SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 5, 1998 (September 8,
1998)
GREENMAN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13776 71-0724248
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7 Kimball Lane
Building A
Lynnfield, Massachusetts 01450
(Address of principal executive offices, including zip code)
(781) 224-2411
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On September 8, 1998, GreenMan Technologies, Inc., ("GMTI" or the
"Registrant") acquired the scrap collection and processing assets ("Acquired
Assets") of United Waste Services, Inc. ("United"), a wholly owned subsidiary of
Republic Services, Inc. ("Republic"). The acquisition was made pursuant to an
Asset Purchase Agreement, dated as of September 8, 1998, by and among GMTI and
United and included in this Report as Exhibit 2. Further information about the
acquisition reported hereby may be found in the Registrant's press release of
September 8, 1998, included as Exhibit 99 to this Report.
In consideration for the Acquired Assets, GMTI paid Republic $4,150,000
in the form of (1) $850,000 from the proceeds of a term loan from Heller
Financial Inc., and (2) $3,200,000 of Series B Preferred Stock of GMTI. The
Preferred Stock is convertible into shares of GMTI's common stock starting in
February 2001 at a price equal to the trailing fifteen (15) day average closing
bid prices of GMTI's common stock prior to the date of conversion. The repayment
of the Heller loan is guaranteed by GMTI, GreenMan Technologies of Georgia, Inc.
("GMTG") and three officers of GMTI and is secured by certain of the Acquired
Assets.
Item 7. Financial Statements and Exhibits
(a) Financial Statements and Exhibits
As of the date of filing of this Current Report on 8-K, it is
impracticable for the Registrant to provide the financial statements required by
this Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, such financial
statements shall be filed by amendment to this Form 8-K no later than 60 days
after the date hereof.
(b) Pro Forma Financial Information
As of the date of filing of this Current Report on 8-K, it is
impracticable for the Company to provide the pro forma financial information
required by this Item 7(b). In accordance with Item 7(b)(2) of Form 8-K, such
financial statements shall be filed by amendment to this Form 8-K no later than
60 days after the date hereof.
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(c) Exhibits
Exhibit 2 Asset Purchase Agreement, dated as of September 8, 1998, by
and among GreenMan Technologies, Inc. ("GMTI"), and United
Waste Service, Inc. ("United").
Exhibit 3 Certificate of Designations, Preferences and Rights of
Class B Convertible Preferred Stock of GMTI, dated
September 3, 1998 by the Board of Directors of GMTI.
Exhibit 10(a) Bill of Sale, Assignment and Assumption Agreement,
dated as of September 4, 1998, by and among GreenMan
Acquisition Corp. ("GAC") and United Waste Service, Inc.
Exhibit 10(b) Lease, dated September 3, 1998, by and between United, as
landlord, and GMTI as tenant.
Exhibit 10(c) Covenant Not To Compete, dated September 4, 1998, by
and among United, GMTI, and Republic Services, Inc.
Exhibit 10(d) Disposal Agreement, dated as of September 4, 1998, by
and among GMTI, United, and Pine Ridge Recycling, Inc.
Exhibit 10(e) Registration Agreement, dated September 4, 1998, by and
among GMTI and Republic Services, Inc.
(*) Exhibit 10(f) Loan and Security Agreement by and among GreenMan
Technologies of Minnesota, Inc. ("GMTM"), GreenMan
Technologies of Georgia, Inc. ("GMTG") and Heller
Financial Inc. ("Heller").
Exhibit 10(g) First Amendment to Loan and Security Agreement of Exhibit
10(f), dated as of September 3, 1998, by and between GMTM,
GMTG, GAC, GMTI, certain officers of the Company and
Heller.
Exhibit 10(h) Promissory Note - Equipment issued by GMTM and GMTG
in favor of Heller, dated as of September, 1998.
(*) Exhibit 10(i) Form of Guaranty delivered by the Company and certain
officers of the Company in favor of Heller.
Exhibit 99 Press Release, dated September 8, 1998.
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(*) Filed as an Exhibit to the Company's Form 10-QSB for the Quarter Ended
February 28, 1998 and incorporated herein by reference
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREENMAN TECHNOLOGIES, INC.
(Registrant)
By: /s/ Robert H. Davis
Robert H. Davis
Chief Executive Officer
Date: October 5, 1998
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ASSET PURCHASE AGREEMENT
BY AND AMONG
GREENMAN TECHNOLOGIES, INC.,
AND
UNITED WASTE SERVICES, INC.
Dated as of September 8, 1998
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
this 4th day of September, 1998, by and among UNITED WASTE SERVICE, INC., a
Georgia corporation (the "Seller"), and GREENMAN TECHNOLOGIES, INC., a Delaware
corporation ("GMTI") and GREENMAN ACQUISITION CORP., a Delaware corporation
("GAC") (hereinafter, GMTI and GAC shall be referred to as the "Purchaser").
Recitals
A. Seller operates a scrap tire collection and processing business (the
"Business") at facilities located in Lawrenceville, Georgia (the "Lawrenceville
Facility") and Batesburg, South Carolina (the "Batesburg Facility").
B. Purchaser desires to purchase and Seller desires to sell certain assets
of the Business.
C. This Agreement sets forth the terms and conditions pursuant to which
such assets of the Business shall be transferred from Seller to Purchaser.
Covenants
In consideration of the mutual representations, warranties and covenants
and subject to the conditions herein contained, the parties hereto, intending to
be legally bound hereby, agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1 Purchased Assets. Subject to and upon the terms and conditions set
forth herein, the Seller agrees to and will sell, transfer, assign, and deliver
to GAC at the Closing (as hereinafter defined) all of its right, title, and
interest in and to, and GAC agrees to and will purchase, acquire and take
assignment and delivery of, the following assets, properties and business of the
Seller which are described generally below and are specifically listed on
Schedule 1.1, as same shall exist on the Closing Date (as hereinafter defined)
(collectively, the "Purchased Assets"):
1.1.1 certain vehicles, including any contents of those vehicles,
used in the scrap tire collection and processing operations of the
Business which are specifically listed on Schedule 1.1;
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1.1.2 certain machinery, including parts inventory, used in the
processing operations of the Business which are specifically listed on
Schedule 1.1 (hereinafter the vehicles referenced in Section 1.1.1 and the
machinery referenced in Section 1.1.2 shall be referred to herein as the
"Fixed Assets");
1.1.3 the Seller's written customer contracts (the "Written
Contracts") pertaining to the Business which are specifically listed on
Schedule 1.1;
1.1.4 any of Seller's rights to provide services to the Business's
customers (the "Oral Contracts" and, collectively together with the
Written Contracts, the "Contracts") as more particulary described on
Schedule 1.1; and
1.1.5 all computer hardware and other equipment, tools, maintenance
machinery and equipment, furniture and fixtures, leasehold improvements
and construction in progress, whether or not reflected as capital assets
in the accounting records of the Seller used in the Business which are
specifically listed on Schedule 1.1;
1.1.6 all books, records and accounts, correspondence, production
records, technical, manufacturing and procedural manuals, customer and
supplier lists, customer leads, covenants not to compete, studies, reports
or summaries relating to any environmental conditions or consequences of
any operation, present or former, as well as all studies, reports or
summaries relating to any environmental aspect or the general condition of
the Purchased Assets, and any confidential information that has been
reduced to documentary form relating to or arising out of the Business
(the "Records");
1.1.7 to the extent transferable, all requisite licenses, permits
and certificates, including environmental, health and safety permits, from
federal, state and local authorities necessary to conduct the Business and
own and operate the Purchased Assets;
1.2 Excluded Assets. Anything to the contrary in Section 1.1
notwithstanding, the Purchased Assets shall not include the following assets of
the Seller: (i) the assets of the Seller that relate to its operations in
general or its operation of businesses other than the Business; (ii) cash and
cash equivalents and investments, whether short-term or long-term, of the
Seller, whether or not relating to the Business; (iii) receivables of the
Seller; (iv) all operating data and records of the Seller other than the
Records; and (v) any other asset not specifically identified herein as being
transferred to the Purchaser pursuant to this Agreement.
ARTICLE II
Purchase Price; Assumption of Liabilities
2.1 Purchase Price. Subject to and upon the terms and conditions set forth
herein, as consideration for the Purchased Assets, the Purchaser agrees to and
will pay and deliver to the Seller at Closing (in the manner prescribed in
Section 3.2), cash and securities of the Purchaser
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as follows (the cash and securities to be paid and delivered are referred to,
collectively, as the "Purchase Price"):
2.1.1 $850,000; plus
2.1.2 A certificate representing $3,200,000 of the Purchaser's
Series B Convertible Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), having the rights, restrictions, privileges and
preferences set forth in the Stock Designation (as hereinafter defined).
2.2 Assumed Liabilities. The Purchaser agrees to and will at the Closing
assume and agree to pay, discharge and perform when lawfully due the following
obligations and liabilities of the Seller (the "Assumed Liabilities"):
2.2.1 all obligations and liabilities of the Seller with respect to
the Contracts, which obligations and liabilities arise or relate to
periods after the Closing;
2.2.2 all obligations and liabilities relating to the processing and
disposal of all scrap tires and scrap tire processing residual material
located at the Lawrenceville Facility and the Batesburg Facility as of the
Closing Date (such obligations and liabilities being referred to herein as
the "Post-Closing Scrap Tire Disposal Obligations") as further described
on Schedule 2.2.2; provided, however, that Purchaser shall not assume any
obligations or liabilities for the processing and disposal of any
hazardous waste (including any scrap tires or scrap tire processing
residual material that may be contaminated with hazardous waste); and
2.2.3 those other obligations and liabilities of the Seller
specifically listed on Schedule 2.2.3.
For purposes of Section 2.2.2, "hazardous waste" shall be defined as waste
defined as, or of a character or in sufficient quantity to be defined as a
"hazardous waste" by the Resource Conservation and Recovery Act, as amended, the
laws of the State of Georgia or any rules or regulations with respect thereto,
or a "toxic substance" as defined in the Toxic Substance Control Act, as
amended, or any rules or regulations with respect thereto, or any reportable
quantity of a "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
any rules or regulations with respect thereto, including any waste whose
storage, treatment, incineration or disposal requires a special license or
permit from an agency of the federal government or the State of Georgia.
Hazardous Waste also includes any substance that is, after the Effective Date of
this Agreement, deemed hazardous by any judicial or governmental entity, body or
agency having jurisdiction to make that determination.
2.3 No Expansion of Third Party Rights. The assumption by the Purchaser of
the Assumed Liabilities and the transfer thereof by the Seller shall in no way
expand the rights and
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remedies such third party would have had against the Seller had the Purchaser
not assumed such liabilities. Without limiting the generality of the preceding
sentence, the assumption by the Purchaser of the Assumed Liabilities shall not
create any third party beneficiary rights.
2.4 Allocation of the Purchase Price among the Purchased Assets. The
Purchase Price shall be allocated among each item or class of the Purchased
Assets as specifically set forth on or determined pursuant to Schedule 2.4. The
Seller and Purchaser agree that this allocation will be used on Form 8594 and
any other notice or filing required pursuant to Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code").
2.5 Tax Treatment. The Purchaser and the Seller intend for the
transactions contemplated by this Agreement to be treated as a taxable
transactions under the Code pursuant to Section 1001.
2.6 Proration of Certain Items. Personal property taxes relating to the
Purchased Assets, utilities relating solely to the Business and other accrued
but unpaid (as of the Closing Date) expenses which are customarily prorated
shall be prorated as of the Closing Date such that the Seller is responsible for
such expenses accruing prior to the Closing and the Purchaser is responsible for
such expenses accruing from and after the Closing. Such proration shall be made
within 30 days after the Closing based upon actual bills (or, if not available,
based upon good faith estimates) for such prorated expenses.
2.7 Budgets, Projections and Forecasts. The Seller has provided to the
Purchaser certain forward-looking information, including budgets, projections
and forecasts, relative to the Business and Purchased Assets being acquired
pursuant to this Agreement. The Purchaser acknowledges, however, that the Seller
makes no representation or warranty regarding such budgets and forecasts or any
information contained therein, and the Purchaser hereby waives any claim for
damages resulting from any information contained herein.
ARTICLE III
Closing
3.1 Time and Place of the Closing. Subject to and after the fulfillment or
waiver of the conditions set forth in Articles IX and X of this Agreement, the
closing of the sale of the Purchased Assets shall take place at the offices
Sullivan & Worcester in Boston, MA at 10:00 a.m. eastern time on September 4,
1998, or such other date, time and place as the parties may agree. Throughout
this Agreement, such event is referred to as the "Closing" and such date and
time are referred to as the "Closing Date".
3.2 Procedure at the Closing. At the Closing, the parties agree to take
the following steps which upon their completion and regardless of the order
completed shall be deemed to have occurred simultaneously:
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3.2.1 The Seller shall deliver to the Purchaser evidence, in such
form as is satisfactory to the Purchaser, that each of the conditions to
the obligations of the Purchaser to purchase the Purchased Assets from the
Seller which is set forth in Article VIII of this Agreement has been
satisfied;
3.2.2 The Purchaser shall deliver to the Seller evidence, in such
form as is satisfactory to the Seller, that each of the conditions to the
obligations of the Seller to sell the Purchased Assets to the Purchaser
which is set forth in Article IX of this Agreement has been satisfied;
3.2.3 The Seller shall deliver to the Purchaser, and the Purchaser
shall deliver to the Seller, a fully executed Bill of Sale, Assignment and
Assumption Agreement in the form of Exhibit 3.2.3;
3.2.4 The Purchaser and the Seller shall execute and deliver a lease
agreement for the Lawrenceville Facility in the form attached hereto as
Exhibit 3.2.4;
3.2.5 The Seller shall deliver to the Purchaser a certificate of
good standing of the Seller issued by the appropriate officer of the State
of Georgia, together with a certificate from the appropriate officer of
the State of South Carolina evidencing Seller's authorization to conduct
business therein as a foreign corporation, each dated not earlier than 10
days prior to the Closing Date;
3.2.6 The Purchaser shall deliver to the Seller a certificate of
good standing of the Purchaser issued by the appropriate officer of the
State of Delaware, together with certificates from the appropriate
officers of the States of Georgia and South Carolina evidencing
Purchaser's authorization to conduct business therein as a foreign
corporation, each dated not earlier than 10 days prior to the Closing
Date;
3.2.7 The Seller shall deliver to the Purchaser a copy of
resolutions adopted by its board of directors authorizing each of the
transactions contemplated hereby which are to be taken by it, certified as
of the Closing Date by the secretary or an assistant secretary of the
Seller;
3.2.8 The Purchaser shall deliver to the Seller a copy of
resolutions adopted by its board of directors authorizing each of the
transactions contemplated hereby which are to be taken by it, certified as
of the Closing Date by the secretary or an assistant secretary of the
Purchaser;
3.2.9 The Purchaser shall deliver to the Seller a copy of the
Certificate of Stock Designation to the Purchaser's Certificate of
Incorporation, as amended (the "Stock Designation") authorizing it to
issue the Preferred Stock having the rights, restrictions,
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privileges and preferences as set forth on Exhibit 3.2.9, certified by the
appropriate officer of the State of Delaware;
3.2.10 The Purchaser shall deliver to the Seller the Purchase Price
as follows:
(a) $850,000.00 in cash by wire transfer or cashiers or
certified check; and
(b) A certificate representing the Preferred Stock.
3.2.11 The Purchaser and the Seller shall execute and deliver a
cross receipt in the form attached hereto as Exhibit 3.2.11 acknowledging
receipt of the Purchased Assets and the Purchase Price.
3.2.12 The Seller shall execute and deliver a Non-Competition
Agreement in the form attached hereto as Exhibit 3.2.12.
3.2.13 The Purchaser and the Seller shall execute and deliver a
Disposal Agreement in the form attached hereto as Exhibit 3.2.13.
3.2.14 The Purchaser and the Seller shall execute and deliver the
Registration Agreement in the form attached hereto as Exhibit 3.2.14.
3.2.15 The Purchaser and Seller shall execute and deliver to the
Seller a Resale Certificate in the form attached hereto as Exhibit 3.2.15.
ARTICLE IV
Representations and Warranties of Seller
The Seller makes the following representations and warranties, which
representations and warranties shall survive the Closing as provided in Section
11.1:
4.1 Organization, Power and Authority of Seller. The Seller is a corporation
duly organized and validly existing in good standing under the laws of the State
of Georgia and has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The Seller is legally
qualified to transact business as a foreign corporation, and is in good standing
under the laws of, the State of South Carolina.
4.2 Due Authorization; Binding Obligation; No Conflict. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action of the Seller. This Agreement has been duly executed and
delivered by the Seller and is a valid and binding obligation of the
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Seller, enforceable against the Seller in accordance with its terms. Except as
set forth on Schedule 4.2, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will: (i)
contravene any provision of the Seller's certificate of incorporation or bylaws;
(ii) violate or conflict with any federal or state law, statute, regulation,
decree, injunction, judgement or order which is either applicable to, binding
upon or enforceable against the Seller; (iii) result in any breach of or default
under any material mortgage, contract, agreement or other instrument which is
either binding upon or enforceable against the Seller or the Purchased Assets;
(iv) result in or require the creation or imposition of any lien upon the
Purchased Assets; or (v) violate any legally protected right arising in the
operation of the Seller's business of any person or entity or give to any person
or entity a right or claim against the Purchaser or the Purchased Assets.
4.3 Consents. Except as set forth on Schedule 4.3 no consent, approval or
authorization of any governmental authority is required for the execution,
delivery and performance of this Agreement by the Seller and the consummation by
the Seller of any of the transactions contemplated by this Agreement.
4.4 Financial Statements. The Seller has previously furnished to the
Purchaser a profit and loss statement of the Business for the period ended
December 31, 1997 (the "P&L"). The P&L presents fairly in all material respects
the results of operations of the Business for the period indicated therein and
was prepared in accordance with generally accepted accounting principles,
consistently applied. The books and records of the Seller with respect to the
Business reflect in all material respects all transactions, properties, assets
and liabilities of the Business.
4.5 Litigation. Except as set forth on Schedule 4.5 there is no action,
suit, or other legal or administrative proceeding or governmental investigation
pending, threatened, anticipated or contemplated against the Seller or the
Purchased Assets which could have a material adverse effect on the Business
taken as a whole, or which questions the validity or enforceability of this
Agreement or the transactions contemplated hereby, and there is no basis for any
of the foregoing. The Business has not been permanently or temporarily enjoined
by any order, judgment or decree of any court or any governmental agency,
authority or body from engaging in or continuing any conduct or practice in
connection with the operations, assets, or properties of the Business. To the
best of Seller's knowledge, there is not in existence on the date hereof any
order, judgment or decree of any court, tribunal or agency enjoining or
requiring the Business to take any action of any kind with respect to its
operations, assets or properties.
4.6 Absence of Undisclosed Liabilities. Except as and to the extent (i)
reflected and reserved against in the books and records of the Business, (ii)
set forth on Schedule 4.6 attached hereto or set forth on any other Schedule
attached to this Agreement, (iii) incurred in the ordinary course of business
after the date of the P&L and not material, either individually or in the
aggregate, or (iv) representing ordinary course purchases of inventory, the
Seller does not have any liability affecting the Purchased Assets.
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4.7 Good Title. Except for the Purchased Assets subject to the Lease
Agreements identified on Schedule 2.2.3, the Seller has, and at the Closing will
have, good and marketable title to the Purchased Assets with full power to sell,
transfer and assign the same, free and clear of any lien, and by delivery of the
Bill of Sale and Assignment as contemplated by Section 3.2, the Seller will
deliver to the Purchaser good and marketable title to such Purchased Assets free
and clear of any lien, or other than liens for taxes not yet due and payable.
The Seller represents that the Purchased Assets do not represent all or
substantially all of the assets of the Seller.
4.8 Compliance with Laws. The Seller is and has been in compliance with all
laws, regulations and orders applicable to the Business and the Purchased
Assets, except where the failure to be in compliance would not have a material
adverse effect on the Business taken as a whole.
4.9 Tax Matters. All Tax Returns required to be filed prior to the date
hereof by the Seller have been timely filed, and all such Tax Returns have been
prepared in compliance with all applicable laws and regulations. All Taxes due
and payable by or with respect to the Seller have been paid and those taxes not
yet due and payable will be accrued on the books and records of the Seller as of
the Closing and cash has been reserved by the Seller for the payment thereof in
full when due and payable (and such taxes will be paid when due and payable).
There are no tax liens (other than for ad-valorem and similar taxes which are
not past due) or taxes on any of the assets of the Business.
4.10 Insurance. The Company is covered valid, outstanding and enforceable
policies of insurance covering the Purchased Assets against risks of the nature
normally insured against by corporations in the same or similar lines of
business and in coverage amounts typically and reasonably carried by such
corporations (the "Insurance Policies"). Such Insurance Policies are in full
force and effect, and all premiums due thereon have been paid and there is no
default under any of the Insurance Policies.
4.11 Licenses and Permits. The Seller has obtained all requisite licenses,
permits and certificates, including environmental, health and safety permits,
from federal, state and local authorities necessary to conduct the Business and
own and operate the Purchased Assets (collectively, the "Permits"), except where
a failure to hold a Permit does not have a material adverse effect on the
Business.
