THE NOTE  REPRESENTED  BY THIS  CERTIFICATE  HAS NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR UNDER THE SECURITIES  LAWS OF ANY STATE;
AND MAY NOT BE SOLD,  ASSIGNED,  TRANSFERRED,  PLEDGED OR OTHERWISE  DISPOSED OF
EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION FROM, THE REQUIREMENTS OF
SUCH ACT OR SUCH LAWS.

                              --------------------


                                CONVERTIBLE NOTE
                              DUE OCTOBER 30, 1998

 ______, 1997                                                         $______


         GREENMAN TECHNOLOGIES, INC., a Delaware corporation (hereinafter called
the  "Issuer"),  for value  received,  hereby  promises to pay to the Holder (as
defined below) on October 30, 1998 the principal  amount of $______ in such coin
or currency of the United  States of America as at the time of payment  shall be
legal  tender for public  and  private  debts,  at the  principal  office of the
Issuer.  Interest on the principal amount of this Note shall be paid at the rate
of ten percent  (10%) per annum  accrued  during the period  that the  principal
amount of this Note is  outstanding,  payable  at the  option of the  Company in
cash, by check, or in shares of Common Stock of the Company using the Conversion
Price  set  forth in  Section  3  hereof,  quarterly  on the  first day of June,
September, December and March, commencing on December 1, 1997.

         This Note is issued by the Company pursuant to a Purchase Agreement (as
defined below) dated of even date herewith, between the Company and the Payee, a
copy of which  agreement is available for inspection at the Company's  principal
office.  Notwithstanding  any provision to the contrary  contained herein,  this
Note is  subject  and  entitled  to certain  terms,  conditions,  covenants  and
agreements contained in the Purchase Agreement. Any transferee or transferees of
the Note, by their acceptance hereof, assume the obligations of the Payee in the
Purchase Agreement with respect to the conditions and procedures for transfer of
the  Note.  Reference  to the  Purchase  Agreement  shall in no way  impair  the
absolute and  unconditional  obligation of the Company to pay both principal and
interest hereon as provided herein.

                                    ARTICLE 1
                                   DEFINITIONS

         SECTION 1.1  Definitions.  The terms  defined in this Article  whenever
used in this Note shall have the respective meanings hereinafter specified.

                  (a)  "Additional  Capital  Shares"  shall have the meaning set
forth in Section 3. l(c).

                  (b)  "Business  Day"  shall  mean a day other  than  Saturday,
Sunday or any day on which banks located in the state of New York are authorized
or obligated to close.

                                       -1-






                  (c)  "Capital  Shares"  shall mean the  Common  Shares and any
other  shares  of any other  class of common  stock,  whether  now or  hereafter
authorized,  which have the right to participate in the distribution of earnings
and assets of the Issuer.

                  (d) "Closing Date" shall mean _______, 1997.

                  (e) "Common Shares" shall mean shares of the common stock, par
value $.01, of the Issuer.

                  (f) "Conversion  Date" shall mean any day on which all or some
part of the  principal  amount of this  Note is  converted  into Note  Shares in
accordance with the terms of this Note,  provided that a Conversion Date must be
a Business Day.

                  (g)  "Conversion  Notice"  shall have the meaning set forth in
Section 3.2.

                  (h)  "Conversion  Price"  shall have the  meaning set forth in
Section 3.1.

                  (i)  "Conversion  Ratio"  shall have the  meaning set forth in
Section 3.1.

                  (j) "Current Market Price" per Common Share on any date herein
specified shall be deemed to be the last trade price on such day on the National
Association of Securities  Dealers  Automated  Quotations  Small  Capitalization
system ("NASDAQ").

                  (k) "Default Interest Rate" shall be equal to 14% per annum.

                  (1) "Event of  Default"  shall have the  meaning  set forth in
Section 6.1.

                  (m) "Holder" shall mean________________ or any person to which
this Note is  subsequently  transferred  in accordance  with the terms  provided
herein.

                  (n)  "Issuer"  shall  mean  GREENMAN  TECHNOLOGIES,   INC.,  a
Delaware corporation,  and any successor  corporation by merger,  consolidation,
sale  or  exchange  of all or  substantially  all of  the  Issuer's  assets,  or
otherwise.

