of Loss
Three Months Ended Six Months Ended
November 30, November 30,
-------------------------- ---------------------------
1996 1997 1996 1997
---- ---- ---- ----
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Net sales $ 796,141 $ 3,389,338 $ 1,683,007 $ 6,104,668
Cost of sales 728,508 2,511,936 1,454,547 4,493,673
----------- ----------- ----------- -----------
Gross profit 67,633 877,402 228,460 1,610,995
----------- ----------- ----------- -----------
Operating expenses:
Research and development 50,321 56,735 117,406 139,050
Selling, general and administrative 807,551 1,178,028 2,037,697 2,017,510
----------- ----------- ----------- -----------
Total operating expenses 857,872 1,234,763 2,155,103 2,156,560
----------- ----------- ----------- -----------
Operating loss (790,239) (357,361) (1,926,643) (545,565)
----------- ----------- ----------- -----------
Other income (expense):
Interest and financing costs (Notes 6 and 7) (84,307) (621,861) (179,605) (1,525,114)
Other, net (17,815) (3,580) (51,093) (11,864)
----------- ----------- ----------- -----------
Other income (expense), net (102,122) (625,441) (230,698) (1,536,978)
----------- ----------- ----------- -----------
Net loss $ (892,361) $ (982,802) $(2,157,341) $(2,082,543)
=========== =========== =========== ===========
Net loss per share (Note 2) $ (.16) $ (.12) $ (.41) $ (.26)
=========== =========== =========== ===========
Shares used in calculation of net loss per share 5,471,977 8,479,936 5,273,250 8,071,177
=========== =========== =========== ===========
See accompanying notes to unaudited condensed consolidated financial statements.
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4
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GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Statements of Changes In Stockholders' Equity
November 30, 1997
Common Stock Additional
---------------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance, May 31, 1997 6,873,296 $ 68,733 $ 11,759,665 $(10,704,933) $ 1,123,465
Shares issued on conversion
of notes payable and
accrued interest 2,055,476 20,555 1,304,496 -- 1,325,051
Fair value of warrants
issued in June and July
1997 convertible debt offering
under SFAS 123 -- -- 7,800 -- 7,800
Fair value of conversion discount on
convertible notes payable issued
in June and July 1997 -- -- 166,001 -- 166,001
Shares issued on exercise of stock
warrants 180,000 1,800 223,200 -- 225,000
Shares issued for purchase of
Cryopolymers, Inc. 767,010 7,670 736,330 -- 744,000
Fair value of warrants
issued for the purchase
of Cryopolymers, Inc. under
SFAS 123 -- -- 31,000 -- 31,000
Net loss for the six months ended
November 30, 1997 -- -- -- (2,082,543) (2,082,543)
Balance, November 30, 1997 9,875,782 $ 98,758 $ 14,228,492 $(12,787,476) $ 1,539,774
============ ============ ============ ============ ============
See accompanying notes to unaudited condensed consolidated financial statements.
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5
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GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Six Months Ended November 30,
------------------------------
1996 1997
---- ----
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Cash flows from operating activities:
Net loss $(2,157,341) $(2,082,543)
Adjustments to reconcile net loss to net cash used for
operating activities:
Amortization of deferred financing costs -- 933,971
Depreciation and amortization 265,088 549,601
Common stock warrants and options issued for services
rendered 285,203 --
Common stock issued for accrued interest -- 39,051
Decrease (increase) in assets:
Accounts receivable 211,706 (34,995)
Inventory 202,191 (47,012)
Other current assets 165,089 (62,598)
(Decrease) increase in liabilities:
Accounts payable (114,362) 715,090
Accrued expenses 223,816 901,253
----------- -----------
Net cash (used for) provided by operating
activities (918,610) 911,818
----------- -----------
Cash flows from investing activities:
Increase in notes receivable (100,000) --
Repayment of loan receivable 500,000 --
Purchase of property and equipment (155,093) (549,303)
Deposit on equipment (20,000) 90,000
Cash acquired upon purchase of Cryopolymers, Inc. -- 117,064
(Increase) decrease in other assets 3,619 (56,418)
----------- -----------
Net cash provided by(used for) investing
activities 228,526 (398,657)
----------- -----------
Cash flows from financing activities:
Proceeds from notes payable 46,550 99,380
Repayment of notes payable (86,634) (385,777)
Proceeds from notes payable related parties 650,000 386,000
Repayment of notes payable related parties (507,823) (30,887)
Principal payments on obligations under capital leases (157,844) (51,276)
Net proceeds on exercise of common stock warrants 337 225,000
Net proceeds on sale of common stock 715,965 --
----------- -----------
Net cash provided by financing activities 660,551 242,440
----------- -----------
Net (decrease) increase in cash (29,533) 755,601
Cash and cash equivalents at beginning of period 153,172 104,193
----------- -----------
Cash and cash equivalents at end of period $ 123,639 $ 859,794
=========== ===========
Supplemental cash flow information:
Machinery and equipment acquired under capital leases $ 124,500 $ 3,055,791
Common stock issued upon conversion of notes payable
and accrued interest -- 1,325,051
Interest paid 66,058 96,681
See accompanying notes to unaudited condensed consolidated financial statements.
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6
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GreenMan Technologies, Inc.
Consolidated Statements of Cash Flow
(Concluded)
Supplemental Schedule of Non-cash Investing and Financing Activities
On June 30, 1997, the Company purchased all of the capital stock of BFI Tire
Recyclers of Minnesota, Inc. and BFI Tire Recyclers of Georgia, Inc. as follows:
Fair value of assets acquired $ 5,472,910
Fair value of liabilities assumed 141,394
-----------
Fair value of net assets acquired 5,331,516
Acquisition deposit (650,000)
Note payable issued $ 4,681,516
===========
On November 19, 1997, Company purchased all of the capital stock of
Cryopolymers, Inc. as follows:
Fair value of assets acquired $ 1,016,597
Fair value of liabilities assumed 341,597
-----------
Fair value of net assets acquired 675,000
Common stock Issued (744,000)
Value ascribed to warrants issued under SFAS 123 (31,000)
-----------
Excess of cost over fair value of net assets $ 100,000
===========
In addition, during the six months ended November 30, 1997, $100,000 of
equipment deposits was reclassified to property, plant and equipment, $200,000
of equipment deposits to other current assets and $400,000 to investment in
joint venture.
See accompanying notes to unaudited condensed consolidated
financial statements.
7
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GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
November 30, 1997
1. Business
The Company develops, manufactures and markets custom molded plastic
parts. The Company is also developing low-cost sources of crumb rubber recovered
from discarded automobile and truck tires and the consumer products to be
manufactured from these recycled materials.
The Company's wholly-owned subsidiary, DuraWear Corporation
("DuraWear") manufactures, installs and markets a diverse range of high quality
ceramic, polymer composite, and alloy steel materials engineered to resist
severe abrasive and corrosive conditions typically encountered in bulk material
handling systems.
On June 30, 1997, the Company acquired all of the capital stock of BFI
Tire Recyclers of Minnesota, Inc. ("BTM") and BFI Tire Recyclers of Georgia,
Inc. ("BTG"), both of which were wholly-owned subsidiaries of Browning-Ferris
Industries, Inc. and are in the scrap tire collection and processing business.
BTM and BTG have been renamed GreenMan Technologies of Minnesota, Inc. ("GMTM")
and GreenMan Technologies of Georgia, Inc. ("GMTG"), respectively.
On November 19, 1997, the Company acquired all of the capital stock of
Cryopolymers, Inc., ("Cryopolymers") a processor of scrap tire chips into crumb
rubber. The Company intends to rename Cryopolymers as GreenMan Technologies of
Louisiana, Inc. and together with the Company's existing rubber recycling
operations will constitute the Company's tire recycling operations. (See Note
3).
2. Basis of Presentation
The consolidated financial statements include the results of the
Company, DuraWear and GreenMan Acquisition Corporation ("GAC") for the six
months ended November 30, 1997, GMTM and GMTG from July 1, 1997 to November 30,
1997 and Cryopolymers since November 19, 1997. All significant intercompany
accounts and transactions are eliminated in consolidation.
The financial statements are unaudited and should be read in
conjunction with the financial statements and notes thereto for the fiscal year
ended May 31, 1997 included in the Company's Form 10-KSB/A1. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles has been condensed or
omitted pursuant to the Securities and Exchange Commission ("SEC") rules and
regulations, although the Company believes the disclosures which have been made
are adequate to make the information presented not misleading.
The results of operations for the periods reported are not necessarily
indicative of those that may be expected for a full year. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
which are necessary for a fair statement of operating results for the interim
periods presented have been made.
3. Acquisition of Subsidiaries
On June 30, 1997, GAC, a wholly-owned subsidiary of the Company
acquired all of the capital stock of BTM and of BTG, (renamed "GMTM" and "GMTG"
respectively), both of which were wholly-owned subsidiaries of Browning-Ferris
Industries, Inc. ("BFI") and whose business is scrap tire collection and
processing. The Company was also granted an exclusive option to purchase certain
assets and agreements of BFI's Ford Heights, Illinois tire recycling operation
which has the capacity to process between 12 and 15 million tires annually. As a
result of the acquisition, the Company's obligations under the December 14, 1995
Put-or-Pay/Take-or-Pay agreement for tire chips and facility lease were
eliminated.
The Company agreed to a pay $5,331,517 for all of the outstanding
capital stock of BTM and BTG of which $650,000 had been previously paid to BFI
as a deposit and the balance of $4,681,517 was financed by a short-term note, at
an interest rate of 10% from BFI to GAC, which loan was originally due and
payable on September 30, 1997. The repayment of such note is guaranteed by the
Company and is secured by all of BTM
8
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GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
November 30, 1997
3. Acquisition of Subsidiaries - (Continued)
and BTG's assets and by a pledge by GAC of all of the capital stock of BTG and
BTM. In October 1997, the Company, GAC and BFI entered into a forbearance
agreement pursuant to which GAC agreed to pay $2,000,000 on or before November
6, 1997 and to pay the balance under the note on or before December 6, 1997. The
Company paid $350,000 to BFI in November and an additional $750,000 in December
(See Note 9) and has received a commitment letter from a third party lender to
provide permanent asset-based debt financing necessary to repay the amounts owed
to BFI. The Company anticipates closing this financing prior to the end of
February 1998.
The Company also assumed $99,356 of long term notes payable associated
with real estate tax assessments on property owned by BTM. Amounts are due in
semi-annual principal installments of $15,353 plus interest at 7.29% through the
year 2002.
The acquisition has been accounted for by the purchase method of
accounting, and accordingly, the net assets and results of operations of GMTM
and GMTG are included in the consolidated financial statements since the date of
acquisition.
The following unaudited proforma financial information summarizes the
consolidated results of operations of the Company and of BTM and BTG as if the
acquisition had occurred at the beginning of fiscal 1997. The unaudited proforma
information is not necessarily indicative either of the results of operations
that would have occurred had the purchase been made at the beginning of the
fiscal year or of future results of operations of the combined companies.
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<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
-------------------------- -------------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 3,731,330 $ 3,389,338 $ 6,811,261 $ 6,855,201
Net Loss (508,237) (974,327) (1,376,559) (2,064,359)
Net Loss per Weighted Average Share ($.10) ($.11) ($.26) ($.26)
</TABLE>
On November 19, 1997, the Company acquired all of the outstanding
common stock of Cryopolymers, Inc., ("Cryopolymers") a privately-held crumb
rubber producer located in St. Francisville, Louisiana. The purchase price
consisted of (1) $550,000 in shares of common stock based upon the closing bid
price the day prior to closing; (2) 200,000 shares of common stock, valued at
$194,000 or $.97 per share; (3) warrants to purchase 1,200,000 shares of common
stock exercisable commencing April 1, 1998 for period of five years at prices
ranging from $3.00 to $7.00 per share; and (4) additional warrants to purchase
100,000 shares of common stock exercisable at $.97 per share for a period of
five years and vesting 25% immediately and 25% each successive six month period.
The Company has determined the total purchase price to be $775,000 based upon a
$.97 closing price of the common stock prior to the closing and a $31,000 value
ascribed to the 1,300,000 warrants issued pursuant to SFAS No. 123, "Accounting
for Stock-Based Compensation" ("SFAS No. 123").
The acquisition has been accounted for as a purchase and accordingly,
the net assets of Cryopolymers are included in the consolidated financial
statements since November 19, 1997. Goodwill was recorded as the total
consideration paid by the Company exceeded the fair value of the net assets of
Cryopolymers by $100,000. Goodwill is being amortized over 10 years on a
straight line basis.
9
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GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
November 30, 1997
4. Net Loss Per Share
Net loss per share is based on the weighted average number of common
shares outstanding during the period.
5. Joint Venture
On August 26, 1997, the Company finalized the formation of a joint
venture ("the joint venture") between the Company and Crumb Rubber Technologies,
Inc. of Jamaica, New York ("CRT"), to collect and process tires in the State of
New York and to market the crumb rubber derived from the tires. The joint
venture will address existing opportunities for larger mesh crumb rubber such as
in rubber mats, ground cover and as a filler in asphalt applications. The
Company has contributed it's investment in the cryogenic crumb rubber equipment
($400,000) which was formerly located in Jackson, Georgia into the venture as
its capital contribution while CRT will contribute on its part certain
facilities, equipment, customer contracts, licenses and permits and provide
operational and technical expertise.
Pursuant to the terms of the joint venture agreement, CRT is required
to return $300,000 of equipment deposits previously made by the Company towards
the purchase of additional cryogenic crumb rubber equipment. The Company
received the first $100,000 installment in September 1997. The remaining balance
is to be repaid over a six month period.
6. Convertible Notes Payable
In January 1997, the Company concluded a $1,525,000 offering of 7%
convertible subordinated debentures ("Debentures") and warrants to purchase
762,500 shares of common stock (the "January Offering") at an exercise price of
$1.25 per share. The Debentures are convertible after a sixty day holding period
into shares of common stock at a conversion price equal to the lower of the
closing bid price on the date of the January Offering closing or 70% of the
closing bid price on the date prior to the conversion of such Debentures. The
Company has recorded a deferred charge of approximately $654,000 associated with
the impact of the 30% discount from market to be realized upon conversion of the
debentures. The Company recorded non-cash deferred financing costs of $75,000 in
connection with the issuance of the warrants to purchase 762,500 shares. The
Company also recorded non-cash deferred financing costs of $695,000 in
connection with the issuance of warrants to purchase 1,050,000 shares of common
stock to the placement agents in accordance with SFAS No. 123. At November 30,
1997, all Debentures had been converted into 2,493,201 shares of the Company's
common stock and all deferred charges had been amortized to expense. As of
November 30, 1997, investors from the January Offering had exercised 180,000
warrants resulting in net proceeds to the Company of $225,000.
In April 1997, the Company concluded a $1,500,000 offering of
convertible notes (the "Notes') due eighteen months after closing and warrants
to purchase 300,000 shares of common stock (the "April Offering") at exercise
prices ranging from $.97 to $1.05. The Notes are convertible after a sixty day
holding period into shares of common stock at a conversion price equal to the
lower of the average closing bid prices on the five trading days preceding the
date of the April Offering closing or 70% of the average closing bid prices on
the five trading days preceding the date of the conversion of the Notes upon
conversion. Upon conversion, the note holders receive 4,000 shares of the
Company's common stock in lieu of interest for each $100,000 converted. The net
proceeds from the April Offering were approximately $1,247,000 after deducting
commissions and expenses of
10
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GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
November 30, 1997
6. Convertible Notes Payable -(Continued)
approximately $253,000. The Company also issued immediately exercisable two year
warrants to purchase 154,839 shares of common stock at an exercise price of $.97
per share to the placement agents. The Company recorded a deferred charge of
approximately $643,000 associated with the impact of the 30% discount from
market to be realized upon conversion of the Notes. The Company also recorded
deferred financing costs of $64,600 in connection with the issuance of warrants
to purchase 454,839 shares of common stock to the investors and placement agents
in accordance with SFAS No. 123. These deferred charges are being amortized over
the estimated life of the notes. As of November 30, 1997, $386,000 of the notes
had been converted into 589,403 shares of common stock including 15,440 shares
associated with accrued interest.
Pursuant to the terms of the notes, the Company filed a Registration
Statement on Form S-3 in May 1997 to register the shares of common stock
issuable upon conversion of the notes, payment of interest and upon exercise of
the warrants to purchase 454,839 shares of common stock. Effective July 1997,
the Company is required to pay the investors 2.5% of their principal investment
per month as a penalty for each month or portion thereof prior to the date the
Form S-3 is declared effective. The Form S-3 was declared effective by the
Securities and Exchange Commission on November 12, 1997. At November 30, 1997
the Company has recorded $162,500 of additional financing costs pursuant to
these terms.