4.12 Scrap Tires. The amount of scrap tires and scrap tire processing
residual material located at the Lawrenceville Facility and the Batesburg
Facility has not materially increased from that amount which existed on June 15,
1998.
4.13 Brokers. The Seller has not paid or become obligated to pay any fee or
commission of any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
4.14 Fixed Assets. Schedule 1.1 attached hereto sets forth a true, correct
and complete list of all Fixed Assets. Except as set forth on Schedule 1.1, all
of the Fixed Assets (i) are in
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good operating condition and repair, normal wear and tear excepted, and (ii)
have been maintained normally and on a consistent basis.
4.15 Books and Records. The general ledgers and books of account of the
Seller and all other books and records of the Seller are in all material
respects complete and correct and have been maintained in accordance with good
business practice and in accordance with all applicable procedures required by
laws and regulations.
4.16 Contracts and Commitments. Each of the Written Contracts of the Seller
is a valid and binding agreement of the Seller, enforceable against the Seller
in accordance with its terms, and the Seller has no knowledge that any Written
Contract is not a valid and binding agreement of the other parties thereto. The
Seller has fulfilled all material obligations required pursuant to the Written
Contracts to have been performed by the Seller on its part prior to the date
hereof. The Seller is not in breach of or default under any Written Contract,
and no event has occurred that with the passage of time or giving of notice or
both would constitute such a default, result in a loss of rights or result in
the creation of any lien, charge or encumbrance, thereunder or pursuant thereto.
To the best knowledge of the Seller, there is no existing breach or default by
any other party to any Written Contract, and no event has occurred that with the
passage of time or giving of notice or both would constitute a default by such
other party, result in a loss of rights or result in the creation of any lien,
charge or encumbrance thereunder or pursuant thereto. The Seller has no Written
Contracts to sell products or perform services that are expected to be performed
at, or to result in, a loss. Except as set forth on Schedule 1.1, the
continuation, validity and effectiveness of each Written Contract will not be
affected by the transfer thereof to Buyer under this Agreement and all such
Written Contracts to be assigned to Buyer pursuant to this Agreement are
assignable to Buyer without a consent.
4.17 Employee Relations. With respect to the Business, the Seller is in
compliance in all material respects with all federal, state and municipal laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practice, and there are no arrears in the payment of wages or social security
taxes. None of the employees of the Seller is represented by any labor union;
there is no unfair labor practice complaint against the Seller pending before
the National Labor Relations Board or any state or local agency; there is no
pending labor strike or other material labor trouble affecting the Seller
(including, without limitation, any organizational drive); and there is no
material labor grievance pending against the Seller.
4.18 Regulatory Approvals. All consents, approvals, authorizations and other
requirements prescribed by any law, rule or regulation that must be obtained or
satisfied by the Seller and that are necessary for the execution and delivery by
the Seller of this Agreement and the documents to be executed and delivered by
the Seller in connection herewith are set forth on Schedule 4.18 attached hereto
and have been, or will be prior to the Closing Date, obtained and satisfied,
except where the failure to obtain such consents, approvals or authorizations
will not have a material adverse effect on the Business or the Purchased Assets.
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ARTICLE V
Representations and Warranties of Purchaser
The Purchaser makes the following representations and warranties, which
representations and warranties shall survive the Closing as provided in Section
11.2:
5.1 Organization, Power and Authority of the Purchaser. The Purchaser is a
corporation duly organized and validly existing under the laws of the State of
Delaware, and has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The Purchaser is legally
qualified to transact business in, and is in good standing under the laws of,
the States of Georgia and South Carolina.
5.2 Due Authorization; Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and is a valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will: (i) contravene any provision of the
Purchaser's charter or bylaws; (ii) violate or conflict with any federal or
state law, statute, regulation, decree, injunction, judgement or order which is
either applicable to, binding upon or enforceable against the Purchaser; (iii)
result in any breach of or default under any material mortgage, contract,
agreement or other instrument which is either binding upon or enforceable
against the Purchaser; or (iv) violate any legally protected right arising in
the operation of the Purchaser's business of any person or entity or give to any
person or entity a right or claim against the Seller or the Purchase Price.
5.3 Capitalization. The shares of Preferred Stock to be issued pursuant to
this Agreement are duly authorized, validly issued, fully-paid and
non-assessable and will be free of any liens and encumbrances. The Preferred
Stock has been issued by the Purchaser in compliance with all applicable federal
and state securities laws. The Preferred Stock has the rights, preferences,
privileges and restrictions set forth in the Stock Designation. The Company has,
and shall at all times ensure, that it has reserved a number of shares of Common
Stock sufficient for the conversion of all shares of Preferred Stock outstanding
at any time.
5.4 Consents. No consent, approval or authorization of any governmental
authority is required for the execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of any of the
transactions contemplated by this Agreement.
5.5 Brokers. The Purchaser has not paid or become obligated to pay any fee
or commission or any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
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ARTICLE VI
Additional Covenants of Seller
6.1 Best Efforts. The Seller will use its best efforts to cause to be
satisfied as soon as practicable and prior to the Closing Date all of the
conditions set forth in Article VIII to the obligation of the Purchaser to
purchase the Purchased Assets pursuant to this Agreement.
6.2 Conduct of Business Pending the Closing. From and after the execution
and delivery of this Agreement and until the Closing Date, except as otherwise
provided by the prior written consent of the Purchaser:
6.2.1 The Seller will use its best efforts to operate the Business in
the manner in which the same have heretofore been operated;
6.2.2 The Seller will use its best efforts to maintain the Purchased
Assets in customary repair, order and condition, reasonable wear and use and
damage by unavoidable casualty excepted, and will maintain insurance of such
types and in such amounts upon all of the Purchased Assets as is in effect
on the date of this Agreement.
6.3 Access to the Business and the Records. From and after the execution and
delivery of this Agreement, the Seller will afford to the representatives of the
Purchaser access, during normal business hours and upon reasonable notice, to
the locations at which the business is operated sufficient to enable the
Purchaser to inspect the Purchased Assets, and the Seller will furnish to such
representatives during such period all such information relating to the
foregoing investigation as the Purchaser may reasonably request.
ARTICLE VII
Additional Covenants of the Purchaser
7.1 Best Efforts. The Purchaser will use its best efforts to cause to be
satisfied as soon as practicable and prior to the Closing Date all of the
conditions set forth in Article IX to the obligation of the Seller to sell the
Purchased Assets pursuant to this Agreement.
7.2 Post-Closing Scrap Tire Obligations. From and after the Closing Date,
the Purchaser shall, as soon as reasonably practicable and in accordance with
all applicable laws and regulations, fulfill and satisfy the Post-Closing Scrap
Tire Obligations.
ARTICLE VIII
Conditions to Obligations of the Purchaser
The obligation of the Purchaser to purchase the Purchased Assets shall be
subject to the fulfillment at or prior to the Closing Date of each of the
following conditions:
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8.1 Accuracy of Representations and Warranties; Compliance with Obligations;
Execution and Delivery of Closing Items. The representations and warranties of
the Seller contained in this Article IV shall have been true and correct at and
as of the date hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time. The Seller shall have duly performed and complied
with in all material respects all of the covenants and agreements of the Seller
contained in this Agreement to be performed or complied with at or prior to the
Closing Date. The Seller shall have delivered to the Purchaser a certificate,
dated as of the Closing Date and signed by a senior officer of the Seller,
certifying that such representations and warranties in Article IV are thus true
and correct and that all such covenants and agreements have been thus performed
and complied with. The Seller shall have executed and delivered on or prior to
the Closing Date each of the items required to be executed and delivered by it
pursuant to Section 3.2 of this Agreement.
8.2 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Purchased Assets
to the Purchaser or any other transaction contemplated hereby, or which affects
the right of the Seller to sell or the Purchaser to own, operate or control the
Purchased Assets.
ARTICLE IX
Conditions to Obligations of the Seller
The obligation of the Seller to sell the Purchased Assets shall be subject
to the fulfillment at or prior to the Closing Date of each of the following
conditions:
9.1 Accuracy of Representations and Warranties; Compliance with Obligations;
Execution and Delivery of Closing Items. The representations and warranties of
the Purchaser contained in this Agreement shall have been true and correct at
and as of the date hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time. The Purchaser shall have duly performed and
complied with in all material respects all of the covenants and agreements of
the Purchaser contained in this Agreement to be performed or complied with at or
prior to the Closing Date. The Purchaser shall have delivered to the Seller a
certificate, dated as of the Closing Date and signed by one a senior officer of
the Purchaser, certifying that such representations and warranties are thus true
and correct and that all such covenants and agreements have been thus performed
and complied with. The Purchaser shall have executed and delivered on or prior
to the Closing Date each of the items required to be executed and delivered by
it pursuant to Section 3.2 of this Agreement.
9.2 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Purchased Assets
to the Purchaser or any other transaction
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contemplated hereby, or which affects the right of the Seller to sell or the
Purchaser to own, operate or control the Purchased Assets.
ARTICLE X
Certain Actions After the Closing
10.1 Delivery of Property Received by the Seller After Closing. The Seller
agrees that it will transfer or deliver to the Purchaser, promptly after the
receipt thereof, any cash or other property which the Seller receives after the
Closing Date in respect of any claims, contracts, licenses, leases, commitments,
sales orders, purchase orders or any other items transferred or intended to be
transferred to the Purchaser as part of the Purchased Assets under this
Agreement.
10.2 Execution of Further Documents. From and after the Closing, upon the
reasonable request of any party hereto, the other party shall execute,
acknowledge and deliver all such further acts, deeds, bills of sale,
assignments, transfers and assurances as may be required or otherwise
appropriate to carry out the transactions contemplated by this Agreement.
10.3 Restrictions on Sales of Purchaser's Securities. Subject always to the
rights granted to the Seller in the Registration Agreement, the Seller hereby
agrees, for the period commencing as of the Closing Date and continuing until
thirty (30) months following the Closing Date, that it shall not sell, pledge,
transfer to an unaffiliated third party, or otherwise dispose of or grant any
option or purchase right with respect to, any securities (including shares of
Common Stock issuable upon conversion of the Preferred Stock), or engage in any
short sale, hedging transaction or other derivative security transaction
involving the Preferred Stock or any Common Stock held by the Seller as a result
of the conversion of the Preferred Stock.
10.4 Sharing of Data. The Purchaser shall have the right for a period of
seven years following the Closing Date to have reasonable access to those books,
records and accounts, including financial and tax information, correspondence,
production records, employment records and other records that are retained by
the Seller pursuant to the terms of this Agreement to the extent that any of the
foregoing relates to the Business and is needed by the Purchaser in order to
comply with its obligations under applicable securities, tax, environmental,
employment or other laws and regulations. The Seller shall have the right for a
period of seven years following the Closing Date to have reasonable access to
such books, records and accounts, including financial and tax information,
correspondence, production records, employment records and other similar
information as are transferred to the Purchaser pursuant to the terms of this
Agreement for the limited purposes of concluding its involvement in the Business
prior to the Closing Date and for complying with its obligations under
applicable securities, tax, environmental, employment or other laws and
regulations. The Seller and the Purchaser each agree that if at the end of such
seven year period either party hereto is involved in a dispute (of which the
other party hereto has been notified) with regard to records held by the party
not engaged in the dispute, the party not engaged in the dispute shall not
destroy such records during the pendency of such dispute.
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10.5 Cooperation in Litigation. Each party hereto will fully cooperate with
the other in the defense or prosecution of any litigation or proceeding which
may be instituted hereafter against or by such party relating to or arising out
of the conduct of the Business prior to or after the Closing Date (other than
litigation arising out the transactions contemplated by this Agreement). The
party requesting such cooperation shall pay the out-of-pocket expenses
(including reasonable legal fees and disbursements) of the party providing such
cooperation and of its officers, directors, employees and agents reasonably
incurred in connection with providing such cooperation, but shall not be
responsible to reimburse the party providing such cooperation for such party's
time spent in such cooperation or the salaries or costs of fringe benefits or
similar expenses paid by the party providing such cooperation to its officers,
directors, employees and agents while assisting in the defense or prosecution of
any such litigation or proceeding.
10.6 [OMITTED]
10.7 Employees. Effective as of the Closing, the Seller shall terminate the
employment of each of the employees of the Business and the Purchaser shall
offer employment to each such employee, except for those employees listed on
Schedule 10.7. The Seller hereby consents to the hiring of such employees by the
Purchaser and waives, with respect to the employment by the Purchaser of such
employees, any claims or rights the Seller may have against the Buyer or any
such employee under any non-competition, confidentiality or employment
agreement.
ARTICLE XI
Indemnification
11.1 Agreement by the Seller to Indemnify. Subject to the other provisions
of this Article XI (including this Section 11.1), the Seller agrees that it will
indemnify and hold harmless the Purchaser in respect of the aggregate of all
Damages (as defined below). For purposes of this Agreement, "Damages" means,
without duplication, the aggregate of all expenses, losses, costs, deficiencies,
liabilities and damages (including reasonable related counsel fees and expenses)
incurred or suffered by the Purchaser to the extent (i) resulting from any
breach of a representation or warranty of the Seller in Article IV or (ii)
resulting from any default in the performance of any of the covenants or
agreements of the Seller in this Agreement.
11.1.1 Each of the representations and warranties of the Seller in
Article IV shall survive for a period of twelve (12) months after the
Closing Date, and thereafter all such representations and warranties shall
expire. No claim for the recovery of Damages may be asserted by the
Purchaser against the Seller or its successors in interest after such
representations and warranties shall thus expire; provided, however, that
bona fide claims first asserted in writing within the applicable period
shall not thereafter be barred.
11.1.2 Notwithstanding any other provision herein to the contrary,
the Seller shall not be liable to the Purchaser (a) for any Damages until
all Damages incurred by the Purchaser under Section 11.1 exceed an aggregate
of $120,000.00 (the "Indemnification Threshold"), in which case the Seller
shall be liable only for Damages exceeding the Indemnification Threshold, or
(b) for any Damages in excess of the Actual Purchase Price.
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11.1.3 Except as otherwise expressly provided in Section 12.3, the
rights and remedies provided in this Section 11.1 shall be the sole and
exclusive rights and remedies of the Purchaser in connection with any breach
of a representation or warranty of the Seller in Article IV or any default
in the performance of any of the covenants or agreements of the Seller in
this Agreement.
11.2 Agreement by the Purchaser to Indemnify. The Purchaser shall indemnify
and hold harmless the Seller in respect of all Losses (as defined below). For
purposes of this Agreement, "Losses" means, without duplication, the aggregate
of all expenses, losses, costs, deficiencies, liabilities and damages (including
reasonable related counsel and paralegal fees and expenses) incurred or suffered
by the Seller to the extent (i) resulting from any breach of a representation or
warranty of the Purchaser in Article V or elsewhere herein, (ii) resulting from
any default in the performance of any of the covenants or agreements of the
Purchaser in this Agreement, including all obligations of the Purchaser in
respect to Assumed Liabilities, (iii) resulting any claims relating to the
Assumed Liabilities or (iv) resulting from the failure of the Parties to comply
with any applicable Bulk Transfer Provisions (as hereinafter defined).
11.2.1 Each of the representations and warranties of the Purchaser in
Article V (other than the representations and warranties of the Purchaser
made in Section 5.3 of the Agreement) shall survive for a period of twelve
(12) months after the Closing Date and thereafter all such representations
and warranties shall expire. The representations and warranties of the
Purchaser made in Section 5.3 of this Agreement shall survive until the
Preferred Stock has been converted. The covenant of the Purchaser found in
Section 7.2 shall survive until the obligations specified therein have been
fully performed and satisfied by Purchaser. No claim for recovery of Losses
may be asserted by the Seller against the Purchaser or its successors in
interest after such representations and warranties or covenants shall thus
expire; provided, however, that bona fide claims first asserted in writing
within the applicable period shall not thereafter be barred.
11.2.2 Notwithstanding any other provision herein to the contrary,
the Purchaser shall not be liable to the Seller (a) for any Damages until
all Damages incurred by the Seller under Section 11.2 exceed an aggregate of
$120,000.00 (the "Indemnification Threshold"), in which case the Purchaser
shall be liable only for Damages exceeding the Indemnification Threshold, or
(b) for any Damages in excess of the Actual Purchase Price.
11.2.3 Except as otherwise expressly provided in Section 12.3, the
rights and remedies provided in this Section 11.2 shall be the sole and
exclusive rights and remedies of the Seller in connection with any breach of
a representation or warranty of the Purchaser in Article V or any default in
the performance of any of the covenants or agreements of the Purchaser in
this Agreement.
11.3 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder the party seeking indemnification (the "Indemnified
Party"), shall promptly notify the party from whom indemnification is sought
(the "Indemnifying Party") of the claim and, when known, the facts constituting
the basis for such claim. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings by
a
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third party, the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder without the prior written
consent of the Indemnifying Party, which shall not be unreasonably withheld,
unless suit shall have been instituted against it and the Indemnifying Party
shall not have taken control of such suit after notification thereof as provided
in Section 10.4 of this Agreement.
11.3.1 In connection with any claim giving rise to indemnity
hereunder resulting from or arising out of any claim or legal proceeding by
a Person who is not a party to this Agreement and where money damages are
the sole and exclusive remedy, the Indemnifying Party at its sole cost and
expense may, upon written notice to the Indemnified Party, assume the
defense of any such claim or legal proceeding if it acknowledges to the
Indemnified Party in writing its obligations to indemnify the Indemnified
Party with respect to all elements of such claim. The Indemnified Party
shall be entitled to participate in (but not control) the defense of any
such action, with its own counsel and at its own expense. If the
Indemnifying Party does not assume the defense of any such claim or
litigation resulting therefrom within 30 days after receiving notification
of such claim, (i) the Indemnified Party may defend against such claim or
litigation, in such manner as it may deem appropriate, including, but not
limited to, settling such claim or litigation, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate, and (ii) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its
counsel and at its own expense. If the Indemnifying Party thereafter seeks
to question the manner in which the Indemnified Party defended such third
party claim or the amount or nature of any such settlement, the Indemnifying
Party shall have the burden to prove by a preponderance of the evidence that
the Indemnified Party did not defend or settle such third party claim in a
reasonably prudent manner.
11.3.2 The Seller hereby acknowledges and agrees that any claim for
indemnification by the Purchaser under this Section 11 or under any other
provision of this Agreement, may, at the Purchaser's sole option, be set off
against the Purchaser's obligation to issue shares of Common Stock upon
conversion of the Preferred Stock. All indemnification by the Purchaser, on
the one hand, or the Seller, on the other hand, hereunder (to the extent not
satisfied in the manner specified in the preceding sentence) shall be
effected by payment of cash or delivery of a cashier's or certified check in
the amount of the indemnification liability.
ARTICLE XII
Miscellaneous
12.1 Transaction Expenses. Each party shall pay its own legal, accounting
and other transaction expenses in connection with the transactions contemplated
hereby.
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12.2 Amendment and Modification. The parties hereto may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
12.3 Termination.
12.3.1 Anything to the contrary herein notwithstanding, this Agreement may
be terminated and the transaction contemplated hereby may be abandoned:
(a) by the mutual written consent of all of the parties hereto at any
time prior to the Closing Date;
(b) by any party in the event of the material breach by any other
party of any provision of this Agreement which breach is not remedied by
the breaching party within 20 days after receipt of notice thereof from the
terminating party.
If this Agreement is terminated pursuant to clauses (a) of this paragraph
12.3.1, no party shall have any liability for any costs, expenses, loss of
anticipated profit or any further obligation for breach of warranty or otherwise
to any other party to this Agreement. Any termination of this Agreement pursuant
to clauses (b), of this paragraph 12.3.1 shall be without prejudice to any other
rights or remedies, if any, of the respective parties.
12.3.2 This Agreement may be terminated by any party hereto upon
written notice to the other party hereto, without liability for any costs,
expenses, loss of anticipated profit or any further obligation for breach or
warranty or otherwise to any party to this Agreement, if the Closing does
not occur on or prior to August __, 1998 unless such date is extended by the
written consent of Purchaser and Seller; provided, however, that the right
to terminate this Agreement shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the
cause of, or resulted in, the failure of the Closing to occur prior to such
date.
12.4 Entire Agreement. This Agreement, including the exhibits and schedules,
contains the entire agreement of the parties hereto with respect to the purchase
of the Purchased Assets and the other transactions contemplated hereby, and
supersedes all prior understandings and agreements (oral and written) of the
parties with respect to the subject matter hereof. The parties expressly
represent and warrant that in entering into this Agreement they are not relying
on any prior representations made by any other party concerning the terms,
conditions or effects of this Agreement which terms, conditions and effects are
not expressly set forth herein. Any reference herein to this Agreement shall be
deemed to include the schedules and exhibits.
12.5 Interpretation. The descriptive headings in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be to an article, section, paragraph, clause, schedule or exhibit to this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". Time shall be of the essence in this
Agreement.
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12.6 Execution in Counterpart. This Agreement may be executed in any number
of counterpart, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same agreement.
12.7 Notices. Any notice, consent, approval, request, other communications
or information to be given or made hereunder to any of the parties by any other
party shall be in writing and (a) delivered personally, (b) sent by express
delivery service or certified mail, postage prepaid, or (c) sent by facsimile as
follows:
If to the Seller, addressed to:
Republic Services, Inc.
