Exhibit 10.46

                             BUSINESS LOAN AGREEMENT

      THIS BUSINESS LOAN AGREEMENT is made and entered into this 4th day of
April, 2002 by and among First American Bank of Des Moines, Iowa, hereinafter
referred to as the "Bank," and GreenMan Technologies of Iowa, Inc., an Iowa
corporation, hereinafter referred to as the "Borrower," and GreenMan
Technologies, Inc., hereinafter referred to as a "Guarantor."

                                   WITNESSETH

      WHEREAS, Borrower desires to borrow monies from Bank in the amounts
described below to facilitate the acquisition by Borrower of the assets of the
Des Moines, Iowa tire shredding operations of Utah Tire Recyclers, Inc.; and

      WHEREAS, Bank is willing to loan monies to Borrower subject to the terms
and conditions hereinafter set forth;

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:

I.    Definitions.

      For purposes of this Agreement, the following terms shall have the
meanings set forth below (and such meanings shall be equally applicable to both
the singular and plural form of the terms, as the context may require):

      "Affiliate" shall mean (a) Guarantor and (b) each Person or group of
Persons which directly or indirectly controls or is controlled by, or is under
common control with Borrower. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

      "Agreement" shall mean this Business Loan Agreement, as amended or
modified from time to time, together with all exhibits or schedules now or
hereafter attached hereto.

      "Assets" shall mean all tangible and intangible property of the Borrower
required by GAAP to be listed as an asset on the Borrower's balance sheet.
<PAGE>

      "Borrowing Base Formula" shall mean seventy-five percent (75%) of the
eligible accounts receivable balance. Eligible account receivables shall exclude
any receivable not paid within ninety (90) days of invoice and any Affiliate or
employee account receivables.

      "Borrowing Base Certificate" shall mean the monthly report due under
Section VI C (iv) illustrating the Borrower's Borrowing Base Formula.

      "Business Day" means any day other than a Saturday, Sunday or any day on
which Bank is required by law to close, or elects to close.

      "Collateral" shall mean without limitation all properties, whether real or
personal, granted by Borrower to Bank as security for Indebtedness, now or in
the future, as more particularly described in any security agreement, mortgage,
pledge or other document intended to grant a lien or security interest in
Borrower's properties to Bank to secure repayment of any Indebtedness owing to
Bank.

      "Debt Service Ratio," as of any date of determination, shall be determined
in accordance with GAAP and shall mean that ratio calculated by dividing the sum
of Borrower's net income plus interest expense, depreciation/amortization
expense and approved dividends or distributions to shareholders by the sum of
Borrower's interest expense plus the current maturities of Borrower's long term
debt.

      "Default" or "Event of Default" shall have the meaning delineated in
Section VIII of this Agreement.

      "$1,185,000 Term Loan" shall have the meaning set forth in Section II B of
this Agreement.

      "$1,185,000 Term Note" shall have the meaning as set forth in Section II B
of this Agreement.

      "Fiscal Year" shall mean the period beginning October 1 and ending
September 30 of each year.

      "GAAP" shall mean those Generally Accepted Accounting Principles and
Practices that are recognized as such by the American Institute of Certified
Public Accountants and by the Financial Accounting Standards Board.

      "Guarantor" shall have the meaning given to it in the preamble to this
Agreement.


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<PAGE>

      "Guaranty" shall mean the Guaranty of each Guarantor for the Indebtedness
owing by the Borrower in substantially the forms attached hereto as Exhibit A,
including any amendments thereto, replacements thereof or substitutions
therefore.

      [The reason I had suggested deleting the preceding term is that it doesn't
appear to be used again.]

      "Indebtedness" shall mean and include without limitation all Loans,
together with all other obligations, debts and liabilities of Borrower to Bank,
as well as all claims by Bank against Borrower; whether now or hereafter
existing, voluntary or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated; whether Borrower may be liable individually or
jointly with others; whether Borrower may be obligated as a guarantor, surety,
or otherwise; whether recovery upon such indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such indebtedness may
be or hereafter may become otherwise unenforceable.

      "Liabilities" shall mean all obligations of the Borrower that are required
by GAAP to be listed as a liability on Borrower's balance sheet.

      "Line of Credit Note" shall have the meaning given to it in Section II A
of this Agreement.

      "Loan" or "Loans" means and includes any and all commercial loans,
advances and financial accommodations from Bank to Borrower, whether now or
hereafter existing, and however evidenced, including without limitation the
Maximum Revolving Credit, the $1,185,000 Term Loan and those financial
accommodations described herein or described on any exhibit or schedule attached
to this Agreement from time to time.

      "Maximum Credit" shall mean the sum of the Maximum Revolving Credit.

      "Maximum Revolving Credit" shall have the meaning given to it in Section
II A of this Agreement.

      "Minimum Advance Amount" shall have the meaning given to it in Section II
A of this Agreement.

      "Net Fixed Assets" shall refer to the building, land, equipment,
furniture, fixtures and vehicles of the Borrower required by GAAP to be listed
as Property and Equipment on the Borrower's balance sheet less accumulated
depreciation.

      "Note" or "Notes" shall refer to the promissory note or notes executed by
Borrower in favor of Bank evidencing a Loan, including but not limited to the
Line of Credit Note and the $1,185,000 Term Note and any and all extensions,
modifications, substitutions or renewals of any thereof.


