ex10-2.htm


    Exhibit
10.2

    


    


    ESCROW
AGREEMENT

    


    THIS
ESCROW AGREEMENT (this “Agreement”) is made
and entered into as of the 27th day of
July, 2009, by and among GreenMan Alternative Energy, Inc., an Iowa corporation
(the “Buyer”),
American Power Group, Inc., an Iowa corporation (the “Seller”), GreenMan
Technologies, Inc., a Delaware corporation (the “Parent”) and Morse,
Barnes-Brown & Pendleton, P.C. (the “Escrow
Agent”).

    


    WHEREAS,
the Seller and the Parent have entered into an Exclusive Patent License
Agreement dated as of June 17, 2009 (the “License”), pursuant
to which the Seller has licensed  to the Parent certain Patent Rights
(as such term is defined in the License) in exchange for the issuance by the
Parent of shares of the Parent’s common stock and the obligation of Parent to
make certain cash payments to the Seller;

    


    WHEREAS,
the Buyer, the Seller and, for certain limited purposes, the Parent have entered
into an Asset Purchase Agreement dated as of July 27, 2009 (the “Purchase Agreement”),
pursuant to which the Buyer is purchasing certain assets, subject to certain
liabilities, from the Seller;

    


    WHEREAS, the Purchase Agreement
contemplates the establishment of an escrow arrangement to secure rights to
indemnification of the Buyer under the Purchase Agreement;

    


    NOW,
THEREFORE, in consideration of the
premises and the mutual covenants, agreements and provisions set forth in this
Agreement, the parties hereto agree as follows:

    


    


    ARTICLE I

    


    DEFINED
TERMS

     

    Section
1.1   Defined Terms. Capitalized terms used in this Agreement and
not otherwise defined shall have the meanings given to them in the Purchase
Agreement.

    


    


    ARTICLE
II

    


    ESCROW
AND INDEMNIFICATION

    


    Section
2.1   Funding of
Escrow.  Pursuant to Section 5.03 of the Purchase Agreement,
Parent, on behalf of Buyer, may from time to time deposit certain funds, which
would otherwise be due and payable to Seller under the License Agreement, with
the Escrow Agent as security for the indemnification provided for in Article V
of the Purchase Agreement (such amounts, collectively, the “Escrow
Funds”).


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section
2.2   Deposit of Escrow
Funds.  The Escrow Agent shall deposit the Escrow Funds in a
federally insured, interest-bearing separately designated account or sub-account
(the “Escrow
Account”) at Citizens Bank, Massachusetts, USA, or at such other bank or
financial institution as the Escrow Agent may use from time to time as a
depository for its own funds. Interest income from such deposit shall be held by
the Escrow Agent in the Escrow Account and shall be considered part of the
Escrowed Funds.

    


    Section
2.3   Release of Escrow
Funds.  The Escrow Agent shall not release any portion of the
Escrow Funds to Buyer, Seller or Parent except (i) upon receipt of written
directions signed on behalf of Buyer, Seller and Parent (an “Escrow Certificate”)
or (ii) in the absence of an Escrow Certificate, in accordance with the written
determination of the arbitrator as provided in Section 7.06 of the Purchase
Agreement (an “Arbitration Award”).
The Escrow Agent shall be entitled to rely on either such Escrow Certificate or
such determination and shall distribute cash from the Escrow Fund in accordance
with the terms thereof.

    


    Section
2.4   Trust Fund. The
Escrow Funds shall be held as a trust fund and shall not be subject to any lien,
attachment, trustee process or any other judicial process of any creditor of any
party hereto. The Escrow Agent shall hold and safeguard the Escrow Funds until
the Escrow Funds are released pursuant to Section 2.3 upon the delivery of an
Escrow Certificate or  Arbitration Award.

    


    Section
2.5   Escrow Non-Exclusive.
The escrow created under this Agreement shall be for the convenience of the
parties, but neither this Agreement, nor any provision hereof, nor the existence
of the Escrow Funds, shall be deemed to limit the right of the Buyer to
indemnification in any amount under the Purchase Agreement.

    


    


    ARTICLE
III

    


    
      
        	
                CONCERNING
      THE ESCROW AGENT

              


      

    

    


    Section
3.1   Fees and
Expenses.

    


    (a)           The
Escrow Agent will be entitled to reasonable compensation for its ordinary
services under this Agreement, such services to be charged at the Escrow Agent’s
then-prevailing standard hourly rates for legal services. The Escrow Agent shall
be entitled to reimbursement for reasonable and documented out-of-pocket
expenses incurred in the performance of its duties hereunder. All such fees and
expenses shall be paid by the Parent.