110 S.E. 6th Street
Suite 2800
Ft. Lauderdale, Florida 33301
Attn: General Counsel
Fax: (954) 769-6527
If to the Purchaser, addressed to:
GreenMan Technologies, Inc.
7 Kimball Lane
Building A.
Lynnfield, Massachusetts 01940
Attn: President
Fax: (781) 224-0114
Any party may change the address to which notices hereunder are to be sent
to it by giving written notice of such change of address in the manner herein
provided for giving notice. Any notice delivered personally shall be deemed to
have been given on the date it is so delivered, and any notice delivered by
express delivery service or certified mail shall be deemed to have been given on
the date it is received, and any notice given by facsimile transmission shall be
deemed to have been give on the date sent (so long as sender receives
confirmation of transmission and a hard copy of such notice is sent by U.S.
mail).
12.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed therein.
12.9 Confidentiality; Publicity. Except as may be required by law or as
otherwise permitted herein, no party hereto or their respective affiliates,
employees, agents and representatives shall disclose to any third party the
subject matter or terms of this Agreement without prior consent of the other
party hereto. No press release or other public announcement related to this
Agreement or the transactions contemplated hereby will be issued by any party
hereto without the prior approval of the other party, except that any party may
make such public
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<PAGE>
disclosure which it believes in good faith to be required by law or by the terms
of any listing agreement with a securities exchange (in which case such party
will consult with the other party prior to making such disclosure).
12.10 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transaction contemplated hereby are fulfilled to the greatest extent possible.
12.11 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior consent of the other party.
12.12 Binding Effect; No Third Party Beneficiaries. This Agreement shall
inure to the benefit of, be binding upon and be enforceable by and against the
Seller and the Purchaser and their respective successors and permitted assigns,
and nothing herein expressed or implied shall be construed to give any other
person or entity any legal or equitable rights hereunder.
12.13 Bulk Transfer. The Purchaser and the Seller hereby waive compliance
with any applicable state's Uniform Commercial Code - Bulk Transfer provisions
("Bulk Transfer Provisions") which may be applicable to the transactions
contemplated hereby.
12.14 Investment Representations. Each party hereto expressly represents and
warrants to all other parties hereto that (a) before executing this Agreement,
said party has fully informed itself or himself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its or his own judgment in executing this Agreement; (c) said
party has had the opportunity to seek and has obtained the advice of counsel
before executing this Agreement; (d) said party has acted voluntarily and of its
or his own free will in executing this Agreement; (e) said party is not acting
under duress, whether economic or physical, in executing this Agreement; and (f)
this Agreement is the result of arm's length negotiations conducted by and among
the parties and their counsel.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
UNITED WASTE SERVICES, INC.
By: /s/ David A. Barclay
------------------------
Name: David A. Barclay
------------------------
Title: Assistant Secretary
------------------------
GREENMAN TECHNOLOGIES, INC.
By: /s/ Charles E. Coppa
------------------------
Name: Charles E. Coppa
------------------------
Title: Acting CFO
------------------------
GREENMAN ACQUISITION CORP.
By: /s/ Charles E. Coppa
------------------------
Name: Charles E. Coppa
------------------------
Title: Treasurer
------------------------
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GREENMAN TECHNOLOGIES, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF CLASS B CONVERTIBLE PREFERRED STOCK
The undersigned officers of GreenMan Technologies, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware, do hereby certify that, pursuant to authority conferred by the
Certificate of Incorporation, and pursuant to the provisions of Section 151 of
the General Corporation Law of the State of Delaware, the Board of Directors of
the Corporation has duly adopted a resolution providing for certain powers,
designations, preferences and relative, participating, optional or other rights,
and the qualifications, limitations or restrictions thereof, of certain shares
of Class B Convertible Preferred Stock, $1.00 par value, which resolutions are
as follows:
RESOLVED: That, pursuant to the authority vested in the Board of Directors of
the Corporation and in accordance with the General Corporation Law of
the State of Delaware and the provisions of the Corporation's
Certificate of Incorporation, as amended, a class of the Corporation's
authorized and undesignated Preferred Stock, par value $1.00 per
share, of the Corporation is hereby created as the Class B Convertible
Preferred Stock, and that the designation and number of shares thereof
and the voting powers, preferences and relative, participating,
optional and other special rights of such series, and the
qualifications, limitations and restrictions thereof, are as set forth
on Exhibit A attached hereto; and that the President and Secretary of
the Corporation be, and each of them hereby is, authorized and
directed to execute and file with the Delaware Secretary of State the
Certificate of Designations, Preferences and Rights of the Class B
Convertible Preferred Stock.
EXECUTED as of this 3rd day of September, 1998.
GREENMAN TECHNOLOGIES, INC.
By: /s/ Charles E. Coppa
---------------------------
Charles E. Coppa
Treasurer
ATTEST:
/s/ John A. Piccione
- -------------------------------
John A. Piccione
Assistant Secretary
<PAGE>
EXHIBIT A
Description and Designation of Class B Convertible Preferred Stock
1. Designation. 320,000 shares of the authorized Preferred Stock of the
Corporation are hereby designated "Class B Convertible Preferred Stock" (the
"Class B Preferred"). Shares of Class B Preferred Stock that are converted by
the holder or that are purchased by the Corporation shall be canceled and shall
revert to authorized but unissued Preferred Stock undesignated as to class or
series. The shares of Class B Preferred are collectively referred to herein as
"Shares."
2. Dividends and Distributions.
2A. Dividends. When and as any dividend or distribution is declared
or paid by the Corporation on the Common Stock and the Class A Preferred at any
time prior to the conversion of all of the outstanding Shares, whether payable
in cash, property, securities or rights to acquire securities, the holders of
Shares will be entitled to participate with the holders of Common Stock and the
Class A Preferred in such dividend or distribution as set forth in this
paragraph 2A. At the time such dividend or distribution is payable to the
holders of Common Stock and the Class A Preferred, the Corporation will pay each
holder of Shares a portion of such dividend or distribution equal to the amount
of the dividend or distribution per share of Common Stock payable at such time
multiplied by the number of shares of Common Stock obtainable upon conversion of
such holder's Shares. To the extent any dividends or distributions payable on
any Shares are not paid, the amount of such dividends or distributions will be
added to the Liquidation Value of such Shares and will remain a part thereof
until such dividends or distributions are paid. The provisions of this
subparagraph 2A shall not apply to dividends or distributions payable in shares
of Common Stock or in Options or Convertible Securities (as defined in paragraph
6 below) or any other dividend or distribution, if the declaration, distribution
or payment thereof has resulted or will result in an adjustment to the
Conversion Price of Shares under paragraph 6 below.
2B. Distribution of Partial Dividend Payments. If at any time the
Corporation pays less than the total amount of dividends then declared with
respect to the Shares, such payment will be distributed ratably among the
holders of the Shares based upon the aggregate declared but unpaid dividends on
the Shares held by each such holder.
3. Liquidation. Upon any liquidation, dissolution or winding up of the
Corporation, the holders of shares of Class B Preferred will be entitled to be
paid pro rata, after any distribution or payment is made upon any shares of
Class A Preferred and before any distribution or payment is made upon any shares
of Junior Securities, an amount in cash equal to the aggregate Liquidation Value
of all shares of Class B Preferred outstanding, and the holders of the shares of
Class B Preferred will not be entitled to any further payment. If upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation's
assets to be distributed among the holders of shares of Class B Preferred are
insufficient to permit payment to such holders of the aggregate amount which
they are entitled to be paid, then the entire assets to be distributed will be
distributed ratably
<PAGE>
among such holders based upon the aggregate Liquidation Value of the shares of
Class B Preferred held by each such holder. The Corporation will mail written
notice of such liquidation, dissolution or winding up, not less than 45 days
prior to the payment date stated therein, to each record holder of Shares.
Neither the consolidation or merger of the Corporation into or with any other
corporation or corporations, nor the sale or transfer by the Corporation of all
or any part of its assets, nor the reduction of the capital stock of the
Corporation will be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this paragraph 3.
4. Redemption. Neither the Corporation nor any Subsidiary will redeem or
otherwise acquire any Shares, except as otherwise expressly authorized herein or
pursuant to a purchase offer made pro rata to all holders of Shares on the basis
of the number of Shares owned by each such holder.
5. Voting Rights. Except as otherwise provided by the General Corporation
Law of the State of Delaware, or in the Certificate of Incorporation of the
Corporation, or as otherwise required by law, the Class B Preferred shall have
no voting rights. The foregoing notwithstanding, approval, by affirmative vote
or written consent, of holders of at least a majority of the outstanding shares
of Class B Preferred shall be required for any of the following transactions:
(a) any amendment to the Certificate of Incorporation of the Corporation if such
amendment would alter the aggregate number of authorized shares, or the par
value, of the Class B Preferred, or would adversely affect the powers,
preferences or rights of the shares of Class B Preferred, or (b) any issuance by
the Corporation of equity securities having a dividend or liquidation preference
senior to, or on a parity with, the Class B Preferred. On all matters where
holders of the Class B Preferred are entitled to vote, each holder of Class B
Preferred shall be entitled to the number of votes equal to the largest integral
number of shares of Common Stock into which such holder's shares of Class B
Preferred could be converted (using the formula described in Sections 6A(i) and
6B hereof), as of the record date, in the case of a meeting, or the effective
date of any consent given in lieu of a meeting.
6. Conversion.
6A. Conversion Procedure.
(i) At any time commencing February 3, 2001, any holder of
Shares may convert all or any portion of the Shares (including any fraction of a
Share) held by such holder into a number of shares of Common Stock computed by
multiplying the number of Shares to be converted by the Conversion Price.
Anything to the contrary herein notwithstanding, the number of shares of Common
Stock issuable upon conversion of the Shares shall not exceed the quotient
obtained by dividing $3,200,000 by the average of the Closing Bid Prices during
the period from September 3, 1998 to February 3, 2001.
(ii) Each conversion of Shares will be deemed to have been
effected as of the close of business on the date (the "Conversion Date") on
which the certificate or certificates representing the Shares to be converted
have been surrendered at the principal office of the Corporation or its transfer
agent, if any. At such time as such conversion has been effected, the rights of
the holder of such Shares as such holder will cease and the Person or Persons in
whose name or names any certificate or certificates for shares of Common Stock
are to be issued upon such
-2-
<PAGE>
conversion will be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby.
(iii) As soon as possible after a conversion has been effected
(but in any event within seven business days in the case of subparagraph (a)
below), the Corporation will deliver to the converting holder:
(a) certificates representing the number of shares of
Common Stock issuable by reason of such conversion in such name or names and
such denomination or denominations as the converting holder has specified;
(b) payment in an amount equal to all declared but
unpaid dividends, if any, with respect to each Share converted plus the amount
payable under subparagraph (vi) below with respect to such conversion; and
(c) a certificate representing any Shares which were
represented by the certificate or certificates delivered to the Corporation in
connection with such conversion but which were not converted.
(iv) The issuance of certificates for shares of Common Stock
upon conversion of Shares will be made without charge to the holders of such
Shares for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
shares of Common Stock. Upon conversion of each Share, the Corporation will take
all such actions as are necessary in order to insure that the Common Stock
issuable with respect to such conversion will be validly issued, fully paid and
nonassessable.
(v) The Corporation will not close its books against the
transfer of Shares or of Common Stock issued or issuable upon conversion of
Shares in any manner which interferes with the timely conversion of the Shares.
(vi) If any fractional interest in a share of Common Stock
would, except for the provisions of this subparagraph (vi), be deliverable upon
any conversion of the Shares, the Corporation, in lieu of delivering the
fractional share therefor, will pay an amount to the holder thereof equal to the
Market Price of such fractional interest as of the date of conversion.
6B. Conversion Price. The Conversion Price of the Class B Preferred
in effect at any time shall be the quotient determined by dividing the Issuance
Price by the Average Closing Bid Price. The Average Closing Bid Price will be
equal to the average of the Closing Bid Prices for the Common Stock for the
fifteen (15) consecutive trading days ending on the trading day immediately
preceding the Conversion Date (subject to equitable adjustment for any stock
splits, stock dividends, reclassifications or similar events occurring during
such fifteen (15) trading day period). Anything to the contrary herein
notwithstanding, the Conversion Price shall at no time exceed the quotient
determined by dividing the Issuance Price by the average of the Closing Bid
Prices during the period from September 3, 1998 to February 3, 2001.
-3-
<PAGE>
6C. Subdivision or Combination of Common Stock. If the Corporation
at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision will be proportionately reduced, and if the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be
proportionately increased.
6D. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any capital reorganization, reclassification, consolidation, merger or sale of
all or substantially all of the Corporation's assets to another Person which is
effected in such a way that holders of Common Stock are entitled to receive
(either directly or upon subsequent liquidation) stock, securities or assets
with respect to or in exchange for Common Stock is referred to herein as an
Organic Change. Prior to the consummation of any Organic Change, the Corporation
will make appropriate provisions (in form and substance satisfactory to the
holders of a majority of the Shares then outstanding) to insure that each of the
holders of Shares will thereafter have the right to acquire and receive, in lieu
of or in addition to the shares of Common Stock immediately theretofore
acquirable and receivable upon the conversion of such holder's Shares, such
shares of stock, securities or assets as such holder would have received in
connection with such Organic Change if such holder had converted his Shares
immediately prior to such Organic Change. In any such case, the Corporation will
make appropriate provisions (in form and substance satisfactory to the holders
of a majority of the Shares then outstanding) to insure that the provisions of
this Section 6 will thereafter be applicable to the Shares (including, in the
case of any such consolidation, merger or sale in which the successor
corporation or purchasing corporation is other than the Corporation, an
immediate adjustment of the Conversion Price to the value for the Common Stock
reflected by the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of shares of Common Stock
acquirable and receivable upon conversion of Shares, if the value so reflected
is less than the Conversion Price in effect immediately prior to such
consolidation, merger or sale). The Corporation will not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor corporation (if other than the Corporation) resulting from
consolidation or merger or the corporation purchasing such assets assumes by
written instrument (in form reasonably satisfactory to the holders of a majority
of the Shares then outstanding), the obligation to deliver to each such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
6E. Notices.
(i) Immediately upon any adjustment of the Conversion Price,
the Corporation will give written notice thereof to all holders of Shares.
(ii) The Corporation will give written notice to all holders
of Shares at least 20 days prior to the date on which the Corporation closes its
books or takes a record (a) with respect to any dividend or distribution upon
Common Stock, (b) with respect to any pro rata subscription offer to holders of
Common Stock or (c) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
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<PAGE>
(iii) The Corporation will also give written notice to the
holders of Shares at least 20 days prior to the date on which any Organic Change
will take place.
7. Registration of Transfer. The Corporation will keep at its principal
office a register for the registration of Shares. Upon the surrender of any
certificate representing Shares at such place, the Corporation will, at the
request of the record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of Shares represented by the
surrendered certificate. Each such new certificate will be registered in such
name and will represent such number of Shares as is requested by the holder of
the surrendered certificate and will be substantially identical in form to the
surrendered certificate.
8. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder will be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing Shares, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the holder is an institutional investor its own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation will (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
Shares represented by such lost, stolen, destroyed or mutilated certificate and
dated the date of such lost, stolen, destroyed or mutilated certificate.
9. Definitions. As used in this Certificate of Stock Designation, the
following terms shall have the following meanings:
"Closing Bid Price" means, as of any date, (i) the closing bid price for
the shares of Common Stock as reported on the Nasdaq SmallCap Market by
Bloomberg Financial Markets or a comparable reporting service of national
reputation selected by the Corporation and reasonably acceptable to the holder
hereof if Bloomberg Financial Markets is not then reporting closing bid prices
for the Common Stock (collectively, "Bloomberg"), or (ii) if the Nasdaq SmallCap
Market is not the principal trading market for the shares of Common Stock, the
last reported sale price reported by Bloomberg on the principal trading market
for the Common Stock, or, if there is no sale price reported, the last bid price
reported by Bloomberg, or (iii) if the foregoing do not apply, the last sale
price of such security in the over-the-counter market on the pink sheets or
bulletin board for such security as reported by Bloomberg, or if no sale price
is so reported for such security, the last bid price of such security as
reported by Bloomberg, or (iv) if the Closing Bid Price cannot be calculated as
of such date on any of the foregoing bases, the Closing Bid Price of the Common
Stock on such date shall be the fair market value as reasonably determined by an
investment banking firm selected by the Corporation and reasonably acceptable to
the holder, with the costs of the appraisal to be borne by the Corporation. The
manner of determining the Closing Bid Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.
"Common Stock" means the Corporation's Common Stock, par value $.01 per
share, and for purposes other than the conversion of Shares into Common Stock,
includes any capital stock of any class of the Corporation hereafter authorized
which is not limited to a fixed sum or percentage
-5-
<PAGE>
of par or stated value in respect to the rights of the holders thereof to
participate in dividends or in the distribution of assets upon any liquidation,
dissolution or winding up of the Corporation.
"Issuance Price" means $10.00 per share of Series B Preferred, subject to
equitable adjustment whenever there shall occur a stock dividend, stock split,
combination, reorganization, reclassification or other similar event involving a
change in the Series B Preferred.
"Junior Securities" means any of the Corporation's equity securities other
than the Shares and the Class A Preferred.
"Liquidation Value" of any Share as of any particular date will be equal
to the sum of $10.00 plus any declared and unpaid dividends on such Share added
to the Liquidation Value of such Share pursuant to paragraph 2A and not paid.
The Liquidation Value shall be subject to equitable adjustment in the event of a
stock dividend, stock split combination, reorganization or other similar event
involving the Class B Preferred.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Subsidiary" means any corporation of which the shares of stock having a
majority of the general voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by the Corporation
either directly or indirectly through Subsidiaries.
10. Amendment and Waiver.
No amendment, modification or waiver will be binding or effective with
respect to any provision of this Certificate of Stock Designation without the
prior written consent of the holders of a majority of the Shares outstanding at
the time such action is taken; provided that no change in the terms hereof may
be accomplished by merger or consolidation of the Corporation with another
corporation unless the Corporation has obtained the prior written consent of the
holders of a majority of the Shares then outstanding.
11. Notices. Except as otherwise expressly provided, all notices referred
to herein will be in writing and will be delivered by registered or certified
mail, return receipt requested, postage prepaid and will be deemed to have been
given when so mailed (i) to the Corporation, at its principal executive offices
and (ii) to any stockholder, at such holder's address as it appears in the stock
records of the Corporation (unless otherwise indicated in writing by any such
holder).
-6-
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT ("Bill of
Sale") is made and entered into by GREENMAN ACQUISITION CORP., a Delaware
corporation ("Purchaser"), and UNITED WASTE SERVICE, INC., a Georgia corporation
(the "Seller), pursuant to the terms of that certain Asset Purchase Agreement
dated as of September 4, 1998 by and among the Purchaser, GreenMan Technologies,
Inc. and the Seller (the "Agreement"). Capitalized terms used herein which are
defined in the Agreement shall have the meanings assigned to them therein unless
otherwise defined herein.
1. For good and valuable consideration, receipt of which is hereby
acknowledged, Seller does hereby sell, convey, transfer, assign and deliver to
Purchaser, and its successors and assigns, free and clear of any liens, the
Purchased Assets.
2. Purchaser does hereby accept the foregoing sale, conveyance,
transfer, assignment and delivery of the Purchased Assets and does hereby assume
and agree to pay, perform and discharge, when lawfully due, the Assumed
Liabilities.
Each of Seller and Purchaser hereby covenants that, from time to
time after delivery of this Bill of Sale, at the other's request and without
further consideration, such party shall do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, any and all such further
acts, instruments and other things or writings reasonably requested by the other
party in order to evidence and effectuate the consummation of any of the
transactions contemplated by this Bill of Sale.
Notwithstanding anything contained in this Bill of Sale to the
contrary, the terms and provisions of the Agreement (including any
representations or warranties of Seller relating to the Purchased Assets) shall
survive the delivery of this Bill of Sale as provided in the Agreement. This
Bill of Sale shall, in all events, be construed so that none of the Assumed
Liabilities shall be expanded, increased, broadened or enlarged as to rights or
remedies which third parties would have had against Purchaser or Seller had this
Bill of Sale not been executed and delivered. This Bill of Sale, being further
documentation of the sales, conveyances, transfers, assignments and assumptions
contemplated by the Agreement, neither expands upon nor limits the rights,
benefits, responsibilities, liabilities and obligations of Purchaser and Seller
provided in and under the Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have caused this Bill of
Sale to be executed on September 4, 1998.
GREENMAN ACQUISITION CORP.
By: /s/ Charles E. Coppa
-----------------------
Title: Treasurer
-----------------------
UNITED WASTE SERVICE, INC.
By: /s/ David A. Barclay
-----------------------
Title: Assistant Secretary
-----------------------
LEASE
BY AND BETWEEN
UNITED WASTE SERVICE, INC., A GEORGIA CORPORATION, AS LANDLORD
AND
GREEN MAN TECHNOLOGIES OF GEORGIA, INC., A GEORGIA CORPORATION, AS TENANT
September 3, 1998
<PAGE>
LEASE
This Lease is made as of this _____ day of __________, 1998 by and between
UNITED WASTE SERVICE, INC., a Georgia corporation ("Landlord") and GREEN MAN
TECHNOLOGIES OF GEORGIA, INC., a Georgia corporation ("Tenant").