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<PAGE>

      "Permitted Liens" shall mean (i) deposits or pledges to secure payment of
worker's compensation, unemployment insurance, old age pensions or other social
security obligations in the ordinary course of business of the Borrower, (ii)
liens for taxes, fees, assessments and governmental charges not delinquent or to
the extent that payment therefore shall not at the time be required to be made
in accordance with the other provisions of this Agreement, (iii) liens of
carriers, warehousemen, mechanic's and materialmen and other like liens arising
in the ordinary course of business, for sums not due or to the extent that
payment therefore shall not at the time be required to be made in accordance
with the other provisions of this Agreement, (iv) liens incurred or deposits or
pledges made or given in connection with, or to secure payment of, indemnity,
performance or other similar bonds, (v) liens arising solely by virtue of any
statutory or common law provision relating to banker's liens, rights of setoff
or similar rights and remedies as to deposit accounts or other funds maintained
with a credit or depository institution, (vi) encumbrances in the nature of
zoning restrictions, easements and rights or restrictions of record on the use
of real property which do not materially detract from the value of such property
or impair the use thereof in the Borrower's business, (vii) the interest of any
Lessor under any capitalized lease entered into after the date on which the
loans are made or purchase money liens on property acquired after such date;
(viii) accounts payable to suppliers incurred in the normal course of business;
and (ix) the lien created through the subordinated debt agreement between
Borrower and Utah Tire Recyclers, Inc.

      "Person" shall mean any natural person, corporation, partnership, limited
partnership, limited liability company, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.

      "Security Documents" shall mean all and each Security Agreement, Mortgage,
Guaranty, Pledge or other loan document providing Collateral to Bank as security
for the Indebtedness or which in any manner obligates any Person for the
Indebtedness of Borrower to Bank.

      Other Definitional Terms. The words "hereof," "thereof," "herein,"
'therein," "hereunder," "thereunder," "hereto," "thereto" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. References to Sections,
Exhibits, Schedules and like references are to this Agreement unless otherwise
expressly provided. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." Unless the context in
which used herein otherwise clearly requires, "or" has the inclusive meaning
represented by the phrase "and/or."

      Other Defined Terms. Other terms defined in different sections of this
Agreement shall have the meanings given to them therein.


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<PAGE>

II.   Loans.

      A.    Revolving Line of Credit.

            (i)   Subject to the terms and conditions of this Agreement, the
                  Bank agrees to lend to the Borrower from time to time during
                  the term of this Agreement, for working capital to fund
                  account receivables, purchase inventory and pay operating
                  expenses, amounts at any one time outstanding not to exceed
                  Three Hundred Thousand Dollars ($300,000) ("Maximum Revolving
                  Credit"). Borrower may borrow, repay and re-borrow hereunder
                  during the term of this Agreement so long as all provisions of
                  this Agreement are met to Bank's satisfaction and the total
                  unpaid principal balance which may be outstanding at any one
                  time does not exceed the Maximum Revolving Credit. The
                  Borrower agrees to immediately repay any borrowings in excess
                  of the Maximum Revolving Credit. Borrower shall execute a
                  promissory note ("Line of Credit Note"), dated as of the date
                  of this Agreement in the amount specified above. Interest and
                  principal payments shall be payable on the dates and in the
                  manner set forth in the Line of Credit Note. Absent error,
                  Bank's determination as to the outstanding principal balance
                  owed by Borrower hereunder shall be conclusive on all parties
                  whomsoever and Bank's documentation to support said
                  outstanding principal balance will be sufficient to establish
                  and sustain Borrower's obligation hereunder.

            (ii)  Conditions to Advances Under Line of Credit. Each request by
                  Borrower for an advance of funds shall be made by a duly
                  authorized representative of Borrower not later than 2:00
                  o'clock P.M. on the day such advance is requested. Upon
                  receipt by Bank of each request for advance, and by 4:00
                  o'clock p.m. on the day such request is made, Bank shall lend
                  to Borrower the amount requested provided, however, that Bank
                  shall not be obligated to make any advance (i) during the
                  existence of any Event of Default; or (ii) if Bank has given
                  notice to Borrower of Borrower's violation of any terms or
                  conditions of this Agreement, the Notes, or any Security
                  Document which violation remains unremedied by Borrower or a
                  Guarantor(s), as applicable; or (iii) if Borrower has failed
                  to observe any of the Affirmative Covenants or Negative
                  Covenants required by this Agreement; or (iv) if Bank has
                  given notice to any Guarantor of such Guarantor's violation of
                  any term or condition of the Guaranty, which violation remains
                  unremedied by Guarantor after the expiration of any applicable
                  cure period; or (v) if the amount of the


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<PAGE>

                  advance requested together with the unpaid principal balance
                  of the Line of Credit Note exceeds the Maximum Credit, or (vi)
                  Borrower becomes insolvent, or voluntarily or involuntarily
                  becomes a debtor in bankruptcy; or (vii) there occurs a
                  material adverse change in Borrower's financial condition, in
                  the financial condition of Guarantor(s), or in the value (as a
                  whole) of the Collateral securing any Loan; or (viii) any
                  Guarantor seeks, claims or otherwise attempts to limit, modify
                  or revoke its respective Guaranty. All advances made under
                  terms of the Notes shall be in the minimum amount of One
                  Thousand Dollars ($1,000.00) (the "Minimum Advance Amount").

            (iii) Overdrafts. Any checks or other charges presented against the
                  regular checking account of the Borrower in excess of the
                  balance of said regular checking account shall be treated by
                  the Bank as a request for an advance under the Line of Credit
                  Note, and payment by the Bank of any check shall at its option
                  constitute a Loan to the Borrower pursuant to this Agreement
                  of the amounts so paid. However, the amounts debited to the
                  loan balance and credited to the checking account shall at no
                  time exceed the unused portion of the Maximum Revolving Credit
                  available under this Agreement.