                  (o)  "Market  Disruption  Event"  shall  mean any  event  that
results in a material  suspension  or  limitation of trading of Common Shares on
the NASDAQ (or,  if the Common  Shares are not listed for trading on the NASDAQ,
the principal  trading  market for the Common Shares as determined by the Holder
in its reasonable discretion).

                  (p) "Maximum Rate" shall have the meaning set forth in Section
6.3.

                  (q)  "Note"  shall  mean this  Convertible  Note or such other
Convertible Note or Notes exchanged therefor as provided in Section 2.1.


                                       -2-




                  (r) "Notes" shall mean the Convertible Note issued pursuant to
the  Purchase  Agreement  and such  other  Convertible  Note or Notes  exchanged
therefor as provided in Section 2.1.

                  (s) "Note Shares" when used with  reference to the  securities
issuable  upon  conversion  of this Note,  shall  mean all Common  Shares now or
hereafter  Outstanding  and  securities  of any other  class into which the Note
Shares shall hereafter have been changed, whether now or hereafter created.

                  (t) "Outstanding" when used with reference to Common Shares or
Capital Shares (collectively, "Shares"), shall mean, at any date as of which the
number of such Shares is to be determined,  all issued and  outstanding  Shares,
and shall include all such Shares  issuable in respect of  outstanding  scrip or
any certificates  representing  fractional  interests in such Shares;  provided,
however,  that  "Outstanding"  shall not mean any such Shares  then  directly or
indirectly owned or held by or for the account of the Issuer or any Subsidiary.

                  (u)  "Person"  shall  mean an  individual,  a  corporation,  a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision or an agency or instrumentality thereof.

                  (v)  "Purchase   Agreement"  means  the  Securities   Purchase
Agreement, dated May 30, 1997, between the Issuer and _______________.

                  (w) "SEC" shall mean the United States Securities and Exchange
Commission.

                  (x) "Securities Act" shall mean the Securities Act of 1933, as
amended,  and the rules and regulations of the SEC thereunder,  all as in effect
at the time.

                  (y) "Subsidiary"  shall mean any entity of which securities or
other  ownership  interests  having ordinary voting power to elect a majority of
the board of directors or other persons  performing  similar functions are owned
directly or indirectly by the Issuer.

                  (z)  "Trading  Day"  shall  mean  any day on which  trades  of
securities  listed  thereon are reported by the NASDAQ (or, if the Common Shares
are not listed for trading on the NASDAQ,  the principal  trading market for the
Common Shares) and on which no Market Disruption Event has occurred.

                  (aa)  "Valuation  Event"  shall have the  meaning set forth in
Section 3.1.

                  (bb)  "Valuation  Period"  shall have the meaning set forth in
Section 3.1. All  references  to "cash" or "$" herein shall mean currency of the
United States of America.

                  (cc) "Warrant"  shall mean the Common Stock  Purchase  Warrant
issued  pursuant to the Purchase  Agreement and any other Common Stock  Purchase
Warrant exchanged therefor.

                                       -3-





                                    ARTICLE 2
                       EXCHANGES AND TRANSFER; REDEMPTION

         SECTION 2.1 Exchange and  Registration of Transfer of Notes. The Holder
may, at its option,  surrender this Note at the office of the Issuer and receive
in exchange  therefor a Note or Notes, each in the denomination of $10,000.00 or
an integral  multiple of $10,000.00 in excess  thereof,  dated as of the date of
this Note, and, subject to Section 4.1, payable to such Person, or order, as may
be designated by such Holder.  The  aggregate  principal  amount of such Note or
Notes  exchanged in  accordance  with this Section 2.1 shall equal the aggregate
unpaid principal amount of this Note as of the date of such surrender; provided,
however,  that upon such exchange  there shall be filed with the Issuer the name
and  address  for all  purposes  hereof of the  Holder or Holders of the Note or
Notes delivered in such exchange.  This Note, when presented for registration of
transfer or for exchange,  conversion  or payment,  shall (if so required by the
Issuer)  be duly  endorsed  by, or be  accompanied  by a written  instrument  of
transfer in form  reasonably  satisfactory  to the Issuer duly  executed by, the
Holder or its attorney duly authorized in writing.