1. FUNDAMENTAL LEASE PROVISIONS
Demised
Premises: Address of Demised Premises: 375 Buford Drive
City: Lawrenceville County: Gwinnett State: Georgia
Term: One (1) year.
"Commencement Date": the later to occur of the date of full
execution of this Lease or delivery of the Premises to Tenant.
Extension
Terms: Four (4) options of One (1) year each.
Rent: One Hundred Forty Seven Thousand and no/100 Dollars
($147,000.00) per year, payable in equal monthly installments
of Twelve Thousand Two Hundred Fifty and No/100 Dollars
($12,250.00) per month during the Term.
Prepaid
Rent: Tenant shall pay the Rent for the first month of the Term upon
execution of this Lease.
Permitted
Use: Scrap tire collection and processing facility, and any lawful
use in connection therewith with Landlord's prior written
consent, not to be unreasonably withheld.
Address To Landlord: United Waste Service, Inc.
For 550 Six Flags Parkway
Notices: Mableton, GA 30126
Attn: Doug Dyson
With copy to: Republic Services, Inc.
110 S. E. 6th Street, 28th Floor
Ft. Lauderdale, FL 33301
Attn: David A. Barclay, Esq.
To Tenant: President, Greenman Technologies of Georgia, Inc.
7 Kimball Lane, Building A
Lynnfield, MA 01940
Attn: Robert H. Davis
With copy to: General Manager, Greenman Technologies of
Georgia, Inc.
138 B Sherrell Avenue
Jackson, GA 30233
Attn: James Maust
and
Mark D. Oldenburg, P.C.
200 WestPark Drive, Suite 140
<PAGE>
Peachtree City, GA 30269
Address
For Payment United Waste Service, Inc.
of Rent: 550 Six Flags Parkway
Mableton, GA 30126
2. DEMISED PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord
the tract of property described in Exhibit "A", which is annexed hereto and
incorporated by reference herein and made a part hereof for all purposes, which
collectively with any buildings, parking area, sidewalks, service area and other
improvements now existing or hereafter erected thereon are herein referred to as
the "Demised Premises."
3. TERM; EXTENSION TERMS
The Term of this Lease shall commence on the Commencement Date and shall
expire at midnight on the last day of the first Lease Year, unless earlier
terminated or extended as provided herein. For purposes hereof, "Lease Year"
shall be defined as that 12 month period during the Term commencing on the
Commencement Date or the annual anniversary thereof, as may be applicable;
provided, however that if the Commencement Date is other than the first day of a
calendar month, then the first Lease Year shall include that period of time from
the Commencement Date up to the first day of the next calendar month, and any
subsequent Lease Year shall be the 12 month period beginning on the first day of
such month. Tenant shall have the right to extend the Term of this Lease for the
Extension Terms set forth in Section 1 hereof, upon at least thirty (30) days
advance written notice to Landlord prior to the expiration of the then-existing
Term. For purposes of this Lease, the "Term" shall include any Extension Terms
exercised by Tenant hereunder.
4. RENT
(a) Rent. Tenant shall pay the Rent set forth in Section 1 hereof on the
first day of each month in advance, beginning on the Commencement Date. If the
Commencement Date occurs on a day other than the first day of the month, then
the Rent for the partial month in which the Commencement Date occurs shall be
prorated on the basis of a thirty (30) day month. Notwithstanding anything to
the contrary set forth herein, the Rent will be a net rental payment. All costs
of maintenance for which Tenant is responsible pursuant to Section 11 hereof,
repairs, utilities, taxes and insurance, and any and all other expenses
necessary in connection with the operation of the Demised Premises will be paid
solely by Tenant during the Term of this Lease.
(b) Prepaid Rent. Tenant shall pay prepaid Rent within ten (10) days of
the full execution of this Lease, as set forth in Section 1 hereof.
5. TAXES PAYABLE SOLELY BY TENANT
In addition to the Rent to be paid by Tenant, Tenant shall, prior to
delinquency, pay the full amount of all taxes, assessments, impositions, levies,
charges, excises, fees, licenses and other sums levied, assessed, charged or
imposed, by any governmental authority or other taxing authority upon Tenant's
leasehold interest under this Lease and all alterations, additions, fixtures
(including Removable Trade Fixtures), inventory and other property installed or
placed or permitted at the Demised Premises by Tenant.
6. LATE PAYMENT
In the event that Tenant shall fail to pay to Landlord when due any Rent,
or other sums owing to Landlord pursuant to the terms of this Lease, said late
payment shall bear interest at the Agreed Rate as herein provided and, in
addition for each such late payment that is not paid within ten (10) days after
the date
3
<PAGE>
the same was due, Tenant shall pay to Landlord a service charge equal to five
percent (5%) of the overdue amount.
7. USE
(a) Permitted Use. Tenant shall use the Demised Premises for the purposes
as set forth in Section 1 hereof. During the term hereof the Demised Premises
and every part thereof, shall be kept by Tenant in a neat and clean condition.
(b) Objectionable Use. Tenant shall not do or permit anything to be done
in or about the Demised Premises nor bring or keep anything therein which will
in any way increase the existing rate of or affect or cause a cancellation of
any fire or other insurance covering the Demised Premises or any of its
contents, nor shall Tenant sell or permit to be kept, used or sold in or about
the Demised Premises any article which may be prohibited by a standard form
policy of insurance. Tenant shall neither use the Demised Premises, nor allow
the Demised Premises to be used, for any unlawful purpose, nor cause, maintain
or permit any nuisance on the Demised Premises. Tenant shall not use or allow
anything to be done in or about the Demised Premises which will in any way
conflict with any law, ordinance or governmental regulation or requirement of
any board of fire underwriters or any duly constituted public authority now in
force or hereafter enacted or promulgated affecting the use or occupancy of the
Demised Premises, and shall promptly comply with all such laws or requirements
at its sole cost and expense.
(c) Hazardous Materials. Tenant shall not do anything throughout the term
of this Lease and any extension thereof that will violate any Environmental Laws
(defined below). Tenant shall indemnify, defend and hold harmless Landlord, its
directors, officers, employees, and agents and assignees or successors to
Landlord's interest in the Demised Premises, their directors, officers,
employees, and agents from and against any and all losses, claims, suits,
damages, judgments, penalties and liability including, without limitation, (i)
all out-of-pocket litigation costs and reasonable attorneys' fees actually
incurred, (ii) all damages (including consequential damages), directly or
indirectly arising out of the use, generation, storage, release or threatened
release or disposal of Hazardous Materials by Tenant, its agents and contractors
and (iii) the cost of and the obligation to perform any required or necessary
repair, clean-up, investigation, removal, remediation or abatement, and the
preparation of any closure or other required plans, to the full extent that such
action is attributable, directly or indirectly, to the use, generation, storage,
release or threatened release or disposal of Hazardous Materials by Tenant, its
agents and contractors. This indemnification obligation of Tenant does not
extend to any repair, clean-up, investigation, removal, remediation or abatement
of Hazardous Materials (i) which were present on, under or in the Demised
Premises on the Commencement Date, or (ii) for which Landlord is otherwise
obligated to indemnify Tenant pursuant to this Section 7(c).
Landlord shall indemnify, defend and hold harmless Tenant, its directors,
officers, employees, and agents, and any assignees, subtenants or successors to
Tenant's interest in the Demised Premises, their directors, officers, employees,
and agents, from and against any and all losses, claims, suits, damages,
judgments, penalties, and liability including, without limitation, all (i)
out-of-pocket litigation costs and reasonable attorneys' fees actually incurred,
(ii) all damages (including consequential damages), directly or indirectly
arising out of the presence, use, generation, storage, release, threatened
release or disposal of Hazardous Materials on, under or in the Demised Premises
before or after the Commencement Date by or due to the actions or omissions of
Landlord, or its agents and contractors and (iii) the cost of and the obligation
to perform any required or necessary repair, clean-up, investigation, removal,
remediation or abatement and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following the
commencement of the initial lease term, to the full extent that such action is
attributable, directly or indirectly, to the presence, use, generation, storage,
release, threatened release, or disposal of Hazardous Materials on, under or in
the Demised Premises due to the actions or omissions of Landlord or its agents
and contractors.
For the purpose of this Section 7(c), Hazardous Materials shall include
but not be limited to substances defined as "hazardous substances," "hazardous
materials," or "toxic substances" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.
4
<PAGE>
Section 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq.; the common law; and any and all state, local or federal
laws, rules, regulations and orders pertaining to environmental, public health
or welfare matters, as the same may be amended or supplemented from time to time
(collectively, the "Environmental Laws"). Any terms mentioned in this Lease
which are defined in any applicable Environmental Laws shall have the meanings
ascribed to such terms in such laws, provided, however, that if any such laws
are amended so as to broaden any term defined therein, such broader meaning
shall apply subsequent to the effective date of such amendment.
In the event any clean-up, investigation, removal, remediation, abatement,
or other similar action on, in or under the Premises is required by any
governmental or quasi-governmental agency as a result of the actions or
omissions of any party other than Tenant or its agents, contractors or invitees
before or after the Commencement Date and such action requires that Tenant be
closed for business for greater than a period of ten (10) consecutive business
days, or if access to the Demised Premises as a result of such action is
materially adversely affected for a period in excess of ten (10) business days,
then Tenant's rental obligations under this Lease shall be abated during the
period beyond the ten (10) days that Tenant is required to be closed for
business in proportion to the degree of interference suffered by Tenant, for a
period not to exceed sixty (60) days, at which point Tenant shall either resume
the payment of Rent, or terminate the Lease.
The provisions of this Section 7(c) shall survive the expiration or sooner
termination of this Lease.
8. PROPERTY TAXES
Tenant agrees to pay to Landlord, or at Landlord's election, directly to
the taxing or assessing authority prior to delinquency, all Real Estate Taxes
during the Term of this Lease upon the land, buildings and personal property
comprising the Demised Premises. Real Estate Taxes for the first and last years
of the Term hereof shall be prorated between Landlord and Tenant. For the
purposes of this Lease, the term "Real Estate Taxes" shall include any form of
real property taxes and general assessments (including special assessments),
imposed by any authority having the direct power to tax, including any city,
county, state or federal government.
9. UTILITIES AND OTHER SERVICES
Tenant shall pay, prior to delinquency, all charges for utility service to
the Demised Premises, including, but not limited to, water, gas, power and
electric current, telephone, trash removal, and all other materials and services
used by Tenant in, on or about the Demised Premises from and after the delivery
of possession of the Demised Premises by Landlord, together with any taxes
thereon. If any such charges are not paid when due Landlord may pay the same,
and any amount so paid by Landlord, together with interest thereon at the
Default Rate from the date of payment, shall thereupon become due to Landlord
from Tenant as Rent.
10. ENTRY BY LANDLORD
Landlord and its authorized representatives shall have the right to enter
the Demised Premises at all reasonable times during normal business hours and at
any time in case of an emergency Landlord shall have the right at all times to
have and retain a key with which to unlock all doors in, upon and about the
Demised Premises, excluding Tenant's vaults and safes, and Landlord shall have
the right to use any and all means which Landlord may deem proper to gain entry
in an emergency.
11. MAINTENANCE AND REPAIR
(a) Tenant, at its sole cost and expense, shall keep in good order,
condition and repair the Demised Premises and every part thereof including,
without limiting the generality of the foregoing, all plumbing; electrical and
lighting facilities and equipment within the Demised Premises (including any
heating, ventilation and air conditioning system serving the Demised Premises);
fixtures; interior walls; roof and roof
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membrane; floors; ceilings; windows; doors; plate glass; skylights; entrances
and vestibules and signage located within the Demised Premises. If Tenant fails
to maintain the Demised Premises in good order, condition and repair, Landlord
may give Tenant notice to do such acts which are Tenant's obligation hereunder.
If Tenant thereafter fails to promptly complete such obligations within ten (10)
days, or if such obligations cannot be completed within ten (10) days, to
commence such work within ten (10) days and diligently prosecute it to
completion, then Landlord shall have the right to do such acts and expend such
funds at the expense of Tenant as are reasonably required to perform such work.
Any amount so expended by Landlord (together with a charge for Landlord's
administration and overhead equal to fifteen percent (15%) thereof) shall be
paid by Tenant promptly after demand, with interest at the Default Rate from the
date of such work. Landlord shall have no liability to Tenant for any damage,
inconvenience, or interference with the use of the Demised Premises by Tenant as
a result of performing any such work.
(b) Notwithstanding anything in this Section 11 to the contrary, Landlord
shall be responsible for the replacement of (i) the foundation, (ii) exterior
walls, (iii) roof and roof membrane, and (iv) the plumbing and electrical
systems outside the Demised Premises, except for (x) any damage caused by any
act, negligence, or omission of Tenant or Tenant's agents, employees,
contractors or customers, (y) reasonable wear and tear, or (z) structural
alterations or improvements required by any governmental agency by reason of
Tenant's use and occupancy of the Demised Premises. The actual cost of any item
set forth in subsections (i) - (iv) may be amortized over the useful life of
such item according to generally accepted accounting procedures and Tenant
agrees to pay annually during the Term hereof an amount equal to the annual
amortized cost of such replacement.
(c) Compliance with Law. Landlord and Tenant shall each do all acts
required to comply with all applicable laws, ordinances, and rules of any public
authority relating to their respective maintenance obligations as set forth
herein. Should any federal, state or local regulatory or governmental agency or
department require any structural changes, repairs or modifications to the
improvements on the Demised Premises not resulting from Tenant or related to
Tenant's use or occupancy of the Demised Premises, Landlord shall be responsible
for payment for said charges, repairs or modifications; otherwise, the same
shall be made by Tenant at its sole cost and expense.
12. ALTERATIONS AND ADDITIONS
Tenant shall make no structural alterations, additions or improvements, or
utility installations (which for purposes of this Section shall be defined to
mean ducting, power panels, lighting fixtures, space heaters, conduits and
wiring), to the Demised Premises or any part thereof without obtaining the prior
written consent of Landlord in each instance. Such consent may be granted or
withheld at Landlord's reasonable discretion.
13. INDEMNIFICATION
Tenant agrees to indemnify and hold harmless Landlord and its affiliated
companies and their agents, servants, directors, officers, shareholders, and
employees (as used in this provision, Landlord and its affiliated companies and
their agents, servants, directors officers, shareholders, and employees are
collectively called "Indemnitees") from and against any and all liabilities,
losses, damages, liens, claims, suits, causes of action, costs (including court
costs, reasonable attorneys' fees actually incurred, and costs of
investigation), and actions of any kind arising out of, caused by, resulting
from or alleged to arise by reason of injury to or death of any person or damage
to or loss of property occurring on the Demised Premises, except to the extent
caused by Landlord's negligence or willful misconduct. Landlord agrees to
indemnify and hold harmless Tenant and its affiliated companies and their
agents, servants, directors, officers, shareholders, and employees (as used in
this provision, Tenant and its affiliated companies and their agents, servants,
directors officers, shareholders, and employees are collectively called
"Indemnitees") from and against any and all liabilities, losses, damages, liens,
claims, suits, causes of action, costs (including court costs, reasonable
attorneys' fees actually incurred, and costs of investigation), and actions of
any kind arising out of, caused by, resulting from or alleged to arise by reason
of injury to or death of any person or damage to or loss of property occurring
on or about the Demised Premises as a result of the acts or omissions of
Landlord, except to the extent caused by Tenant's gross negligence or willful
misconduct
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14. INSURANCE
(a) General. All insurance required to be carried by Tenant hereunder
shall be issued by responsible insurance companies licensed to do business in
Georgia and reasonably acceptable to Landlord and the holder of any deed of
trust secured by any portion of the Demised Premises (hereinafter referred to as
a "Mortgagee"). Tenant shall deliver duplicate originals of all policies to
Landlord, evidencing the existence and amounts of such insurance, at least ten
(10) days prior to Tenant's occupancy in the Demised Premises (Tenant may
deliver certificates of such insurance in lieu of duplicate originals of
policies, provided that such certificates shall in Landlord's sole judgment
provide clear and unambiguous evidence of the existence and amounts of such
insurance). Failure to make such delivery shall constitute a material default by
Tenant under this Lease. All policies of insurance delivered to Landlord must
contain a provision that the company writing said policy will give to Landlord
thirty (30) days notice in writing in advance of any modification, cancellation
or lapse or reduction in the amounts of insurance. All public liability,
property damage and other casualty insurance policies shall be written as
primary policies, not contributing with, and not in excess of coverage which
Landlord may carry. Tenant shall furnish Landlord with renewals or "Binders" of
any such policy at least thirty (30) days prior to the expiration thereof.
Tenant agrees that if Tenant does not procure and maintain such insurance,
Landlord may (but shall not be required to) obtain such insurance on Tenant's
behalf and charge Tenant the premiums therefor together with a ten percent (10%)
handling charge, payable upon demand.
(b) Casualty Insurance. At all times during the Term hereof, Tenant shall
maintain in effect policies of casualty insurance covering trade fixtures,
merchandise and other personal property from time to time in, on or upon the
Demised Premises. Such policies shall include coverage in an amount not less
than one hundred percent (100%) of the actual replacement cost thereof from time
to time during the Term of this Lease. Such policies shall provide protection
against any peril included within the classification "Fire and Extended
Coverage," against vandalism and malicious mischief, against theft unless waived
in writing by Landlord, against sprinkler leakage, against earthquake damage
unless waived in writing by Landlord, and against flood damage unless waived in
writing by Landlord (and including cost of demolition and debris removal).
Replacement cost for purposes hereof shall be determined by an accredited
appraiser selected by Landlord or otherwise by mutual agreement. The proceeds of
such insurance shall be used for the repair or replacement of the property so
insured. Upon termination of this Lease following a casualty as set forth
herein, the proceeds shall be paid to Tenant.
(c) Liability Insurance. Tenant shall at all times during the Term hereof
at its own cost and expense obtain and continue in force bodily injury liability
and property damage liability insurance adequate to protect Landlord against
liability for injury to or death of any person in connection with the activities
of Tenant in, on or about the Demised Premises or with the use, operation or
condition of the Demised Premises. Such insurance at all times shall be in an
amount of not less than Two Million Dollars ($2,000,000.00) for injuries to
persons in one accident, not less than One Million Dollars ($1,000,000.00) for
injury to any one person and not less than Five Hundred Thousand Dollars
($500,000.00) with respect to damage to property. The limits of such insurance
do not limit the liability of Tenant hereunder.
(d) Workers' Compensation Insurance. Tenant shall also, at all times
during the Term hereof, and at Tenant's own cost and expense, procure and
continue in force workers' compensation insurance with employer liability
(coverage B) limits of not less than Five Hundred Thousand Dollars
($500,000.00).
(e) Comprehensive Automobile Liability. Tenant shall maintain
comprehensive automobile liability insurance on a standard from written to cover
all owned, hired and non-owned automobiles with insurance in an amount of not
less than One Million Dollars ($1,000,000.00) for injuries to persons in one
accident, not less than Five Hundred Thousand Dollars ($500,000.00) for injury
to any one person and not less than Two Hundred Fifty Thousand Dollars
($250,000.00) with respect to damage to property.
15. DAMAGE AND DESTRUCTION
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(a) Partial Damage - Insured. If the Demised Premises are damaged by a
risk covered under fire and extended coverage insurance protecting Landlord,
then Landlord shall restore such damage provided insurance proceeds are
available to Landlord to pay one hundred percent (100%) of the cost of
restoration, and provided such restoration by Landlord can be completed within
six (6) months after the commencement of work, in the opinion of a registered
architect or engineer appointed by Landlord. In such event this Lease shall
continue in full force and effect, except that Tenant shall, so long as the
damage is not due to the act or omission of Tenant, be entitled to an equitable
reduction of Rent while such restoration takes place, such reduction to be based
upon the extent to which the damage and the restoration efforts materially
interfere with Tenant's business in the Demised Premises.
(b) Partial Damage - Uninsured. If the Demised Premises are damaged by a
risk not covered by such insurance or the insurance proceeds available to
Landlord are less than one hundred percent (100%) of the cost of restoration for
any reason whatsoever (including, without limitation, as a result of a Mortgagee
requiring the proceeds of insurance to be applied towards any indebtedness owed
to Mortgagee), or if the restoration cannot be completed within six (6) months
after the commencement of work in the opinion of the registered architect or
engineer appointed by Landlord, then Landlord shall have the option either to
(i) repair or restore such damage, this Lease continuing in full force and
effect, but the Rent to be equitably reduced as hereinabove provided, or (ii)
give notice to Tenant at any time within ninety (90) days after such damage
terminating this Lease as of a date to be specified in such notice, which date
shall be not less than thirty (30) nor more than sixty (60) days after giving
such notice. If such notice is given, this Lease shall expire and any interest
of Tenant in the Demised Premises shall terminate on the date specified in such
notice and the Rent, reduced by an equitable reduction (except as hereinabove
provided) based upon the extent, if any, to which such damage materially
interfered with Tenant's business in the Demised Premises, shall be paid to the
date of such termination, and Landlord agrees to refund to Tenant any Rent or
Expenses theretofore paid in advance for any period of time subsequent to such
date.
(c) Total Destruction. If the Demised Premises are totally destroyed, or
if in Landlord's judgment the Demised Premises cannot be restored as required
herein under applicable laws and regulations, then, notwithstanding the
availability of insurance proceeds, this Lease shall be terminated effective as
of the date of the damage.