            (iv)  Collateral Protection. In the event Borrower shall fail to
                  provide adequate insurance, pay taxes, or pay any other
                  charges which may affect the Collateral, Bank may, at its
                  option, without notice, but without any obligation or
                  liability to do so, procure insurance, pay taxes or pay any
                  other charges and add said sum to the balance of the Notes.

            (v)   Excess of Maximum Credit. Although it is contemplated that at
                  no time during the term of this Agreement shall the
                  outstanding principal amount of the Line of Credit Note exceed
                  the Maximum Revolving Credit, it is understood and agreed that
                  the Maximum Revolving Credit may be exceeded at any time, in
                  Bank's sole discretion, and the Borrower shall nevertheless
                  remain liable for the repayment in full of all sums advanced
                  by or to the Borrower by Bank, together with interest, late
                  charges, attorneys' fees and costs, if any, as more fully set
                  forth herein.

      B.    $1,185,000 Term Loan. Subject to the terms and conditions of this
            Agreement, Bank agrees to lend to the Borrower a term loan in the
            amount of One Million One Hundred Eighty-five Thousand Dollars
            ($1,185,000), (the "$1,185,000 Term Loan"), under which Borrower may
            borrow a term


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<PAGE>

            loan from Bank to be made in a single drawing on the date hereof, at
            which time the commitment of Bank to make the $1,185,000 Term Loan
            shall expire. The Borrower shall execute a promissory note (the
            "$1,185,000 Term Note"), dated as of the date of this Agreement in
            the principal amount of $1,185,000. Interest and principal payments
            shall be payable on the dates and in the manner set forth in the
            $1,185,000 Term Note. Absent error, Bank's determination as to the
            outstanding principal balance owed by Borrower thereunder shall be
            conclusive on all parties, whomsoever and Bank's documentation to
            support said outstanding principal balance will be sufficient to
            establish and sustain Borrower's obligations hereunder. Borrower
            acknowledges that the proceeds of the $1,185,000 Term Loan shall be
            applied to finance the acquisition of fixed assets of Utah Tire
            Recyclers, Inc. consisting of such Person's recycling operations
            located in Des Moines, Iowa.

      C.    Closing Fees. Concurrently with the execution and delivery of this
            Agreement, and as a condition to the making of the Loans hereunder
            by Bank, Borrower shall pay to Bank, in cash or other immediately
            available funds, non-refundable commitment fees in the amount of
            $10,000 with respect to the $1,185,000 Term Loan, and in the amount
            of $1,500 with respect to the $300,000 Maximum Revolving Credit.

III.  Security.

      A.    Bank Deposits. Bank shall at all times have a first security
            interest in and right of setoff against any and all deposit balances
            of Borrower whether now existing or hereafter established, and may
            at any time, without notice, apply the same against payment of the
            respective obligations of Borrower or Guarantor to Bank with respect
            to the Loans, whether or not due, regardless of the existence or
            amount of any other security held by the Bank.

B.    Collateral.

            (i)   As security for all Loans and advances made pursuant to this
                  Agreement, and any renewals, modifications, substitutions or
                  extensions thereof, and any other loans or advances made by
                  the Bank to Borrower, Borrower grants to Bank a security
                  interest in the Collateral and in all assets evidenced by any
                  and all existing and future security agreements and mortgages,
                  between Borrower and Bank. Borrower shall execute and deliver
                  to Bank a Security Agreement in substantially the form
                  attached hereto as Exhibit B and dated as of the date of this
                  Agreement together with such financing


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<PAGE>

                  statements as shall be necessary in Bank's discretion to
                  perfect the security interest granted to Bank by Borrower.

IV.   Guaranty.

      A.    Guarantor. The Loans, and any renewals, modifications, substitutions
            or extensions thereof, and any other Indebtedness or advances made
            by Bank to Borrower pursuant to this Agreement shall be guaranteed
            by Guarantor pursuant to the Guaranty and secured as required
            therein.

V.    Representations and Warranties.

      To induce Bank to make loans and advances hereunder, Borrower represents
and warrants, and Guarantor represents and warrants to the extent expressly
stated below, to Bank from the date of this Agreement and thereafter until all
Indebtedness of the Borrower to Bank is paid in full that:

      A.    Corporate Authority. (1) Borrower is duly organized and validly
            existing under the laws of the state of its organization, has full
            power, right, and authority to make and execute this Agreement, and
            to borrow the money provided for in this Agreement; (2) the
            execution of this Agreement, the Notes and the Security Documents
            will not conflict with any applicable provision of law or the
            Borrower's Articles of Incorporation or Bylaws, and will not result
            in a breach of or constitute a default under any material agreement
            or instrument to which the Borrower is a party or by which it or any
            of its property may be bound or affected; (3) the individuals who,
            on behalf of the Borrower, execute and deliver this Agreement, the
            Notes and Security Documents are authorized to do so and have
            provided to the Bank the appropriate resolution evidencing same; and
            (4) Borrower will provide such evidence of the foregoing as the Bank
            may require.

      B.    Articles, Bylaws and Shareholder. The Borrower has provided to Bank
            a true and accurate copy of the Articles of Organization and Bylaws
            of Borrower, together with all amendments thereto. Attached hereto
            as Exhibit C is a true and correct list of all of the officers,
            directors and shareholders of the Borrower, together with the
            percentage of ownership of each shareholder.

      C.    No Litigation. No litigation or governmental proceedings are pending
            or threatened against the Borrower or Guarantor nor does Borrower or
            Guarantor have any material liabilities, actual or contingent, not
            disclosed on either the Securities and Exchange Form 10-K for the
            period ended September 30, 2001 or the Securities and Exchange Form
            10-Q for the


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<PAGE>

            period ended December 31, 2001, of which both documents have been
            provided to the Bank.