    
      
         


      

      
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    (b)           In
the event that the Escrow Agent renders any services jointly requested by the
Seller, on the one hand, and the Buyer or the Parent, on the other hand, that
are not provided for in this Agreement or there is any assignment of any
interest in the subject matter of this escrow or modification of any interest,
the Escrow Agent will be reasonably compensated for such extraordinary services
(to be charged at its then-prevailing standard hourly rates for legal services),
and will be reimbursed for all reasonable costs, third-party, unaffiliated
attorneys’ fees and expenses occasioned thereby, which compensation, costs, fees
and expenses shall be paid by the party requesting such additional service or
whose interest is assigned or modified.

    


    Section
3.2   Responsibility of
the Escrow Agent.

    


    (a)           If any party to this Agreement disagrees
on anything connected with this escrow, (i) the Escrow Agent will not have to
settle the matter, (ii) the Escrow Agent may wait for a settlement by
appropriate legal proceedings or other means it may require, and in such event
it will not be liable for interest or damages, and (iii) the Escrow Agent is
entitled to hold the Escrow Funds in the Escrow Account pending settlement of
the disagreement by any of the above means.

    


    (b)           The Escrow Agent is to act as a
depository agent only and is hereby relieved of any liability in connection
with any representations made by the other parties hereto or any of their
agents.

    


    Section
3.3   Limitation of
Escrow Agent’s Liability.

    


    (a)           The
Escrow Agent undertakes to perform such duties as are specifically set forth in
this Agreement only and shall have no duty under any other agreement or document
(other than the Purchase Agreement), and no implied covenants or obligations
shall be read into this Agreement against the Escrow Agent. The Escrow Agent
shall incur no liability with respect to any action taken by it or for any
inaction on its part in reliance upon any notice, direction, instruction,
consent, statement or other document believed by it in good faith to be genuine
and duly authorized, nor for any other action or inaction except for its own
gross negligence or willful misconduct. In all questions arising under this
Agreement, the Escrow Agent may rely on the advice of counsel, and for anything
done, omitted or suffered in good faith by the Escrow Agent based upon such
advice the Escrow Agent shall not be liable to anyone. In no event shall the
Escrow Agent be liable for incidental, punitive or consequential
damages.

    


    (b)           The
Seller, the Buyer and the Parent hereby jointly and severally agree to indemnify
the Escrow Agent and its shareholders, officers, directors, employees and agents
for, and hold it and them harmless against, any loss, liability or expense
arising under this Agreement, including, but not limited to reasonable
attorneys’ fees and expenses, unless such loss, liability or expense is due to
the gross negligence or willful misconduct on the part of the Escrow Agent. This
right of indemnification shall survive the termination of this Agreement and the
resignation of the Escrow Agent.


    
      
         


      

      
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    Section
3.4   Acknowledgement and Waiver
of Potential Conflict. The Seller acknowledges and agrees that (a) the
Escrow Agent has served as legal counsel to the Buyer and Parent in connection
with the negotiation and execution of the Purchase Agreement and the other
agreements and documents executed in connection therewith and the transactions
contemplated thereby; (b) the Escrow Agent may be deemed to have a conflict of
interest in serving as Escrow Agent hereunder; and (c) the Escrow Agent has
agreed to serve as Escrow Agent hereunder at the mutual request of, and as an
accommodation to, the Seller, the Buyer and the Parent. Accordingly, the Seller,
the Buyer and the Parent each (i) irrevocably waive any such conflict, and any
objection thereto, to the fullest extent of the law, and (ii) agree not to raise
any objection to the existence of such conflict of interest in connection with
the performance of this Escrow Agreement or any dispute among the parties with
respect thereto.

    


    Section
3.5   Successor Escrow
Agent. In the event the Escrow Agent becomes unavailable or unwilling to
continue as escrow agent under this Agreement, the Escrow Agent may resign and
be discharged from its duties and obligations hereunder by giving its written
resignation to the Seller, the Buyer and the Parent. Such resignation shall take
effect not less than 30 days after such notice is given. In such event, the
Parent may appoint a successor Escrow Agent. If the Parent fails to appoint a
successor Escrow Agent within 15 days after receiving the Escrow Agent’s written
resignation, the Escrow Agent shall have the right to apply to a court of
competent jurisdiction for the appointment of a successor Escrow Agent. The
successor Escrow Agent shall execute and deliver to the Escrow Agent an
instrument accepting such appointment, and the successor Escrow Agent shall,
without further acts, be vested with all the estates, property rights, powers
and duties of the predecessor Escrow Agent as if originally named as Escrow
Agent herein. The Escrow Agent shall act in accordance with written instructions
from the Parent as to the transfer of the Escrow Funds to a successor escrow
agent.