(d) Landlord's Obligations. Landlord shall not be required to carry
insurance of any kind on Tenant's property and shall not be required to repair
any injury or damage thereto by fire or other cause, or to make any restoration
or replacement of any paneling, decorations, partitions, ceilings, floor
covering, office fixtures, utility installations or any other improvements or
property installed in the Demised Premises by or at the direct or indirect
expense of Tenant, and Tenant shall be required to restore or replace same in
the event of damage. Tenant shall have no claim against Landlord for any loss
suffered by reason of any such damage, destruction, repair or restoration.
Notwithstanding anything to the contrary contained in this Section, Landlord
shall have no obligation whatsoever to repair, reconstruct or restore the
Demised Premises with respect to damage or destruction as described in this
Section occurring during the last twelve (12) months of the Term of this Lease
or any extension thereof, in which event this Lease shall terminate as of the
date of damage or destruction.
16. CONDEMNATION
If all or any part of the Demised Premises is taken or appropriated for
public or quasi-public use by the right of eminent domain or otherwise by a
taking in the nature of inverse condemnation, with or without litigation, or is
transferred by agreement in lieu thereof (any of the foregoing being referred to
herein as a "taking"), either party hereto may, by written notice given to the
other within thirty (30) days of receipt of notice of taking, elect to terminate
this Lease as of the date possession is transferred pursuant to the taking;
provided, however, that before Landlord or Tenant may terminate this Lease for a
taking, such taking shall be of such an extent and nature as to materially and
adversely affect Tenant's business in Demised Premises. Tenant shall be entitled
to pursue an award for separate damages, provided the same shall not diminish
Landlord's claim or award. Nothing contained herein shall be deemed to give
Landlord any interest in, or to require Tenant to assign to Landlord, any award
made to Tenant for the taking of personal property belonging
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to Tenant. In the event of a partial taking which does not result in a
termination of this Lease, Rent shall be equitably reduced to the extent
Tenant's business in or use of the Demised Premises is materially and adversely
affected and impaired as described above. No temporary taking of the Demised
Premises shall terminate this Lease, or give Tenant any right to any abatement
of Rent or Expenses hereunder, except that Rent and Expenses shall be equitably
reduced as described above during that portion of any temporary taking lasting
more than thirty (30) days. Each party hereto waives the provisions of any
applicable law allowing either party to petition the court to terminate this
Lease for a partial taking, it being the intent of the parties that this Section
shall govern.
17. LIENS
Tenant shall keep the Demised Premises free from any liens arising out of
work performed, materials furnished, or obligations incurred by Tenant, and
shall indemnify, hold harmless and defend Landlord from any liens and
encumbrances arising out of any work performed or materials furnished by or at
the direction of Tenant. Landlord shall have the right at all times to keep
posted on the Demised Premises any notices permitted or required by law, or
which Landlord shall deem proper for the protection of Landlord and the Demised
Premises, and any other party having any interest therein, from mechanics' and
materialmen's liens. If any claim of lien is filed against the Demised Premises
or any similar action affecting title to such property is commenced, the party
receiving notice of such lien or action shall immediately give the other party
written notice thereof. If Tenant fails, within twenty (20) days following the
imposition of any lien, to cause such lien to be released of record by payment
or posting of a proper bond, Landlord shall have, in addition to all other
remedies provided herein and by law, the right (but not the obligation) to cause
the same to be released by such means as it shall deem proper, including payment
of the claim giving rise to such lien. All such sums paid by Landlord and all
costs and expenses incurred by it in connection therewith (including attorneys'
fees) shall be payable to Landlord by Tenant on demand, with interest at the
Agreed Rate from the date of expenditure.
18. DEFAULTS BY TENANT
The occurrence of any one or more of the following events shall constitute
a material default and breach of this Lease by Tenant:
(a) Monetary Default. The failure by Tenant to make any payment of Rent or
of any other sum required to be made by Tenant hereunder, within ten (10) days
of the date such sum shall be due and payable.
(b) Non-Monetary Default. The failure by Tenant to observe or perform any
of the covenants, conditions or provisions of this Lease to be observed or
performed by Tenant, if such failure is not cured within twenty (20) days after
written notice thereof from Landlord to Tenant; provided, however, that if the
nature of Tenant's default is such that it cannot be cured solely by payment of
money and more than twenty (20) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
the twenty (20) day period and thereafter diligently prosecutes such cure to
completion; provided, further, that repeated breaches or defaults by Tenant
(more than three (3) in any twelve (12) month period) shall entitle Landlord at
its option, to terminate this Lease.
(c) Bankruptcy. The making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or of a petition for reorganization or arrangement
under any law relating to bankruptcy (unless, in the case of a petition filed
against Tenant, the same is dismissed within sixty (60) days); the appointment
of a trustee or receiver to take possession of substantially all of Tenant's
assets located at the Demised Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within thirty (30) days.
19. LANDLORD'S REMEDIES
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In the event of any default or breach of this Lease by Tenant, Landlord
may at any time thereafter, without limiting Landlord in the exercise of any
other right or remedy at law or in equity which Landlord may have (all remedies
provided herein being non-exclusive and cumulative), do any one or more of the
following:
(a) Right to Relet. Maintain this Lease in full force and effect and
recover the Rent and other monetary charges as they become due, without
terminating Tenant's right to possession irrespective of whether Tenant shall
have abandoned the Demised Premises. If Landlord elects not to terminate the
Lease, Landlord shall have the right to attempt to relet the Demised Premises at
such rent and upon such conditions, and for such a term, as Landlord deems
appropriate in its sole discretion and to do all acts necessary with regard
thereto, without being deemed to have elected to terminate the Lease, including
re-entering the Demised Premises to make repairs or to maintain or modify the
Demised Premises, and removing all persons and property from the Demised
Premises; such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant. Reletting may be for a
period shorter or longer than the remaining term of this Lease, and for more or
less rent. If reletting occurs, this Lease shall terminate automatically when
the new tenant takes possession of the Demised Premises and commences rent
payment. Notwithstanding that Landlord fails to elect to terminate the Lease
initially, Landlord at any time thereafter may elect to terminate the Lease by
virtue of any previous uncured default by Tenant. In the event of any such
termination, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default (including, without
limitation, the damages described below), as well as all costs of reletting,
including commissions, reasonable attorneys' fees actually incurred, restoration
or remodeling costs for subsequent tenant, and all other consequential damages.
(b) Termination. Terminate Tenant's right to possession by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Demised Premises to Landlord. In such event Landlord
shall be entitled to recover from Tenant all damages incurred by Landlord by
reason of Tenant's default.
(c) Right to Cure Tenant's Default. Proceed to cure the default at
Tenant's sole cost and expense, without waiving or releasing Tenant from any
obligation hereunder. If at any time Landlord pays any sum or incurs any expense
as a result of or in connection with curing any default of Tenant (including any
administrative fees provided for herein and attorneys' fees), the amount thereof
shall be immediately due as of the date of such expenditure and, together with
interest at the Agreed Rate from the date of such expenditures, shall be paid by
Tenant to Landlord immediately upon demand, and Tenant hereby covenants to pay
any and all such sums.
(d) Remedies are Cumulative. Notwithstanding any termination of this Lease
pursuant to a default by Tenant, Landlord shall be entitled to any and all
remedies set forth in this Lease or at law or equity.
20. COSTS OF SUIT
If either party brings action for relief against the other, declaratory or
otherwise, arising out of this Lease, including any suit by Landlord for the
recovery of Rent or possession of the Demised Premises, the unsuccessful party
shall pay the successful party its costs incurred in connection with and in
preparation for said action, including its reasonable attorneys' fees actually
incurred (which costs shall be deemed to have accrued on the commencement of
such action and shall be paid whether or not such action is prosecuted to
judgment).
21. SURRENDER OF DEMISED PREMISES
(a) Surrender. On expiration or termination of this Lease, Tenant shall
surrender to Landlord the Demised Premises, and all Tenant's improvements
thereto and alterations thereof, broom clean and in good condition (except for
ordinary wear and tear and damage due to casualty), and shall remove all of its
personal property including any signs, notices and displays.
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(b) Holding Over. If Tenant holds over after the Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or an extension for any further
term, and in such case Rent shall be payable at a rental in the amount of one
hundred fifty percent (150%) of the Rent in effect as of the last month of the
Term hereof and at the time specified in this Lease, and such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein. The foregoing shall not, however, be construed as a consent by Landlord
to any holding over by Tenant and Landlord reserves the right to require Tenant
to surrender possession of the Demised Premises upon expiration or termination
of this Lease.
22. TRANSFER OF LANDLORD'S INTEREST
Landlord shall have the right to assign its interest in this Lease to any
party in Landlord's sole discretion. If Landlord sells or transfers its interest
in the Demised Premises (other than a transfer for security purposes) Landlord
shall be released from all obligations and liabilities accruing thereafter under
this Lease, if Landlord's successor has assumed in writing Landlord's
obligations under this Lease. Any prepaid Rent or other funds of Tenant in the
hands of Landlord at the time of transfer shall be delivered to such successor.
Tenant agrees to attorn to the purchaser or assignee, provided all Landlord's
obligations hereunder are assumed in writing by such successor.
23. ASSIGNMENT AND SUBLETTING
Tenant shall not transfer this Lease or any interest therein, and shall
not sublet the Demised Premises or any part thereof, without the prior written
consent of Landlord (such consent to be in the reasonable discretion of
Landlord) in each instance.
24. ATTORNMENT
If any proceeding is brought for default under any ground or underlying
lease to which this Lease is subject, or in the event of foreclosure or the
exercise of the power of sale under any mortgage or deed of trust made by
Landlord covering the Demised Premises, Tenant shall attorn to the successor
upon any such foreclosure or sale and recognize that successor as Landlord under
this Lease, provided such successor expressly agrees in writing to be bound to
all future obligations by the terms of this Lease, and, if so requested, Tenant
shall enter into a new lease with that successor on the same terms and
conditions as are contained in this Lease (for the unexpired term of this Lease
then remaining).
25. SUBORDINATION
Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, this Lease shall be subject and
subordinate at all times to: (i) all ground or underlying leases which may now
exist or hereafter be executed affecting the Demised Premises, and (ii) the lien
of any first mortgage or first deed of trust which may now exist or hereafter be
executed in any amount for which the Demised Premises, such ground or underlying
leases, or Landlord's interest or estate in any of them, is specified as
security. Tenant covenants and agrees to execute and deliver, upon demand by
Landlord and in such form as shall be reasonably requested by Landlord, any
documents evidencing the priority or subordination of this Lease with respect to
any such ground or underlying leases or the lien of any such first mortgage or
first deed of trust, and specifically to execute, acknowledge, and deliver to
Landlord from time to time within ten (10) days after requested to do so a
subordination of lease, or a subordination of deed of trust, in substantially
the form set forth in Exhibit "B" respectively, attached hereto, or such other
form as may be reasonably required by any Mortgagee of Landlord, and failure of
Tenant to do so shall be a material default hereunder. Tenant hereby irrevocably
appoints Landlord as its attorney-in-fact to execute, deliver, and record any
such documents in the name and on behalf of Tenant if Tenant fails to comply
with the foregoing.
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26. ESTOPPEL CERTIFICATE
Tenant shall from time to time within twenty (20) days after prior written
notice from Landlord execute, acknowledge and deliver to Landlord a statement in
writing in the form set forth in Exhibit "C" attached hereto.
27. QUIET ENJOYMENT
Tenant shall lawfully and quietly have, hold and enjoy the Demised
Premises without hindrance or molestation by Landlord or anyone claiming by,
through or under Landlord, subject, however, to all the provisions of this
Lease.
28. NOTICES
Any notice, demand or communication required or permitted to be given
hereunder shall be personally served, deposited in the United States mails, duly
registered or certified with postage fully prepaid thereon or by Federal Express
or other reputable overnight courier service, addressed to the other party at
the address set forth in Section 1 hereof, or to such other address requested in
writing by either party upon thirty (30) days notice to the other party, notices
shall be deemed to have been given upon the date same is post-marked if sent by
registered or certified mail or the day deposited with Federal Express or such
reputable overnight courier or the day sent if by personal service, but shall
not be deemed received until one (1) business day following deposit with Federal
Express or other reputable overnight courier or three (3) days following deposit
in the United States Mail if sent by certified or registered mail or upon
receipt if by personal service.
29. NON-WAIVER
No delay or omission in the exercise of any right or remedy of Landlord
for any default by Tenant shall impair such right or remedy or be construed as a
waiver. The receipt and acceptance by Landlord of delinquent payments shall not
constitute a waiver of any other default, and shall not constitute a waiver of
timely payment of the particular payment involved. No act or conduct of
Landlord, including, without limitation, the acceptance of keys to the Demised
Premises, shall constitute an acceptance of the surrender of the Demised
Premises by Tenant before the expiration of the Term. Only an express notice to
such effect from Landlord to Tenant shall constitute acceptance of the surrender
of the Premised sufficient to terminate this Lease. Landlord's consent to or
approval of any act by Tenant requiring Landlord's consent or approval shall not
constitute a consent or approval of any subsequent act by Tenant. Any waiver by
Landlord of any default must be in writing and shall not be a waiver of any
other default concerning the same or any other provision of this Lease.
30. MISCELLANEOUS
(a) Not an Offer. The submission of this document for examination and
negotiation does not constitute an offer to lease, or a reservation of, or an
option for, the Demised Premises.
(b) Execution. This document becomes effective and binding only upon
execution and delivery hereof by Tenant and by Landlord. No act or omission of
any employee or agent of Landlord or of Landlord's broker shall alter, change or
modify any of the provisions hereof. This Lease may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument. A telecopy signature of any party shall
be considered to have the same binding effect as an original signature.
(c) Landlord and Tenant. As used in this Lease, the words "Landlord" and
"Tenant" include the plural as well as the singular. Words used in the neuter
gender include the masculine and feminine and words in the masculine or feminine
gender include the neuter, If there is more than one person or entity
constituting Landlord or Tenant, the obligations imposed hereunder upon Landlord
or Tenant are joint and several, If Tenant consists of a husband and wife, the
obligations of Tenant hereunder extend individually to the sole and
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separate property of each of them as well as to their community property. The
obligations contained in this Lease to be performed by Landlord shall be binding
on Landlord's successors and assigns only during their respective periods of
ownership of the Demised Premises.
(d) Brokers. Each party shall indemnify and hold the other party harmless
from all damages (including attorneys' fees and costs) resulting from any claims
that may be asserted by any broker, finder, or other person claiming by, through
or under the party, except as specifically set forth above.
(e) Nonrecordability of Lease. Tenant agrees that in no event shall this
Lease or a memorandum hereof be recorded.
(f) Matters of Record. This Lease and Tenant's rights hereunder are
subject and subordinate in all respects to matters affecting Landlord's title
recorded in the official records of the county recorder's office for the county
in which the Demised Premises is located. Tenant agrees that as to its leasehold
estate it, and all persons in possession or holding under it, will conform with
and will not violate any such covenants, conditions and restrictions, or other
matters, of record; provided, however, that in the event any such matter
prohibits Tenant from using the Demised Premises for a scrap tire collection and
processing facility, Tenant may terminate this Lease upon thirty (30) days
advance written notice to Landlord.
(g) Severability. If any provision of this Lease shall, to any extent, be
determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Lease shall not be affected thereby, and every other term
and provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
(h) Construction. All provisions hereof, whether covenants or conditions,
shall be deemed to be both covenants and conditions. The definitions contained
in this Lease shall be used to interpret this Lease.
(i) Interest. Except as expressly provided otherwise in this Lease, any
amount due to Landlord which is not paid when due shall bear interest from the
date due at the prime commercial rate of interest published from time to time by
the Wall Street Journal as the base rate on corporate loans posted by at least
75% of the nations thirty (30) largest banks, plus two percent (2%) per annum,
but not to exceed the maximum rate of interest allowable under the law (the
"Agreed Rate"). Payment of such interest shall not excuse or cure any default by
Tenant under this Lease.
(j) Binding Effect; Choice of Law. Except as expressly provided otherwise
in this Lease, all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. This Lease shall be governed by the
laws of the state where the Demised Premises is located.
(k) Time; Rights Cumulative. Time is of the essence of this Lease and each
and every provision hereof, except as to the provisions relating to delivery of
possession of the Demised Premises to Tenant. All rights and remedies of the
parties shall be cumulative and non-exclusive of any other remedy at law or in
equity.
(l) Inability to Perform. This Lease and the obligations of Tenant
hereunder shall not be affected or impaired because Landlord is unable to
fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of force majeure, strike, labor troubles,
acts of God, acts of government, unavailability of materials or labor, or any
other cause beyond the control of Landlord (the "Permitted Delays").
(m) Authority. The individuals executing this Lease on behalf of Landlord
and Tenant represent and warrant that they are duly authorized to execute and
deliver this Lease.
13
<PAGE>
(n) No Partnership. Nothing herein contained, either in the method of
computing Rent or otherwise, shall create between the parties hereto, or be
relied upon by others as creating, any relationship or partnership, association,
joint venture, or otherwise. The sole relationship of the parties hereto shall
be that of landlord and tenant.
(o) Exhibits. Each of the following exhibits are incorporated herein as a
part of this Lease:
(i) Exhibit "A" - Legal Description of the Demised Premises
(ii) Exhibit "B" - Subordination of Lease
(iii) Exhibit "C" - Estoppel Statement
31. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS
This Lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this Lease, and no prior
agreement, negotiations, brochures, arrangements, or understanding pertaining to
any such matter shall be effective for any purpose unless expressed herein. No
provisions of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
last date indicated below.
LANDLORD: TENANT:
UNITED WASTE SERVICE, INC., GREEN MAN TECHNOLOGIES OF GEORGIA,
a Georgia corporation a Georgia corporation
BY: /s/ David A. Barclay BY: /s/ Charles E. Coppa
------------------------------- -----------------------------
ITS: Assistant Secretary ITS: Treasurer
------------------------------- -----------------------------
DATE: DATE: 9/4/98
------------------------------- -----------------------------
EXHIBIT A
[INSERT LEGAL DESCRIPTION OF THE DEMISED PREMISES]
14
<PAGE>
EXHIBIT B
SUBORDINATION OF LEASE
Recording Requested By And
When Recorded Return To:
Attention:
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE LEASEHOLD ESTATE IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER
OR LATER SECURITY DOCUMENT.
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
THIS AGREEMENT made as of the ___________ day of _______________________
19__, among __________________________ (hereinafter referred to as "Mortgagee"),
UNITED WASTE SERVICE, INC., a Georgia corporation (hereinafter referred to as
"Landlord"), and GREEN MAN TECHNOLOGIES, INC., a Delaware corporation
(hereinafter referred to as "Tenant").
W I T N E S S E T H
WHEREAS, Mortgagee has become the owner and holder of a beneficial
interest under a deed of trust recorded ____________________ as Instrument No.
__________________, Official Records, County of _____________________,
____________ (hereinafter referred to as the "Mortgage") covering certain
premises described in Exhibit A attached hereto (hereinafter referred to as the
"Mortgaged Demised Premises") and of the note, bond or other obligation secured
thereby (hereinafter referred to as the 'Note");
WHEREAS, Tenant is the holder of a leasehold estate in a portion of the
Mortgaged Demised Premises (hereinafter referred to as the "Demised Premises")
under and pursuant to the provisions of a certain lease dated
_____________________, 19_______ by and between Tenant and Landlord (hereinafter
referred to as the "Lease");
WHEREAS, Landlord's interest in the Lease has been assigned to Mortgagee
as additional security for the Mortgage; and
WHEREAS, Tenant has agreed to subordinate the Lease to the Mortgage and to
the lien thereof and Mortgagee has agreed to grant non-disturbance to Tenant
under the Lease on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt of which is hereby acknowledged, Mortgagee and Tenant hereby covenant
and agree as follows:
1. So long as Tenant is not in default in the payment of rent or
additional rent or in the performance of any of the other terms, covenants or
conditions of the Lease on Tenant's part to be performed. Tenant's possession of
the Demised Premises under the Lease, or any extensions or renewals thereof
which may be effected in accordance with any option therefor in the Lease, shall
not be diminished or interfered with by Mortgagee and Mortgagee shall not join
Tenant as a party defendant in any action or proceeding for the purpose of
terminating Tenant's interest and estate under the Lease because of any default
under the Mortgage.
15
<PAGE>
2. If Mortgagee shall become the owner of the Mortgaged Demised Premises
or the Mortgaged Demised Premises shall be sold by reason of foreclosure,
trustee's sale or other proceedings brought to enforce the Mortgage, or if the
Mortgaged Demised Premises shall be transferred by deed in lieu of the
foreclosure, the Lease shall continue in full force and effect as a direct Lease
between the then owner of the Mortgaged Demised Premises (including Mortgagee or
the grantee under a deed in lieu of foreclosure) and Tenant, upon and subject to
all of the terms, covenants and conditions of the Lease for the balance of the
term thereof remaining and any extensions or renewals thereof which may be
effected in accordance with any option therefor in the Lease, and Tenant does
hereby attorn to Mortgagee or any other such owner as its Landlord, said
attornment to be effective and self-operative without the execution of any
further instruments, except that Tenant shall, from and after Mortgagee's or
other such owner's succession to the interest of Landlord under the Lease, have
the same remedies for the breach of covenant contained in the Lease that Tenant
might have had under the Lease against Landlord.