         SECTION  2.2 Loss,  Theft,  or  Destruction  of Note.  Upon  receipt of
evidence  satisfactory  to  the  Issuer  of  the  loss,  theft,  destruction  or
mutilation of this Note and, in the case of any such loss, theft or destruction,
upon receipt of indemnity or security reasonably satisfactory to the Issuer, or,
in the case of any such  mutilation,  upon  surrender and  cancellation  of this
Note, the Issuer will make and deliver, in lieu of such lost, stolen,  destroyed
or mutilated Note, a new Note of like tenor and unpaid principal amount dated as
of the date hereof. This Note shall be held and owned upon the express condition
that the  provisions  of this  Section  2.2 are  exclusive  with  respect to the
replacement  of a mutilated,  destroyed,  lost or stolen Note and shall preclude
any and  all  other  rights  and  remedies  notwithstanding  any law or  statute
existing or hereafter enacted to the contrary with respect to the replacement of
negotiable instruments or other securities without their surrender.

         SECTION 2.3 Who Deemed Absolute  Owner.  The Issuer may deem the person
in whose  name this Note  shall be  registered  upon the  registry  books of the
Issuer to be, and may treat it as, the absolute  owner of this Note  (whether or
not this Note shall be overdue)  for the purpose of  receiving  payment of or on
account of the principal of this Note,  for the  conversion of this Note and for
all other  purposes,  and the Issuer  shall not be affected by any notice to the
contrary.  All such payments and such conversion shall be valid and effectual to
satisfy and discharge  the liability  upon this Note to the extent of the sum or
sums so paid or the conversion so made.


                                    ARTICLE 3
                               CONVERSION OF NOTE

         SECTION 3.1 Conversion;  Conversion Price. At the option of the Holder,
at any time  commencing  one hundred and twenty (120) days following the date of
issuance  of this  Note  until  this  Note is paid in  full,  this  Note  may be
converted,  either in whole or in part up to the principal  amount hereof (or in
case some portion of this Note shall have been called for

                                       -4-




redemption  prior to such date,  then at the portion that is not so called),  at
the conversion  price the  ("Conversion  Price") equal to seventy  percent (70%)
(the "Conversion Ratio") of the average closing bid price of the Common Stock on
the five Trading Days  immediately  preceding the relevant  Conversion Date (the
"Valuation Period"),  (but in no event shall such amount be in excess of seventy
percent  (70%) of the average  closing bid price of the Common Stock on the five
Trading Days immediately preceding the issuance date of this Note).

         SECTION 3.2 Exercise of Conversion Privilege.  In order to exercise the
conversion  privilege,  either in whole or in part,  the Holder shall  surrender
this Note to the Issuer during usual business hours at its principal  office and
shall give written  notice to the Issuer in the form attached  hereto in Annex I
(the "Conversion  Notice") at said office that the Holder elects to convert this
Note.  The Holder may exercise its right to convert this Note by  telecopying an
executed and completed  Conversion Notice. The Issuer shall convert the Note and
issue the Note Shares  effective  as of the time  requested by the Holder in the
Conversion Notice so long as such time is after the date on which the Conversion
Notice is given. The Conversion  Notice shall also state the name or names (with
address)  of the  persons  who are to become the  holders of the Note  Shares in
connection with such conversion.  Upon surrender for conversion, this Note shall
be  accompanied  by a proper  assignment  hereof to the  Issuer or in blank.  As
promptly as practicable after the receipt of the original  Conversion Notice and
this Note as  aforesaid,  but in any event no more than three (3) Business  Days
after the Issuer's  receipt of such Conversion  Notice and this Note, the Issuer
shall (i) issue the Note Shares issuable upon such conversion in accordance with
the  provisions  of this  Article  3,  and  (ii)  deliver  to the  Holder  (X) a
certificate or  certificate(s)  representing  the number of Note Shares to which
the Holder is entitled by virtue of such  conversion,  and (Y) cash, as provided
in Section  3.3, in respect of any fraction of a Note Share  issuable  upon such
conversion. Such conversion shall be deemed to have been effected at the time at
which the  Conversion  Notice  indicates  so long as this Note  shall  have been
surrendered as aforesaid at such time, and at such time the rights of the Holder
as holder of this Note shall  cease and the person and  persons in whose name or
names the Note Shares shall be issuable upon such conversion  shall be deemed to
have  become  the holder or  holders  of record of the Note  Shares  represented
thereby.  The Conversion  Notice shall  constitute a contract between the Holder
and the Issuer,  whereby the Holder shall be deemed to subscribe  for the number
of Note Shares that it will be entitled to receive upon such  conversion and, in
payment and  satisfaction of such  subscription  (and for any cash adjustment to
which it is entitled  pursuant to Section  3.4),  to surrender  this Note and to
release the Issuer from all liability thereon.