7. Notes Payable, Related Parties
During June and July 1997, the Company borrowed an additional $386,000
from four officers of the Company and issued warrants to purchase 77,200 shares
of common stock at exercise prices ranging from $.72 to $.97 per share. The
notes are convertible after a one hundred and twenty day holding period into
shares of common stock at a conversion price equal to the lower of the average
closing bid price on the five trading days preceding the closing or 70% of the
average closing bid prices on the five trading days preceding the date of the
conversion of such notes. The Company recognized a deferred charge of $166,002
associated with the impact of the 30% discount from market to be realized upon
conversion and $7,800 of non-cash deferred financing costs in connection with
the issuance of the warrants to the officers to purchase 77,200 shares of common
stock in accordance with SFAS No. 123.
On November 25, 1997, Palomar Medical Technologies, Inc. ("Palomar")
converted $200,000 of principal and $22,685 of accrued interest into 222,685
shares of common stock pursuant to the terms of its $1,200,000 convertible note
payable. In January 1998, Palomar converted an additional $200,000 of principal
and $25,452 of accrued interest into 225,452 shares of common stock. The Company
has received an extension until January 31, 1998 to pay the remaining balance of
the convertible note.
8. Capital Leases
At November 30, 1997, the Company was eight months past due on amounts
due under its injection molding equipment leases. Past due principal payments at
November 30, 1997 amounted to $314,000. Accordingly, the lessor has the right to
demand the payment of all amounts due under the past due lease agreements. The
Company is currently negotiating new payment terms with the lessor for past due
amounts (See Note 9) and as of January 16, 1998 has not received notification of
the lessor's intent to exercise any of the default remedies available. As a
result of the default, the Company has classified all payments due under the
affected leases as current liabilities at November 30, 1997.
Effective October 1997, the Company entered into a fifteen-year
cryogenic equipment lease agreement with Cryopolymer's Leasing, Inc., a former
stockholder of Cryopolymers. Under the terms of the agreement, Cryopolymers will
pay $25,500 per month rental plus an additional rent of $100,000 per year for
the first six years of the agreement to be payable in the Company's common stock
with the number of shares determined using the closing bid price of the common
stock on each December 31. The lease has been classified as a capital lease at
November 30, 1997 and has a value of $3,063,000.
11
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GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
November 30, 1997
9. Subsequent Events
Shutdown of Injection Molding Operations
The Company has determined that it will discontinue operations at its
Malvern, Arkansas facility (the "facility'). The facility is engaged in
providing injection molding manufacturing services to customer specifications
("Contract/Custom molding") in the production of plastic and thermoplastic
rubber parts for such products as stereo components and speakers, water filters
and pumps, plumbing components and automotive accessories.
During the year ended May 31, 1997, the facility's revenues totaled
$1,936,450 and had net losses totaling $589,094. For the three and six months
ended November 30, 1997, the facility's revenues were $327,760 and $895,831,
respectively and the facility's net losses were $297,536 and $444,570,
respectively. For the three and six months ended November 30, 1996, the
facility's revenues were $227,461 and $645,922, respectively and the facility
had net losses of $215,325 and $439,083, respectively. For the year ended May
31, 1997 and the three and six months ended November 30, 1997, the facility's
revenues represented 48%, 10% and 15% , respectively of consolidated revenue and
38%, 30% and 21% of the Company's consolidated net loss. At May 31, 1997 and
November 30, 1997, the facility's assets totaled $3,411,979 and $3,055,558,
respectively, and represented 45% and 17% of consolidated assets.
The Company is currently exploring several alternatives with respect to
the facility: (1) the sale of the entire operation; (2) the contribution of the
facility's assets into a joint venture; or (3) the relocation of a portion of
the facility's assets to other Company locations and the sale of any remaining
assets. The Company is currently in discussions with several parties regarding
one or more of the following alternatives; however, it has not reached any
understandings or agreements with any party.
The Company has not adopted a formal plan to dispose of the facility
and as a result, is unable to ascertain the financial impact on disposal of the
assets.
Convertible Notes Payable
In December 1997, the Company received $1,600,000 in an offering of 8%
convertible debentures and warrants to purchase 160,000 shares of common stock
(the "December Offering") at an exercise price of $.69 per share. The Company
received a commitment from the December Offering investors for up to an
additional $2,000,000 of financing under similar terms for a period of 12 months
following the December Offering closing. The debentures are convertible after a
sixty day holding period into shares of common stock at a conversion price equal
to the lower of the average closing bid prices on the five trading days
preceding the date of the December Offering closing or 75% of the average
closing bid prices on the five trading days preceding the date of the conversion
of the debentures. The debentures automatically convert into shares of common
stock upon maturity.
The net proceeds from the December Offering were approximately
$1,350,000 after deducting commissions and expenses of approximately $250,000.
The Company paid $750,000 from the proceeds to BFI towards the outstanding loan
payable for the purchase of GMTM and GMTG. The Company has recorded a deferred
charge of approximately $533,000 associated with the impact of the 25% discount
from market to be realized upon conversion of the debentures. The Company also
recorded deferred financing costs of $32,000 in connection with the issuance of
warrants to purchase 320,000 shares of common stock to the investors and
placement agents in accordance with SFAS No. 123. The deferred charges are being
amortized over the estimated life of the debentures.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following information should be read in conjunction with the
unaudited condensed consolidated financial statements and the notes thereto
included in Item 1 of the Quarterly Report, and the audited consolidated
financial statements and notes thereto and Management's Discussion and Analysis
of Financial Condition and Results of Operations contained in the Company's Form
10-KSB filed for the fiscal year ended May 31, 1997.
Overview
GreenMan Technologies, Inc. (the "Company" or "GreenMan") was formed to
primarily develop, manufacture and sell "environmentally friendly" plastic and
thermoplastic rubber parts and products that are manufactured using recycled
materials and/or are themselves partially or wholly recyclable.
The Company's Molding operation (the "Molding operation"), located in
Malvern, Arkansas, provided injection molding manufacturing services to
customers' specifications in the production of plastic and thermoplastic rubber
parts. The facility also conducted research and development on the Company's
GreenMan Environmental Materials ("GEM") Stock and tested the use of these
materials in the manufacture of a variety of potential products. As discussed in
Note 9, the Company has decided effective December 31, 1997 to discontinue
operations at the Malvern facility. Management believes that third party
contract manufacturers can provide the Company with equivalent injection molding
capabilities at equal or less cost.
On October 10, 1995, the Company acquired all of the outstanding common
stock of DuraWear Corporation ("DuraWear"). DuraWear which is located in
Birmingham, Alabama, manufactures, installs and markets a diverse range of high
quality ceramic, polymer composite, and alloy steel materials engineered to
resist severely abrasive and corrosive conditions typically encountered in bulk
material handling systems in such industries as paper and pulp, mining, coal
handling and grain storage and transportation..
On June 30, 1997, the Company acquired BFI Tire Recyclers of Minnesota,
Inc. and BFI Tire Recyclers of Georgia, Inc., (renamed GreenMan Technologies of
Minnesota, Inc. ("GMTM") and GreenMan Technologies of Georgia, Inc. ("GMTG"),
respectively) which provides the Company access to over 10 million tires
annually. The Company was also granted an exclusive option to purchase certain
assets and agreements of BFI's Ford Heights, Illinois tire recycling operation
which has the capacity to process between 12 and 15 million tires annually. The
acquired operations are in the scrap tire collection and processing business
whereby they charge a fee to dispose of customers' scrap tires and then process
the tires into two inch rubber chips which are then sold as alternative fuel
("TDF" - Tire Derived Fuel) to cement kilns, paper and pulp producers and
electric utilities; or utilized in civil engineering projects such as landfill
construction (leach-bed lining), soil erosion and road stabilization projects.
On November 19, 1997, the Company acquired all of the outstanding
common stock of Cryopolymers, Inc., ("Cryopolymers") a privately-held crumb
rubber producer located in St. Francisville, Louisiana. The Company has targeted
several markets with products incorporating significant amounts of recovered
crumb rubber and plastic waste, including the building industry (with
anti-fatigue floor mats, roofing products, and timbers); the lawn and garden
market (with landscape timbers); the consumer products market (with trash
containers, recycling totes, and storage containers); and the transportation
industry (with rubber modified asphalt, nose cones, barriers, railroad ties and
railway crossing mats).
13
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three Months ended November 30, 1997 Compared to the Three Months ended
November 30, 1996
Net sales for the three months ended November 30, 1997 were $3,389,338
as compared to $796,141 for the three months ended November 30, 1996. The
increase of $2,593,197 or 326% was primarily due to the inclusion of revenues
from GMTM and GMTG which collectively totaled $2,333,716.
Gross profit for the three months ended November 30, 1997 was $877,402
or 26% of net sales as compared to $67,633 or 8% of net sales for the three
months ended November 30, 1996. The improvement in gross profit was primarily
due to the inclusion of GMTM and GMTG operations which averaged 27% of revenues
and gross profits from DuraWear's operations which generated a 53% gross margin.
Also contributing to the improvement in gross profit was the elimination of the
Company's "take or pay" tire chip obligation (as a result of the GMTG
acquisition) which expense totaled $112,500 during the three months ended
November 30, 1996. These collective increases offset a gross loss of $125,045
associated with the Company's molding operations during the three months ended
November 30, 1997.
Research and development expenditures were $ 56,735 for the three
months ended November 30, 1997 as compared to $50,321 for the same period in
1996. The increase is attributable to the Company's continued research and
development efforts in identifying applications for ultra-fine mesh crumb
rubber.
Selling, general and administrative expenses were $1,178,028 for the
three months ended November 30, 1997, or 35% of sales as compared to $807,551,
or 101% of sales, for the same period in 1996. The increase of $370,477 was
primarily attributable to the inclusion of GMTM and GMTG's collective operating
expenses of $303,963 and increased professional expense associated with the GMTM
and GMTG acquisition.
As a result of the foregoing, the operating loss for the three months
ended November 30, 1997 decreased by $432,878 to $357,361 or 11% of sales as
compared to an operating loss of $790,239, or 99% of sales for the comparable
period in 1996. Approximately $258,000 of the operating loss for the three
months ended November 30, 1997 was attributable to the Company's molding
operations which were discontinued effective December 31, 1997.
Interest and financing costs increased by $537,554 to $621,861 due to
increased borrowings related to the issuance of $3,665,000 in convertible
debentures during fiscal 1997 and an additional $386,000 in fiscal 1998 and the
inclusion of $124,313 of interest owed on the note payable to BFI. Approximately
$287,398 of the increase is associated with the impact of amortizing the 30%
discount from market to be realized upon conversion of the debentures and
financing expense amortization associated with the borrowings. The Company also
recognized $87,500 of additional financing costs pursuant to the terms of the
debentures as a result of the delay in registering under the Securities Act of
1933 the common stock issuable upon conversion of the debentures issued in the
April 1997 offering.
The Company experienced a net loss of $982,802, or $.12 per share for
the quarter ended November 30, 1997 as compared to a net loss of $892,361, or
$.16 per share for the quarter ended November 30, 1996.
14
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Six Months ended November 30, 1997 Compared to the Six Months ended November 30,
1997
Net sales for the six months ended November 30, 1997 were $6,104,668 as
compared to $1,683,007 for the six months ended November 30, 1996. The increase
of $4,421,661 or 263% is due to the inclusion of revenues from GMTM and GMTG
which collectively totaled $3,995,381 and a $75,842 increase in DuraWear's
revenue.
Gross profit for the six months ended November 30, 1997 was $1,610,995
or 26% of net sales as compared to $228,460 or 14% of net sales for the six
months ended November 30, 1996. The improvement in gross profit was primarily
due to the inclusion of GMTM and GMTG operations which averaged 29% of revenues
and gross profits from DuraWear's operations which generated a 51% gross margin.
Also contributing to the improvement in gross profit was the elimination of the
Company's "take or pay" tire chip obligation (as a result of the GMTG
acquisition) which expenses totaled $225,000 during the six months ended
November 30, 1996. These collective increases offset a negative gross profit of
$113,587 associated with the Company's molding operations during the six months
ended November 30, 1997.
Research and development expenditures were $ 139,050 for the six months
ended November 30, 1997 as compared to $117,406 for the same period in 1996. The
increase is attributable to the Company's continued research and development
efforts in identifying applications for ultra-fine mesh crumb rubber.
Selling, general and administrative expenses decreased $20,187 to
$2,017,510 for the six months ended November 30, 1997 as compared to $2,037,697
for the same 1996 period. The results for the six months ended November 30, 1997
reflect $492,721 of expenses associated with the inclusion of GMTM and GMTG
since July 1, 1997 and increased professional expenses associated with the
acquisition. This increase was offset by the elimination of approximately
$455,000 of one-time expenses incurred in the same period in 1996 associated
with a significant financial public relations campaign and the non-cash expense
in connection with the issuance of common stock warrants and options in
accordance with SFAS No. 123, "Accounting for Stock- Based Compensation". The
results for the six months ended November 30, 1996 also reflected $266,880 of
costs associated with the Company's recycling operation which had been operating
under limited conditions.
As a result of the foregoing, the operating loss for the six months
ended November 30, 1997 decreased by $1,381,078 to $545,565 as compared to an
operating loss of $1,926,643 for the comparable period in 1996.
Interest and financing costs increased by $ 1,345,509 to $1,525,114 due
to increased borrowings related to the issuance of $3,665,000 in convertible
debentures during fiscal 1997 and an additional $386,000 in fiscal 1998 and the
inclusion of $205,552 of interest owed on the note payable to BFI. Approximately
$933,971 of the increase is associated with the impact of amortizing the 30%
discount from market to be realized upon conversion of the debentures and
financing expense amortization associated with the borrowings. The Company also
recognized $162,500 of additional financing costs pursuant to the terms of the
debentures as a result of the delay in registering under the Securities Act of
1933 the common stock issuable upon conversion of the debentures issued in the
April 1997 offering.
The Company experienced a net loss of $2,082,543, or $.26 per share for
the six months ended November 30, 1997 as compared to a net loss of $2,157,341,
or $.41 per share for the six months ended November 30, 1996.
15
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
Since its inception, the Company has satisfied its capital requirements
through the sale of common and preferred stock and debt securities to investors,
loans from affiliated and unaffiliated lenders, the acquisition of machinery and
equipment through capital leases and notes payable, and the issuance of common
stock and common stock options and warrants in lieu of cash for services
rendered.
During June and July 1997, the Company borrowed an additional $386,000
from four officers of the Company and issued warrants to purchase 77,200 shares
of common stock at exercise prices ranging from $.72 to $.97 per share. The
notes are convertible after a one hundred and twenty day holding period into
shares of common stock at a conversion prices equal to the lower of the average
of the closing bid prices on the five trading days preceding the closing or 70%
of the average of the closing bid prices on the five trading days preceding the
date of the conversion of such notes.
During the six months ended November 30, 1997, investors from the
January Offering exercised 180,000 warrants to purchase common stock at $1.25
per share.
Pursuant to the terms of the joint venture agreement between the
Company and Crumb Rubber Technologies, Inc. ("CRT"), in September 1997 the
Company received the first of three $100,000 installments towards the refund of
equipment deposits.
At November 30, 1997, the Company had cash of $859,794, a working
capital deficit of $7,193,460, net capital of $1,539,774 and accumulated losses
of $12,787,476. The working capital deficit includes $1,000,000 of convertible
notes payable and approximately $1,833,000 relating to the reclassification of
certain long term capital lease obligations to current as several leases are in
default. These leases relate to equipment used in the Company's Molding
operations. The Company is currently working with the lessor to bring its
obligations current and has not received any written or verbal notice of the
lessors intention to enforce the default provisions. In January 1998, $200,000
of the convertible notes payable and $24,250 of accrued interest were converted
into 224,250 shares of common stock. The Company anticipates that the remaining
convertible notes payable outstanding balances will be converted into common
stock pursuant to their respective terms in lieu of repayment.
In December 1997, the Company concluded $1,600,000 in an offering of 8%
convertible debentures and warrants to purchase 160,000 shares of common stock
(the "December Offering") at an exercise price of $.69 per share. The Company
received a commitment from the December Offering investors for up to an
additional $2,000,000 of financing under similar terms for a period of 12 months
following the December Offering closing. The debentures are convertible after a
sixty day holding period into shares of common stock at a conversion price equal
to the lower of the average closing bid prices on the five trading days
preceding the date of the December Offering closing or 75% of the average
closing bid prices on the five trading days preceding the date of the conversion
of the debentures. The debentures automatically convert into shares of common
stock upon maturity. The net proceeds from the December Offering were
approximately $1,350,000 after deducting commissions and expenses of
approximately $250,000. The Company paid $750,000 from the proceeds to BFI
towards the outstanding note payable for the purchase of GMTM and GMTG and has
received a commitment letter from a third party lender to provide permanent
asset-based debt financing necessary to repay the amounts owed to BFI. The
Company anticipates closing this financing prior to the end of February.