    


    


    
      	
               
      

            	
              ARTICLE
      IV

            


    

    


    
      	
               
      

            	
              GENERAL
      PROVISIONS; ADDITIONAL AGREEMENTS

            


    

    


    Section
4.1   Termination. This
Agreement shall terminate upon the earlier to occur of (a) the repayment in full
of the principal amount of the Goodwill Gross-up Note and the Goodwill True-up
Note, if any, together with all interest accrued thereon, or (b) the prior
written agreement of the parties.

    


    Section
4.2   Notices. Any notices,
waivers, correspondences or other communications required under or pertaining to
this Agreement shall be in writing and shall be delivered by hand, or sent by a
reputable overnight mail service (e.g., Federal Express), or by first class mail
(certified or registered), or by facsimile confirmed by one of the foregoing
methods, to the other party. Notices will be deemed effective (a) three (3)
working days after deposit, postage prepaid, if mailed, (b) the next day if sent
by overnight mail, or (c) the same day if sent by facsimile and confirmed as set
forth above or delivered by hand.  Unless changed in writing in
accordance with this Section, the notice address for each of the Parties shall
be as follows:


    
      
         


      

      
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    If
to the Buyer or the Parent:

    


    GreenMan Technologies,
Inc.

    7 Kimball Lane

    Lynnfield, Massachusetts
01940

    Attention:
Mr. Charles E. Coppa

    Telephone:
(781) 224-2411

    Facsimile:
(781) 224-0114

    


    If
to the Seller:

    


    Rick
Kremer

    9159
St. Rt. 118

    Ansonia,
OH  45303

    Telephone:
(937) 547-9633

    Facsimile:
______________

    


    If
to the Escrow Agent:

    


    Morse,
Barnes-Brown & Pendleton, P.C.

    Reservoir Place

    1601 Trapelo Road

    Waltham, Massachusetts
02451

    Attention: Carl F. Barnes

    Telephone:
(781) 622-5930

    Facsimile:
(781) 622-5933

    


    Any
party may change its address for receiving notices by giving written notice of
such change to the other party in accordance with this Section 4.2.

    


    Section
4.3   Waiver of Jury Trial.
If this Agreement is found to be not subject to arbitration, each party
irrevocably agrees that all legal proceedings will be tried in a court of
competent jurisdiction by a judge without a jury. Each party waives any right to
a jury trial in any such proceeding and agrees to take, or not to take, such
action as is appropriate to give effect to this provision.

    


    Section
4.4   Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall
constitute one in the same instrument.

    


    Section
4.5   Amendment; Waiver.
This Agreement may be amended,
modified or supplemented by a writing signed by the parties against whom
enforcement of any amendment is sought. Any party hereto may, by a written
signed instrument, extend the time for or waive the performance of any of the
obligations of any other party hereto or waive compliance by such other party
with any of the covenants or conditions contained herein.


    
      
         


      

      
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    Section
4.6   Entire Agreement.
This Agreement, together with the Purchase Agreement, constitutes the entire
agreement among the parties, and there are no agreements, understandings,
restrictions, warranties, or representations between the parties other than
those set forth or provided for in this Agreement relating to the subject matter
hereof.

    


    Section
4.7   Succession
and Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties named
herein and their respective successors and permitted assigns. Neither
this Agreement nor any of the parties’ rights hereunder shall be assignable by
any party without the prior written consent of the other parties.

    


    Section
4.8   Headings. The
headings contained in this Agreement are for convenience of reference only,
shall not be deemed to be a part of this Agreement and shall not be referred to
in connection with the construction or interpretation of this
Agreement.

     

    Section
4.9   Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any law or public policy, all other conditions and provisions
of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent
possible.

    


    Section
4.10   Governing Law. This
Agreement shall be governed in all respects, including validity, interpretation
and effect, by the internal laws of the Commonwealth of Massachusetts without
regard to principles of conflicts of laws.

    


    Section
4.11   No Presumption. This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.

    


    Section
4.12   No Third-Party
Beneficiaries. This Agreement shall not confer any rights or remedies
upon any person other than the parties and their respective successors and
permitted assigns.

    


    Section
4.13   Tax Reporting Information
and Certification of Tax Identification Numbers.

    


    (a)           The
parties hereto agree that, for tax reporting purposes, all interest on or other
income, if any, attributable to the Escrow Funds which shall not have been
distributed pursuant to Section 2.3 in respect to any tax year shall be
allocable 50% to the Buyer and 50% to the Seller.


    
      
         


      

      
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    (b)           The
Buyer and the Seller agree to provide the Escrow Agent with certified tax
identification numbers for each of them by furnishing appropriate Forms W-9 (or
Forms W-8, in the case of non-U.S. persons) and any other forms and documents
that the Escrow Agent may reasonably request (collectively, “Tax Reporting
Documentation”) to the Escrow Agent within 30 days after the date hereof.
The parties hereto understand that, if such Tax Reporting Documentation is not
so furnished to the Escrow Agent, the Escrow Agent shall be required by the
Internal Revenue Code of 1986, as amended, to withhold a portion of any interest
or other income earned on the investment of monies or other property held by the
Escrow Agent pursuant to this Agreement, and to immediately remit such
withholding to the Internal Revenue Service.