         SECTION  3.3  Fractional  Shares.  No  fractional  Note Shares or scrip
representing  fractional  Note Shares  shall be issued upon  conversion  of this
Note.  Instead of any  fractional  Note Shares that would  otherwise be issuable
upon  conversion of this Note, the Issuer shall pay a cash adjustment in respect
of such  fraction in an amount equal to the same  fraction of the greater of the
Current  Market  Price per Common Share at the close of business on the Business
Day that next precedes the day of conversion or the  Conversion  Price in effect
at the time of  conversion.  No  payment  or  adjustment  shall be made upon any
conversion  on account of any  distribution  on the Note Shares issued upon such
conversion.

                                       -5-





         SECTION 3.4 Reclassification,  Consolidation, Merger or Mandatory Share
Exchange. At any time while this Note remains outstanding and unexpired, in case
of any  reclassification  or change of Outstanding  Common Shares  issuable upon
conversion of this Note (other than a change in par value,  or from par value to
no par  value  per  share,  or from no par  value per share to par value or as a
result of a subdivision or combination of outstanding  securities  issuable upon
conversion  of this Note) or in case of any  consolidation,  merger or mandatory
share  exchange of the Issuer  with or into  another  corporation  (other than a
merger or mandatory share exchange with another  corporation in which the Issuer
is a continuing corporation and which does not result in any reclassification or
change,  other than a change in par value, or from par value to no par value per
share,  or from no par  value  per  share  to par  value,  or as a  result  of a
subdivision or combination of Outstanding  Common Shares upon conversion of this
Note),  or in the case of any sale or  transfer  to another  corporation  of the
property of the Issuer as an  entirety  or  substantially  as an  entirety,  the
Issuer, or such successor or purchasing corporation,  as the case may be, shall,
without payment of any additional  consideration  therefore,  execute a new Note
providing  that the Holder  shall have the right to convert  such new Note (upon
terms and conditions not less favorable to the Holder than those then applicable
to this Note) and to receive  upon such  exercise,  in lieu of each Common Share
theretofore issuable upon conversion of this Note, the kind and amount of shares
of  stock,   other   securities,   money  or  property   receivable   upon  such
reclassification,  change, consolidation, merger, mandatory share exchange, sale
or transfer by the holder of one Common Share  issuable upon  conversion of this
Note had this Note been converted  immediately  prior to such  reclassification,
change, consolidation, merger, mandatory share exchange or sale or transfer. The
provisions   of  this   Section  3.4  shall   similarly   apply  to   successive
reclassifications,  changes, consolidations,  mergers, mandatory share exchanges
and sales and transfers.


                                    ARTICLE 4
                        STATUS; RESTRICTIONS ON TRANSFER

         SECTION 4.1 Status of Note.  Subject to Section 4.2 below, this Note is
a direct, general and unconditional  obligation of the Issuer ranking pari passu
with all other unsecured indebtedness of the Issuer, and constitutes a valid and
legally  binding  obligation of the Issuer,  enforceable in accordance  with its
terms subject, as to enforcement, to bankruptcy, insolvency,  reorganization and
other similar laws of general applicability  relating to or affecting creditors'
rights and to general principals of equity.

         SECTION 4.2  Restrictions  on Transfer.  This Note, and any Note Shares
issued  according to the terms hereof,  have not been and will not be registered
under the United States Securities Act. This Note and any Note Shares may not be
offered or sold,  directly or indirectly,  except pursuant to registration under
the Act, an available exemption therefrom, or pursuant to Regulation S.

                                    ARTICLE 5
                                    COVENANTS

         The  Issuer  covenants  and  agrees  that so long as this Note shall be
outstanding:

                                       -6-




         SECTION 5.1 Payment of Note. The Issuer will  punctually,  according to
the terms hereof, (a) pay or cause to be paid the principal of this Note and (b)
issue Note Shares upon conversion.