Based on the Company's operating plans management believes that the
available working capital together with revenues from operations, the equity
financing commitment secured in December 1997, the purchase of equipment through
lease financing arrangements and the successful refinancing of the BFI short
term note will be sufficient to meet the Company's cash requirements through the
end of fiscal 1998. The Company expects that additional financing will be
required after this time in order to fund continued growth. Management has
identified and is currently evaluating several immediate financing alternatives
and diligently working to determine the feasibility of each alternative. No
assurances can be given that such financing will be concluded in the near future
on favorable terms, if at all. If the Company is unable to obtain additional
financing, its ability to maintain its current level of operations could be
materially and adversely affected and the Company may be required to adjust its
operating plans accordingly.
16
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Factors Affecting Future Results
The Company's revenue and operating results may fluctuate from quarter
to quarter and from year to year due to a combination of factors, including (i)
refacilitation of the Company's crumb rubber plant and production of crumb
rubber in commercial quantities at a price that will be competitive in the
market; (ii) the Company's ability to secure additional customers for its
products, thereby reducing its reliance on a few major customers; (iii) the
Company's ability to refinance the GMTM and GMTG acquisition related short term
note and the Company's ability to integrate and manage the operations of GMTM,
GMTG and Cryopolymers, Inc., its recently acquired subsidiaries; (iv) market
acceptance of the Company's proposed GEM Stock material and GreenMan consumer
products; (v) ability to obtain raw materials from suppliers on terms acceptable
to the Company; and (vi) general economic conditions. The Company's plans and
objectives, are based on assumptions that it will be successful in integrating
the operations of GMTM,GMTG and Cryopolymers, Inc., that it will produce crumb
rubber at a price that will be competitive in the market, that the Company will
be successful in receiving additional financing to fund future growth and that
there will be no material adverse change in the Company's operations or
business.
Assumptions relating to the foregoing involve judgments with respect
to, among other things, future economic, competitive and market conditions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. As a result, there can be no assurance that
the Company will be able to achieve or sustain profitability on a quarterly or
annual basis. In light of the significant uncertainties inherent in the
Company's business, forward-looking statements made in this report should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.
17
<PAGE>
PART II - OTHER INFORMATION
November 30, 1997
Item 1. Legal Proceedings
There has been no significant changes in legal proceedings
during the quarter ended November 30, 1997.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.64 -- Act of Sale of Common Stock of Cryopolymers,
Inc. between Messer Griesheim Industries,
Inc. and GreenMan Technologies, Inc.
Exhibit 10.65 -- Agreement of Settlement and Release between
Messer Griesheim Industries, Inc. and
GreenMan Technologies, Inc.
Exhibit 10.66 -- Act of Sale of Common Stock of Cryopolymers,
Inc. between Cryopolymers Leasing , Inc. and
GreenMan Technologies, Inc.
Exhibit 10.67 -- Act of Sale of Common Stock of Cryopolymers,
Inc. between Cryopolymers Management, Inc.
and GreenMan Technologies, Inc.
Exhibit 10.68 -- Equipment Lease between GreenMan
Technologies, Inc. and Cryopolymers Leasing
Inc.
Exhibit 10.69 -- Letter from Palomar Medical Technologies,
Inc. to the Company extending the maturity
date of the December 1996 Note.
Exhibit 10.70 -- Form of Securities Purchase Agreement
between the Company and various investors in
connection with the December 1997 Offering
of Convertible Notes due December 2000 and
Warrants.
Exhibit 10.71 -- Form of Registration Rights Agreement
between the Company and various investors in
connection with the December 1997 Offering
of Convertible Notes due December 2000 and
Warrants.
Exhibit 10.72 -- Form of Convertible Notes due December 2000.
Exhibit 10.73 -- Form of Common Stock Purchase Warrant.
Exhibit 11 -- Statement regarding net loss per share.
Exhibit 27 -- Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended November 30, 1997.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934 , the
Registrant certifies that it has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
By: GreenMan Technologies, Inc.
/s/ Robert H. Davis
Robert H. Davis
Chief Executive Officer
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- ------- ----
<S> <C> <C>
/s/ Robert H. Davis Chief Executive Officer January 20, 1998
Robert H. Davis (Principal Executive Officer)
/s/ Joseph E. Levangie Chief Financial Officer and Director January 20, 1998
Joseph E. Levangie (Principal Financial Officer and
Principal Accounting Officer)
</TABLE>
19
EXHIBIT 10.64
ACT OF SALE OF COMMON STOCK OF
CYROPOLYMERS, INC.
"THE COMPANY"
THE AGREEMENT made as of the 18th day of November, 1997, by and between
Messer Griesheim Industries, Inc. (hereinafter referred to as the "Seller") and
GreenMan Technologies, Inc. (hereinafter referred to as the "Purchaser").
I. RECITALS
1. There are presently 1,000 shares of issued and outstanding common
stock of the Company out of 10,000 shares authorized. There are presently no
treasury shares held by the Company.
2. The Seller is the owner of 475 shares of Common Stock ( or 47.5%) of
the issued and outstanding stock of Cryopolymers, Inc. ("the Shares") and is
entitled or may be entitled to the receipt of 35 additional shares of common
stock of the Company ("the Entitlement Shares"). Seller's entire interest in the
Company including the shares and the Entitlement Shares are collectively
referred to as "the Collective Shares."
3. The Seller desires to sell to Purchaser, and the Purchaser desires
to purchase the Collective Shares.
4. The Collective Shares represent 51% of the issued and outstanding
common stock of the Company.
5. The sale contemplated hereby is contingent upon Purchaser purchasing
a majority of the issued and outstanding shares of the Company.
<PAGE>
II. AGREEMENTS
In consideration of the covenants, warranties, and mutual agreements
herein set forth, and in reliance upon the representation and warranties
contained herein, the parties do hereby agree as follows:
1. Sale. Subject to all the terms and conditions of this Agreement, the
Seller hereby sells, assigns, transfers, and delivers to Purchaser, and the
Purchaser hereby purchases the "Collective Shares" which represent 51% percent
of the issued and outstanding shares of the common stock of the Company on this
date. Seller represents to Purchaser that no stock certificates evidencing the
Collective Shares were received by Seller from the Company. The Seller
acknowledges that the Collective Shares represent all the shares of the Company
to which it was entitled and agrees to release the Company and Purchaser from
any and all claims for any shares of the Company other than the Collective
Shares.
2. Purchase Price. In consideration of the sale of Collective Shares,
and subject to the conditions hereafter set forth, Purchaser agrees to issue to
Seller shares of Common Stock, $.01 par value per share, of Purchaser (the
"Purchaser Shares"). The number of Purchaser Shares to be issued shall be an
amount equal to 100,000 shares plus a number of additional shares determined by
dividing $550,000 by the closing price of Purchaser's Common Stock as reported
by the NASDAQ Small-Cap Market in the Wall Street Journal on the last trading
day immediately prior to the day of the closing of this transaction (Act of
Sale). In the event that the number of Purchaser Shares calculated pursuant to
the forgoing formula results in a fractional share, the number of Purchaser
Shares to be issued to Seller shall be rounded to the next whole share. In
addition, the number of Purchaser Shares issuable to Seller shall be subject to
adjustment for events such as a reorganization, consolidation or merger of the
Purchaser, a stock
2
<PAGE>
split or stock dividend made by the Purchaser, or a similar event. Accordingly,
Seller shall be entitled to the same rights with respect to the Purchaser Shares
as granted to Purchaser in Sections 3, 4 and 5 of the Common Stock Purchase
Warrant of even date herewith issued by Purchaser to Seller.
Seller understands and agrees that a meeting of shareholders of
Purchaser is required to approve an increase in the number of shares of Common
Stock authorized under Purchaser's Certificate of Incorporation prior to
delivery of the Purchaser Shares. In the event that shareholder approval is not
obtained by Purchaser, Purchaser shall pay to Seller no later than April 1, 1998
the sum of $650,000.00 plus interest on said sum at the rate of eight percent
(8%) per annum (calculated from the date of this Act of Sale until the payment
date) in cash or in Common Stock of Purchaser, valued as in this paragraph.
Purchaser also agrees that it will register the Purchaser Shares under
the Securities Act of 1933, as amended, as soon as practicable after the
shareholders approve the amendment to the Company's Certificate of
Incorporation, provided however, that such registration shall only occur in
connection with the registration of other shares of Common Stock of Purchaser
that the Purchaser is required to register at the time.
3. Further Conditions of Sale.
A. In further consideration of the sale of the
Collective Shares, Seller agrees to provide
sufficient evidence of a release of the existing
nitrogen sales contract between Seller and the
Company to allow Purchaser to obtain competitive
bids. It is understood and agreed that Seller shall
have the right to match the lowest bona fide written
competitive offer received by Purchaser or the
Company for supply to the Company's St. Francisville
facility (the "Facility");
In the event that Seller is unable or unwilling to
match the lowest bona fide written competitive offer
received by Purchaser or the Company for gas sales to
the Facility, the parties understand and agree that
Seller may
3
<PAGE>
remove at is expense equipment owned by Seller that
is located at the Facility. A list of Seller's
equipment is attached hereto as Exhibit A.
B. Purchaser and Seller hereby agree to release and
fully acquit one another from any and all claims in
any way involving the Facility, known and unknown,
anticipated or unanticipated, pursuant to the terms
and conditions of Agreement of Settlement and Release
attached hereto as Exhibit B;
C. Purchaser grants Seller a warrant to purchase up to
1,200,000 shares of Common Stock of the Purchaser
pursuant to the terms and conditions of the Common
Stock Purchase Warrant attached hereto as Exhibit C;
D. Purchaser agrees to indemnify, defend and hold
harmless Seller from any and all liabilities
attendant to Seller's ownership of the Collective
Shares herein conveyed antedating this Act of Sale
with the exception of any and all accounts payable
owed by the Company as of the closing date to third
parties (other than Cryopolymers Leasing, Inc.),
vendors and taxing authorities all of which are
listed on Exhibit D attached hereto. It is expressly
agreed and understood that at closing, Seller shall
promptly pay all accounts payable of the Company
listed on Exhibit D to said parties and taxing
authorities.
E. Seller shall on or before the Closing release all
security interests in assets owned by the Company,
attached hereto as Exhibit E;
F. On or before the Closing, Seller shall forgive any
and all other obligations owed it by the Company or
which may be owed by the Company;
G. Seller agrees to indemnify and hold harmless
Purchaser and the Company from any obligations the
Company has or may have to Haynes Haselmeir. Said
indemnity applies to all costs of defense and/or to
any payments made compulsorily or by agreement to
Haselmeir. Seller also agrees to indemnify Purchaser
for any breach of Seller's representations made under
paragraph 3 hereof.
4. Arbitration. any and all claims or controversies arising out of this
Agreement shall be submitted to and settled by binding arbitration in Louisiana
in accordance with the commercial rules of the American Arbitration Association
then in effect, and judgement upon the award rendered in such arbitration may be
entered in any court having jurisdiction over the claim or controversy.
4
<PAGE>
5. Seller's Representations
A. Seller has good and marketable title to the
Collective Shares. The Collective Shares on the
Closing Date will be free and clear of any and all
covenants, conditions, restrictions, voting trust
arrangements, liens, charges, encumbrances, options
and adverse claims or rights whatsoever.
B. The Seller the full right, power and authority to
enter into this Act of Sale and to transfer and
convey to Purchaser the Collective Shares to be
surrendered and conveyed by the Seller hereunder and,
upon the surrendering thereof for cancellation,
Purchaser will acquire from the Seller good and
marketable title to the Collective Shares, free and
clear of all covenants, conditions, restrictions,
voting trust arrangements, liens, charges,
encumbrances, options and adverse claims or rights
whatsoever.
C. As of the Closing, the Seller shall not be a party
to, subject to or bound by any agreement or any
judgment, order, writ, prohibition, injunction or
decree of any court or other governmental body which
would prevent the execution or delivery of this Act
of Sale by the Seller or the transfer, conveyance and
surrender of the Collective Shares to be surrendered
by the Seller to Purchaser pursuant to the terms
hereof.
D. No broker or finder has acted for the Seller in
connection with this agreement or the transactions
contemplated hereby, and no broker or finder is
entitled to any brokerage or finder's fee or other
commissions in respect of such transactions based
upon agreements, arrangements or understandings made
by or on behalf of the Seller.
E. The Seller understands that the Purchaser Shares
being acquired by it have not been registered under
the Securities Act of 1933, as amended, or any state
securities laws and is being offered and sold in
reliance upon federal and state exemptions for
transactions not involving any public offering. The
Seller represents that it has had a full opportunity
to request from Purchaser and to review and has
received all information which it deems relevant in
making a decision to acquire the Purchaser Shares.
6. Access and Information. The Seller has caused the Company to give to
Purchaser and to Purchaser's attorney, accountants, and other representatives
full access, during normal business hours throughout the period prior to the
date first above written, to all of the Company's properties, books, contracts,
commitments, and records, and has furnished and will continue to
5
<PAGE>
furnish such information concerning the Company's affairs as Purchaser has or
may reasonably request.
7. Purchase of Interest in business. The Purchaser represents that its
purchase hereunder is being made for its own account, and with no present
intention of resale. The parties hereto intend that the purchase of stock
evidenced is actually the purchase of an interest of the business conducted by
the Company.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
SELLER:
MESSER GRIESHEIM INDUSTRIES, INC.
By:
JIM DOERR, PRESIDENT
DATE:
PURCHASER:
GREENMAN TECHNOLOGIES, INC.
By:
ROBERT DAVIS, CEO
DATE: 11/18/97
6
EXHIBIT 10.65
AGREEMENT OF
SETTLEMENT AND RELEASE
This agreement is made and entered into this 18th day of November,
1997, by and between Messer Griesheim Industries, Inc. ("MG") and GreenMan
Technologies, Inc. ("GreenMan").
WITNESSETH
WHEREAS, GreenMan and MG entered into and were parties to various
negotiations and discussions which culminated in an agreement or series of
agreements beginning in late 1996;
WHEREAS, a series of disputes arose between MG on the one hand and
GreenMan on the other relative to the agreements or the existence of the
agreements and relative to other matters;
WHEREAS, each of the parties believed and/or asserted that they had
claims or potential claims against the other;
WHEREAS, the parties deny all liability to one another;
WHEREAS, GreenMan and MG desire that all claims that have been, could
have been, or could be asserted by and against one another be compromised and
dismissed;
WHEREAS, the parties desire that the words "and" and "or" as used
herein, be construed as terms of inclusion and not of exclusion and that such
words be construed either disjunctively or conjunctively as necessary to bring
within the scope of this agreement any and all claims and demands that might
otherwise be construed to be outside of its scope;
WHEREAS, the parties desire that the mutual releases contained herein
be construed within reason as broadly as possible, so as to bring within their
scope any and all claims, demands, and causes of action that might otherwise be
construed to be outside their scope;
NOW, THEREFORE, the parties mutually, covenant and acknowledge as
follows:
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STOCK TRANSFERS
1. GreenMan and MG hereby stipulate and agree that any shares of stock
in Cryopolymers, Inc. ("CI") purportedly owned by MG or to which MG has any
claim of ownership have been conveyed by virtue of that Act of Sale Agreement
executed contemporaneous with this agreement. ("The Act of Sale")
2. MG further stipulates and agrees that it has no other ownership
interest in CI and disclaims any and all such interests should they exist.
Should any certificate evidencing MG's ownership of stock exist, then MG will
execute an appropriate document authorizing CI and/or GreenMan to take whatever
action is necessary to cancel such certificate on the corporate records.
3. MG further stipulates and agrees that contemporaneous with the
execution of this document, CI shall have no further obligations to MG
whatsoever including without limitation, rights of repayment of any
indebtedness, right to reclaim property, contractual rights, security interests,
nor shall MG have any rights directly or indirectly, in any assets tangible,
intangible, movable or immovable of CI; proprietary rights in technology
existing at the CI facility, ownership (direct or indirect) in any asset of CI
or any other relationship whatsoever, disclosed or nondisclosed, present or
future.
MUTUAL RELEASES
4. GreenMan does hereby release and forever discharge MG as well as its
respective officers, directors, employees, representatives, agents,
stockholders, affiliates, attorneys, and any and all persons for whom MG might
be liable or responsible for any and all acts, omissions, facts, obligations,
and responsibilities of every kind and character whether asserted or unasserted,
known or unknown, that GreenMan has or may have against MG in any and every
capacity which acts, omissions, facts, obligations, and responsibilities
antedate the execution of this agreement including without limitation; (a) any
and all claims and demands arising out of or in any way connected with
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the ownership, operation of the CI rubber processing facility located in St.
Francisville, Louisiana ("the St. Francisville facility") prior to the date of
execution for this agreement; (b) any and all claims and or demands arising out
of or in any way connected with any agreements written, oral, express or implied
in any way connected with the St. Francisville facility, any proposed facility,
or in any other venture or discussion in which the parties may have been
involved.