    


    
      	
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    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal as of the date first written above.

    


    


    THE
PARENT:

    


    GREENMAN
TECHNOLOGIES, INC.

    


    


    By:   
/s/ Charles E. Coppa

    Charles
E. Coppa,

    Chief
Financial Officer

    


    


    COMMONWEALTH
OF MASSACHUSETTS, ESSEX COUNTY, SS:

    


    On this 27th day of July, 2009, before
me, the undersigned, a Notary Public in and for said County and State,
personally appeared Charles E. Coppa, to me personally known, who being by me
duly sworn, did say that he is the Chief Financial Officer of said corporation;
that said instrument was signed on behalf of said corporation by authority of
its Board of Directors; and that the said Charles E. Coppa as such officer,
acknowledged the execution of said instrument to be the voluntary act and deed
of said corporation by it and by them voluntarily executed.

    


    


    
      	 
      	
              /s/
      Cynthia A. Gray

            
	 
      	
              NOTARY
      PUBLIC IN AND FOR THE

            
	 
      	
              COMMONWEALTH
      OF MASSACHUSETTS

            


    

    


    


    


    [SEAL]

    


    


    


    


    [Escrow
Agreement]


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    THE
BUYER:

    


    GREENMAN
ALTERNATIVE ENERGY, INC.

    


    


    By:   
 /s/ Charles E. Coppa

    Charles
E. Coppa

    Treasurer

    


    


    COMMONWEALTH
OF MASSACHUSETTS, ESSEX COUNTY, SS:

    


    On this 27th day of
July, 2009, before me, the undersigned, a Notary Public in and for said County
and State, personally appeared Charles E. Coppa, to me personally known, who
being by me duly sworn, did say that he is the Treasurer of said corporation;
that said instrument was signed on behalf of said corporation by authority of
its Board of Directors; and that the said Charles E. Coppa as such officer,
acknowledged the execution of said instrument to be the voluntary act and deed
of said corporation by it and by them voluntarily executed.

    


    


    


    
      	 
      	
              /s/
      Cynthia A. Gray

            
	 
      	
              NOTARY
      PUBLIC IN AND FOR THE

            
	 
      	
              COMMONWEALTH
      OF MASSACHUSETTS

            


    

    


    


    [SEAL]

    


    


    [Escrow
Agreement]


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    THE
SELLER:

    


    AMERICAN
POWER GROUP, INC.

    


    


    By:  
 /s/ Rick Kremer

    Rick
Kremer, President

    


    


    STATE
OF OHIO, DARKE COUNTY, SS:

    


    On this 27th day of July, 2009, before
me, the undersigned, a Notary Public in and for said County and State,
personally appeared Rick Kremer, to me personally known, who being by me duly
sworn, did say that he is the President of said corporation; that said
instrument was signed on behalf of said corporation by authority of its Board of
Directors; and that the said Rick Kremer as such officer, acknowledged the
execution of said instrument to be the voluntary act and deed of said
corporation by it and by them voluntarily executed.

    


    


    


    
      	 
      	
              /s/
      Wendy Aultman

            
	 
      	
              NOTARY
      PUBLIC IN AND FOR THE

            
	 
      	
              STATE
      OF OHIO

            


    

    


    


    


    


    [SEAL]

    


    


    


    [Escrow
Agreement]


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    THE
ESCROW AGENT:

    


    MORSE,
BARNES-BROWN & PENDLETON, P.C.

    


    


    By:
/s/ Carl F. Barnes

    Carl
F. Barnes, Vice President

    


    


    COMMONWEALTH
OF MASSACHUSETTS, MIDDLESEX COUNTY, SS:

    


    On this 27th day of July, 2009, before
me, the undersigned, a Notary Public in and for said County and Commonwealth,
personally appeared Carl F. Barnes, to me personally known, who being by me duly
sworn, did say that he is the Vice President of said corporation; that said
instrument was signed on behalf of said corporation by authority of its Board of
Directors; and that the said Carl F. Barnes as such officer, acknowledged the
execution of said instrument to be the voluntary act and deed of said
corporation by it and by them voluntarily executed.

    


    


    


    
      	 
      	
              /s/
      Kevin M. Johnson

            
	 
      	
              NOTARY
      PUBLIC IN AND FOR THE

            
	 
      	
              COMMONWEALTH
      OF MASSACHUSETTS

            


    

    


    


    


    


    [SEAL]

    


    


    Escrow
Agreement]