         SECTION  5.2 Notice of Default.  If any one or more  events  occur that
constitute  or,  with the  giving of notice or the lapse of time or both,  would
constitute an Event of Default or if the Holder shall demand payment or take any
other action  permitted  upon the  occurrence of any such Event of Default,  the
Issuer  will  forthwith  give notice to the  Holder,  specifying  the nature and
status of the Event of Default or other  event or of such  demand or action,  as
the case may be.

         SECTION 5.3 Sufficient  Authorized  Common  Shares.  (a) So long as the
Current  Market  Price of the Common  Shares is greater  than or equal to ninety
percent (90%) of the Current  Market Price on the date hereof,  the Issuer shall
at all times have  authorized  and reserved for issuance,  free from  preemptive
rights,  a sufficient  number of Common  Shares to yield a number of Note Shares
sufficient to satisfy the  conversion  rights of the  Purchaser  pursuant to the
terms and conditions hereof; and

                  (b) at any time when the  Current  Market  Price of the Common
Shares is less than ninety  percent  (90%) of such  Current  Market Price on the
date hereof, the Issuer shall continue to reserve the number of shares of Common
Stock  required  by  clause  (a)  above  and  in  addition  (including,  without
limitation,  by  authorizing  increases  in its  capital)  to have at all  times
authorized and reserved for issuance,  free from preemptive rights, a sufficient
number of Common  Shares that will yield a number of Note Shares  sufficient  to
satisfy  the  conversion  rights  of the  Purchaser  pursuant  to the  terms and
conditions  hereof and  required  by the drop in the market  price of the Common
Stock below ninety percent (90%) of such market price on the date hereof.

         SECTION 5.4 Insurance. The Issuer will carry and maintain in full force
and  effect at all times with  insurers  the Issuer  reasonably  believes  to be
financially  sound and reputable  such insurance in such amounts as is customary
in the respective industries of the Issuer and its Subsidiaries.

         SECTION 5.5 Payment of  Obligations.  The Issuer will pay and discharge
at or before maturity,  all its respective material obligations and liabilities,
including,  without  limitation,  tax liabilities,  except where the same may be
contested  in good  faith  by  appropriate  proceedings,  and will  maintain  in
accordance with generally accepted accounting  principles,  appropriate reserves
for the accrual of any of the same.

         SECTION  5.6  Compliance  with  Laws.  The  Issuer  will  comply in all
material respects with all applicable laws, ordinances,  rules, regulations, and
requirements  of  governmental   authorities   except  where  the  necessity  of
compliance therewith is contested in good faith by appropriate proceedings.

         SECTION 5.7 Inspection of Property,  Books and Records. The Issuer will
keep proper books of record and account in which full,  true and correct entries
shall be made of all

                                       -7-




dealings and  transactions  in relation to its business and  activities and will
permit  representatives  of the  Holder  at the  Holder's  expense  to visit and
inspect any of its respective properties, to examine and make abstracts from any
of its  respective  books and  records and to discuss  its  respective  affairs,
finances and accounts with its respective  officers,  employees and  independent
public accountants,  all at such reasonable times and as often as may reasonably
be desired.

                                    ARTICLE 6
                                    REMEDIES

         SECTION 6.1 Events of Default.  "Event of Default" wherever used herein
means any one of the following events:

                  (a) default in the due and punctual  payment of the  principal
of on, or any other  amount  owing in respect of, this Note when and as the same
shall become due and payable,  and  continuance  of such default for a period of
thirty (30) calendar days; or

                  (b)  substantial  failure in the  performance or observance of
Section  5.5 of this Note and the  continuance  of such  default for a period of
thirty (30) calendar days; or

                  (c) default in the  performance  or observance of any covenant
or  agreement  of the Issuer in this Note (other than a covenant or  agreement a
default in the  performance of which is  specifically  provided for elsewhere in
this Section),  and the  continuance of such default for a period of thirty (30)
calendar  days  after  there has been  given to the Issuer by a Holder a written
notice specifying such default and requiring it to be remedied; or

                  (d)  the  entry  of  a  decree  or  order  by a  court  having
jurisdiction  in the premises  adjudging the Issuer or any Subsidiary a bankrupt
or insolvent,  or approving as properly filed a petition seeking reorganization,
arrangement,  adjustment or composition of or in respect of the Issuer under the
Bankruptcy  Code or any other  applicable  Federal or state law, or appointing a
receiver,  liquidator,  assignee,  trustee  or  sequestrator  (or other  similar
official) of the Issuer or of any substantial part of its property,  or ordering
the winding-up or liquidation  of its affairs,  and the  continuance of any such
decree or order  unstayed  and in effect  for a period of thirty  (30)  calendar
days; or