5. MG does hereby release and forever discharge GreenMan as well as its
respective officers, directors, employees, representatives, agents,
stockholders, affiliates, attorneys, and any and all person for whom GreenMan
might be liable or responsible for any and all acts, omissions, facts,
obligations, and responsibilities of every kind and character whether asserted
or unasserted, known or unknown, that MG has or may have against GreenMan in any
and every capacity which acts, omissions, facts, obligations, and
responsibilities antedate the execution of this agreement including without
limitation; (a) any and all claims and demands arising out of or in any way
connected with the ownership, operation of the CI rubber processing facility,
the St. Francisville facility, prior to the date of execution of this agreement;
(b) any and all claims and or demands arising out of or in any way connected
with any agreements written, oral, express or implied in any way connected with
the St. Francisville facility, any proposed facility, or in any other venture or
discussion in which the parties may have been involved.
6. The parties to this agreement hereby stipulate and agree that the
mutual releases set forth in paragraphs 1 through 5 hereof include, without
limitation, a full complete and final compromise and settlement of the claims
and defenses that have, could have been, or could be asserted between and among
them in any litigation.
7. The parties have taken into consideration not only the known,
anticipated and ascertained claims, demands, actions, causes of action,
liabilities and damages, but also the possibility that other claims, demands,
actions, causes of action, liabilities or damages may become
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known in the future. Therefore, the parties declare that this agreement shall
apply to all known, unknown, anticipated, unanticipated, ascertained and
unascertained claims, demands, actions, causes of action, liabilities and
damages resulting from the facts giving rise to this agreement as well as those
related in any way thereto, it being the intent of the parties to give the
broadest possible interpretation of the terms of this agreement.
OTHER AGREEMENTS
DECLARATION OF NON-LIABILITY
8. It is understood and agreed that the parties to this agreement have
not admitted any liability or responsibility whatsoever to each other in
connection with the litigation, and it is recognized and understood that the
parties hereto do specifically deny any and all responsibility in connection
with the claims and demands that have been, could have been, and could be
asserted by the other party in litigation.
LAWSUITS & INVESTIGATION
9. Subject only to their legal obligation to comply with a subpoena or
other compulsory process issued in conjunction with a civil proceeding or
investigation, the parties hereby stipulate and agree they will not testify,
either by deposition, affidavit or otherwise, or by transcript in person or
otherwise, in any proceeding involving one another individually or collectively
where any such proceeding is based in whole or in part on facts antedating the
date of this agreement. The parties agree that subject only to the legal
obligation to comply with a subpoena or other compulsory process, they will not
provide to any person documents within their possession, custody or control
which documents concern, refer or relate to one another individually or
collectively, and which concern, refer or relate to any facts annotating the
date of this agreement.
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10. If subpoenaed or otherwise compelled to testify or to provide such
documents, the parties will notify one another of the subpoena or other
compulsory process by mailing such notice to the other parties identified in
paragraph 20 herein within three (3) days after receiving such subpoena or
compulsory process. The parties agree collectively and individually that in the
event of a breach of this agreement, they cannot adequately receive redress in
the form of monetary damages and hereby stipulate to injunctive relief in
addition to any other relief to which they may be entitled.
SEVERABILITY
11. If any provision of this agreement is determined by a court of
competent jurisdiction or an arbitration panel to be invalid or unenforceable,
the remainder of this agreement shall remain in full force and effect.
GENERAL PROVISIONS
12. This agreement shall be binding upon the parties, their successors,
heirs and assigns.
13. Each party to this agreement has participated in revising the
agreement and in the event a dispute arises out of it, each party agrees not to
assert that any ambiguities in it shall be construed against any other party.
14. The section headings appearing in this agreement are for
convenience of reference only and are not intended to limit or define the text
of any section or subsection. This agreement shall be construed with all other
agreements executed this date.
15. This agreement has been approved and executed by the parties hereto
after consultation with their respective counsel.
16. The parties hereto agree that all prior discussions and
understandings as to the settlement and compromise of their various claims are
merged into this agreement and/or those agreements executed simultaneously with
this agreement and that these agreements constitute their sole understanding
hereto as to the resolution of their claims and differences.
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17. Neither this agreement nor any provision of it may be modified or
waived in any way except in writing by all parties to this agreement.
18. Both MG and GreenMan warrant that they have full power and
authority to enter into the releases herein.
19. This agreement may be executed in multiple counterparts.
20. All notices shall be in writing. The parties' addresses for the
giving of notices are as follows:
MG Industries, Inc.
c/o Jim Doerr
3 Great Valley Parkway
Post Office Box 3039
Malvern, PA 19355-0739
GreenMan Technologies, Inc.
c/o Robert Davis
7 Kimball Ln., Bldg. A
Lynnfield, MA 01790
A party may change its address by giving notice of the new address. The
change of address shall be effective on the date specified in the notice
provided that the effective date shall be not sooner than fifteen (15) days or
later than forty-five (45) days after the notice is delivered. A notice shall be
deemed given two (2) business days after it was mailed by United States
Certified Mail, Return Receipt Requested, with proper postage pre-paid or when
actually delivered in hand, facsimile, courier, or otherwise (whichever occurs
sooner).
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IN WITNESS WHEREOF, the parties have signed this agreement in the
presence of the undersigned witnesses and notaries, on the dates appearing below
the parties respective signatures.
MG INDUSTRIES, INC.
WITNESS:
By: /s/ James Anderson _____________________________
VICE PRESIDENT
_____________________________
Sworn to and subscribed before me this _______ day of
___________________, 199___.
_____________________________
NOTARY PUBLIC
GREENMAN TECHNOLOGIES, INC.
WITNESS:
By: /s/ Robert H. Davis /s/ Cynthia M. Barker
PRESIDENT
/s/ Joseph E. Levangie
Sworn to and subscribed before me this _______ day of
___________________, 199___.
_____________________________
NOTARY PUBLIC
EXHIBIT 10.66
ACT OF SALE OF COMMON STOCK OF
CRYOPOLYMERS, INC.
"THE COMPANY"
THE AGREEMENT made as of the _______ day of _______, 1997, by and
between Cryopolymers Leasing, Inc. (hereinafter referred to as the "Seller") and
GreenMan Technologies, Inc. (hereinafter referred to as the "Purchaser").
Recitals:
1. There are presently 1,000 shares of issued and outstanding common
stock of the Company out of 10,000 shares authorized. There are presently no
treasury shares held by the Company.
2. The Seller is the owner of 270 shares of the issue and outstanding
common stock of Cryopolymers, Inc.
3. The Seller desires to sell to Purchaser, and the Purchaser, and the
Purchaser desires to purchase 270 issued and outstanding shares (the "Shares")
of the common stock of the Company.
4. The Shares represent 27% percent of the issued and outstanding
common stock of the Company.
5. The sale contemplated hereby is contingent upon Purchaser purchasing
a majority of the issued and outstanding shares of the Company.
Agreements:
In consideration of the covenants, warranties, and mutual agreements
herein set forth, and in reliance upon the representation and warranties
contained herein, the parties do hereby agree as follows:
<PAGE>
1. Sale of Shares; Consideration.
1.01 Sale. Subject to all the terms and conditions of this Agreement,
the Seller hereby sells, assigns, transfers, and delivers to Purchaser, and the
Purchaser hereby purchases the "Shares" which represent 27% percent of the
issued and outstanding shares of the common stock of the Company on this date.
These shares are evidences by stock certificate number _______which has been
duly endorsed by Seller and delivered to Purchaser, receipt of which is hereby
acknowledged.
1.02 Purchase Price. In consideration of the sale of Shares, and
subject to the conditions hereinafter set forth, Purchaser pays to Seller,
receipt of which is hereby acknowledged by Seller, as follows:
1. 100,000 shares of GreenMan Technologies, common stock.
2. In further consideration of the sale of shares, Purchaser and
Seller have entered into a new lease, contemporaneous
herewith, attached as Exhibit "A".
1.03 Right of First Refusal and Stock Transfer Restrictions. Seller
understands that any stock transferred by virtue of this Agreement or by the
Equipment Lease executed by and between them may result in Seller holding at any
given time, a significant number of shares in GreenMan Technology Stock ("the
Stock"). Any sale of a large block of the stock (in excess of 30,000 shares) or
any series of trades constituting a large block, could result in a material
disruption in the share price or in the trading of GreenMan Technology Stock in
the hands of other shareholders. Seller agrees that in the event of its intent
to sell any shares of the stock, it shall first offer these shares to GreenMan
Technologies. The price of the block shall be that price which a bona fide third
party purchaser is, or will be willing to pay for the block of shares Seller
wishes to sell. If GreenMan elects not to purchase the block of shares
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within fifteen (15) days, Seller may then sell the block to the third party bona
fide purchaser on the same terms and conditions offered by Seller to GreenMan.
2. Arbitration. Any and all claims or controversies arising out of this
Agreement shall be submitted to and settled by binding arbitration in Louisiana
in accordance with the commercial rules of the American Arbitration Association
then in effect, and judgment upon the award rendered in such arbitration may be
entered in any court having jurisdiction over the claim or controversy.
3. Access and Information. The Seller has caused the Company to give to
Purchaser and to Purchaser's attorney, accountants, and other representatives
full access, during normal business hours throughout the period prior to the
date first above written, to all of the Company's properties, books, contracts,
commitments, and records, and has furnished and will continue to furnish such
information concerning the Company's affairs as Purchaser has or may reasonably
request. Purchaser warrants that it has made its own investigation of the
affairs of the Company and is not relying on any representation or warranty of
Seller or Company, it being expressly agreed that no such representations or
warranties were given.
4. Purchase of Interest in Business. The Purchaser represents that its purchaser
hereunder is being made for its own account and with no present intention of
resale. The parties hereto intend that the purchase of stock evidenced hereby is
actually the purchase of an interest of the business conducted by the Company.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement.
SELLER:
CRYOPOLYMERS LEASING, INC.
BY: /s/ Ruth Mae Dupin
Ruth Mae Dupin, President
DATE:________________________________
PURCHASER:
GREENMAN TECHNOLOGIES, INC.
BY: /s/ Robert H. Davis
Robert Davis, CEO
DATE: 11/18/97
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EXHIBIT 10.67
ACT OF SALE OF COMMON STOCK OF
CRYOPOLYMERS, INC.
"THE COMPANY"
THE AGREEMENT made as of the ___ day of _______, 1997, by and between
Cryopolymers Management, Inc. (hereinafter referred to as the "Seller") and
GreenMan Technologies, Inc. (hereinafter referred to as the "Purchaser").
Recitals:
1. There are presently 1,000 shares of issued and outstanding common
stock of the Company out of 10,000 shares authorized. There are presently no
treasury shares held by the Company.
2. The Seller is the owner of 255 shares of the issue and outstanding
common stock of Cryopolymers, Inc.
3. The Seller desires to sell to Purchaser, and the Purchaser, and the
Purchaser desires to purchase 255 issued and outstanding shares (the "Shares")
of the common stock of the Company.
4. The Shares represent 25.5% percent of the issued and outstanding
common stock of the Company.
5. The sale contemplated hereby is contingent upon Purchaser purchasing
a majority of the issued and outstanding shares of the Company.
Agreements:
In consideration of the covenants, warranties, and mutual agreements
herein set forth, and in reliance upon the representation and warranties
contained herein, the parties do hereby agree as follows:
<PAGE>
1. Sale of Shares; Consideration.
1.01 Sale. Subject to all the terms and conditions of this Agreement,
the Seller hereby sells, assigns, transfers, and delivers to Purchaser, and the
Purchaser hereby purchases the "Shares" which represent 25.5% percent of the
issued and outstanding shares of the common stock of the Company on this date.
Theses shares are evidences by stock certificate number _______ which has been
duly endorsed by Seller and delivered to Purchaser, receipt of which is hereby
acknowledged.
1.02 Purchase Consideration. In consideration of the sale of Shares,
and subject to the conditions hereinafter set forth, Purchaser shall make
available and Seller agrees to take receipt of;
100,000 warrants to purchase GreenMan Common Stock. The strike price of
the warrants shall be that price at which the last shares of GreenMan
shares are traded in the NASDAQ market on the date of the execution of
this Act of Sale.
The warrants shall vest at the rate of 25,000 warrants at execution of
this Agreement with the balance of the warrants vesting in increments
of 25,000 at six month intervals following the execution of this
Agreement.
2. Arbitration. Any and all claims or controversies arising out of this
Agreement shall be submitted to and settled by binding arbitration in Louisiana
in accordance with the commercial rules of the American Arbitration Association
then in effect, and judgment upon the award rendered in such arbitration may be
entered in any court having jurisdiction over the claim or controversy. 3.
Access and Information. The Seller has caused the Company to give to Purchaser
and to Purchaser's attorney, accountants, and other representatives full access,
during normal business hours throughout the period prior to the date first above
written, to all of the Company's
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<PAGE>
properties, books, contracts, commitments, and records, and has furnished and
will continue to furnish such information concerning the Company's affairs as
Purchaser has or may reasonably request. Purchaser warrants that it has made its
own investigation of the affairs of the Company and is not relying on any
representation or warranty of Seller or Company, it being expressly agreed that
no such representations or warranties were given. 4. Purchase of Interest in
Business. The Purchaser represents that its purchase hereunder is being made for
its won account, and with no present intention of resale. The parties hereto
intend that the purchase of stock evidenced hereby is actually the purchase of
an interest of the business conducted by the Company.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
SELLER:
CRYOPOLYMERS MANAGEMENT, INC.
BY: /s/ Samuel B. Laverne
DATE:________________________________
PURCHASER:
GREENMAN TECHNOLOGIES, INC.
BY: /s/ Robert H. Davis
Robert Davis
Date: 11/18/97
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EXHIBIT 10.68
EQUIPMENT LEASE
This lease, effective as of the last date stated below, is by and
between CRYOPOLYMERS LEASING, INC., of 500 Kirby Street, City of Lake Charles,
Parish of Calcasieu, State of Louisiana, referred to as "Lessor", and GREENMAN
TECHNOLOGIES, INC., of 7 Kimball Lane, Building A, City of Lynnfield, State of
Massachusetts, referred to as "Lessee."
SECTION ONE
PROPERTY LEASED
Lessor leases to Lessee, and Lessee leases from Lessor, the movable
property described in Exhibit "A", attached to and made a part of this agreement
(the "property").
SECTION TWO
TERM OF LEASE
The term of this lease shall be for a fifteen (15) year period
commencing on August 1, 1997, and ending on July 31, 2112.
SECTION THREE
RENT
Lessee agrees to pay Lessor, as rent for the property, both base rent
and bonus rent. Rent for the term of the lease shall be monthly payments of
$25,500.00 payable in advance on or before the first day of each month until the
termination of the lease.
In addition to the base rent, a bonus rent shall be paid on the last
day of each successive year for a six (6) year period beginning on December 31,
1997 and ending December 31, 2002. The bonus rent shall be that amount of common
stock of Lessee, the value of which is equal to the sum of $100,000.00. The
closing bid price as reported by the "NASDAQ" market on the last
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reporting day immediately prior to the date the bonus payment is due will be
used to determine the value of the common stock payable as bonus rental.
Right of First Refusal and Stock Transfer Restrictions. Lessor
understands that any stock transferred by virtue of this Agreement, the Act of
Sale, or by the Non-Qualified Stock Option Agreement executed by and between
them may result in Lessor holding at any given time, a significant number of
shares in GreenMan Technology Stock (the "Stock"). Any sale of a large block of
the stock (in excess of ____ shares) or any series of trades constituting a
large block, could result in a material disruption in the share price or in the
trading of GreenMan Technology Stock in the hands of other shareholders. Lessor
agrees that in the event of its intent to sell any shares of the stock, it shall
first offer these shares to GreenMan Technologies. The price of the block shall
be that price which a bona fide third party purchaser is, or will be willing to
pay for the block of shares Lessor wishes to sell. If GreenMan elects not to
purchase the block of shares within fifteen (15) days, Optionee may then sell
the block to the third party bona fide purchaser on the same terms and
conditions offered by Lessor to GreenMan.
Rent unpaid when due shall bear interest at the rate of eighteen
percent (18%) per year.
SECTION FOUR
LOCATION OF PROPERTY
The property leased under this agreement shall be kept at 4664
Princeville Road, City of St. Francisville, Parish of West Feliciana, State of
Louisiana. It shall not be removed from that location without the prior written
consent of Lessor, which consent shall not be withheld unreasonably.
SECTION FIVE
OWNERSHIP OF PROPERTY
Lessor warrants that the property leased under this agreement is
Lessor's sole and exclusive property. Lessee shall have no right or interest in
such property except as expressly set forth in this agreement. A detailed
schedule of the property leased is attached hereto as Exhibit "A".
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SECTION SIX
IDENTIFICATION MARKS ON PROPERTY
The property leased under this agreement may be identified or marked by
Lessor with appropriate labels, plates, or other markings stating that the
property is owned by Lessor and identifying the property with specific numbers.
Lessee, without Lessor's prior consent, shall not remove any such identifying
markings.
SECTION SEVEN
LESSOR'S RIGHT TO INSPECT
Lessor shall have the right at any time during normal business hours to
enter on the premises where the leased property is located for the purpose of
inspecting it or observing its use, maintenance, and operation, provided Lessor
provides 24 hour notice of intent to inspect to Lessee.