3. The Lease is hereby made, and shall at all times be subject and
subordinate in each and every respect, to the Mortgage and to any and all
renewals, modifications, extensions, substitutions, replacements and/or
consolidations of the Mortgage, but any and all such renewals, modifications,
extensions, substitutions, replacements and/or consolidations, shall
nevertheless be subject to and entitled to the benefits of the terms of this
Agreement.
4. To the extent that the Lease shall entitle the Tenant to notice of any
Mortgage, this Agreement shall constitute such notice to the Tenant with respect
to the Mortgage and to any and all renewals, modifications, extensions,
substitutions, replacements and/or consolidations of the Mortgage.
5. This Agreement may not be modified orally or in any other manner than
by an agreement in writing signed by the parties hereto or their respective
successors in interest. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and acknowledged as of the day and year first above written.
Mortgagee: Landlord:
UNITED WASTE SERVICE, INC.
- -----------------------------------
/s/ David A. Barclay
- ----------------------------------- -----------------------------------
By: By: David A. Barclay
- ----------------------------------- -----------------------------------
Title: Title: Assistant Secretary
- ----------------------------------- -----------------------------------
Tenant:
GREEN MAN TECHNOLOGIES, INC.
- -----------------------------------
By:
- -----------------------------------
Title:
- -----------------------------------
16
<PAGE>
EXHIBIT C
ESTOPPEL STATEMENT
Re: Lease dated as of ______________ (hereinafter the "Lease"),
between UNITED WASTE SERVICE, INC., a Georgia corporation
(hereinafter the "Lessor") and GREEN MAN TECHNOLOGIES, INC., a
Delaware corporation (hereinafter the "Lessee"), concerning the
premises described in Exhibit A attached hereto (the "Demised
Premises").
As Lessee under the above-referenced Lease, the undersigned hereby
acknowledges for the benefit of __________________ ("Lender"), which has or is
about to make a loan to said Lessor, part of the security for which will be a
mortgage or deed of trust covering the Demised Premises leased to the
undersigned and an assignment of Lessor's interest in the Lease, the truth and
accuracy of the following statements pertaining to said Lease. To Lessee's
knowledge:
1. Lessee is not aware of any patent or latent defects in construction of
said improvements (except for only nonsubstantial defects, notice of which has
previously been given to Lessor) which would constitute a default by Lessor
pursuant to the Lease.
2. Lessee is paying the full rent stipulated in said Lease to be paid by
Lessee as of the date hereof with no offsets, defenses or claims.
3. Lessor is not presently in default under any of the terms, covenants or
provisions of said Lease.
4. Lessor has satisfactorily complied with all of the requirements and
conditions precedent to the commencement of the term of said Lease as specified
in said Lease.
5. The current fixed base monthly rent under said Lease is
$_______________ and no moneys have been paid to Lessor in advance of the due
date set forth in the Lease described above, except as follows:
________________________________________________________________________________
______________________________________________________________________________.
6. The Lease is for a term of ___________ years and Lessee has been in
occupancy since ________________ and paying rent since ________________.
7. The Lease commenced on __________________.
8. Lessee acknowledges that Lender assumes no liability for its security
deposits, if any, or for sums escrowed with the Lessor for taxes or insurance or
other expenses in the event that Lender acquires the Demised Premises through
foreclosure or through a transfer of title in lieu of foreclosure, unless such
security deposits or escrowed sums have been delivered to Lender.
Dated: ____________________________ 19 __.
LESSEE:
--------------------------------
BY:
----------------------------
ITS
----------------------------
1
COVENANT NOT TO COMPETE/NON-SOLICITATION
AND CONFIDENTIALITY AGREEMENT
THIS COVENANT NOT TO COMPETE/NON-SOLICITATION AND CONFIDENTIALITY
AGREEMENT (this "Agreement") is made and entered into this 4th day of September,
1998 by and among UNITED WASTE SERVICES, INC. ("UWS"), a Georgia corporation,
Republic Services, Inc. ("Republic"), a Delaware corporation (hereinafter UWS
and Republic are referred to as ("United") and GREENMAN TECHNOLOGIES, INC., a
Delaware corporation ("GreenMan").
RECITALS:
WHEREAS, on the date hereof, pursuant to that certain Asset Purchase
Agreement, dated as of September 4, 1998 (the "Asset Purchase Agreement"),
between GreenMan and United, GreenMan acquired from United certain assets used
in the operation of United's scrap tire and collection business.
WHEREAS, pursuant to Section 3.2.12 of the Asset Purchase Agreement,
United agreed, among other things, to enter into the Agreement and to refrain
from certain activities competitive with those of GreenMan in the business of
tire collection and shredding.
WHEREAS, in order that GreenMan realizes the full value and goodwill
inherent in the assets acquired pursuant to the Asset Purchase Agreement, the
parties hereto mutually desire that United execute and deliver this Agreement in
favor of GreenMan.
AGREEMENT:
FOR AND IN CONSIDERATION of the Agreements contained in this Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Restrictive Covenants
1.1 United, on behalf of itself and its Affiliates (as hereinafter
defined), subsidiaries, to the extent applicable, successors and assigns agrees,
for a period of five (5) years commencing on the date hereof and terminating on
the fifth anniversary of the date the parties entered into this Agreement, not
to:
1.1.1 Directly or indirectly engage in (as an owner, partner,
employee, agent, consultant or otherwise) the tire collection and
shredding business in the States of
<PAGE>
Georgia, Florida, Alabama, South Carolina, North Carolina, Tennessee,
Kentucky or Virginia (collectively, the "Territory") or acquire or retain
any financial interest having a fair value in excess of the lesser of
$500,000 in, or 5% of the equity of, any business that is so engaged in
the Territory; or
1.1.2 (i) Induce any customer of GreenMan or its Affiliates to
patronize any business that is in direct or indirect competition with the
tire collection and shredding business of GreenMan or its Affiliates; (ii)
canvass, solicit or accept from any customer of GreenMan or its Affiliates
any business that competes with the tire shredding and collection business
of GreenMan or its Affiliates; or (iii) request or advise any individual
or company that is a customer of GreenMan or its Affiliates to withdraw,
curtail or cancel any such customer's business with GreenMan or its
Affiliates.
1.1.3 Solicit or endeavor to entice away any dealer, distributor,
sales representative, officer or employee of GreenMan or its Affiliates,
including without limitation those former employees of RSI or United hired
by GreenMan or its Affiliates following the Closing under the Asset
Purchase Agreement.
Notwithstanding anything to the contrary herein, GreenMan acknowledges that the
ownership by United, or any of its Affiliates, of less than five percent (5%) of
the shares of stock of any corporation having a class of equity securities
actively traded on a National Securities Exchange or over the counter market
shall not be a violation of this Agreement. For the purposes of this Agreement,
the term "Affiliate" shall mean any individual, corporation, partnership, joint
venture, trust or unincorporated organization or association, joint stock
company or other similar organization or legal entity, that controls, or is
controlled by, or is under common control with GreenMan, RSI or United, as the
case may be, whether such control be direct or indirect. As used in the
foregoing sentence, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such individual, corporation, partnership, joint venture, trust or
unincorporated organization or association, joint stock company or other similar
organization or legal entity, whether through the ownership of voting
securities, by contract or otherwise.
1.2 If any provision of paragraph 1.1 of this Article I is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other
provision of the said paragraph 1.1 or any other part of this Agreement, the
application of such provision in any other circumstances or the validity or
enforceability of this Agreement. If any such provision, or any part thereof, is
held to be unenforceable because of the duration of such provision or the
geographic area covered thereby or the nature of the business activity covered
thereby, the parties agree that the court making such determination shall reduce
the duration, geographic area, and/or business coverage of such provision,
and/or to delete specific words or phrases, and in its reduced form such
provision will then be enforceable and will be enforced. Upon a breach of any
provision of paragraph 1.1, GreenMan shall be entitled to injunctive relief and
specific
2
<PAGE>
performance, because the remedy at law would be inadequate and insufficient. In
addition, GreenMan shall be entitled to all other damages as provided by law.
ARTICLE II
Confidentiality Agreement
United, on behalf of itself and its Affiliates agrees and warrants that,
for a period of five (5) years from the date hereof, it will not, directly or
indirectly, at any time divulge, furnish, or make accessible to anyone, or
appropriate to its own use, or to the use of any third party, any knowledge or
information with respect to secret, confidential or proprietary methods,
processes, formulae, designs, equipment, plans, projects, material, information,
business, operations, techniques or customer lists of United; provided, however,
that the foregoing restriction shall not apply to information that (i) is in the
public domain or becomes part of the public domain through no fault of United,
(ii) is used by United in businesses other than Untied's tire collection and
shredding business, or (iii) United is required to disclose by order of a court
of competent jurisdiction in any legal proceeding, provided that United shall
notify GreenMan before so disclosing such information.
ARTICLE III
Miscellaneous
3.1 Amendment and Modification. The parties hereto may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
3.2 Entire Agreement. This Agreement, including the exhibits and
schedules, contains the entire agreement of the parties hereto with respect to
the purchase of the Purchased Assets and the other transactions contemplated
hereby, and supersedes all prior understandings and agreements (oral and
written) of the parties with respect to the subject matter hereof. The parties
expressly represent and warrant that in entering into this Agreement they are
not relying on any prior representations made by any other party concerning the
terms, conditions or effects of this Agreement which terms, conditions and
effects are not expressly set forth herein. Any reference herein to this
Agreement shall be deemed to include the schedules and exhibits, if any.
3.3 Interpretation. The descriptive headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be to an article, section, paragraph, clause, schedule or exhibit to this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". Time shall be of the essence in this
Agreement.
3
<PAGE>
3.4 Execution in Counterpart. This Agreement may be executed in any number
of counterpart, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same Agreement.
3.5 Notices. Any notice, consent, approval, request, other communications
or information to be given or made hereunder to any of the parties by any other
party shall be in writing and (a) delivered personally, (b) sent by express
delivery service or certified mail, postage prepaid, or (c) sent by facsimile as
follows:
If to RSI or United, addressed to:
Republic Services, Inc.
110 S.E. 6th Street
Suite 2800
Ft. Lauderdale, Florida 33301
Attn: General Counsel
Fax: (954) 769-6527
If to the GreenMan, addressed to:
GreenMan Technologies, Inc.
7 Kimball Lane
Building A.
Lynnfield, Massachusetts 01940
Attn: President
Fax: (781) 224-0114
Any party may change the address to which notices hereunder are to be sent
to it by giving written notice of such change of address in the manner herein
provided for giving notice. Any notice delivered personally shall be deemed to
have been given on the date it is so delivered, and any notice delivered by
express delivery service or certified mail shall be deemed to have been given on
the date it is received, and any notice given by facsimile transmission shall be
deemed to have been give on the date sent (so long as sender receives
confirmation of transmission and a hard copy of such notice is sent by U.S.
mail).
3.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed therein.
3.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the
4
<PAGE>
3.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transaction contemplated hereby are fulfilled to the greatest extent possible.
3.8 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior consent of the other party.
3.9 Binding Effect; No Third Party Beneficiaries. This Agreement shall
inure to the benefit of, be binding upon and be enforceable by and against the
Seller and the Purchaser and their respective successors and permitted assigns,
and nothing herein expressed or implied shall be construed to give any other
person or entity any legal or equitable rights hereunder.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the day and year first above written.
UNITED WASTE SERVICES, INC. REPUBLIC SERVICES, INC.
By: /s/ David A. Barclay By: /s/ David A. Barclay
------------------------- -------------------------
Name: David A. Barclay Name: David A. Barclay
------------------------- -------------------------
Title: Assistant Secretary Title: Senior Vice President
------------------------- -------------------------
GREENMAN TECHNOLOGIES, INC.
By: /s/ Charles E. Coppa
-------------------------
Name: Charles E. Coppa
-------------------------
Title: Acting CFO
-------------------------
5
Exhibit 3.2.13
DISPOSAL AGREEMENT
THIS DISPOSAL AGREEMENT (this "Agreement") is entered into this 4th day of
September, 1998, by and among GREENMAN TECHNOLOGIES OF GEORGIA, INC., a Georgia
corporation ("GreenMan"); UNITED WASTE SERVICE, INC., a Georgia corporation
("United"), and PINE RIDGE RECYCLING, INC. a Georgia corporation ("PRR").
WHEREAS, on the date hereof, pursuant to that certain Asset Purchase
Agreement, dated as of September 4, 1998 (the "Asset Purchase Agreement")
between GreenMan and United, GreenMan acquired from United certain assets used
in the operation of a scrap tire collection and processing business, part of the
operations of which are conducted at a site in Lawrenceville, Georgia (the
"Lawrenceville Site").
WHEREAS, GreenMan owns and operates a scrap tire collection and processing
business in Jackson, Georgia (the "Jackson Site").
WHEREAS, an affiliate of United, PRR, owns and operates a landfill in
Griffin, Georgia, known as the "Pine Ridge Landfill" and operates a landfill in
Winder, Georgia, known as the "Oak Grove Landfill", (hereinafter the Pine Ridge
Landfill and the Oak Grove Landfill are collectively referred to as the
"Landfills").
WHEREAS, one of the conditions to closing the transactions contemplated by
the Asset Purchase Agreement is that the parties hereto enter into this
Agreement providing for the disposal of solid waste from the Lawrenceville Site
and the Jackson Site upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration set forth herein and in the Asset Purchase Agreement, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
each intending to be legally bound, agree as follows:
1. Definitions. For the purpose of this Agreement, the following terms
shall have the meanings set forth below:
(a) "Agreement" means this Agreement between GreenMan, United and
PRR, as modified, supplemented or restated from time to time.
(b) "Effective Date" means the date first above written.
(c) "Force Majeure" means any event relied upon by United or PRR, as
justification for delay in or excuse from complying with any obligation required
of United or PRR under this Agreement, which event is beyond the control of
United or PRR or its agents
<PAGE>
relying thereon, including, without limitation: (i) an act of God, landslide,
lightning, earthquake, fire, explosion, storm, flood or similar occurrence; (ii)
any act of any federal, state, county or local court, administrative agency or
governmental office or body that stays, invalidates, or otherwise affects this
Agreement with respect to the disposal of Waste; (iii) the denial, loss,
suspension, expiration, termination or failure of renewal of any permit, license
or other governmental approval required to dispose of Waste; (iv) the adoption
or change (including a change in interpretation or enforcement) of any federal,
state, county, or local law, rule, permit, regulation or ordinance after the
Effective Date hereof, applicable to the obligations hereunder, including,
without limitation such changes that have a substantial, material and adverse
effect on the cost of performing the contractual obligations herein; (v) the
institution of a legal or administrative action, or similar proceeding, by any
person or entity which delays or prevents any aspect of the disposal of Waste.
(d) "Hazardous Waste" means waste defined as, or of a character or
in sufficient quantity to be defined as a "hazardous waste" by the Resource
Conservation and Recovery Act, as amended, the laws of the State of Georgia or
any rules or regulations with respect thereto, or a "toxic substance" as defined
in the Toxic Substance Control Act, as amended, or any rules or regulations with
respect thereto, or any reportable quantity of a "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, or any rules or regulations with respect thereto,
including any waste whose storage, treatment, incineration or disposal requires
a special license or permit from an agency of the federal government or the
State of Georgia. Hazardous Waste also includes any substance that is, after the
Effective Date of this Agreement, deemed hazardous by any judicial or
governmental entity, body or agency having jurisdiction to make that
determination.
(e) "Landfills" means the landfill in Winder, Georgia, and the
landfill in Griffin, Georgia, operated by PRR as of the Effective Date hereof.
(f) "Regular Business Hours" means: with respect to the Pine Ridge
Landfill, the hours of 3:30 a.m. to 5:00 p.m. on Monday thru Friday and 6:00
a.m. to 10:00 a.m. on Saturday; and (ii) with respect to the Oak Grove Landfill,
the hours of 7:00 a.m. to 5:30 p.m. on Monday thru Friday and 7:00 a.m. to 12:00
p.m. on Saturday.
(g) "Ton" means 2,000 pounds.
(h) "Unacceptable Waste" means highly inflammable substances,
Hazardous Waste, liquid wastes, certain pathological and biological wastes,
explosives, radioactive materials, and other materials deemed by State and
Federal law, or in the reasonable discretion of United or PRR, to be dangerous
or threatening to the environment.
(i) "Waste" means any and all non-hazardous solid waste from the
Lawrenceville Site and from GreenMan's facility in Jackson Georgia delivered to
the Landfills by GreenMan or its
2
<PAGE>
designated representative. Waste shall include, but not be limited to, waste
from tire shredding activities which is comprised of wire and rubber as well as
solid rubber tires, forklift tires, conveyor belting, solid rubber items, dirt,
pallets, sheared (or "quartered") "off-the-road" tires and other non-hazardous
waste generated at any GreenMan facility in Georgia.
2. Term. Unless earlier terminated pursuant to Section 5 below, the term
of this Agreement shall commence on the Effective Date, and shall remain in full
force for a period of two (2) years ("Initial Term").
3. Disposal Fees.
3.01 GreenMan shall pay PRR disposal fees of $15.44 per Ton for the
disposal of Waste at the Landfills, inclusive of federal, state and local taxes,
fees or assessments that are levied on PRR with respect to the acceptance and
disposal of such Waste; provided, however, that PRR shall provide to GreenMan
credit for disposal fees equal to $10,000.00; and provided further that any
documented increase over the current level of federal, state and local taxes,
fees or assessments that are currently levied on PRR with respect to the
acceptance and disposal of such Waste during the term of this Agreement shall be
payable by GreenMan in addition to the disposal fees specified herein.
3.02 Should this Agreement be extended beyond the Initial Term, the
fees provided for in Section 3.01 shall be renegotiated by the parties upon the
expiration of the Initial Term, or any extension thereof, of this Agreement.
3.03 If PRR performs disposal services outside Regular Business
Hours or any additional services, PRR may adjust the disposal fees to offset the
additional costs in performing such services.
3.04 PRR shall send GreenMan a monthly invoice for the disposal fees
incurred during the previous month. GreenMan shall pay PRR the full amount
within thirty (30) days of receipt of the invoice. Unpaid invoices shall carry
interest at the rate of one and one half percent (1.5%) per month. The
obligations of GreenMan to pay the disposal fees and other amounts payable
hereunder shall be absolute and unconditional. In the event that GreenMan fails
to timely pay any outstanding amount, PRR may, in addition to any other remedies
available to PRR, terminate this Agreement by giving 15 days written notice to
GreenMan. GreenMan may cure by making full payment within the 15 day period
after receipt of notice.
3.05 In the event that (i) any Waste requires special handling or
management due to its composition or volume, or (ii) PRR agrees to dispose of
any Unacceptable Waste, GreenMan and PRR shall determine in advance, on a case
by case basis, the charge to GreenMan for PRR's disposal of such wastes. Payment
for such disposal shall be upon the same terms as the payment of other disposal
fees. The parties hereto agree that scrap residual generated by tire processing
activities and sheared pieces of "off-the-road" tires shall not be considered
Unacceptable Waste or Waste requiring special handling or management.
3
<PAGE>
4. Delivery and Acceptance of Waste.
4.01 GreenMan agrees to deliver to the Landfill only Waste generated
at and residing at the Lawrenceville Site. PRR represents and warrants that
there is no Unacceptable Waste located at the Lawrenceville Site as of the date
of this Agreement. GreenMan also agrees that it will offer to deliver to PRR any
Waste generated by any other site operated by GreenMan in the state of Georgia
before it delivers such Waste to any other landfill, provided, however, that the
disposal fees for such Waste shall not exceed the amount set forth in Section
3.01 hereof.
4.02 PRR shall have the right to weigh all vehicles delivering Waste
to the Landfill. At any time, PRR may confirm the tare weight of any vehicle
delivering Waste to the Landfill by or on behalf of GreenMan.
4.03 GreenMan acknowledges that PRR intends to reject waste that, in
PRR's reasonable determination, would be in violation of the Landfills' then
existing licenses or permits or would result in a violation of applicable
federal, state or local laws, regulations or ordinances. The foregoing
notwithstanding, PRR agrees that it will not reject any Waste from the
Lawrenceville Site that existed prior to the date of this Agreement.
4.04 Ownership of Waste delivered to the Landfill by or on behalf of
GreenMan shall pass to and be accepted by PRR when the vehicle transporting the
Waste is fully unloaded at the Landfill. Ownership of Unacceptable Waste
delivered to the Landfill by or on behalf of GreenMan shall not pass to PRR at
any time unless PRR agrees in advance to accept such Unacceptable Waste.
4.05 PRR may detain and inspect the contents of all vehicles owned
or operated by GreenMan that are delivering Waste to the Landfill. GreenMan
agrees to monitor and inspect on a regular basis the contents of its vehicles in
order to ensure that the Waste being delivered to the Landfill contains no
Unacceptable Waste.
4.06 GreenMan shall not deliver any Unacceptable Waste to the
Landfill. If any Unacceptable Waste is delivered by or on behalf of GreenMan,
PRR shall have the right to refuse or reject such waste, or, if not detected
prior to acceptance at the Landfill, PRR may remove such waste and assure its
proper disposal, all at GreenMan's expense, which expense GreenMan agrees to
promptly pay upon presentation by PRR of an invoice setting forth the costs in
reasonable detail.