                  (e)  the  institution  by  the  Issuer  or any  Subsidiary  of
proceedings to be  adjudicated a bankrupt or insolvent,  or the consent by it to
the  institution  of  bankruptcy or  insolvency  proceedings  against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under the Federal  Bankruptcy Code or any other applicable Federal or state law,
or the consent by it to the filing of any such petition or to the appointment of
a receiver,  liquidator,  assignee,  trustee or  sequestrator  (or other similar
official) of the Issuer or of any substantial part of its property, or

                  (f) the Issuer shall fail to issue and deliver the Note Shares
within  three (3)  Business  Days of its  receipt of the  original  Note and the
original Conversion Notice in accordance with Section 3.2; or


                                       -8-





                  (g) any principal of other  indebtedness  of the Issuer or any
Subsidiary,  exceeding  $500,000 is not repaid on its original  maturity date or
becomes due and payable by reason of default before its original  maturity date;
or

                  (h) (i) the  Issuer  or any  Subsidiary  is  unable to pay its
debts as they fall due,  stops,  suspends,  or  threatens  in writing to stop or
suspend  payment  of all or any  material  part of its debts  (other  than debts
contested in good faith by  appropriate  proceedings),  begins  negotiations  or
takes any proceeding or other step with a view to readjustment,  rescheduling or
deferral of all of its  indebtedness (or any material part thereof) that it will
or might  otherwise  be  unable to pay when due or seeks  the  appointment  of a
statutory  manager or  proposes in writing or makes a general  assignment  or an
arrangement or composition with or for the benefit of its creditors or any group
or class thereof or a moratorium  or statutory  management is agreed or declared
in respect of or affecting all or any material part of the  indebtedness  of the
Issuer or any of its wholly  owned  subsidiaries,  or (ii) the Issuer  ceases or
threatens  in  writing  to cease to  carry  on all or any  material  part of the
business carried on by the Issuer and its Subsidiaries taken as a whole and as a
result of such cessation or threat of cessation,  the Issuer will not be able to
perform or comply with its payment obligations under this Note; or

                  (i) on or after the date  hereof,  a final  judgment  or final
judgments  for the  payment  of money  shall  have been  entered by any court or
courts of competent jurisdiction against the Issuer and remains undischarged for
a period (during which  execution  shall be  effectively  stayed) of thirty (30)
days,  provided  that the  aggregate  amount of all such  judgments  at any time
outstanding  (to the extent not paid or to be paid,  as  evidenced  by a written
communication to that effect from the applicable  insurer, by insurance) exceeds
$500,000; or

                  (j) it  becomes  unlawful  for the Issuer to perform or comply
with its obligations under this Note, the Purchase Agreement, or the Warrant.

         SECTION 6.2 Acceleration of Maturity;  Rescission and Annulment.  If an
Event of  Default  occurs  and is  continuing,  then and in every  such case any
Holder may declare the principal of this Note to be due and payable immediately,
by a notice  in  writing  to the  Issuer,  and upon  any  such  declaration  the
principal of this Note shall become immediately due and payable.

         SECTION 6.3  Default Interest Rate.

                  (a) If any portion of the  principal  of the Note shall not be
paid when due (whether at the stated  maturity,  by  acceleration  or otherwise)
such  principal  of the Note that is due and owing but not paid  shall,  without
limiting  the Holder's  rights under this Note or under the Purchase  Agreement,
bear interest at the Default Interest Rate until paid in full.

                  (b)  Notwithstanding   anything  herein  or  in  the  Purchase
Agreement  to the  contrary,  if at any time  the  applicable  interest  rate as
provided for herein shall exceed the maximum lawful rate which may be contracted
for, charged, taken or received by the Lender in accordance with applicable laws
of the State of New York (the "Maximum Rate"),  the rate of interest  applicable
to the Note shall be limited to the Maximum Rate.

                                       -9-




         SECTION  6.4  Remedies  Not  Waived.  No course of dealing  between the
Issuer and the Holder or any delay in  exercising  any  rights  hereunder  shall
operate as a waiver by the Holder.