SECTION EIGHT
LESSEE'S INSPECTION AND ACCEPTANCE
Lessee acknowledges that it has inspected every item of property
delivered pursuant to this lease, that they are in good condition or a condition
otherwise acceptable to Lessee, and that Lessee has accepted such property in
its present condition. It is agreed that the property is being leased on an "as
is, where is" basis, with no warranty whatsoever except as to title.
SECTION NINE
RETURN OF PROPERTY
On the expiration or termination of this lease, Lessee agrees to return
to Lessor at Lessee's own expense the property leased, in as good a condition as
it was when delivered to Lessee, ordinary wear and tear resulting from proper
use excepted, to Prosperity Road, City of St. Francisville, Parish of West
Feliciana, State of Louisiana. Should Lessee for any reason be unable to so
return the leased property or any portion thereof to Lessor, Lessee shall pay
Lessor as liquidated damages an amount equal to the option price of the property
shown on the attached Schedule "C", subject to any reduction in the option price
by virtue of Section 23 infra.
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SECTION TEN
WARRANTIES
Lessor does not make any warranties, express or implied, nor shall any
warranties arise by operation of law, as to the property leased, including
fitness for any particular use, merchantability, design, capacity, or
performance.
Warranties made by the seller or manufacturer of the leased property
are assigned by Lessor to Lessee for the term of this lease. In the event of any
claim concerning the location, installation, repair or use of the property
leased or any other claim concerning the property, regardless of cause of
consequence, Lessee's only remedy, if any, shall be against the seller or
manufacturer of the property. No defect, regardless of the cause or consequence,
shall relieve Lessee from performing its obligation under this agreement,
including the payment of rentals.
SECTION ELEVEN
STATUS OF PROPERTY AS PERSONALTY
The property leased under this agreement is, and will at all times
remain, movable property, notwithstanding that such property or any part may now
be, or may become, attached to, or permanently rest on, immovable property.
Lessee agrees to obtain and keep in full force and effect for benefit of Lessor,
a waiver of landlord's lien from the owner(s) of any immovable property upon
which the property lease is located.
SECTION TWELVE
USE, CARE, AND OPERATION OF PROPERTY
Lessee shall use the property in a careful and proper manner, and shall
comply with all laws and regulations prescribed by governmental authority and
with the seller's or manufacturer's instructions relating to the possession,
use, maintenance, repair and operation of the property. The cost of maintenance
and repair shall be the sole responsibility of Lessee without right of
reimbursement from Lessor. Lessee shall keep a log book showing, at a minimum,
the type of maintenance, repair, or replacement work performed, the date, the
cost, and the person ro entity performing the work. All replacement parts to any
of the property shall become a part of the property, and shall likewise be the
property of Lessor.
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Lessee shall provide for the registration and licensing of any property
leased, whenever required. Lessee shall permit the property to be used only by
competent and qualified personnel.
SECTION THIRTEEN
LOSS OR DAMAGE
1. Lessee assumes all risks of loss of or damage to the leased property
from any cause. No loss of or damage to the property shall impair any obligation
of Lessee under this Lease, including the payment of rentals, and all such
obligations shall continue in full force and effect until otherwise discharged.
2. In the event of loss or damage to the leased property, the following
shall apply:
(a) If, in Lessor's judgment, the property is properly and permanently
lost or damaged beyond repair so as to be unusable for the purpose for which the
property is intended, and if Lessor is indemnified to the extent of the agreed
insurable value specified in the attached Schedule "B" for that particular item
of property, the lease shall terminate with respect to such property. If the
property is not insured, or the insurance is not collectible, or the property is
lost or destroyed by a peril not insured against, then, at the option of Lessor,
Lessee shall either replace the property with like property in good condition,
which property shall become the property of Lessor and subject to this lease, or
pay Lessor the agreed on insurance valuation of the property as specified in the
attached Schedule "B", and on payment, Lessee shall become the owner of such
property, and the lease with respect to such property shall be terminated.
(b) In the event the loss or damage to any of the leased property is
capable of being replaced or repaired, and if Lessor shall be indemnified in an
amount less than the agreed on insurance valuation specified in the attached
schedule, Lessor shall have the option of repairing or replacing the property at
Lessee's cost, and the proceeds of any insurance recovered, including the
portion applicable to Lessor's interest, shall be applied in paying for the
costs of repair or replacement. If no insurance is maintained by Lessee, or if
such insurance is uncollectible, or if the damage or loss is caused by a peril
not insured against, Lessee shall be responsible for the costs of repair or
replacement. This lease shall continue uninterrupted after such loss or
destruction until the lease is otherwise terminated.
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3. Lessee shall notify Lessor in writing within fifteen (15) days of
the occurrence of any loss or damage to the leased property, and shall cooperate
fully with Lessor and the insurance company in the investigation and processing
of all claims, and in the recovery of damages from third persons who are or
might be liable.
SECTION FOURTEEN
PERSONAL INJURIES OR DEATH
Liability and responsibility for all claims and damages of any nature,
including personal injuries or death of any person, in connection with the
condition, use, operation, or transportation of the leased property shall be
born by Lessee, and Lessee shall indemnify, defend and hold harmless Lessor
against all such liability, to the fullest extent allowed by law.
SECTION FIFTEEN
INSURANCE
Lessee shall obtain and maintain at all times during the term of this
lease, at Lessee's sole expense, the following insurance coverages:
1. Fire, flood, vandalism, malicious mischief, burglary, and theft
insurance in an amount not less than the agreed on insurance valuation as
specified in the attached Schedule "B".
2. Bodily injury insurance of not less than $1,000,000.00 Dollars per
person and $3,000,000.00 Dollars per accident.
3. Third party property damage insurance in an amount of not less than
$1,000,000.00.
Lessee shall cause Lessor to be named as an additional insured, to the
extent of Lessor's interest in the property. Such insurance shall be endorsed to
constitute primary insurance with respect to any other insurance that Lessor may
have covering such property.
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In the event Lessee fails to pay the premiums of the insurance policies
when due, Lessor may, but is under no obligation to, pay the premiums. Lessee
shall within five (5) days from notice the Lessor has paid the premiums,
reimburse Lessor for such payment. If Lessee fails to reimburse Lessor for such
premiums with the period provided, the amount of unreimbursed premiums shall
bear interest at eighteen percent (18%) per year.
SECTION SIXTEEN
TAXES AND FEES
Lessee shall pay all taxes, assessments, licenses, and registration
fees that may now or hereafter be imposed on the ownership, leasing, possession,
or use of the leased property. Lessee shall furnish Lessor satisfactory proof
that such payment has been made before such taxes, assessments, license and
registration fees become delinquent. If Lessee fails to pay the charges before
the delinquency date, Lessor may, but is not obligated to, pay them. Lessee
shall reimburse Lessor for any such payment within five (5) days from written
notice of payment from Lessor. Any such amounts that remain unreimbursed shall
bear interest at the rate of eighteen percent (18%) per year.
SECTION SEVENTEEN
INVESTMENT TAX CREDIT
Any eligible investment tax credits after the execution of this Lease,
with respect to the leased property allowed by the Internal Revenue Code, as
amended, shall belong to Lessee.
SECTION EIGHTEEN
FREEDOM FROM LIENS
Lessee shall keep the property leased from any claim, levy, lien,
privilege, encumbrance, or other legal process. Lessee shall notify Lessor of
such process in writing within ten (10) days from the receipt of notice of the
claim, levy, lien, privilege or legal process. Lessee shall pay cost of
defending or removing the claim, levy, lien, or legal process, unless the cost
is attributable solely to the acts or omissions of Lessor. Lessee may not place
the property leased on any property owned by another without the written
permission of Lessor.
SECTION NINETEEN
DEFAULT
The following events shall constitute default under this agreement:
1. The nonpayment by Lessee for a period of ten (10) days of any amount
required under this lease to be paid by Lessee.
2. The nonperformance by Lessee of any term or condition of this lease
if it is not cured within ten (10) days after written notice of nonperformance
from Lessor.
<PAGE>
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3. The filing by or against Lessee of any petition under the bankruptcy
laws, debts moratorium laws, or any law for the relief of, or relating to,
debtors.
4. Appointment of any receiver or trustee to take possession of the
property of Lessee, unless the appointment is set aside or withdrawn or stayed
within twenty-five (25) days of the date of the appointment.
5. The subjection of Lessee's property to any levy, seizure,
attachment, lien, privilege, garnishment, assignment, or sale for or by any
creditor or governmental agency, unless the process is set aside within
twenty-five (25) days from the date of such subjection.
SECTION TWENTY
LESSOR'S RIGHT TO PREVENT DEFAULT
In the event Lessee fails to make any payment or do any act as provided
in this lease, Lessor shall have the right, but not the obligation, without
notice to or on demand on Lessee, and without releasing Lessee from any
obligation under this Lease, to pay, purchase, contest, or compromise any
encumbrance, charge, or lien that, in the sole judgment of Lessor, affects the
property leased, and in exercising such right, Lessor may incur any liability
and expend whatever amounts it may deem necessary. All such expenses incurred by
Lessor shall be reimbursed by Lessee within fifteen (15) days from written
notice of their being incurred from Lessor. The amount paid by Lessor on behalf
of Lessee shall bear interest at eighteen percent (18%) per annum from the date
Lessor made the payment.
SECTION TWENTY-ONE
LESSOR'S RIGHTS ON DEFAULT
On the occurrence of any of the events specified in Section Nineteen as
constituting default, Lessor, without notice to or demand on Lessee, may
exercise any and all legal rights including those accorded it by LSA-R.S. 9:3318
A, et seq.
<PAGE>
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SECTION TWENTY-TWO
TERMINATION
Lessee, if not in default in any of its obligations under this
agreement, may terminate this lease with respect to any or all items or property
leased at any time after sixty (60) months from the date of delivery of such
property, by giving sixty (60) days written notice of termination to Lessor.
Lessor, at its option, within sixty (60) days after return of such property, may
sell the property at public or private sale for the highest cash offer made. If,
after deducting all costs and expenses in connection with the storage and sale,
the aggregate net proceeds from such sale exceeds the option price of such
property as stipulated in the attached Schedule "C", Lessor shall pay Lessee
fifty percent (50%) of the excess. If, after making such deductions, the
aggregate net proceeds are less than the specified option price, Lessee shall
pay to Lessor the amount of the difference, on written demand from Lessor. Such
amount shall bear interest at the rate of eighteen percent (18%) per annum from
the date of demand.
SECTION TWENTY-THREE
LESSEE'S OPTION TO PURCHASE
Lessee, if not in default in any of its obligations under this lease,
shall have an option to purchase any or all items of property leased at any time
after sixty (60) months from the date hereto.
In the event Lessee exercises this option, eighty-five percent (85%) of
the sum paid as base rent shall be applied to the purchase price of the
property. On payment by Lessee to Lessor of the balance of the option price for
such property as is specified in the Schedule "C" attached to this lease, plus
any applicable unpaid sales of use taxes, Lessor will transfer title of the
Leased property to Lessee, and this lease will terminate with respect to such
property.
SECTION TWENTY-FOUR
ASSIGNMENT OR SUBLETTING BY LESSEE
Lessee shall not assign, sublet, transfer, pledge, or mortgage any of
its rights under this lease or any of the property subject of this lease,
without the prior written consent of Lessor.
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Lessee shall not lend or allow the property leased to be used by any
person other than Lessee's employees, without the prior written consent of
Lessor.
Lessor may assign this lease or any of its rights under this agreement
to anyone other than a direct competitor of Lessee without prior notice to
Lessee and without obtaining Lessee's consent. In the event Lessor intends to
assign this lease to a competitor of Lessee, written consent to the assignment
must be obtained by Lessee. This consent may not be unreasonably withheld. Any
such assignee shall have all the rights and obligations of Lessor under this
lease. However, Lessor shall not be relieved from performing any of its
obligations and responsibilities under this lease in the event its assignee is
unable to do so.
SECTION TWENTY-FIVE
WAIVER
No delay or omission to exercise any right of Lessor under this lease
shall be construed as a waiver of any such right or as impairing any such right.
Any waiver by Lessor of a single breach or default shall not be construed as a
waiver of any prior or subsequent breach or default.
SECTION TWENTY-SIX
CREDIT INFORMATION
Lessee certifies that the statements, trade references, and other
documents submitted to Lessor in connection with this lease are material
inducements to the granting of this lease and any material misrepresentation
shall constitute a default under this agreement.
SECTION TWENTY-SEVEN
PLACE OF GIVING NOTICES AND MAKING PAYMENTS
Any notice to be given, and any payments to be made, under this lease,
shall be personally delivered or mailed by registered mail, postage prepaid, at
the address set forth in this lease. Such notice or payment shall be deemed
given or made when actually received.
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SECTION TWENTY-EIGHT
ATTORNEY FEES
In the event judicial proceedings are instituted in connection with
this lease, the unsuccessful party shall pay to the successful party a
reasonable amount for the successful party's attorney fees to be fixed by the
court.
SECTION TWENTY-NINE
SURVIVAL OF LESSEE'S COVENANTS
Lessee's covenants under this Lease shall survive the return of the
property leased, whenever the context permits.
SECTION THIRTY
LEASE NOT A CONSUMER CONTRACT
The lease of the property listed in the attached schedule "A" is for
commercial purposes, and the parties agree that this lease shall not be
construed as a consumer contract.
SECTION THIRTY-ONE
BINDING EFFECT
This lease shall be binding on the respective heirs, legatees, personal
representatives, successors, and assigns of the parties.
SECTION THIRTY-TWO
SEVERABILITY
If any provision of this lease is held invalid by a court of competent
jurisdiction, it shall be considered deleted from this lease, but such
invalidity shall not affect the other provisions that can be given effect in the
absence of the invalid provisions.
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SECTION THIRTY-THREE
ENTIRE AGREEMENT
This lease constitutes the entire agreement between the parties. This
lease shall not be amended except by written agreement signed by both parties.
SECTION THIRTY-FOUR
HEADINGS
Headings or titles to sections or paragraphs of this lease are solely
for the convenience of the parties and shall have no effect whatsoever on the
interpretation of the provisions of this agreement.
SECTION THIRTY-FIVE
GOVERNING LAW
This lease shall be governed by the laws of the State of Louisiana.
<PAGE>
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IN WITNESS WHEREOF, each party has caused this agreement to be executed
on the date indicated below.
"LESSOR"
CRYOPOLYMERS LEASING, INC.
By: /s/ Ruth G. Dupin
, President
Date: 9/12/97
"LESSEE"
GREENMAN TECHNOLOGIES, INC.
By: /s/ Robert H. Davis
Robert Davis, CEO
Date: 10/18/97
EXHIBIT 10.69
January 15, 1998
Mr. Joseph Caruso
Chief Financial Officer
Palomar Medical Technologies, Inc.
45 Harrwell Avenue
Lexington, MA 02173
Dear Mr. Caruso:
This letter shall serve as acknowledgment of GreenMan's request for an extension
until January 31, 1998 of the maturity of the remaining $1,000,000 due on the
July 1, 1997 $1,200,000 convertible note. GreenMan acknowledges that effective
July 2, 1997, the interest rate has increased to 15%.
If you are in agreement with the above, please sign and fax back to my
attention.
Sincerely
/s/ Joseph E. Levangie
Joseph E. Levangie /s/ Joseph P. Caruso
Chief Financial Officer Agreed, Joseph P. Caruso, CFO
Palomar Medical Technologies, Inc.
EXHIBIT 10.70
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between GreenMan
Technologies, Inc, a Delaware corporation, with headquarters located at 7
Kimball Lane, Building A, Lynnfield, MA 01940 ("Company") and the undersigned
(the "Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer are executing and
delivering this Agreement in reliance upon certain exemptions from securities
registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and/or
Section 4(2) of the 1933 Act; and
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, 8% Convertible Debentures (the
"Debentures"), of the Company which will be convertible into shares of Common
Stock, $.01 par value per share (the "Common Stock"), of the Company upon the
terms and subject to the conditions of such Debentures (the Common Stock and the
Debentures sometimes referred to herein as the "Securities"), and subject to
acceptance of this Agreement by the Company.