      D.    First Lien For Bank. The lien of the Bank on the Collateral is, and
            will continue to be a first lien on the Collateral subject only to
            Permitted Liens.

      E.    No Other Liens. Except for the Permitted Liens, none of Borrower's
            Assets are subject to any mortgage, pledge, encumbrance, or other
            lien, except as otherwise disclosed to the Bank in writing.

      F.    Tax Returns. Borrower and Guarantor have filed all federal and state
            income tax returns required to be filed and have paid all taxes and
            assessments reflected thereon, other than those being contested in
            good faith and where adequate reserves have been established
            therefor.

      G.    Acknowledgment of Bank's Reliance. Borrower and Guarantor understand
            that the Bank is relying upon the accuracy and completeness of
            certain financial information and financial statements, (including
            pro forma financial statements reflecting the acquisition by
            Borrower of certain assets from Utah Tire Recyclers, Inc.) provided
            by the Borrower and Guarantor to the Bank in making advances under
            this Agreement. Borrower and Guarantor warrant that such financial
            statements and financial information fairly present the financial
            condition of the Borrower and Guarantor at such dates; and, where
            applicable, the results of its operations and changes in financial
            position for the respective periods then ended, and that no material
            adverse change in the financial condition of the Borrower or
            Guarantor has occurred since the date of the most recent financial
            statement which would result in the Borrower or Guarantor being
            unable to meet their respective obligations as they mature.

      [The reason I had suggested deleting the clause in the preceding paragraph
is that is is not customary to provide a "10b-5" representation with respect to
financial statements on a stand-alone basis. If one could do this, then the
entire prospectus, other than the financial statements, would be unnecessary to
fully inform potential buyers of securities. The clause that precedes the one I
suggested deleting, that the financial statements fairly present the financial
condition of the Borrower and the Guarantor, are customary and should be
sufficient.

      H.    Ownership of Collateral. Borrower warrants that it owns the entire
            legal and beneficial ownership interest, free and clear of all
            encumbrances, liens, agreements and security interests, of all
            Assets (unless otherwise disclosed in writing to Bank) set forth in
            its financial statements and all Collateral for the Loans, free and
            clear of all encumbrances, liens, agreements and


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<PAGE>

            security interests, subject, however, to easements, restrictions,
            zoning ordinances, the security interests and liens granted to Bank
            hereunder and the Permitted Liens.

      I.    No Violation of Occupational Safety and Environmental Protection.
            Borrower is not in violation in any material manner of any
            applicable federal, state, county or city statutes, orders, rules or
            regulations pertaining to occupational safety or environmental
            protection, nor does it presently anticipate that future
            expenditures needed to meet the provisions of existing applicable
            federal, state, county or city statutes, orders, rules or
            regulations will be so burdensome as to affect or impair in a
            materially adverse manner its financial condition.

      J.    Addresses of Borrower and Guarantor. The addresses appearing on the
            signatory page of this Agreement represent the principal business
            office of the Borrower and the addresses of Guarantor.

      K.    Fiscal Year End. Borrower's Fiscal Year ends on September 30 of each
            calendar year.

      L.    No Damage To Collateral. The Collateral is not now damaged or
            injured as a result of any fire, explosion, accident, flood or other
            casualty in any material respect.

      M.    Collateral Not in Flood Zone. The Collateral is not and will not be
            located in any federal or state designated flood zone.

      N.    Bank's Cost. Borrower shall pay all reasonable costs incurred by
            Bank for the preparation, review and approval of loan documents,
            lien searches, filing fees and attorney fees.

VI.   Affirmative Covenants.

      From the date of this Agreement and thereafter until all Indebtedness of
the Borrower to the Bank is paid in full, Borrower agrees it will and Guarantor
shall cause Borrower to:

      A.    Preservation of Borrower's Existence. Do all things necessary to
            preserve and keep in full force and effect Borrower's existence,
            rights and franchises necessary to the operation of its business and
            comply with all laws applicable to Borrower.

      B.    GAAP Accounting. Maintain a modern system of accounting in
            accordance with GAAP.


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<PAGE>

      C.    Financial Reports. Furnish to Bank (i) within ninety (90) days after
            each Fiscal Year End of the Borrower, a copy of the audited
            financial statements of Borrower signed by an independent certified
            public accountant acceptable to the Bank who reviewed such financial
            statements and prepared in accordance with GAAP, (ii) within
            twenty-five (25) days after the end of each calendar month, a copy
            of Borrower's unaudited and internal financial statements, similarly
            prepared, consisting of at least a balance sheet as of the close of
            such period, a profit and loss statement and a reconciliation of net
            worth or capital accounts, all for the period from the beginning of
            the fiscal year to the close of such reporting period; (iii) within
            twenty-five (25) days of the end of each calendar month, an accounts
            receivable and accounts payable aging report together with such
            other information as Bank may reasonably request from time to time;
            and (iv) within twenty-five (25) days after the end of each calendar
            month, a Borrowing Base Certificate.

      D.    Financial Information of Guarantor. Furnish to Bank (i) the
            Guarantor's Securities and Exchange Commission Form 10-K within
            ninety (90) days after the end of each Fiscal Year of the Guarantor,
            and (ii) within forty-five (45) days after the end of each Fiscal
            Quarter of Guarantor its Securities and Exchange Commission Form
            10-Q.

      E.    Access to Books. At all times, keep proper books of account in a
            manner satisfactory to Bank, and permit the Bank and its agents
            access to the books, records, premises, and operations of the
            Borrower at all reasonable times.