                                    ARTICLE 7
                                  MISCELLANEOUS

         SECTION 7.1  Register.

         (a) The Issuer shall keep at its  principal  office a register in which
the Issuer shall provide for the registration of this Note. Upon any transfer of
this Note in accordance  with Article 2 and 4 hereof,  the Issuer shall register
such transfer on the Note register.

         (b) The  Issuer  may deem the  person in whose  name this Note shall be
registered upon the registry books of the Issuer to be, and may treat it as, the
absolute  owner of this Note (whether or not this Note shall be overdue) for the
purpose of receiving  payment of principal of this Note,  for the  conversion of
this Note and for all other  purposes,  and the Issuer  shall not be affected by
any notice to the  contrary.  All such  payments and such  conversions  shall be
valid and effective to satisfy and discharge the liability upon this Note to the
extent of the sum or sums so paid or the conversion or conversions so made.

         SECTION 7.2 Withholding.  To the extent required by applicable law, the
Issuer may withhold  amounts for or on account of any taxes imposed or levied by
or on behalf of any taxing  authority in the United States  having  jurisdiction
over the Issuer from any payments made pursuant to this Note.

         SECTION  7.3  Governing  Law.  THIS  NOTE  SHALL BE  GOVERNED  BY,  AND
CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO CONFLICTS  OF LAWS  PRINCIPLES).  WITH RESPECT TO ANY SUIT,  ACTION OR
PROCEEDINGS  RELATING  TO THIS  NOTE,  THE  ISSUER  IRREVOCABLY  SUBMITS  TO THE
EXCLUSIVE  JURISDICTION  OF THE  COURTS OF THE STATE OF NEW YORK AND THE  UNITED
STATES  DISTRICT  COURT  LOCATED IN THE BOROUGH OF  MANHATTAN IN THE CITY OF NEW
YORK AND HEREBY WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY APPLICABLE LAW, ANY
CLAIM  THAT  ANY  SUCH  SUIT,  ACTION  OR  PROCEEDING  HAS  BEEN  BROUGHT  IN AN
INCONVENIENT  FORUM.  SUBJECT TO  APPLICABLE  LAW, THE ISSUER  AGREES THAT FINAL
JUDGMENT AGAINST IT IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS NOTE SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN ANY OTHER  JURISDICTION
WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A CERTIFIED COPY OF
WHICH  JUDGMENT  SHALL BE  CONCLUSIVE  EVIDENCE  THEREOF  AND THE  AMOUNT OF ITS
INDEBTEDNESS, OR BY SUCH OTHER MEANS PROVIDED BY LAW.

         SECTION 7.4 Headings. The headings of the Articles and Sections of this
Note are  inserted  for  convenience  only and do not  constitute a part of this
Note.


                                      -10-




         IN WITNESS WHEREOF, the Issuer has caused this Note to be signed by its
duly  authorized  officer  under  its  corporate  seal,  attested  by  its  duly
authorized officer, on the date of this Note.

                                         GREENMAN TECHNOLOGIES, INC.


                                         By:
                                            ---------------------------
                                         Name: Maurice E. Needham
                                         Title: Chief Executive Officer

Attest

By:
   ------------------------
Name: Cynthia M. Barker
Title: Assistant Secretary
[Corporate Seal]

                                      -11-





                               ANNEX I TO THE NOTE
                           [FORM OF CONVERSION NOTICE]

TO _____________________:

         The undersigned  owner of the  Convertible  Note,  dated ______,  1997,
issued by GREENMAN TECHNOLOGIES,  INC. (the "Note") hereby irrevocably exercises
the option to convert  $______________  of the principal amount of the Note into
Common  Shares,  par value  $.01,  of  GREENMAN  TECHNOLOGIES,  INC.  (the "Note
Shares"), in accordance with the terms of the Note. The undersigned directs that
the  Note  Shares  issuable  and  certificates  therefor  (to  the  extent  that
certificates  evidencing  Common  Shares  are  then  being  issued  by  GREENMAN
TECHNOLOGIES,  INC. deliverable upon the conversion,  together with any check in
payment for fractional Note Shares,  be issued in the name of and delivered,  if
appropriate,  to the  undersigned  unless a  different  name has been  indicated
below.


Dated:_______________                         ________________________________
                                                          Signature


Fill in for registration of Note Shares:
                                        -------------

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Please print name and address
(including zip code number)


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