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 parties agree as
follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase. The undersigned hereby agrees to purchase from
the Company up to $_________ in principal amount of Debentures, $_______
principal amount at the Closing Date as defined below, and the balance as more
specifically set forth in P. 4(i) hereof. The purchase price for each Debenture
shall be 100% of the principal amount of such Debenture (the "Purchase Price")
and shall be payable in United States Dollars. The Debentures offered hereby are
part of an aggregate offering of up to $3,600,000 in principal amount of
Debentures, including $1,600,000 principal amount at the First Closing. The
Debentures shall be substantially in the form attacged hereto as Annex I. In the
event that any buyer in the offering does not fulfill its obligation to purchase
Additional Debentures (as defined in P. 4(j) hereof), then the Buyer shall have
the right, but not the obligation to purchase such Additional Debentures.
b. Form of Payment. The Buyer shall pay the Purchase Price for
each Debenture by delivering immediately available good funds in United States
Dollars to the escrow agent (the "Escrow Agent") identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions") as
set forth below. Promptly following payment by the Buyer to the Escrow Agent of
the Purchase Price of the Debenture, the Company shall deliver the Debenture
duly executed on behalf of the Company to the Escrow Agent. By signing this
Agreement, the
<PAGE>
Buyer and the Company, and subject to acceptance by the Escrow Agent, each
agrees to all of the terms and conditions of, and becomes a party to, the Joint
Escrow Instructions, all of the provisions of which are incorporated herein by
this reference as if set forth in full.
c. Method of Payment. Payment into escrow of the Purchase
Price for each Debenture shall be made by wire transfer of funds to:
Gersten, Savage, Kaplowitz & Fredericks LLP
101 East 52nd Street, 9th Floor
New York, New York 10022
Attention: Wesley C. Fredericks, Jr.
Account Name: Gersten, Savange et. al. Escrow Account
Citibank N.A.
111 Wall Street
New York, NY
ABA #: 021000089
Account No.: 37959725
F/B/O GreenMan Technologies, Inc
Not later than 1:00 p.m., New York time, on the date which is one (1)
New York Stock Exchange trading day after the Company shall have accepted this
Agreement and returned a signed counterpart of this Agreement to the Escrow
Agent by facsimile (the "Closing Date"), the Buyer shall deposit with the Escrow
Agent the Purchase Price for the initial $_______ Debenture, in currently
available funds. Time is of the essence with respect to such payment on the
Closing Date and each Additional Closing Date (as defined in P. 4j hereof), and
failure by the Buyer to make such payment, shall allow the Company to cancel
this Agreement.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
a. Without limiting Buyer's right to sell the Common Stock
pursuant to the Registration Statement as defined in the Registration Rights
Agreement, the Buyer is purchasing the Debentures and will be acquiring the
shares of Common Stock issuable upon conversion of the Debentures for its own
account for investment only and not with a view towards the public sale or
distribution thereof and not with a view to or for sale in connection with any
distribution thereof;
b. The Buyer is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), and (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company
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<PAGE>
or any of its affiliates or selling agents), to protect its own interests in
connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its investment in the
Securities;
c. All subsequent offers and sales of the Debentures and the
shares of Common Stock issuable upon conversion of, or issued as interest on,
the Debentures (the "Shares" or "Common Stock" and, together with the
Debentures, the "Securities") by the Buyer shall be made pursuant to
registration of the Shares under the 1933 Act or pursuant to an exemption from
registration;
d. The Buyer understands that the Debentures are being offered
and sold, and the Shares are being offered, to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Debentures and to receive an offer of the Shares, and Buyer shall
indemnify and hold harmless the Company from and against any liability incurred
by the Company proximately caused by any breach thereof by Buyer;
e. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Debentures and the
offer of the Shares which have been requested by the Buyer, including Annex VI
hereto. The Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and have received complete and satisfactory
answers to any such inquiries. Without limiting the generality of the foregoing,
the Buyer has also had the opportunity to obtain and to review the Company's (1)
Annual Report on Form 10-KSB for the fiscal year ended May 31, 1997, as amended,
(2) Quarterly Report on Form 10-QSB for the fiscal quarter ended August 31,
1997, and (3) Registration Statement on Form S-3 (file No. 333-27625) (the
"Company's SEC Documents");
f. The Buyer understands that its investment in the Securities
involves a high degree of risk;
g. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities;
h. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally;
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<PAGE>
i. Neither Buyer, nor any affiliate of Buyer, shall enter
into, any put option, short position, or other similar position with respect to
the Debentures or the Shares; provided, however, that the foregoing shall not in
any manner restrict the Buyer from selling any Shares simultaneous with, or
following the delivery of a Conversion Notice.
j. Notwithstanding the provisions hereof or of the Debentures,
in no event, other than the automatic conversion of the outstanding amount of a
Debenture at maturity, shall the holder be entitled to convert any Debenture to
the extent after such conversion, the sum of (1) the number of shares of Common
Stock beneficially owned by the Buyer and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debenture), and (2) the number of shares of Common
Stock issuable upon the conversion of the Debenture with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Buyer and its affiliates of more than 4.9% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13 D-G
thereunder, except as otherwise provided in clause (1) of such proviso.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
a. Concerning the Shares. There are no preemptive rights of
any stockholder of the Company, as such, to acquire the Common Shares;
b. Reporting Company Status. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. 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 traded on the NASDAQ/Small Cap. The Company has
received no notice, either oral or written, with respect to the continued
eligibility of the Common Stock for such listing;
c. Authorized Shares. The Company has sufficient authorized
and unissued Shares as may be reasonably necessary to effect the conversion of
the Debentures. The Shares have been duly authorized and, when issued upon
conversion of, or as interest on, the Debentures, will be duly and validly
issued, fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder;
d. Securities Purchase Agreement; Registration Rights
Agreement and Stock. This Agreement and the Registration Rights Agreement, the
form of which is attached hereto as Annex IV (the "Registration Rights
Agreement"), and the transactions contemplated thereby, have been duly and
validly authorized by the Company, this Agreement has been duly executed and
delivered by the Company and this Agreement is, and the Registration Rights
Agreement, when executed and delivered by the Company, will be, valid and
binding agreements of the Company enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws affecting the
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<PAGE>
enforcement of creditors' rights generally; and the Debenture will be duly and
validly authorized and, when executed and delivered on behalf of the Company in
accordance with this Agreement, will be a valid and binding obligation of the
Company in accordance with its terms, subject to general principles of equity
and to bankruptcy, insolvency, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally;
e. Non-contravention. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company, the issuance of
the Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Debentures do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under (i)
the articles of incorporation or by-laws of the Company, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
including any listing agreement for the Common Stock except as herein set forth,
(iii) any existing applicable law, rule, or regulation or any applicable decree,
judgment, or (iv) order of any court, United States federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction over
the Company or any of its properties or assets, except such conflict, breach or
default which would not have a material adverse effect on the transactions
contemplated herein;
f. Approvals. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or of
any stock exchange or market or the stockholders of the Company is required to
be obtained by the Company for the issuance and sale of the Securities to the
Buyer as contemplated by this Agreement, except such authorizations, approvals
and consents that have been obtained;
g. SEC Filings. None of the SEC Filings with the Securities
and Exchange Commission since June 1, 1996 contained, at the time they were
filed, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements made
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 Securities and Exchange Commission;
h. Absence of Certain Changes. Since June 1, 1997, there has
been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, or results of operations
of the Company, except as disclosed in Annex VI or in the documents referred to
in Section 2(e) hereof;
i. Full Disclosure. There is no fact known to the Company
(other than general economic conditions known to the public generally) or as
disclosed in the documents referred to in Section 2(e), that has not been
disclosed in writing to the Buyer that (i) could reasonably be expected to have
a material adverse effect on the condition (financial or otherwise) or in the
earnings, business affairs, properties or assets of the Company or (ii) could
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations pursuant to this Agreement;
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<PAGE>
j. Absence of Litigation. Except as set forth in Annex VI
hereto, and in the documents referred to in Section 2(e), which the Buyer has
reviewed, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body pending or, to the knowledge of the
Company or any of its subsidiaries, threatened against or affecting the Company
or any of its subsidiaries, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the properties, business, condition
(financial or other), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by this Agreement
or any of the documents contemplated hereby or which would adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of such other documents;
k. Absence of Events of Default. Except as set forth in Annex
VI hereto, no Event of Default, as defined in the respective agreement to which
the Company is a party, and no event which, with the giving of notice or the
passage of time or both, would become an Event of Default (as so defined), has
occurred and is continuing, which would have a material adverse effect on the
Company's financial condition or results of operations;
l. No Default. Except as set forth on Annex VI, the Company is
not in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust or other material instrument or agreement to which it is a party or by
which it or its property is bound, and neither the execution, nor the delivery
by the Company, nor the performance by the Company of its obligations under this
Agreement or the Debentures, other than the conversion provision thereof, will
conflict with or result in the breach or violation of any of the terms or
provisions of, or constitute a default or result in the creation or imposition
of any lien or charge on any assets or properties of the Company under, any
material indenture, mortgage, deed of trust or other material agreement
applicable to the Company or instrument to which the Company is a party or by
which it is bound or any statute or the Articles of Incorporation or By-Laws of
the Company, or any decree, judgment, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or its
properties, or the Company's listing agreement for its Common Stock;
m. Prior Issues. During the twelve (12) months preceding the
date hereof, the Company has not issued any securities except as set forth in
the documents listed in P. 2e hereof. Except as set forth in Annex VI hereto, no
person holds any registration rights or conversion rights with respect to any
securities of the Company.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyer acknowledges that (1) the
Debentures have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyer shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company and its transfer agent,
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such
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<PAGE>
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other person is under any obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.
b. Restrictive Legend. The Buyer acknowledges and agrees that
the Debentures, and, until such time as the Common Stock has been registered
under the 1933 Act as contemplated by the Registration Rights Agreement and sold
in accordance with such Registration Statement, the shares of Common Stock
issued to the Holder upon conversion of the Debentures shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the Debenture and such shares of Common Stock):
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR
CANADIAN PROVINCE, OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES ARE RESTRICTED AND MAY NOT BE
OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
c. Registration Rights Agreement. The parties hereto agree to
enter into the Registration Rights Agreement, in substantially the form attached
hereto as Annex IV, on or before the Initial Closing Date.
d. Filings. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Debentures to the Buyer
under any United States laws and regulations, or by any domestic securities
exchange or trading market, and to provide a copy thereof to the Buyer promptly
after such filing.
e. Reporting Status. So long as the Buyer beneficially owns
any of the Debentures, the Company shall file all reports required to be filed
with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would permit such termination.
f. Use of Proceeds. The Company will use the proceeds from the
sale of the Debentures (excluding amounts paid by the Company for legal fees and
finder's fees in connection
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with the sale of the Debentures) for internal working capital purposes , and
shall not, directly or indirectly, use such proceeds for any loan to or
investment in any other corporation, partnership enterprise or other person,
except for wholly owned subsidiaries or for the purpose of making acquisitions
of businesses.
g. Certain Agreements. For a period of fifteen (15) months
following the First 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 financing) to purchase any debt or equity
securities of the Company which the Company intends to offer in a private
placement transaction for cash proceeds. However, this provision shall not apply
to (x) the issuance of securities (other than for cash) in connection with a
merger, consolidation, sale of assets, disposition of a business, sale of
products or granting of a license by the Company in the ordinary course of
business, strategic alliance, bank loan or agreement, compensation to employees
or consultants, the exercise of outstanding options and warrants, or the
conversion of any outstanding covertible securities or (y) the exchange of the
capital stock for assets, stock, partnership, limited liability company, or
other joint venture interests.
h. Available Shares. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, shares of
Common Stock sufficient to yield the number of Common Stock issuable at
conversion as may be required to satisfy the conversion rights of the Buyer
pursuant to the terms and conditions of the Debentures.
i. Warrants. The Company agrees to issue to Buyer at the
Closing, transferable divisible warrants (the "Warrants") for ______ shares of
Common Stock. Such Warrants shall bear an exercise price per share of Common
Stock as follows: 110% of the Market Price, as defined in the Debenture, on the
Closing Date, and shall be exercisable two (2) business days following issuance,
and for a period of two (2) years thereafter, in the form annexed hereto as
Annex V, and the shares of Common Stock issuable upon exercise of the Warrant
shallbe registered in accordance with the Registration Rights Agreement annexed
hereto as Annex IV. At each date on which Additional Debentures (as defined in
P. 4(j) below) are issued (each an "Additional Closing Date"), the Company shall
issue to the Buyer at each such closing, additional Warrants (as defined in this
P. 4(i)) at the rate of one Warrant for the purchase of 100,000 shares of Common
Stock for each $1 million of Additional Debentures purchased, or pro rated for
any portion thereof.
j. The Buyer irrevocably agrees to purchase up to an
additional $_______ of Debentures (the "Additional Debentures") in a series of
tranches, commencing thirty (30) days after the effective date of the
registration statement contemplated by the Registration Rights Agreement
attached hereto as Annex IV (the "Effective Date") and ending 12 months
following the Effective Date, upon the same terms and conditions and
substantially in the form as those applicable to the initial Debentures issued
pursuant to the Agreement except as set forth in 4(j)(d) and the maturity date
of such Additional Debenture shall be December 15, 2000. Buyer's obligation to
purchase the Additional Debentures, on each Additional Closing Date (which shall
occur not less than thirty (30) days apart), shall be contingent upon the
satisfaction of the following conditions:
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<PAGE>
(a) The Company shall give the Buyer seven (7) days prior
written notice and at least thirty (30) days shall have lapsed since the closing
of the prior tranche;
(b) The Debentures issued in each tranche shall be not less
than $75,000 nor in excess of $175,000 principal amount;
(c) On each Additional Closing Date:
(i) the Registration Statement required to be filed under
the Registration Rights Agreement, is effective;
(ii) The representations and warranties contained in
Section 3 shall be true and correct in all material respects;
(iii) The share value of the Company's Common Stock must
be $.60 or greater and the average daily trading volume of the Company's Common
Stock for the previous three months must exceed 50,000 shares per day;
(iv) The dollar value of the average daily trading volume
of the Company's Common Stock for the previous three months must exceed $600,000
per month;
(v) The number of shares issuable upon conversion of the
Debentures, together with the Shares of Common Stock issued prior thereto
pursuant to this Agreement, will not exceed 20% of the outstanding Common Shares
of the Company.
(d) The conversion price for shares to be issued upon
conversion of the Additional Debentures shall be 75% of the Market Price (as
defined in the Debentures) on the Conversion Date (as defined in the
Debentures). The maximum conversion rate will be 100% of the average closing bid
price of the Common Stock on the five consecutive trading days preceding the
Additional Closing Date.
(e) In the event that the Company does not exercise its option
to require the Buyer to purchase at least $1,219,000 of Debentures (including
the $750,000 at the First Closing), the Company will, not later than twelve (12)
months after the date hereof, issue to the Buyer an additional 46,900 Warrants
upon the terms and conditions of P. 4i hereof. In any event, the Company's
obligations under the Registration Rights Agreement, shall be to register the
necessary Common Stock underlying $3,600,000 in Debentures, and the shares
underlying 360,000 Warrants to purchase Common Stock.
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company will permit the Buyer to exercise its right to
convert the Debenture and/or exercise the Warrant, as the case may be, by
telecopying an executed and completed Notice of Conversion or Exercice Notice,
as the case may be, in the respective forms attached to the Form of Debenture
attached hereto as Annex I and Form of Warrant attached hereto as Annex V, to
the Company and delivering within three business days thereafter, the original
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<PAGE>
Notice of Conversion and the Debenture representing the Shares, or the original
Exercise Notice and Warrant, to the Company by express courier to the Transfer
Agent. Each date on which a Notice of Conversion or Exercise Notice is
telecopied to and received by the Company in accordance with the provisions
hereof shall be deemed a Conversion Date or exercise date. The Company will
transmit, or cause to be transmitted, the certificates representing the Shares
of Common Stock issuable upon conversion of any Debenture (together with a
replacement Debenture representing any principal amount not so converted) or
exercise of the Warrant (together with a replacement Warrant representing any
portion not exercised) to the Buyer via express courier, by electronic transfer
or otherwise, within three (3) business days after receipt by the Company or its
transfer agent of the original Notice of Conversion and the Debenture
representing the Shares to be converted or the original Exercise Notice and
Warrant (the "Delivery Date").
b. In lieu of delivering physical certificate representing the
Common Stock issuable upon conversion of a Debenture or exercise of a Warrant,
provided the company's transfer agent is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer program, upon request of the
Buyer and its compliance with the provisions contained in this paragraph, so
long as the certificates do not bear a legend and the Buyer thereof is not
obligated to return such certificate for the placement of a legend thereon, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion or exercise to the Buyer by
crediting the account of Buyer's Prime Broker with DTC through its Deposit
Withdrawal Agent Commission system.
c. The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Delivery Date could result in economic loss to
the Buyer. As compensation to the Buyer for such loss, the Company agrees to pay
late payments to the Buyer for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond three (3) business days from
Delivery Date):
Late Payment For Each
$10,000 of Debenture
No. Business Days Late Principal Amount Being Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 +$200 for each
Business Day Late beyond
10 days
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<PAGE>
The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Nothing herein shall limit Buyer's right to pursue
actual damages for the Company's failure to issue and deliver Common Stock to
the Buyer. Furthermore, in addition to any other remedies which may be available
to the Buyer, in the event that the Company fails for any reason to effect
delivery of such shares of Common Stock within five business days after the
Delivery Date, the Buyer will be entitled to revoke the relevant Notice of
Conversion by delivering a notice to such effect to the Company whereupon the
Company and the Buyer shall each be restored to their respective positions
immediately prior to delivery of such Notice of Conversion.