      F.    Timely Payment of Liabilities. Pay when due all taxes, assessments,
            trade payables and other liabilities except for those disputed by
            Borrower.

      G.    Notification of Legal Proceedings. Notify the Bank promptly of any
            litigation or legal proceedings involving the Borrower or Guarantor.

      H.    Insurance. Maintain insurance on all Collateral in amounts and with
            companies satisfactory to Bank; and provide appropriate loss payee/
            mortgagee endorsements in favor of Bank and furnish evidence of said
            insurance and endorsement to Bank.

      I.    Maintenance and Preservation of Property. At all times maintain,
            preserve and protect all of Borrower's franchises, trade names, and
            property used or useful, in the conduct of its business, and keep
            the same in good repair, working order and condition.


                                       11
<PAGE>

      J.    ERISA Compliance. Meet its minimum funding requirements under the
            Employee Retirement Income Security Act of 1974 ("ERISA"), as
            amended, with respect to any employee benefit plan or other class of
            benefit (Plan), which the Pension Benefit Guaranty Corporation,
            established under ERISA (PBGC) has elected to insure, in either
            case, whether now in existence or hereafter instituted by the
            Borrower.

      K.    Notice of ERISA Reportable Event. Furnish to the Bank as soon as
            possible, and in any event, within thirty (30) days after the
            Borrower knows, or has reason to know, that any Reportable Event (as
            defined in ERlSA) with respect to any plan has occurred, the
            statement of the President or other authorized officer or manager of
            the Borrower, setting forth details as to such Reportable Event, and
            the action which the Borrower proposes to take with respect thereto,
            together with a copy of the notice of such Reportable Event to PBGC.

      L.    Hazardous Waste. Waiver of Claims and Indemnification. Borrower
            represents and warrants that in connection with any Collateral given
            to Bank, such Collateral never will be, so long as any Indebtedness
            remains unpaid, used for the generation, manufacture, storage
            treatment, disposal, release or threatened release of any hazardous
            waste or substances, as those terms are defined in the Comprehensive
            Environmental Response, Compensation and Liability Act of 1980, as
            amended, 42 U.S.C. Section 9601, Compensation and Liability Act of
            1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), and
            Amendments and Reauthorization Act ("SARA"), applicable state or
            federal laws, or regulations adopted pursuant to any of the
            foregoing. Borrower hereby (i) releases and waives any future claims
            against Bank for indemnity or contribution in the event Borrower
            becomes liable for cleanup or other costs under any such laws; (ii)
            agrees that Bank may recover against Borrower to the full extent of
            any damages, claims or other liabilities suffered by Bank as a
            result of the violation of any such environmental laws, whether or
            not such violation occurred while the Collateral was owned by a
            predecessor in interest to Borrower or Borrower; and (iii) agrees to
            indemnify and hold Bank harmless against any and all claims and
            losses resulting from a breach of this provision of this Agreement,
            including reasonable attorney's fees and expenses; provided,
            however, that none of the foregoing shall obligate Borrower to
            indemnify Bank for any portion of such claims, damages, liabilities,
            expenses, costs, indemnity or contribution resulting from Bank's
            gross negligence, willful misconduct or violation of any such
            environmental laws occurring in any period when Bank or any
            successor-in-interest to Bank had possession or control of the
            property with respect to which such violation has occurred.


                                       12
<PAGE>

      M.    Collateral Funds. Borrower shall at all times maintain either (i)
            availability of advances under the Maximum Revolving Credit or (ii)
            collected funds in its accounts at the Bank sufficient to pay all
            items presented for payment from such accounts and sufficient to pay
            service charges imposed by the Bank. Borrower agrees to pay to the
            Bank interest on any overdraft or deficit balance in any such
            account at the rate set forth in the Line of Credit Note.

      N.    Submission of Environmental Reports. Promptly upon receipt thereof,
            Borrower shall submit to Bank copies of any reports of inspections
            or examinations conducted by the Iowa Department of Natural
            Resources or the Federal Environmental Protection Agency, or any
            similar agency, with respect to Borrower's properties.

      O.    Notice of Adverse Change. Notify the Bank immediately concerning any
            material adverse change in the financial condition of the Borrower
            or any Guarantor.

      P.    Primary Deposit Accounts at Bank. Maintain Borrower's deposit
            accounts with Bank.

      Q.    Notice of Corporate Change. Borrower shall provide written notice to
            Bank not less that ten (10) days prior to any amendment to its
            Articles of Incorporation, Bylaws, addition of new shareholders or
            any change in theshareholders, including any change in the ownership
            percentage of each of the shareholders. Borrower shall provide
            written notice to Bank promptly after any change in its officers or
            directors.

      R.    Other Covenants. During the term of this Agreement, Borrower shall:

            (i)   Maintain a Debt Service Ratio of not less than 1.25 to 1.00.

            (ii)  Maintain a reserve account with a minimum of twelve (12)
                  months debt payments ($250,000).

VII.  Negative Covenants.

      From the date of this Agreement and thereafter until all Indebtedness of
the Borrower to the Bank is paid in full, Borrower will not, and Guarantor will
not allow Borrower to, without the prior written consent of the Bank:

      A.    Incur Debt. Incur, permit to remain outstanding, assume or in any
            way become committed for indebtedness except (i) those debts
            incurred in connection with this Agreement; and (ii) those debts
            incurred in the


                                       13
<PAGE>

            ordinary course of business consistent with past practices which may
            include borrowings only from Affiliates or Guarantor.