4.07 In addition to other remedies provided in this Agreement, PRR
may terminate this Agreement upon repeated deliveries or the one-time
intentional delivery of Unacceptable Waste by GreenMan. PRR shall notify
GreenMan in writing of its intention to terminate, and termination shall become
effective within 15 days of receipt.
4
<PAGE>
4.08 PRR shall not be responsible for the transportation of Waste to
the Landfill. PRR shall not be responsible for the transportation or redelivery
to GreenMan, or elsewhere, of any waste, including without limitation
Unacceptable Waste to the Landfill by or on behalf of GreenMan.
5. Termination. PRR may terminate this Agreement upon (i) any breach or
default of this Agreement by GreenMan or (ii) an event of Force Majeure that
continues unabated for a period of sixty (60) days and renders PRR unable,
wholly or in part, to carry out any of its obligations under this Agreement.
6. Representations and Warranties of GreenMan. GreenMan represents and
warrants to PRR as follows:
6.01 GreenMan has full legal right, power and authority to enter
into and to fully and timely perform its obligations under this Agreement;
6.02 GreenMan duly authorizes, executes and delivers this Agreement,
and acknowledges that this Agreement constitutes a valid and legally binding
obligation of GreenMan.
6.03 GreenMan or its designated representative has obtained all
necessary licenses and permits required to operate solid waste transportation
vehicles in order to deliver Waste to the Landfill.
7. Representations and Warranties of PRR. PRR represents and warrants to
GreenMan as follows:
7.01 PRR has the full legal right, power and authority to enter into
and to fully and timely perform its obligations under this Agreement;
7.02 PRR has duly authorized the execution and delivery of this
Agreement, and acknowledges that this Agreement constitutes a valid and legally
binding obligation of PRR.
7.03 PRR has obtained all necessary licenses and permits required
under all applicable federal, state and local laws to operate the Landfills,
that such licenses and permits are in full force and effect, and that such
licenses and permits will not expire prior to the expiration of the Initial
Term.
8. Indemnification.
8.01 GreenMan agrees to indemnify and save harmless PRR, its
officers, directors, shareholders, agents, employees and attorneys (collectively
"PRR") from any loss, claim, liability, penalty, fine, forfeiture, demand, cause
of action, suit and costs and expenses
5
<PAGE>
incidental thereto (including cost of defense, settlement and reasonable
attorneys' fees) ("Indemnified Costs"), caused by or resulting from any
negligent or willful act or omission of GreenMan, its agents or employees in
connection with this Agreement or resulting from a breach by GreenMan of any of
the agreements, representations, or warranties of GreenMan contained in this
Agreement. The indemnity obligation of GreenMan under this Section shall survive
the expiration or termination of this Agreement subject to any applicable
statute of limitation.
8.02 PRR agrees to indemnify and save harmless GreenMan, its
officers, directors, shareholders, agents, employees and attorneys (collectively
"GreenMan") from any loss, claim, liability, penalty, fine, forfeiture, demand,
cause of action, suit and costs and expenses incidental thereto (including cost
of defense, settlement and reasonable attorneys' fees) ("Indemnified Costs"),
caused by or resulting from any negligent or willful act or omission of PRR, its
agents or employees in connection with this Agreement or resulting from a breach
by PRR of any of the agreements, representations, or warranties of PRR contained
in this Agreement. The indemnity obligation of PRR under this Section shall
survive the expiration or termination of this Agreement subject to any
applicable statute of limitation.
9. Notices. All notices or other communications to be given hereunder
shall be in writing and shall be by registered or certified United States mail,
return receipt requested, properly addressed as follows:
To PRR or United: Republic Services, Inc.
110 S.E. 6th Street
Suite 2800
Ft. Lauderdale, Florida
Attn: General Counsel
To GreenMan: GreenMan Technologies of Georgia, Inc.
138 Sherrel Avenue
Jackson, Georgia 30233
Attn: General Manager
Fax: (770) 775-4304
With a copy to: GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Attn: President
Fax: (781) 224-0114
10. Miscellaneous. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the subject matter of this
Agreement and supersedes all arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of either party hereto. There are no restrictions, representations, warranties,
covenants or undertakings other than those expressly set forth or referred to
herein. This Agreement shall be binding upon and inure to the benefit of the
parties
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<PAGE>
hereto and their respective subsidiaries, successors and assigns; provided,
however, that no party may assign or transfer its rights or obligations under
this Agreement without the prior written consent of the other party, except that
PRR may assign to an affiliate its rights and obligations under this Agreement.
No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted the waiver. The provisions of this Agreement are
independent of and severable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that any provision
may be invalid or unenforceable in whole or in part. This Agreement shall be
construed and enforced in accordance with the laws of the State of Delaware. All
warranties and indemnifications contained herein shall survive the termination
of this Agreement.
IN WITNESS WHEREOF, the parties execute this Agreement as of the date
first above written.
GREENMAN TECHNOLOGIES OF GEORGIA, INC.
By: /s/ Charles E. Coppa
------------------------------
Its: Treasurer
-----------------------------
PINE RIDGE RECYCLING, INC.
By: /s/ David A. Barclay
------------------------------
Its: Assistant Secretary
-----------------------------
UNITED WASTE SERVICE, INC.
By: /s/ David A. Barclay
------------------------------
Its: Assistant Secretary
-----------------------------
7
Exhibit 3.2.14
GREENMAN TECHNOLOGIES, INC.
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (the "Agreement") is made as of
September 4, 1998 between GREENMAN TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), and REPUBLIC SERVICES, INC., a Delaware corporation ("RSI").
RECITALS:
The parties to this Agreement are parties to an Asset Purchase
Agreement of even date herewith (the "Purchase Agreement") pursuant to which RSI
received as consideration thereunder certain securities of the Company. In order
to induce RSI and to enter into the Purchase Agreement, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the Closing under the Purchase
Agreement.
TERMS OF AGREEMENT:
The parties hereto agree as follows:
1. Piggyback Registrations.
(a) Right to Piggyback. For the period commencing on the date hereof
and continuing up to and until the second anniversary of the date of this
Agreement, whenever the Company proposes to register any of its equity
securities under the Securities Act of 1933, as amended, and the Rules and
Regulations promulgated thereunder (the Securities Act of 1933 and such Rules
and Regulations being hereinafter collectively referred to as the "Act") on Form
S-1, Form S-2 or Form S-3 (or any successor forms), the Company shall give
prompt written notice to RSI of its intention to effect such a registration and
shall include in such registration all Registrable Securities of RSI (a
"Piggyback Registration") with respect to which the Company has received a
written request from RSI for inclusion therein within 20 days after the receipt
of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses (as defined in
Section 4 hereof) of Registrable Securities shall be paid by the Company in all
Piggyback Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range reasonably acceptable to the Company, the Company shall include
<PAGE>
in such registration (i) first, the securities the Company proposes to sell and
(ii) second, the Registrable Securities requested to be included in such
registration by RSI, and any other securities requested to be included in such
registration pro rata among the holders of such securities on the basis of the
number of shares owned by each such holder.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range reasonably acceptable to the holders initially
requesting such registration, the Company shall include in such registration the
Registrable Securities requested to be included therein by RSI, and any
securities of the Company requested to be included in such registration, pro
rata among the holders of such securities on the basis of the number of shares
owned by each such holder.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering where the Registrable Securities requested to be included
therein represent more than 10% of all securities being registered, the
selection of investment banker(s) and manager(s) for the offering must be
approved by RSI. Such approval shall not be unreasonably withheld.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to this
paragraph 1, and if such previous registration has not been withdrawn or
abandoned, the Company shall not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Act (except
on Form S-8 or S-4 or any successor forms), whether on its own behalf or at the
request of any holder or holders of such securities, until a period of at least
60 days has elapsed from the effective date of such previous registration.
2. Holdback Agreements.
(a) RSI shall not effect any public sale or distribution of its
Registrable Securities (including sales pursuant to Rule 144) of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and the 90-day
period beginning on the effective date of any underwritten Piggyback
Registration in which RSI's Registrable Securities are included (except as part
of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(b) The Company (i) shall not effect any public sale or distribution
of its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and during the
90-day period beginning on the effective
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<PAGE>
date of any underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-8 or S-4 or any
successor form), unless the underwriters managing the registered public offering
otherwise agree, and (ii) shall cause each holder of its Common Stock, or any
securities convertible into or exchangeable or exercisable for Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
3. Registration Procedures. Whenever RSI has requested that any of
its Registrable Securities be registered pursuant to this Agreement, the Company
shall use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, which documents
shall be subject to the review and comment of such counsel);
(b) notify RSI of the effectiveness of each registration statement
filed hereunder and prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period commencing on the date such
registration statement has been declared and continuing until the fourth
anniversary of the date of this Agreement and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(c) furnish to RSI such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by RSI;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
RSI reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable RSI to consummate the disposition in
such jurisdictions of the Registrable Securities owned by RSI
-3-
<PAGE>
(provided that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify RSI, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of RSI, the
Company shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security" or as a
NASDAQ "small cap market security" within the meaning of Rule 11Aa2-1 of the
Securities and Exchange Commission or, failing that, to secure NASDAQ
authorization for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as RSI or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including effecting a stock split or
a combination of shares);
(i) make available for inspection by RSI, any underwriter
participating in any disposition pursuant to such registration statement and any
one firm of attorneys, accountants or other agents retained by RSI or
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least
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<PAGE>
twelve months beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and
(k) permit RSI if in its sole and exclusive judgment, it determines
that it might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of RSI and its counsel
should be included; and
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order.
4. Obligations of RSI. In connection with the registration of the
Registrable Securities, RSI shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of RSI that RSI 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) business days prior to the
first anticipated filing date of the Registration Statement, the Company shall
notify RSI of the information the Company requires from RSI.
(b) RSI, by its 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
RSI has notified the Company in writing of RSI's election to exclude all of such
Registrable Securities from the Registration Statement.
(c) RSI agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(e) hereof, RSI
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until RSI's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3(e) 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.
-5-
<PAGE>
5. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), shall be borne as provided in this
Agreement, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system.
(a) In connection with each Piggyback Registration, the Company
shall reimburse RSI for the reasonable fees for the purpose of rendering a legal
opinion on behalf of such holder in connection with any underwritten Piggyback
Registration.
6. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
RSI, its officers and directors and each Person who controls RSI (within the
meaning of the Act) against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by RSI
expressly for use therein or by RSI's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company shall
indemnify such underwriters, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the holders
of Registrable Securities.
(b) In connection with any registration statement in which RSI is
participating, RSI shall furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law,
shall indemnify the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of
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<PAGE>
material fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by such holder; provided that the obligation to indemnify
shall be limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. [Intentionally Omitted.]
8. Definitions.
(a) "Registrable Securities" means (i) any Common Stock, par value
$.01 per share ("Common Stock") of the Company issued to RSI upon the conversion
of the Series B Convertible Preferred Stock $1.00 par value per share, and (ii)
any Common Stock issued or issuable with respect to the securities referred to
in clause (i) above by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when they have been distributed to the
public pursuant to a offering registered under the Act or sold to the public
through a broker, dealer or market maker in
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<PAGE>
compliance with Rule 144 under the Act (or any similar rule then in force) or
repurchased by the Company or any Subsidiary. For purposes of this Agreement,
RSI shall be deemed to be a holder of Registrable Securities, and the
Registrable Securities shall be deemed to be in existence, whenever RSI has the
right to acquire directly or indirectly such Registrable Securities (upon
conversion or exercise in connection with a transfer of securities or otherwise,
but disregarding any restrictions or limitations upon the exercise of such
right), whether or not such acquisition has actually been effected, and RSI
shall be entitled to exercise the rights of a holder of Registrable Securities
hereunder.
(b) Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Purchase Agreement.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to RSI in this Agreement.
(b) Adjustments Affecting Registrable Securities. The Company shall
not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of RSI to include
Registrable Securities in a registration undertaken pursuant to this Agreement
or which would materially and adversely affect the marketability of such
Registrable Securities in any such registration (including, without limitation,
effecting a stock split or a combination of shares).
(c) Remedies. RSI shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and RSI.
(e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of RSI
are also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
-8-
<PAGE>
(f) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Governing Law. The corporate law of the State of Delaware shall
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other] issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(j) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable overnight courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid as follows:
to the Company:
GreenMan Technologies, Inc.
7 Kimball Lane
Building A
Lynnfield, Massachusetts 01940
Attn: President
to RSI:
Republic Services, Inc.
110 S.E. 6th Street
Suite 2800
Fort Lauderdale, Florida 33301
Attn: General Counsel
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<PAGE>
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GREENMAN TECHNOLOGIES, INC.
By /s/ Charles E. Coppa
--------------------------
Its Acting CFO
--------------------------
REPUBLIC SERVICES, INC.
By /s/ David A. Barclay
--------------------------
Its Senior Vice President
--------------------------
-11-
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND, SECURITY AGREEMENT (this "Amendment") is
made as of the 3rd day of September, 1998 by and among GREENMAN TECHNOLOGIES OF
MINNESOTA, INC. ("GTM"), a Minnesota corporation with its principal place of
business at 12498 Wyoming Ave., Savage, Minnesota 55378, GREENMAN TECHNOLOGIES
OF GEORGIA, INC. ("GTG"), a Georgia corporation with its principal place of
business at 138 Sherrel Ave., Jackson, Georgia 30233 (collectively referred to
herein as "Borrower"), GREENMAN TECHNOLOGIES, INC., a Delaware corporation
("GTI"), GREENMAN ACQUISITION CORP., a Delaware corporation ("GAC"), ROBERT
DAVIS ("DAVIS"), MAURICE NEEDHAM ("NEEDHAM") and JOSEPH LEVANGIE ("LEVANGIE")
(GTI, GAC, Davis, Needham and Levangie being collectively referred to herein as
"Guarantors") and HELLER FINANCIAL, INC., a Delaware corporation, with offices
at 500 West Monroe Street, Chicago, Illinois 60661 ("Lender").
RECITALS:
A. Pursuant to the terms and conditions of that certain Loan and Security
Agreement dated as of January 29, 1998 (the "Loan Agreement"), Lender made the
following Loan to Borrowers:
(i) A Revolving Loan, in the Maximum Revolving Loan Amount of the lesser
of (a) 85% of the aggregate (for both Borrowers combined), outstanding
amount of Eligible Accounts; or (b) $1,700,000.00 (the "Revolving Loan");
and
(ii) A Term Loan in an amount equal to the lesser of (a) 80% of the
aggregate (for both Borrowers combined), forced liquidation value of
Borrower's Equipment, or (b) $1,900,000.00, as evidenced by a Term Note
dated as of January 29, 1998 (the "Equipment Note"); and
(iii) A Term Loan in an amount equal to the lesser of (a) 50% of the
aggregate fair market value of either both borrowers' interest in the Real
Property, or (b) $1,400,00.00, as evidenced by a Term Note dated as of
January 29, 1998 (the "Real Property Note").
B. The Revolving Loan, Equipment Note and Real Property Note me secured by
the Agreement granting Lender a security interest in certain "Collateral", as
more particularly described therein, a Multi-State Mortgage, Assignment of Rents
and Security Agreement encumbering certain real property located in Scott
County, Minnesota (the "Minnesota Mortgage"), a Deed to Secure Debt, Assignment
of Rents and Security Agreement encumbering certain real property located in
Butts County, Georgia, (the "Georgia Mortgage") and certain Guaranties of
Payment dated as of January 29, 1998, executed by each of the Guarantors in
favor of Lender (the "Guaranties"). The Agreement, Equipment Note, Real Property
Note, Minnesota Mortgage, Georgia Mortgage, the Guaranties and all other
documents now or hereafter executed by the Borrowers or the Guarantors to
evidence or secure the Loans are sometimes collectively referred to herein as
the "Loan Documents".
C. Borrowers desire to acquire certain assets (the "New Assets") from
United Waste Service, Inc. ("United") pursuant to the terms and provisions of an
Asset Purchase Agreement
1
<PAGE>
dated September 4, 1998 (the "Asset Purchase Agreement") and to finance the
acquisition with a Term Loan from Lender secured by the Collateral in accordance
with the Agreement. Lender desires to make the new Term Loan to Borrowers for
the acquisition of the New Assets, and to modify certain covenants and
provisions of the Agreement.
D. Borrowers and Lender desire to modify the terms and provisions of the
Loan Documents as hereinafter provided. The Guarantors desire to join in the
execution of this Amendment to acknowledge their consent to the modifications
set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration in hand paid, the receipt and sufficiency of which is
hereby acknowledged, Lender, Borrowers and Guarantors agree as follows:
1. Any term defined in the "Loan Documents" (as such term is herein
defined) and used in this Amendment shall have the same meaning as assigned to
such term in the Loan Documents.
2. Contemporaneously with the execution of this Agreement and as a
condition to Lender's obligation to advance a new $850,000 Term Loan (the
"Additional Term Loan") to be used for the acquisition of the New Assets,
Borrowers shall cause each of the following conditions to be satisfied:
(a) The Borrowers shall execute and deliver to Lender a Promissory
Note-Equipment dated as of September 3, 1998 in the amount of $850,000.00 (the
"Additional Term Loan Note").
(b) The Borrowers shall cause United to execute and deliver to Lender a
Landlord Waiver in form and substance satisfactory to Lender.
(c) The Borrowers shall, execute and deliver to Lender such UCC statements
and other documents as Lender may require to grant and perfect the Lender's
security interest in the New Assets. Upon receipt thereof, the New Assets shall
become a part of the Collateral securing the Loans, including the Additional
Term Loan.
(d) The Borrowers shall cause the following documents to be delivered to
Lender:
(i) Certified copy of the Articles of Incorporation of GTG;
(ii) Certificate of Good Standing of GTG;
(iii) Certified resolution of GTG authorizing execution of this
Amendment;
(iv) Certified copy of the Certificate of Incorporation of GTM;
(v) Certificate of Good Standing of GTM;
(vi) Certified resolution of GTM authorizing the execution of
this Amendment;
(vii) Certified copy of the Articles of Incorporation of GAC;
(viii) Certificate of Good Standing of GAC;
(ix) Certified resolution of GAC authorizing the acquisition of
the New Assets and execution of this Amendment;
(x) Certified copy of the Certificate of Incorporation of GTI;
(xi) Certificate of Good Standing of GTI;
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<PAGE>
(xii) Certified resolution of GTI authorizing the execution of this
Amendment; and
(xiii) An opinion letter of Borrowers' counsel, in form and
substance satisfactory to Lender.
Upon satisfaction of all of the foregoing conditions and notification by
John Piccione of Borrowers that Borrowers are prepared to close the acquisition
of the New Assets, Lender shall, and is hereby directed to disburse the
Additional Term Loan by wire transfer to NationsBank, Dallas, Texas, ABA No.
111000012 for deposit to the account of Republic Services, Inc., Account Number
3751040219.
3. Effective as of the date hereof, the Agreement is hereby modified in
the following respects:
(a) The "Maximum Revolving Loan Amount" as defined in Section 2.1 of
the Agreement is defined as and shall hereafter mean the lesser of (i) 85% of
the aggregate (for both Borrowers combined) outstanding amount of Eligible
Accounts; or (ii) $1,079,000.00.
(b) Borrowers shall cause to be prepared and delivered to Lender an
updated appraisal of all of the Equipment, including the New Assets, in form and
substance satisfactory to Leader, within thirty (30) days after the date of this
Amendment and, thereafter, annually, on or before August 15 of each year. Upon
receipt and approval of the initial appraisal by Lender, the definition of
"Eligible Accounts" as provided in Section 2.1 of the Agreement shall be
modified to read as follows:
(6) Accounts with respect to which the account debtor is the United
States of America, unless the affected Borrower has, with respect to
such account, complied with the Federal Assignment of Claims Act of
1940 as amended (31 U.S.C. Section 3727 et seq.), or any state, any
municipality, or any department, agency or instrumentality thereof,
in the aggregate in excess of (x) eighty percent (80%) of the forced
liquidation value of the Equipment, excluding Borrowers' office
furniture, fixtures and equipment, as based upon the appraised value
thereof from time to time, less (y) the outstanding principal
balance of the Equipment Term Loan and the Additional Term Loan as
of September 1 of each year hereof.
(c) In addition to the financial statements and other reports listed
on the Reporting Addendum attached to the Agreement, Borrowers shall hereafter
deliver to Lender a certification each month, in the form attached hereto as
Exhibit A, detailing the receivables from abatement contracts with the federal
government, any state, any municipality or any department, agency or
instrumentality thereof.
4. If there is any conflict or inconsistency between the provisions of
this Amendment and the provisions of the Notes, the Mortgages or the other Loan
Documents, the provisions of this Agreement shall control.