6. DELIVERY INSTRUCTIONS.
Each Debenture shall be delivered by the Company to the Escrow
Agent pursuant to Section 1(b) hereof, or a delivery against payment basis at
each closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the initial
$1,600,000 Debenture (the "Closing Date") shall occur no later than 12:00 Noon,
New York time on the second NYSE trading day after the fulfillment or waiver of
all Closing conditions pursuant to Sections 8 and 9, or such other mutually
agreed to time. The Closing shall occur on such date at the offices of the
Escrow Agent. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the funds representing the Purchase
Price for the Debenture, and the Debenture only upon satisfaction of the
conditions set forth in Section 8 hereof. The Additional Debentures shall be
issued and sold on the Additional Closing Dates in accordance with this section
and the Joint Escrow Instructions.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell
the Debentures on the Closing Date and Additional Closing Dates to the Buyer
pursuant to this Agreement is conditioned upon:
a. The receipt and acceptance by the Buyer of this Agreement
as evidenced by execution of this Agreement by the Buyer for at least Seven
Hundred Fifty Thousand ($750,000.00) Dollars in Debenture (or such lesser amount
as the Company, in its sole discretion, shall determine);
b. Delivery by the Buyer to the Escrow Agent of good funds as
payment in full of an amount equal to the Purchase Price for the Debenture in
accordance with Section 1(c) hereof;
c. The accuracy on the Closing Date and each Additional
Closing Date of the representations and warranties of the Buyer contained in
this Agreement as if made on the Closing Date and the performance by the Buyer
on or before the Closing Date and each Additional Closing Date of all covenants
and agreements of the Buyer required to be performed on or before the Closing
Date and each Additional Closing Date;
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<PAGE>
d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to
purchase the Debentures on the Closing Date and each Additional Closing Date is
conditioned upon:
a. Acceptance by the Company of this Agreement for the sale of
Debentures, as indicated by execution of this Agreement;
b. Delivery by the Company to the Escrow Agent of the
appropriate Debenture and Warrant in accordance with this Agreement;
c. The accuracy in all material respects on the Closing Date
and each Additional Closing Date of the representations and warranties of the
Company contained in this Agreement as if made on the Closing Date and such
Additional Closing Date and the performance by the Company on or before the
Closing Date and each Additional Closing Date of all covenants and agreements of
the Company required to be performed on or before the Closing Date and such
Additional Closing Date, and as to Additional Debentures, the conditions set
forth in P. 4j; and
d. On the Closing Date and each Additional Closing Date, the
Buyer having received an opinion of counsel for the Company, dated the Closing
Date and each Additional Closing Date, in form, scope and substance reasonably
satisfactory to the Buyer, to the effect set forth in Annex III attached hereto,
and on the First Closing Date only, the Registration Rights Agreement annexed
hereto as Annex IV.
10. GOVERNING LAW; COST OF COLLECTION; MISCELLANEOUS.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
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<PAGE>
Any costs (including attorneys fees and disbursements) incurred by Buyer with
respect to any default by the Company under this Agreement, the Registration
Rights Agreement, or the Debenture, shall be the obligation of the Company.
11. NOTICES. Any notice required or permitted hereunder shall
be given in writing (unless otherwise specified herein) and shall be deemed
effectively given upon, (a) by personal delivery or fax (with written
confirmation copy by recognized overnight delivery service), or (b) one business
day after deposit with a nationally recognized overnight delivery service such
as Federal Express, with postage and fees prepaid, addressed to each of the
other parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by ten days advance written notice to each of
the other parties hereto.
COMPANY: GREENMAN TECHNOLOGIES, INC
7 Kimball Lane, Building A
Lynnfield, MA 01940
Attn.: Joseph E. Levangie
Telecopier No. (781) 224-0114
with a copy to:
John A. Piccione, Esq.
Sullivan & Worcester, LLP
1 Post Office Square
Boston, MA 02109
Telecopier No. (617) 338-2880
PURCHASER: At the address set forth on the signature page of
the Agreement.
with a copy to:
Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
Telecopier No. (212) 213-2077
ESCROW AGENT: Gersten, Savage, Kaplowitz & Fredericks, LLP
101 East 52nd Street, 9th Floor
New York, NY 10022
Telecopier No. (212) 980-5192
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Company's representations and warranties shall survive the execution and
delivery hereof of this Agreement and the delivery of the Debenture.
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<PAGE>
AGGREGATE INITIAL PURCHASE PRICE OF SUCH DEBENTURE: $ _______
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Securities Purchase
Agreement to be duly executed on its behalf this ___ day of December, 1997.
Amro International S.A.
By: ________________________________
(Signature of Authorized Person)
Address:
=====================
- ---------------------
------------------------------------
Print Name and Title
Jurisdiction of Incorporation
or Organization
This Agreement has been accepted as of the date set forth
below.
GREENMAN TECHNOLOGIES, INC.
By:
Title:
Date:
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<PAGE>
ANNEX I FORM OF DEBENTURE
ANNEX II JOINT ESCROW INSTRUCTIONS
ANNEX III OPINION OF COUNSEL
ANNEX IV REGISTRATION RIGHTS AGREEMENT
ANNEX V FORM OF WARRANT
ANNEX VI COMPANY DISCLOSURE MATERIALS
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<PAGE>
ANNEX VI
COMPANY DISCLOSURE
-16-
EXHIBIT 10.71
Annex IV to
Stock Purchase
Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of December ___, 1997
(this "Agreement"), is made by and between GREENMAN TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and the person named on the signature page
hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of December __, 1997, between the Initial Investor
and the Company (the "Securities Purchase Agreement"), the Company has agreed to
issue and sell to the Initial Investor one or more 8% Convertible Debentures of
the Company (collectively the "Debentures"), and warrants to purchase up to
_______ shares of Common Stock which Debentures will be convertible into shares
of the common stock, $.01 par value (the "Common Stock"), of the Company (the
"Conversion Shares") upon the terms and subject to the conditions of such
Debentures, and the Warrants will be exercisable for shares of Common Stock (the
"Warrant Shares"); and
WHEREAS, to induce the Initial Investor 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
"Securities Act"), with respect to the Conversion Shares and Warrant Shares;
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 Investor hereby agrees as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Investor" means the Initial Investor and any permitted transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
"Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
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").
"Registrable Securities" means the Conversion Shares and the Warrant
Shares.
"Registration Statement" means a registration statement of the Company
under the Securities Act.
<PAGE>
As used in this Agreement, the term Investor includes (i) each Investor
(as defined above) and (ii) each person who is a permitted transferee or
assignee of the Registrable Securities pursuant to Section 9 of this Agreement.
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 prepare and file with the
SEC, no later than fifteen (15) days following the initial Closing Date under
the Securities Purchase Agreement, either a Registration Statement on Form S-3
registering for resale by the Investor a sufficient number of shares of Common
Stock for the Initial Investors (or such lesser number as may be required by the
SEC, but in no event less than the number of shares into which the Debentures
would be convertible and the Warrants exercisable at the time of filing of the
Form S-3, or an amendment to any pending Company Registration Statement on Form
S-3, and such Registration Statement or amended Registration Statement shall
state that, in accordance with Rule 416 and 457 under the Securities Act, it
also covers such indeterminate number of additional shares of Common Stock as
may become issuable upon conversion of the Debentures and the exercise of the
Warrants resulting from adjustment in the Conversion Price, or to prevent
dilution resulting from stock splits, or stock dividends). If at any time the
number of shares of Common Stock into which the Debentures may be converted
exceeds the aggregate number of shares of Common Stock then registered, the
Company shall, within ten (10) business days after receipt of a written notice
from any Investor, either (i) amend the Registration Statement filed by the
Company pursuant to the preceding sentence, if such Registration Statement has
not been declared effective by the SEC at that time, to register all shares of
Common Stock into which the Debenture may be converted, or (ii) if such
Registration Statement has been declared effective by the SEC at that time, file
with the SEC an additional Registration Statement on Form S-3 to register the
shares of Common Stock into which the Debenture may be converted that exceed the
aggregate number of shares of Common Stock already registered. If the staff of
the SEC determines that all of the Conversion Shares cannot be registered by the
Company for resale by the Investor because, in the view of the staff, such
registration would constitute a primary offering by the Company, then the
Company shall have an additional sixty (60) days in which to amend such
registration statement to another available form.
(b) Liquidated Damages. The Company shall use its best efforts to
obtain effectiveness of the Registration Statement as soon as practicable. If
(i) the 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 (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
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<PAGE>
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 Debentures held by such
Investors (including, without limitation, Debentures that have been converted
into Conversion Shares then held by such Investors) (the "Aggregate Share
Price") multiplied by three hundredths (.03) 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 $30,000 for
each $1,000,000 of Aggregate Share Price and would continue to pay $30,000 per
month 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 Debenture), may be convertible into Common Stock at the "Conversion Price"
(as defined in the Debenture). Any shares of Common Stock issued upon conversion
of such amounts shall be Registrable Securities. If the Investor desires to
convert the amounts due hereunder into Registrable Securities it shall so notify
the Company in writing within two (2) 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 Debenture), 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,
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
Debenture. 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 Debenture Shares, and valued at
the Conversion Rate, as such term is defined in Section 4 of the Debenture.
(c) Late Filing Payments by the Company.
If the Registration Statement covering the Registrable Securities is
not filed in proper form with the Securities and Exchange Commission within
twenty five (25) days after the Closing, the Company will make payment to the
Initial Investor in the amount of $500 per day for each $10,000 in principal
amount of Debentures for each day thereafter until such Registration Statement,
in proper form, is filed with the Securities and Exchange Commission.
3. Obligations of the Company. In connection with the registration of
the Registrable Securities, the Company shall do each of the following.
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<PAGE>
(a) Prepare promptly, and file with the SEC by fifteen (15) days after
the initial Closing Date, a Registration Statement with respect to not less than
the number of Registrable Securities provided in Section 2(a), above, and
thereafter use its best efforts to cause each Registration Statement relating to
Registrable Securities to become effective on the earlier of (i) five days after
notice from the Securities and Exchange Commission that the Registration
Statement may be declared effective, or (b) sixty (60) days after the Closing
Date, and keep the Registration Statement effective at all times until the
earliest (the "Registration Period") of (i) the date that is two years after the
Closing Date (ii) the date when the Investors may sell all Registrable
Securities under Rule 144 without restriction, or (iii) the date the Investors
no longer own any of the Registrable Securities, which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(b) 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 effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities 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;
(c) 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.
(d) Furnish to each Investor whose Registrable Securities are included
in the Registration Statement and its legal counsel identified to the Company,
(i) promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one (1) copy of the Registration Statement,
each preliminary prospectus and prospectus, and each amendment or supplement
thereto, and (ii) such number of copies of a 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;
(e) As promptly as practicable after becoming aware of such event, and
in no event later than two (2) business days after becoming aware of such event,
notify each Investor of the happening of any event of which the 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
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
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<PAGE>
(f) As promptly as practicable after becoming aware of such event, and
in no event later than two (2) business days after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold of the issuance
by the SEC of a Notice of Effectiveness or any notice of effectiveness or any
stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(g) Use its commercially reasonable efforts to secure designation of
all the Registrable Securities covered by the Registration Statement as a
National Association of Securities Dealers Automated Quotations System
("NASDAQ") "Small Capitalization" within the meaning of Rule 11Aa2-1 of the SEC
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the quotation of the Registrable Securities on the NASDAQ Small Cap Market; or
if, despite the Company's commercially reasonable efforts to satisfy the
preceding clause, the Company is unsuccessful in doing so, to secure NASDAQ/OTC
Bulletin Board authorization and quotation for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD") as such with respect to such Registrable Securities;
(h) 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;
(i) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Investors may reasonably
request, and, within three (3) business days after a Registration Statement
which includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and opinion of such counsel;
(j) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement;
(k) Use its best efforts to qualify the sale of the Registrable
Securities for sale in such states as the Investor actually maintains its
principal residence, provided, however, the Company shall not be required to
qualify in any state where it would be required to register as a broker or
dealer or where the state would require an escrow or other similar restrictions
to upon the Company, any of its shareholders or the Investor; and
(l) The Company shall not be obligated to take any action to effect any
such registration, qualification or compliance pursuant to this Registration
Rights Agreement or to pay any amount for failure to do so if the Company would
be required to provide audited financial statements in the Registration
Statement for a period other than the end of its fiscal year, in which event the
Company's obligation to register, qualify or comply with the provisions
requiring it to cause the Registration Statement to become effective shall be
deferred for a period not to exceed the shorter of: (i) the time reasonably
required to obtain audited financial statements for the period ending on the
last day of its fiscal year, and to include them in the Registration Statement
or an amendment
-5-
<PAGE>
thereto, or (ii) 120 days from the date required for such Registration Statement
to become effective pursuant to this Registration Rights Agreement.
4. Obligations of the Investors. In connection with the registration of
the Registrable Securities, the Investors shall have the following obligations:
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. At least five (5) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor (the "Requested Information") if such Investor elects to have any
of such Investor's Registrable Securities included in the Registration
Statement. If at least two (2) business days prior to the filing date the
Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
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 election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
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),
above, 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. No
Investor shall have any right to seek or obtain an injunction or restraining
order, or otherwise delay any such registration as a result of any controversies
that might arise with respect to the interpretation of this Agreement.
5. Expenses of Registration. All reasonable expenses, other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 3, but including,
without limitation, all registration, listing, and qualifications fees, printers
and accounting fees, the fees and disbursements of counsel for the Company,
shall be borne by the Company. The Investors shall be responsible for the fees
and expenses of their respective counsels.
6. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
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<PAGE>
To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, each person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities or expenses (joint or several) incurred (collectively,
"Claims") to which any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations in the
Registration Statement, or any post-effective amendment thereof, or any
prospectus included therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"). The
Company shall reimburse the Investors, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) 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 or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(b) hereof; (II) be available to the extent such Claim is based on a failure of
the Investor to deliver or cause to be delivered the prospectus made available
by the Company; or (III) 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. Each Investor shall indemnify
the Company and its officers, directors and agents against any claims 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 or on behalf of such
Investor, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company to this Section 6.
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.
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 be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed,
-7-
<PAGE>
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 reasonable 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. In such event, the Company shall
pay for only one separate legal counsel for the Investors; such legal counsel
shall be selected by the Investors holding a majority in interest of the
Registrable Securities included in the Registration Statement to which the Claim
relates. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action. 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 (a) 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; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. Reports under Exchange Act. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities 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 Securities Act and the Exchange Act;
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
Securities Act and the Exchange 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.
-8-
<PAGE>
9. Assignment of the Registration Rights. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any Debenture of the Company which is
convertible into such securities) only if: (a) 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, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, and (d) at or before the time the Company received the
written notice contemplated by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein; provided, however, that in no event shall the rights granted
by this provision be (a) assigned on more than two occasions, or (b) to greater
than five (5) assignees. In the event of any delay in filing or effectiveness of
the Registration Statement as a result of such assignment, the Company shall not
be liable for any damages arising from such delay, or the payments set forth in
Section 2(b) hereof.
10. Amendment of Registration Rights. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold an eighty (80%) percent
interest 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 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.
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, receipt confirmed, or
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, attn.: Joe
Levangie, with a copy to John A. Piccione, Esq., Sullivan & Worcester, LLP, 1
Post Office Square, Boston, MA 02109; (ii) if to the Initial Investor, at the
address set forth under its name in the Securities Purchase Agreement, with a
copy to Samuel Krieger, Esq., Krieger & Prager, 319 Fifth Avenue, Third Floor,
New York, NY 10016; and (iii) if to any other Investor, at such address as such
Investor shall have provided in writing to the Company, 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 (4) calendar days after deposit with the United
states Postal Service.
Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or
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<PAGE>
delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non coveniens, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
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.
All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.
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 telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
The Company acknowledges that any failure by the Company to perform its
obligations under Section 3(a), or any delay in such performance could result in
to the Investors and the Company agrees that, in addition to any other liability
of the company may have by reason of any such failure or delay, the Company
shall be liable for all direct damages caused by any such failure or delay,
unless same is the result of force majeure. Neither party shall be liable for
consequential damages.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
GREENMAN TECHNOLOGIES, INC.
By: ______________________________
Name:____________________________
Title:_____________________________
INVESTOR
By:______________________________
Name:___________________________
Title:____________________________
-11-
EXHIBIT 10.72
ANNEX IA
DEBENTURE
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE,
OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR
TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
No. A- US $
GREENMAN TECHNOLOGIES, INC.
8% CONVERTIBLE DEBENTURE DUE DECEMBER 15, 2000
THIS DEBENTURE is one of a duly authorized issue of up to $3,600,000 in
Debentures of GREENMAN TECHNOLOGIES, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Company") designated as its 8%
Convertible Debenture Due December 15, 2000.
FOR VALUE RECEIVED, the Company promises to pay to________________, the
registered holder hereof (the "Holder"), the principal sum of
____________________________ and 00/100 (US $_______) Dollars on December 15,
2000 (the "Maturity Date") and to pay interest on the principal sum outstanding
from time to time in arrears upon conversion as provided herein on December 15,
2000 at the rate of 8% per annum accruing from the date of initial issuance.