      B.    Grant Liens. Pledge, mortgage, lease or otherwise encumber, or
            permit any lien to exist on any asset or property of any kind,
            except as may exist at and be reflected on the financial statements
            provided at the time of this Agreement, other than (i) liens,
            security interests and encumbrances granted to the Bank under the
            Security Documents to secure the loans and (ii) Permitted Liens.

      C.    Sell Assets Out of Ordinary Course. Sell, lease or otherwise dispose
            of any part of Borrower's real or personal property other than in
            the ordinary course of business.

      D.    Make Loans or Guarantee Debt. Make any loans or advances to, or
            become guarantor of or surety for, any other Person.

      E.    Capital Expenditures. Make any capital expenditures (which for
            purposes hereof shall also include capital leases) for fixtures,
            vehicles, equipment, real estate, real estate improvements, or other
            fixed assets which in the aggregate exceed One Hundred Fifty
            Thousand Dollars ($150,000) in any Fiscal Year.

      F.    Dividends/Distributions/Fees. Borrower shall not, without prior
            written consent of Bank, declare or pay any dividends,
            distributions, bonuses, compensation or fees to Guarantor or any of
            its or Borrower's officers, directors or shareholders until
            September 30, 2002. After September 30, 2002, and the reserve
            account referenced in Section VI R (ii) has been established, the
            Borrower may declare and pay in the aggregate no more than $20,000
            of dividends, distributions, bonuses, compensation and fees per
            month. The amount of the dividends, distributions, bonuses,
            compensation and fees may be increased upon mutual agreement between
            the Borrower and Bank.

      G.    No Merger or Acquisition. Be a party to any merger or consolidation;
            sell, transfer, convey or lease all or any substantial part of its
            property; sell or assign, with or without recourse, any accounts
            receivable; purchase or otherwise acquire all or substantially all
            of the assets or any equity interests of any Person.

VIII. Events of Default.


                                       14
<PAGE>

      If any of the following events occur, the Bank may, at its option, without
notice or demand, declare the entire Indebtedness of Borrower to Bank
immediately due and payable:

      A.    Late Payment. Any payment of principal or interest due under the
            terms of any Note is not made within five (5) days of the due date.

      B.    Misrepresentation. Any representation or warranty made by Borrower
            or any Guarantor in this Agreement or in any Security Document shall
            prove to be incorrect or untrue, or any schedule, statement, report
            or writing furnished by the Borrower or any Guarantor to the Bank is
            untrue in any material aspect as of the time it was made.

      C.    Breach of Covenants. Borrower or any Guarantor fails to perform or
            observe any term, covenant or condition of this Agreement or any of
            the Security Documents binding upon it or them and such failure is
            not remedied or corrected within thirty (30) days after written
            notice thereof shall have been sent to Borrower or such Guarantor,
            as the case may be, by Bank.

      D.    Breach Under Other Loan Documents. Any breach of any provisions
            contained in any Note, Security Document or any other loan document
            (other than a breach described in paragraphs A, B and C above) and
            such breach is not remedied within thirty (30) days after written
            notice thereof shall have been sent to Borrower by Bank.

      E.    Death, Bankruptcy, Etc. If a Guarantor dies or becomes legally
            incompetent, or Borrower becomes insolvent or bankrupt or makes an
            assignment for the benefit of creditors, or a petition in bankruptcy
            is filed by, on behalf of or against either Borrower or
            Guarantor(s), either voluntarily or involuntarily, and the same is
            not dismissed within ninety (90) days thereafter.

      F.    Adverse Litigation. Notice is given to the Borrower by the Bank,
            that, in the opinion of the Bank, any litigation, lien or
            governmental proceeding which has been instituted or filed against
            the Borrower will, to a material extent, adversely affect the
            financial condition or continued operation of the Borrower, and such
            litigation, lien or proceeding is not dismissed within sixty (60)
            days after such notice.

      G.    Adverse Impairment in Collateral. Bank's interest in any Collateral
            is materially, adversely impaired in any manner, as solely
            determined by Bank.


                                       15
<PAGE>

      H.    Adverse Change in Financial Condition. Any adverse material change
            in Borrower or any Guarantor's financial condition shall have
            occurred, as solely determined by Bank and the same is not remedied
            or corrected within thirty (30) days after written notice is given
            to Borrower or any Guarantor, as the case may be, to the
            satisfaction of Bank.

      I.    Default Under Guaranty. Any Guarantor shall default in the
            performance of any covenant or agreement set forth in such
            Guarantor's Guaranty.

      J.    Revocation of Guaranty. Any Guarantor revokes such Guarantor's
            Guaranty, or contests the validity or enforceability of such
            Guaranty.

      K.    Bank Deems Itself Insecure. If Bank at any time believes in good
            faith that the prospect of receiving payment or performance from
            Borrower or any Guarantor is impaired in a material respect.

      L.    Coast Business Credit. Any and all defaults by Borrower under any
            credit or financing agreement now or hereafter existing between
            Coast Business Credit and Borrower or any of its Affiliates.

IX.   Remedies.

      Upon the occurrence of a Default (it being understood that a Default under
any Note or Security Document shall constitute a Default under all Notes or
Security Documents and this Agreement), the Bank may, after expiration of any
grace period referenced above, declare the unpaid principal balance and interest
on the Notes immediately due and payable, together with any other Indebtedness
owed by Borrower to Bank, and all such principal, interest and other
Indebtedness shall thereupon be immediately due and payable in full. The Bank
shall thereupon have all remedies set forth herein and in any Note, Security
Document or any other loan document and all remedies otherwise available to a
secured creditor under the Uniform Commercial Code of Iowa or under any other
Iowa law.