5. (a) Borrowers hereby represent and warrant to, and covenant with Lender
that:
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<PAGE>
(i) Borrowers are the owners of the Collateral, free and clear of all
claims, liens, interests, charges and encumbrances except those
evidenced by the Loan Documents;
(ii) At the date hereof, the "Loan Documents" (as such term is herein
defined) are in full force and effect, and Borrowers are not in
default in the payment of any sums, charges or obligations under the
Loan Documents or in the payment or performance of any covenants,
agreements or conditions of Borrowers contained in the Loan
Documents, except for the covenant with respect to capital
expenditure limits set forth in Section 6.2 of the Agreement, as
previously disclosed to Lender;
(iii) At the date hereof, Borrowers have no right or claim of set-off,
discount deduction, defense or counterclaim which could be asserted
in any action brought to enforce the Loan Documents;
(iv) At the date hereof, the Guaranties are in full force and effect and
neither Borrowers nor the Guarantors have any right or claim of
set-off, discount, deduction, defense or counterclaim which could be
asserted in any action brought to enforce the Guaranties or any of
them;
(v) Lender is not in default in the performance or observance of any of
its covenants, agreements and obligations under the Loan Documents;
(vi) There are no actions, suits or proceedings (including, without
limitation, proceedings before any court, arbitrator or
governmental authority or agency) pending or threatened against
Borrowers or Guarantors (or to the knowledge of Borrowers or
Guarantors, any basis for any such action, suit or proceeding),
which if adversely determined, might individually, or in the
aggregate, materially adversely:
(1) impair the ability of Borrowers or Guarantors to pay or perform
their respective obligations under the Loan Documents and the
Guaranties; or
(2) affect the Collateral or the use, manner of use, or operation
thereof;
(vii) There is no presently known fact which affects, or may affect in the
future (so far as Borrowers or Guarantors can foresee), materially and
adversely the condition (financial or other) of Borrowers or Guarantors,
the operation, use or manner of use of the Collateral or the ability of
Borrowers or Guarantors to pay or perform their respective obligations
under the Loan Documents and the Guaranties; and
(viii) Neither the Low Documents, the Guaranties nor any other document or
written materials delivered or made, and no other communication made, to
Lender or any employee or agent of Lender contains any untrue statement of
a material fact or fails to state a material fact necessary in order to
make any statement contained
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<PAGE>
therein not misleading in light of the circumstances in which such
statement was made.
(b) The representations, warranties and covenants of Borrowers and
Guarantors made in subparagraph 5(a) hereof are, as of the date hereof and shall
be, at all times, true and correct in all material respects, and are and shall
be of continuing force and effect until all indebtedness and obligations of
Borrowers under the Loan Documents have been fully and finally paid and
performed.
6. (a) All of the terms, covenants, agreements, conditions,
representations, warranties and provisions contained in each of the Loan
Documents are adopted and incorporated into all of the other Loan Documents to
the same full extent and with the same binding force and effect as if all of the
terms, covenants, agreements, conditions, representations, warranties and
provisions of each of the Loan Documents were stated in full in all of the other
Loan Documents, it being the intent that each of the Loan Documents complements
and supplements the others to the fullest extent necessary or required to
protect, preserve and confirm all the rights. benefits, privileges, powers and
remedies of Lender and under the Loan Documents.
(b) Any breach or violation by Borrowers or Guarantors of any of the
covenants, agreements, conditions, representations and warranties of Borrowers
or Guarantors, respectively, under this Amendment shall constitute and be a
default under the Agreement and the Loan Documents and shall entitle Lender, at
the election of Lender, to exercise any and all rights, powers and remedies
available to Lender under the Loan Documents and the Guaranties.
(c) Except as herein expressly modified, all of the Loan Documents and the
terms and provisions thereof are hereby reaffirmed and ratified and remain in
full force and effect, and unchanged, in all respects.
7. Guarantors, as guarantors under the Guaranties, hereby acknowledge and
consent to the modifications of the Loan Documents as herein provided and, in
consideration of such modifications, hereby agree that:
(a) The modifications to the Loan Documents as herein provided do not and
shall not in any way limit, prejudice or impair the obligations of Guarantors,
as guarantors, under the Guaranties, or the rights, powers, privileges, benefits
and remedies of Lender under the Guaranties;
(b) The Guaranties and all of the provisions thereof are hereby reaffirmed
and ratified and remain in full force and effect;
(c) The Guaranties, when made, constituted and, at the date hereof,
continue to constitute a valid and binding obligation of Guarantors, as
guarantors, to pay unconditionally and absolutely the entire amount of the Loans
evidenced by the Agreement and the Notes, which obligation is enforceable in
accordance with the terms and conditions of the Agreement and the Notes; and
(d) Guarantors hereby waive all errors and imperfections, if any, in the
Guaranties and all defenses, if any, on account thereof in case of any
subsequent action to enforce the Guaranties.
5
<PAGE>
8. Lender hereby represents to Borrowers and Guarantors; that Lender is,
at the date hereof, the absolute and exclusive owner of the Agreement and the
Notes and, as such, has full power and authority to enter into, and is bound by,
this Amendment.
9. Notwithstanding any prior act of Lender or any procedure established by
Lender with regard to the loans evidenced by the Agreement and the Notes and
secured by the Loan Documents, Borrowers and Guarantors each acknowledge and
agree that Lender has not heretofore waived any of its rights or remedies under
the Notes and the Loan Documents nor has Lender waived any of the duties or
obligations of Borrowers and Guarantors thereunder. No waiver by Lender of any
covenant or condition under the Notes or the Loan Documents shall be deemed a
waiver of any subsequent breach of the same or any other covenant or condition.
No covenant, term or condition of the Notes or the Loan Documents shall be
deemed waived by Lender unless waived in writing.
10. (a) Time is of the essence with respect to the payment, performance
and observance of each and every covenant, agreement, condition, representation,
warranty and obligation of Borrowers under the Loan Documents and of Guarantors
under the Guaranties.
(b) None of the covenants, terms or conditions of this Amendment shall in
any manner be altered, waived, modified, changed or abandoned, except by written
instrument, duly signed and delivered by all the parties hereto.
(c) This Amendment contains the whole agreement between the patties hereto
as to the subject matter hereof and there am no other terms, obligations,
covenants, representations, warranties, statements or conditions, oral or
otherwise, of any kind.
(d) This Amendment shall extend to, be obligatory upon and inure to the
benefit of the respective successors and assigns of Borrowers, Lender and
Guarantors.
(e) The recitals to this Agreement are hereby incorporated into and made a
part of this Amendment, and shall constitute covenants, representations and
warranties of Borrowers and Guarantors which shall be binding upon and
enforceable against Borrowers and Guarantors respectively.
(f) This Agreement has been executed by Borrowers and Guarantors in the
State of Illinois and, together with all of the Loan Documents, shall be
construed and enforced in accordance with the laws of the State of Illinois.
6
<PAGE>
(g) This Agreement may be executed in counterparts and any set of
counterparts containing the original signatures of all parties shall constitute
an original for all purposes.
IN WITNESS WHEREOF, the Lender, Borrowers and Guarantors have caused this
First Amendment to Loan and Security Agreement to be executed and delivered the
day and year first above written.
GREENMAN TECHNOLOGIES OF MINNESOTA,
INC., a Minnesota corporation
By: /s/ Robert H. Davis
-------------------------------
Its: Executive Vice President
--------------------------
GREENMAN TECHNOLOGIES OF GEORGIA,
INC., a Georgia corporation
By: /s/ Robert H. Davis
-------------------------------
Its: Executive Vice President
--------------------------
GREENMAN TECHNOLOGIES, INC., a
Delaware corporation
By: /s/ Robert H. Davis
-------------------------------
Its: President/CEO
--------------------------
GREENMAN ACQUISITION CORP., a
Delaware corporation
By: /s/ Robert H. Davis
-------------------------------
Its:
--------------------------
/s/ Robert H. Davis
------------------------------
ROBERT DAVIS
/s/ Maurice Needham
------------------------------
MAURICE NEEDHAM
/s/ Joseph E. Levangie
------------------------------
JOSEPH LEVANGIE
HELLER FINANCIAL, INC., a Delaware
corporation
By: /s/ Michael L. DuBois
-------------------------------
Its: Vice President
--------------------------
7
<PAGE>
EXHIBIT A
RECEIVABLES CERTIFICATE FORM
8
<PAGE>
MONTHLY CERTIFICATION
GREENMAN TECHNOLOGIES OF MINNESOTA, INC.
GREENMAN TECHNOLOGIES OF GEORGIA, INC.
Appraisal Date GA: Lawrenceville (6/29/98), Jackson (___________)
Appraisal Date MN: Savage (_____________)
Appraiser Name: MB Valuation Service
<TABLE>
<S> <C> <C>
Forced Liquidation Value GA (net of Lawrenceville): $
Forced Liquidation Value GA - Lawrenceville $1,148,613.00
Forced Liquidation Value MN: $
-------------
(1) Total Forced Liquidation Value: $
Less:
Office Equipment Furniture, Fixtures,
Computers, Telephones, etc.
Lawrenceville, GA $6,293.00
Jackson, GA $
Savage, MN $
(2)
< >
-------------
(3) Net M&E (1-2) $
(4) Item #3 multiplied by advance rate of 80% $
Less:
Loan Balances
GTI 02 Sept 1, 1998 $1,151,996.96
GTI 04 Sept 1, 1998 $ 39,599.96
GTI 12 Sept 1, 1998 $ 558,003.02
GTI 14 Sept 1, 1998 $ 61,200.08
GTI 15 Sept 4, 1999 $ 850,000.00
- ------------------- -------------
(5) Total Loans $<2,660,800.02>
(6) Net Suppressed. Item #4 less Item #5. $
===============
</TABLE>
9
PROMISSORY NOTE-EQUIPMENT
$850,000.00 September, 1988
Chicago, IL
FOR VALUE RECEIVED, the undersigned, GREENMAN TECHNOLOGIES OF MINNESOTA,
INC., a Minnesota corporation, and GREENMAN TECHNOLOGIES OF GEORGIA, INC., a
Georgia corporation (collectively, "Borrowers") promise to pay to the order of
HELLER FINANCIAL, INC. ("Lender") at its office, 500 West Monroe Street,
Chicago, IL 60661, or at such other place as the holder hereof may appoint, the
principal sum of (A) all unpaid costs and fees due under that certain Loan and
Security Agreement dated as of January 29, 1998, as amended by the First
Amendment to Loan and Security Agreement dated September ___, 1998
(collectively, the "Loan Agreement") between Lender and Borrowers, and (B) Eight
Hundred Fifty Thousand and no/100 Dollars ($850,000.00). This sum is payable on
the earlier of (A) the acceleration of the obligations pursuant to the terms of
this Note or pursuant to subsection 7.3 of the Loan Agreement, or (B) the
Termination Date; provided, that prior to such time, the principal of this Note
shall be payable in thirty-six (36) consecutive monthly installments of
principal plus interest at a rate per annum equal to the Base Rate plus 1.75%
(the "Interest Rate") until due or declared due, commencing October 1, 1998, and
continuing on the same day of each consecutive calendar month thereafter until
this Note is fully paid, with the first such monthly installments each in the
principal amount of Fourteen Thousand Six Hundred Sixty-Six and 67/100 Dollars
($14,666.67), plus accrued interest, and the final monthly installment in the
amount of the entire then outstanding principal balance hereunder, plus all
accrued and unpaid interest charges and other fees or other amounts hereunder or
under the Loan Agreement. After the occurrence and during the continuance of an
Event of Default, the obligations under this Note shall, at the option of
Lender, bear interest at a rate per annum equal to 3.0% plus the Interest Rate
(the "Default Rate").
"Base Rate" means a variable rate of interest per annum equal to the
higher of (a) the rate of interest from time to time published by the Board of
Governors of the Federal Reserve System as the "Bank Prime Loan" rate in Federal
Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any
successor publication of the Federal Reserve System reporting the Bank Prime
Loan rate or its equivalent, or (b) for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the
immediately following business day by the Board of Governors of the Federal
Reserve System as the Federal Funds Rate in Federal Reserve Statistical Release
H.15(519) entitled "Selected Interest Rates" or any successor publication of the
Federal Reserve System reporting the Federal Funds Effective Rate or its
equivalent or, if such rate is not published for any business day, the average
of the quotations for such business day from three Federal funds brokers of
recognized standing selected by payee or any holder of this Note. In the event
the Board of Governors of the Federal Reserve System ceases to publish a Bank
Prime Loan rate or its equivalent, the term "Base Rate" shall mean a variable
rate of interest per annum equal to the highest of the "prime rate", "reference
rate", "base rate", or other similar rate announced from time to time by any of
the three largest banks located in New York City, New York (with the
understanding that any such rate may merely be a reference rate and
<PAGE>
may not necessarily represent the lowest or best rate actually charged to any
customer by any such bank).
Interest will be computed on the basis of a 360 day year for the actual
number of days elapsed. All interest and other obligations of the undersigned
under this Note that are not paid when due shall be added to the principal
amount of this Note and thereafter shall bear interest at the applicable rate
specified in this Note.
To secure the payment of the principal and interest of this Note and all
renewals and extensions of the same or any part thereof and any and all other
sums, indebtedness and liabilities now or hereafter owing or to become owning
from the undersigned to the payee, or the holder hereof, howsoever created,
arising, evidenced or acquired by said payee or holder, whether direct or
contingent, the undersigned has granted and given to payee a general and
continuing lien and security interest in certain of its assets as listed and
described in the various financing agreements (collectively, the "Financing
Agreements") by and between the undersigned and payee, all as amended from time
to time, including, without limitation, the Loan Agreement (the "Loan
Agreement") to which reference is made for a statement of the nature and extent
of the security and protection afforded, the rights of the payee or holder
hereof and the rights and obligations of the undersigned, together with all
other and sundry grants and pledges of security heretofore and hereafter given
(collectively called the "Collateral"), with full power and authority to the
payee or holder to transfer, assign, pledge or replace the same in whole or in
part.
Unless otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to such terms in the Loan Agreement.
If the undersigned voluntarily prepays all or any portion of the
outstanding principal balance of this Note, the undersigned, at the time of
prepayment, shall pay the payee, as compensation for the costs of being prepared
to make funds available to the undersigned under this Note, and not as a
penalty, an amount determined by multiplying the applicable percentage set forth
below by the principal amount being prepaid, three percent (3%) upon prepayment
during the first Loan Year; two percent (2%) upon prepayment during the second
Loan Year; and one percent (1%) upon a prepayment during the third Loan Year.
In case of exchange of, or substitution for, or addition to the
Collateral, the provisions hereof shall extend to such exchanged, substituted,
or additional Collateral. Upon payment of this Note, the payee or holder may
nevertheless retain the Collateral hereby pledged to secure the payment of any
other portion of the Obligations, if any, for which the same is pledged. The
payee and every holder hereof are expressly released from any duty, obligation
or liability (in each case, if any): (a) to protect, collect, demand payment of,
protest or enforce the Collateral; (b) to take any action whatsoever in regard
to the Collateral or any part thereof; or (c) for any loss of or depreciation in
the value of the Collateral.
If this Note or any renewal or extension thereof, or any other
indebtedness or obligations secured hereby, or any installment of principal or
interest upon any of the foregoing shall not be
2
<PAGE>
paid when due, or if the undersigned defaults in the performance of any of the
terms or provisions of this Note, the Financing Agreements, any of the other
Loan Documents, or any other agreement with the payee or the holder of this
Note, the payee or holder may, without notice or demand, declare the entire
amount of this Note and all other indebtedness or liabilities of the undersigned
to the payee or h older to be immediately due and payable, proceed to collect
and enforce the same at one and proceed to enforce all rights and remedies
provided under the Loan Agreements or otherwise provided by law. Further, if the
undersigned defaults on any of its obligations hereunder or under the Loan
Agreement, then Lender may exercise any and all of its rights and remedies
against the undersigned under the Loan Agreement or applicable law.
The payee or holder shall not be required to look to the Collateral for
the payment of this Note, but may proceed against the undersigned in such manner
as it deems desirable. None of the rights or remedies of the payee or holder
hereunder or under any other Loan Document or under any other agreement are to
be deemed waived or affected by any failure or delay to exercise same. All
remedies conferred upon the payee or holder by this Note or any other remedies
may be exercised concurrently or consecutively at the option of the payee or
holder.
The undersigned and all endorsers and guarantors hereof hereby waive
presentment, demand for payment, notice of dishonor, notice of nonpayment,
protest and notice of protest, and all other notices and demands in connection
with the delivery, acceptance, performance, default or enforcement of this Note,
and agree that the liability of each of the undersigned shall be unconditional
without regard to the liability of any other party and shall not be affected by
any indulgence, extension of time, waiver, release of any party or collateral,
or other modification granted or consented to by payee or holder hereof.
This Note and the other Loan Documents embody the entire agreement among
the parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof, and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
undersigned and payee.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
THE UNDERSIGNED HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK STATE OF ILLINOIS AND
IRREVOCABLY AGREES THAT, SUBJECT TO PAYEE'S ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS NOTE, OR THE OTHER LOAN DOCUMENTS SHALL BE
LITIGATED IN SUCH COURTS. THE UNDERSIGNED EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. THE UNDERSIGNED HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE
3
<PAGE>
MADE UPON THE UNDERSIGNED BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO THE UNDERSIGNED AT THE ADDRESS SET FORTH AS ITS
PRINCIPAL PLACE OF BUSINESS ADDRESS IN THE LOAN AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
THE UNDERSIGNED WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE AND THE OTHER LOAN DOCUMENTS. THE
UNDERSIGNED ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE
UNDERSIGNED AND PAYEE TO ENTER INTO A BUSINESS RELATIONSHIP, THAT THE
UNDERSIGNED AND PAYEE HAVE RELIED ON THE WAIVER IN ENTERING INTO AND MAKING THE
LOANS EVIDENCED UNDER THIS NOTE AND IN ENTERING INTO THE OTHER LOAN DOCUMENTS,
AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS. THE UNDERSIGNED FURTHER WARRANTS AND REPRESENTS THAT THE UNDERSIGNED
HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT THE UNDERSIGNED
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
GREENMAN TECHNOLOGIES OF MINNESOTA, INC.,
a Minnesota corporation
By: /s/ Robert H. Davis
-------------------------------
Its: Executive Vice President
--------------------------
GREENMAN TECHNOLOGIES OF GEORGIA, INC.,
a Georgia corporation
By: /s/ Robert H. Davis
-------------------------------
Its: Executive Vice President
--------------------------
4
[LOGO]
GREENMAN
TECHNOLOGIES
Press Release
FOR IMMEDIATE RELEASE
CONTACT:
Robert H. Davis, President/CEO at (781) 224-2411
Charles E. Coppa, Chief Financial Officer
GREENMAN TECHNOLOGIES ACQUIRES SCRAP TIRE RECYCLING ASSETS FROM UNITED WASTE
SUBSIDIARY OF REPUBLIC SERVICES
Acquisition adds $5 million in revenues; Over 4 million tires/year
LYNNFIELD, MA -- Sept. 8, 1998 -- GreenMan Technologies, Inc. (NASDAQ:
GMTI, GMTW) (BSE: GMY, GMYW) announced today that it has completed the
previously announced acquisition of the scrap tire collection and processing
assets of United Waste Service, Inc. (United), a wholly owned subsidiary of
Republic Services, Inc. (NYSE RSG).
GreenMan paid approximately $4.1 million for the acquired assets in the form of
cash and $3.2 million of preferred stock which is not convertible into common
stock until February 2001.
Bob Davis, GreenMan's CEO stated, "We are particularly pleased that Republic has
given GreenMan an enormous vote of confidence by taking a long term position in
our company. This acquisition enhances GreenMan's position in the tire recycling
industry by adding $5 million in profitable revenues and over 4 million
additional passenger tire equivalents per year. Further, it positions us to
achieve our goal of $20 million in annualized revenues through a combination of
previously announced acquisitions and internal growth," he said.
The United operations, located in Lawrenceville, GA and Batesburg, SC, will
expand GreenMan's presence in the Southeastern U.S. "We will realize very
significant cost saving/consolidation benefits in Georgia by integrating
United's Lawrenceville operations into our Jackson facility which was recently
expanded and has independently experienced year-over-year internal growth
exceeding 15%. The South Carolina addition provides an already profitable
base from which to further pursue our internal growth goals while also opening
new markets for GreenMan," Davis added.
Jim Cosman, President and COO of Republic Services, Inc., said, "We are focused
on the basics in our waste collection and disposal business and determined that
tire recycling was not part of our business strategy going forward. During
United's divestiture proceedings, we talked to many significant tire recycling
companies and are convinced that GreenMan is the company with which to align
ourselves."
GreenMan Technologies, Inc. addresses the worldwide issue of tire disposal. Over
250 million tires are discarded in the U.S. annually. Through vertically
integrated operations, GMTI recycles scrap tires into a wide variety of
industrial and consumer products and materials. Operations include tire
remediation services, collection and processing into metal-free chips for civil
engineering and alternative fuel
More...
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PRESS RELEASE September 8, 1998 Page 2.
GreenMan Technologies acquires scrap tire recycling operations from
Republic Services
applications and for use internally for crumb rubber production; production of
super-fine crumb rubber powders for use in markets such as modified crumb rubber
for asphalt and new tire manufacture. Through its DuraWear subsidiary, the
company manufactures and markets wear resistant ceramic, polymer composite and
alloy steel products for bulk material handling systems.
"Safe Harbor" Statement: Under the Private Security Litigation Reform Act
With the exception of the historical information contained in this release, the
matters described herein contain forward-looking statements that involve risk
and uncertainties that may individually or collectively impact the matters
herein described, including but not limited to product acceptance, economic,
competitive, governmental, results of litigation, technological and/or other
factors, outside the control of the Company, which are detailed from time to
time in the Company's SEC reports, including the report on Form 10-QSB for the
quarter ended February 28, 1998. The Company disclaims any intent or obligation
to update these forward-looking statements.
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