Accrual of interest shall commence on the first such business day to occur after
the date hereof until payment in full of the principal sum has been made or duly
provided for. Subject to the provisions of P. 4 below, the principal of, and
interest on, this Debenture are payable at the option of the Company, in shares
of Common Stock of the Company, $.01 par value ("Common Stock"), or in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at the address last appearing on
the Debenture Register of the Company as designated in writing by the Holder
from time to time; provided, however that this Debenture shall only be payable
in shares of Common Stock on the Maturity Date . The Company will pay the
principal of and accrued interest due upon this Debenture on the Maturity Date,
less any amounts required by law to be deducted, to the registered holder of
this Debenture as of the tenth day prior to the Maturity Date and addressed to
such holder at the last address appearing on the Debenture Register. The
forwarding of such check, or the required number of shares of Common Stock
determined pursuant to the provisions of P. 4 below, shall constitute a payment
of principal and interest hereunder and shall satisfy and discharge the
liability for principal and interest on this Debenture to the extent of the sum
represented by such check plus any amounts so deducted.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Fifty Thousand
Dollars (US$50,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering the same. No
<PAGE>
service charge will be made for such registration or transfer or exchange.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws. In the event of any proposed
transfer of this Debenture, the Company may require, prior to issuance of a new
Debenture in the name of such other person, that it receive reasonable transfer
documentation including legal opinions that the issuance of the Debenture in
such other name does not and will not cause a violation of the Act or any
applicable state or foreign securities laws. Prior to due presentment for
transfer of this Debenture, the Company and any agent of the Company may treat
the person in whose name this Debenture is duly registered on the Company's
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Debenture be
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.
4. The Holder of this Debenture is entitled, at its option, to convert
at any time commencing sixty (60) days after the date hereof or such earlier
date as the Registration Statement is declared effective (the "Initial Exercise
Date"), the principal amount of this Debenture together with accrued but unpaid
interest, provided that the principal amount is at least US $10,000 (unless if
at the time of such election to convert the aggregate principal amount of all
Debentures registered to the Holder is less that Ten Thousand Dollars (US
$10,000), then the whole amount thereof) into shares of Common Stock of the
Company ("Debenture Shares") at a conversion price for each share of Common
Stock ("Conversion Rate") equal to the lessor of subsections (i) or (ii) below:
(i) 100% of the average of the closing bid prices of the
Common Stock on the five consecutive trading days
preceding the initial issuance date of this Debenture
(the "Issuance Date"); or
(ii) 75% of the Market Price;
Notwithstanding anything to the contrary contained herein, the entire
unpaid balance and accrued interest outstanding on the Maturity Date hereof
shall automatically convert into Common Stock in accordance with the foregoing
Conversion Rate.
For purposes of this Section 4, the Market Price shall be the average
of the closing bid prices of the Common Stock on the five (5) trading days
immediately preceding the Conversion Date, as reported by the National
Association of Securities Dealers, or the closing bid price on the
over-the-counter market on such date or, in the event the Common Stock is listed
on a stock exchange, the Market Price shall be the closing price on the exchange
on such date, as reported in the Wall Street Journal. Conversion shall be
effectuated by surrendering the Debentures to be converted to the Company during
usual business hours at the Company's principal offices, with the form of
conversion notice attached hereto as Exhibit A, executed by the Holder of the
Debenture evidencing such Holder's intention to convert this Debenture or a
specified portion (as above provided) hereof, and accompanied, if required by
the Company, by proper assignment hereof in blank. Interest accrued or accruing
from the date of issuance to the date of conversion shall, at the
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<PAGE>
option of the Company, be paid in cash or Common Stock upon conversion at the
Conversion Rate. No fraction of Shares or scrip representing fractions of shares
will be issued on conversion, but the number of shares issuable shall be rounded
to the nearest whole share. The date on which notice of conversion is given (the
"Conversion Date") shall be deemed to be the date on which the Holder faxes the
conversion notice duly executed, to the Company. Facsimile delivery of the
conversion notice shall be accepted by the Company at facsimile number (781)
224-0114; Att.: Chuck Coppa). Certificates representing Common Stock upon
conversion will be delivered within three (3) business days from the date the
notice of conversion with the original Debenture is delivered to the Company's
principal offices. In the event that the Holder requests delivery of shares of
Common Stock through the Deposit Withdrawal Agent Commission system ("DWAC") of
the Depository Trust Company, the Company will be deemed to have delivered the
Common Stock upon delivery of instructions and any other necessary documents to
the Company's transfer agent.
5. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
and interest on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture and all other Debentures now or
hereafter issued of similar terms are direct obligations of the Company.
6. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
7. If the Company merges or consolidates with another corporation or
sells or transfers all or substantially all of its assets to another person and
the holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee agree that the Debenture may thereafter be
converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Debenture might have been converted immediately before
such merger, consolidation, sale or transfer, subject to adjustments which shall
be as nearly equivalent as may be practicable. In the event of any proposed
merger, consolidation or sale or transfer of all or substantially all of the
assets of the Company (a "Sale"), the Holder hereof shall have the right to
convert by delivering a Notice of Conversion to the Company within fifteen (15)
days of receipt of notice of such Sale from the Company. In the event the Holder
hereof shall elect not to convert, the Company may prepay all outstanding
principal and accrued interest on this Debenture, less all amounts required by
law to be deducted, upon which tender of payment following such notice, the
right of conversion shall terminate.
8. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.
9. This Debenture shall be governed by and construed in accordance with
the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York
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<PAGE>
in connection with any dispute arising under this Agreement and hereby waives,
to the maximum extent permitted by law, any objection, including any objection
based on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions.
10. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of principal or
interest on this Debenture and same shall continue for a
period of ten (10) days; or
b. Any of the representations or warranties made by the Company
herein, in the Securities Purchase Agreement, the
Registration Rights Agreement, or in any agreement,
certificate or financial or other written statements
heretofore or hereafter furnished by the Company in
connection with the execution and delivery of this Debenture
or the Securities Purchase Agreement shall be false or
misleading in any material respect at the time made; or
c: The Company fails to issue shares of Common Stock to the
Holder or to cause its Transfer Agent to issue shares of
Common Stock upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this
Debenture, fails to transfer or to cause its Transfer Agent
to transfer any certificate for shares of Common Stock
issued to the Holder upon conversion of this Debenture and
when required by this Debenture or the Registration Rights
Agreement, and such transfer is otherwise lawful, or fails
to remove any restrictive legend or to cause its Transfer
Agent to transfer on any certificate or any shares of Common
Stock issued to the Holder upon conversion of this Debenture
as and when required by this Debenture, the Agreement or the
Registration Rights Agreement and such legend removal is
otherwise lawful, and any such failure shall continue
uncured for five (5) business days from the date of receipt
of the original Debenture and original Conversion Notice in
accordance with Section 4 hereof.
d. The Company shall fail to perform or observe, in any
material respect, any other covenant, term, provision,
condition, agreement or obligation of the Company under this
Debenture and such failure shall continue uncured for a
period of thirty (30) days after written notice from the
Holder of such failure; or
e. The Company shall (1) admit in writing its inability to pay
its debts generally as they mature; (2) make an assignment
for the benefit of creditors or commence proceedings for its
dissolution; or (3) apply for or consent to the appointment
of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; or
f. A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or
business without its consent and shall not be discharged
within sixty (60) days after such appointment; or
-4-
<PAGE>
g. Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency
shall assume custody or control of the whole or any
substantial portion of the properties or assets of the
Company and shall not be dismissed within sixty (60) days
thereafter; or
h. Any money judgment, writ or warrant of attachment, or
similar process in excess of Two Hundred Fifty Thousand
($250,000) Dollars in the aggregate shall be entered or
filed against the Company or any of its properties or other
assets and shall remain unpaid, unvacated, unbonded or
unstayed for a period of sixty (60) days or in any event
later than five (5) days prior to the date of any proposed
sale thereunder; or
i. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Company and, if instituted
against the Company, shall not be dismissed within sixty
(60) days after such institution or the Company shall by any
action or answer approve of, consent to, or acquiesce in any
such proceedings or admit the material allegations of, or
default in answering a petition filed in any such
proceeding; or
j. The Company shall have its Common Stock suspended or
delisted from an exchange or over-the-counter market from
trading for in excess of two trading days; provided,
however, that so long as the Common Stock continues to be
quoted on the NASDAQ System, it shall not constitute a
default hereunder.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, anything herein or
in any note or other instruments contained to the contrary notwithstanding, and
the Holder may immediately enforce any and all of the Holder's rights and
remedies provided herein or any other rights or remedies afforded by law.
11. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: December __, 1997
GREENMAN TECHNOLOGIES, INC.
By:_______________________________________
Robert H. Davis, CEO
-5-
<PAGE>
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________
of the principal amount of the above Debenture No. ___ into Shares of Common
Stock of GREENMAN TECHNOLOGIES, INC. (the "Company") according to the conditions
hereof, as of the date written below.
Date of Conversion* ___________________________________________________________
Applicable Conversion Price __________________________________________________
Signature _____________________________________________________________________
[Name]
Address: ______________________________________________________________________
______________________________________________________________________
Delivery Instructions for Shares:______________________________________________
______________________________________________
______________________________________________
* This original Debenture and Notice of Conversion must be received by the
Company by the third business date following the Date of Conversion.
-6-
EXHIBIT 10.73
ANNEX V
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE, OR UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES ARE RESTRICTED
AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
GREENMAN TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by GREENMAN
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), ________________, or
registered assigns (the "Holder") is hereby granted the right to purchase at any
time commencing two (2) days following the date hereof and until 5:00 P.M., New
York City time, on December 10, 1999 (the "Expiration Date"),
_______________________ (______) fully paid and nonassessable shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock") at an
initial exercise price of $____ per share, as defined in the Securities Purchase
Agreement between the Company and Holder dated December 12, 1997 (the "Exercise
Price"), subject to further adjustment as set forth in Section 6 hereof.
2. Exercise of Warrants. This Warrant is exercisable in whole
or in part at the Exercise Price per share of Common Stock payable hereunder,
payable in cash or by certified or official bank check. Upon surrender of this
Warrant Certificate with the annexed Notice of Exercise Form duly executed,
together with payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased.
3. Reservation of Shares. The Company hereby agrees that at
all times during the term of this Warrant there shall be reserved for issuance
upon exercise of this Warrant such number of shares of its Common Stock as shall
be required for issuance upon exercise of this Warrant (the "Warrant Shares").
The Company shall use its best efforts and all due diligence to increase the
number of shares of Common Stock so reserved to cure any deficiencies, and, if
necessary, to obtain approval of its stockholders therefor, including
authorization of such additional number of shares of Common Stock as may be
required in excess of the number so reserved.
<PAGE>
4. Mutilation or Loss of Warrant Upon receipt by the Company
of evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. Protection Against Dilution.
6.1 Adjustment Mechanism. If an adjustment of the Exercise
Price is required pursuant to this Section 6, the Holder shall be entitled to
purchase such number of additional shares of Common Stock as will cause (i) the
total number of shares of Common Stock the Holder is entitled to purchase
pursuant to this Warrant, multiplied by (ii) the adjusted purchase price per
share, to equal (iii) the dollar amount of the total number of shares of Common
Stock the Holder is entitled to purchase before adjustment multiplied by the
total purchase price before adjustment.
6.2 Capital Adjustments. In case of any stock split or
reverse stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company, the provisions of this Section 6 shall be
applied as if such capital adjustment event had occurred immediately prior to
the date of this Warrant and the original purchase price had been fairly
allocated to the stock resulting from such capital adjustment; and in other
respects the provisions of this Section shall be applied in a fair, equitable
and reasonable manner so as to give effect, as nearly as my be, to the purposes
hereof. A rights offering to stockholders shall be deemed a stock dividend to
the extent of the bargain purchase element of the rights.
6.3 Merger, Sale of Assets, Etc. If at any time while this
Warrant, or any portion hereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation or other entity
including a merger or consolidation in which the Company is the surviving entity
but the shares of the Company's capital stock outstanding immediately prior to
the merger are converted by virtue of the merger into other property, whether in
the form of securities, cash, or otherwise, or (iii) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then as a part of such reorganization, merger, consolidation, sale
or transfer lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this
-2-
<PAGE>
Warrant, during the period specified herein and payment of the Exercise Price
then in effect, the number of shares of stock or other securities or property
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon exercise of this Warrant would have been
entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 6. The foregoing provisions of this
Section 6 shall similarly apply to successive reorganization, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation or other entity that are at the time receivable upon the exercise of
this Warrant. If the per-share consideration payable to the Holder hereof for
shares in connection with any such transactions is in a form other than cash or
marketable securities, then the value of such consideration shall be determined
in good faith by the Company's Board of Directors. In all events, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
7. Transfer to Comply with the Securities Act; Registration
Rights.
(a) This Warrant has not been registered under the Securities
Act and has been issued to the holder for investment purposes and not with a
view to the distribution of either the Warrant or the Warrant Shares. Neither
this Warrant nor any of the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may be sold, transferred, pledged or
hypothecated in the absence of an effective registration statement under the Act
relating to such security or an opinion of counsel reasonably satisfactory to
the Company that registration is not required under the Securities Act. Each
certificate for the Warrant, the Warrant Shares and any other security issued or
issuable upon exercise of this Warrant shall contain a legend on the face
thereof, in form and substance satisfactory to counsel for the Company, setting
forth the restrictions on transfer contained in this Section.
(b) The Company agrees to file a registration statement, which
shall include the Warrant Shares, on Form S-3 or another available form (the
"Registration Statement"), pursuant to the terms of the Registration Rights
Agreement between the Company and the Holder dated December _, 1997.
8. Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon, (a) by personal
delivery or fax, or (ii) one business day after deposit with a nationally
recognized overnight delivery service such as Federal Express, with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may designate by
written notice to each of the other parties hereto.
-3-
<PAGE>
COMPANY: GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, MA 01940
Attn.: Chuck Coppa
Telecopier No. (781) 224-0114
with a copy to:
John A. Piccione, Esq.
Sullivan & Worcester, LLP
1 Post Office Square
Boston, MA 02109
Telecopier No. (617) 338-2880
HOLDER: At the address set forth on the signature page of the Agreement.
with a copy to:
Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
Telecopier No. (212) 213-2077
9. Supplements and Amendments; Whole Agreement. This Warrant
may be amended or supplemented only by an instrument in writing signed by the
parties hereto. This Warrant and the Securities Purchase Agreement (including
Annexes thereto) between the Company and the Holder dated December __, 1997,
contain the full understanding of the parties hereto with respect to the subject
matter hereof and thereof and there are no representations, warranties,
agreements or understanding of the parties hereto with respect to the subject
matter hereof and thereof and there are no representations, warranties,
agreements or understandings other than expressly contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a
contract under the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to contracts to be made and performed entirely within such State.
11. Counterparts. This Warrant may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constititute but one
and the same instrument.
-4-
<PAGE>
12. Descriptive Headings. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
Capitalized terms used herein which are not otherwise defined shall have the
meanings ascribed to such terms as in the Securities Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the ___ day of December, 1997.
GREENMAN TECHNOLOGIES, INC.
By:________________________________
Name:______________________________
Title:_____________________________
Attest:
- -----------------------
-5-
Exhibit 11
GreenMan Technologies, Inc.
Statement Regarding Net Loss per Share
November 30, 1997
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
1996 1997 1996 1997
----- ---- ---- -----
<S> <C> <C> <C> <C>
Net loss $ (892,361) $ (892,361) $(2,157,341) $(2,157,341)
=========== =========== =========== ===========
Shares used in calculation of loss per share:
Weighted average common shares outstanding 5,471,977 8,479,936 5,273,250 8,071,177
=========== =========== =========== ===========
Net loss per share $ (.16) $ (.12) $ (.41) $ (.26)
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> NOV-30-1997
<CASH> 859,794
<SECURITIES> 0
<RECEIVABLES> 1,762,724
<ALLOWANCES> 89,760
<INVENTORY> 712,970
<CURRENT-ASSETS> 4,087,314
<PP&E> 13,929,973
<DEPRECIATION> 1,289,789
<TOTAL-ASSETS> 18,467,557
<CURRENT-LIABILITIES> 11,280,774
<BONDS> 2,140,000
0
0
<COMMON> 98,758
<OTHER-SE> 14,228,492
<TOTAL-LIABILITY-AND-EQUITY> 18,467,557
<SALES> 6,104,668
<TOTAL-REVENUES> 6,104,668
<CGS> 4,493,673
<TOTAL-COSTS> 2,156,560
<OTHER-EXPENSES> 11,864
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,525,114
<INCOME-PRETAX> (2,082,543)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,082,543)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,082,543)
<EPS-PRIMARY> (.26)
<EPS-DILUTED> (.26)
</TABLE>