X.    Conditions to Bank's Obligations.

      Bank's obligations to perform hereunder shall be subject to satisfaction
of the following conditions on or before closing:

      A.    No Breach of Covenants. Borrower and Guarantor shall have performed
            all agreements required to be performed, and shall not be in breach
            of any covenant, agreement, representation or warranty made herein
            or in any other loan document applicable to Borrower or Guarantor.


                                       16
<PAGE>

      B.    No Default. No Event of Default and no event or condition which,
            with notice or the lapse of time, or both, would constitute an Event
            of Default, shall exist.

      C.    No Material Change in Financial Condition. Neither the Borrower nor
            the Guarantor shall have incurred any material Liabilities, direct
            or contingent, other than in the ordinary course of business, since
            the date of the last financial statement given to Bank by Borrower
            or a Guarantor.

      D.    Insurance. Borrower shall have obtained hazard and/or fire and
            extended coverage insurance on the Collateral, issued by a company
            or companies approved by Bank and in amounts acceptable to Bank
            which policy or policies shall name Bank as loss payee under a
            standard loss payee clause, and Bank shall also have been provided
            with such additional policies of insurance as Bank may reasonably
            require insuring against such risks and in such amounts as are
            customarily carried by like businesses operating in the same
            vicinity. If, during the term of this Agreement, any of the
            Collateral is destroyed by fire or any other casualty, Bank, in its
            sole discretion shall determine if the damaged collateral shall be
            repaired, replaced or restored with the insurance proceeds (in which
            event Bank's lien shall remain affixed to such Collateral), or if
            the insurance proceeds shall be applied against the Notes to the
            extent of the unpaid balance.

      E.    Authorized Action. Borrower shall have delivered to Bank a copy,
            duly certified as of the date of this Agreement, by an authorized
            representative of the Borrower, of the resolutions of the Borrower's
            management authorizing the borrowings hereunder and the execution
            and delivery of this Agreement, the Notes, the Security Documents
            and all other loan documents.

      F.    Legal Opinion. Borrower shall have delivered an opinion of its legal
            counsel in form and substance satisfactory to Bank dated the date of
            this Agreement to the effect that (i) the Borrower is a corporation,
            duly organized, and validly existing under the laws of the State of
            Iowa; (ii) Borrower has full corporate power to execute, deliver and
            perform its obligations under this Agreement, the Notes, the
            Security Documents and any other loan documents; (iii) the
            Borrower's actions have been duly authorized by all necessary
            corporate action, and are not in violation of any applicable
            provision of law known to such counsel or of the Articles of
            Incorporation or Bylaws of the Borrower, nor in violation of any
            agreement binding upon the Borrower or any Guarantor of which such
            counsel has knowledge; and (iv) the security agreement as entered
            into between Borrower and Bank has created a valid security interest
            in favor of Bank in the items of the Collateral consisting of
            personal property to the


                                       17
<PAGE>

            extent a security interest in such items can be created under the
            Iowa Uniform Commercial Code and the security interest in the
            Collateral as granted by Borrower to Bank will, upon the filing of a
            proper financing statement naming Borrower as debtor and Bank as
            secured party and containing a reasonable description of such items,
            and payment of any applicable filing fees, be a first priority
            perfected security interest.

      G.    Reimbursement of Bank's Expenses. The payment by Borrower of all
            out-of-pocket expenses incurred by Bank in making and administering
            this Loan, including, without limitation, all costs of appraisals,
            environmental studies or reports, abstracting, title opinions,
            attorneys' fees and expenses, surveys, filings and recordings.

      H.    Closing Fees. The payment by Borrower of the fees described in
            Section II C above.

      I.    Subordinated Debt. Borrower shall have executed a promissory note
            with Utah Tire Recyclers, Inc. pursuant to which Utah Tire
            Recyclers, Inc. lends to Borrower a minimum principal amount of Four
            Hundred Thousand Dollars ($400,000) with monthly principal and
            interest payments based on a four-year amortization schedule, which
            shall repay the loan in full. Such promissory note shall be
            subordinated to the Loans.

      J.    No Litigation. For the period beginning January 1, 2002 through
            Closing no litigation or governmental proceedings are pending or
            threatened against the Borrower or Guarantor nor does Borrower or
            Guarantor have any material liabilities, actual or contingent not
            otherwise disclosed to Bank pursuant to Section V.C.

      K.    Landlord Waiver. Borrower shall deliver to Bank a landlord's lien
            waiver for the premises located at 1914 E. Euclid Avenue in Des
            Moines.

      L.    Guaranty. The Guarantor shall have executed a Guaranty in favor of
            Bank for the total amount of Indebtedness.

      M.    Licenses and Permits. Borrower has obtained all licenses and permits
            required for the operation of the tire recycling business.

XI.   Miscellaneous.

      A.    Waiver Not Binding. Any waiver of any default by Bank is not a
            waiver of any subsequent default. Further, no delay on the part of
            the Bank in the exercise of any power or right shall constitute a
            waiver thereof, nor shall


                                       18
<PAGE>

            any single or partial exercise of any power or right preclude other
            or further exercise thereof.

      B.    Notice. Any notice hereunder to the Borrower or any Guarantor and
            Bank shall be in writing, and, if mailed, shall be deemed to be
            given when sent by ordinary mail, postage prepaid, and addressed to
            the Borrower, Guarantor and Bank as appearing on the signature page
            of this Agreement, or at such other address as the Borrower,
            Guarantor, or Bank may, by written notice directed to the other
            parties, designate as the Borrower's, Guarantor's, or Bank's address
            for purposes of notice hereunder.

      C.    Governing Law and Enforcement. This Agreement, and the Notes,
            Security Documents and Guaranty shall be governed in all respects by
            the laws of the State of Iowa. Borrower and Guarantor consent to
            jurisdiction in Iowa and construction of the Agreement under the
            laws of the State of Iowa, and waive any right to commence any
            action against the Bank except in Iowa.

      D.    Waiver of Jury Trial. Bank, Borrower and Guarantor hereby knowingly,
            voluntarily and intentionally waive the right any may have to a
            trial by jury in respect to any litigation based on, or arising out
            of, under or in conjunction with this Agreement, the Notes, the
            Security Documents and any other agreement contemplated to be
            executed in conjunction herewith or therewith, or any course of
            conduct, course of dealing, statements (whether verbal or written)
            or actions of either party. This provision is a material inducement
            for Bank making the Loans evidenced by the Notes.

      E.    Term of Agreement. The term of this Agreement shall coincide with
            the term of any Notes executed by Borrower in favor of the Bank, as
            modified, extended, substituted, renewed and until all Indebtedness
            is paid in full and any commitment to extend credit has terminated.

      F.    Assignment. This Agreement shall not be assigned by Borrower without
            the written consent of the Bank.

      G.    Participation. The Bank may not enter into participation agreements
            with other financial institutions with regard to any indebtedness of
            Borrower without prior written consent of Borrower.


                                       19
<PAGE>

      H.    Successors and Assigns. This Agreement shall be binding upon
            Borrower and Guarantor's heirs, successors and assigns.

      I.    Additional Documents. Borrower and Guarantor agree to execute and
            cause to be executed such additional documents as the Bank may
            require in order to effectuate the terms of this Agreement.

      J.    Invalidity of Documents. A determination that any provision of this
            Agreement is unenforceable or invalid shall not affect the validity
            or enforceability of any other provision.

      K.    Survival of Representations and Warranties. All representations,
            warranties, covenants, and agreements of Borrower and Guarantor
            herein shall survive the execution and delivery of this Agreement
            and shall be deemed continuing until the Indebtedness is paid in
            full to the Bank and any commitment to extend credit has terminated.

      L.    Collection Costs. If Bank hires an attorney to assist in collecting
            any amount due or to enforce any right or remedy under this
            Agreement, the Note, the Security Documents, the guaranty, or any
            other loan document, Borrower and/or Guarantor agree to pay the
            attorney fees and expenses incurred by Bank.

      M.    Complementary Documents. This Agreement, the Notes, the Security
            Documents and all other documents executed in connection with this
            Agreement are intended to be complementary and supplementary one to
            the other. In the event of any conflict between the terms of one or
            more of such documents with one or more of the other documents, such
            term shall, to the fullest extent reasonably possible, be construed
            to be complementary one with the other. However, if such terms
            cannot be construed as complementary, then the terms of this
            Agreement shall govern.

      N.    Limitation and Indemnification of Liability. Bank shall not be
            liable or responsible to Borrower or Guarantor in connection with
            its conduct or performance under this Agreement, the Notes, Guaranty
            or any other Loan Documents, except for acts of gross negligence or
            willful misconduct, and Borrower and Guarantor shall indemnify Bank
            and hold Bank harmless against all claims, actions, suits,
            proceedings, costs, expenses, losses, damages and liabilities of any
            kind, including tort, penalties and interest, whether made by
            Borrower, Guarantor, or any third party, in connection


                                       20
<PAGE>

            with any act of Bank, directly or indirectly, in connection with
            this Agreement, Notes, Security Documents, Guaranty or any other
            loan documents, except for acts of gross negligence, willful
            misconduct of Bank or breach by Bank of the terms of this Agreement,
            the Notes, the Security Documents or any other agreement executed by
            Bank in furtherance of this Agreement. This provision and condition
            shall survive the payment of all Indebtedness to Bank by Borrower
            and Guarantor.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]


                                       21
<PAGE>

      IMPORTANT. READ BEFORE SIGNING, THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

      Borrower and Guarantor warrant that they have received a copy of this
Agreement and further state that Borrower and Guarantor understand fully the
terms and conditions described herein.

      BANK                                     BORROWER

      First American Bank                      GREENMAN TECHNOLOGIES
      12333 University Avenue                     OF IOWA, INC.
      P. O. Box 71156
      Des Moines, Iowa 50325-0156


      By:                                      By:
          -------------------------------          -----------------------------
          Scott Geadelmann, Vice President     Title:
                                                        ------------------------


      By:
          -------------------------------

      GUARANTOR

      GREENMAN TECHNOLOGIES, INC.


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

      (Need addresses of Borrower and Guarantor)



                                       22
<PAGE>

                                    EXHIBIT A
                                       TO
                             BUSINESS LOAN AGREEMENT

                                Form of Guaranty
<PAGE>

                                    EXHIBIT B
                                       TO
                             BUSINESS LOAN AGREEMENT


                      Form of Commercial Security Agreement
                                   of Borrower
<PAGE>

                                    EXHIBIT C
                                       TO
                             BUSINESS LOAN AGREEMENT

                  Officers, Directors and Ownership of Borrower

      Shareholders:
      -------------

            GreenMan Technologies, Inc. 100%

      Directors:
      ---------

            Charles E. Coppa

            Robert H. Davis

            Mark T. Maust

      Officers:
      --------

            President                     Mark T. Maust

            Vice President                Robert H. Davis

            Treasurer                     Charles E. Coppa

            Secretary                     Charles E. Coppa

            Assistant Treasurer           Bradley W. Hughes

            Assistant Secretary           Rahni Bahr

            Assistant Secretary           Carl F. Barnes