Document:

Exhibit 4.1

                           GREENMAN TECHNOLOGIES, INC.

                          SECURITIES PURCHASE AGREEMENT

                                  July 20, 2005
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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.    Agreement to Sell and Purchase.........................................1

2.    Fees and Option........................................................1

3.    Closing, Delivery and Payment..........................................2
      3.1     Closing........................................................2
      3.2     Delivery.......................................................2

4.    Representations and Warranties of the Company..........................2
      4.1     Organization, Good Standing and Qualification..................3
      4.2     Subsidiaries...................................................3
      4.3     Capitalization; Voting Rights..................................4
      4.4     Authorization; Binding Obligations.............................4
      4.5     Liabilities....................................................5
      4.6     Agreements; Action.............................................5
      4.7     Obligations to Related Parties.................................6
      4.8     Changes........................................................6
      4.9     Title to Properties and Assets; Liens, Etc.....................8
      4.10    Intellectual Property..........................................8
      4.11    Compliance with Other Instruments..............................8
      4.12    Litigation.....................................................9
      4.13    Tax Returns and Payments.......................................9
      4.14    Employees......................................................9
      4.15    Registration Rights and Voting Rights.........................10
      4.16    Compliance with Laws; Permits.................................10
      4.17    Environmental and Safety Laws.................................11
      4.18    Valid Offering................................................11
      4.19    Full Disclosure...............................................11
      4.20    Insurance.....................................................11
      4.21    SEC Reports...................................................12
      4.22    Listing.......................................................12
      4.23    No Integrated Offering........................................12
      4.24    Stop Transfer.................................................12
      4.25    Dilution. ....................................................12
      4.26    Patriot Act...................................................12

5.    Representations and Warranties of the Purchaser.......................13
      5.1     No Shorting...................................................13
      5.2     Requisite Power and Authority.................................13
      5.3     Investment Representations....................................14
      5.4     Purchaser Bears Economic Risk.................................14
      5.5     Acquisition for Own Account...................................14
      5.6     Purchaser Can Protect Its Interest............................14
      5.7     Accredited Investor...........................................14
      5.8     Legends.......................................................14

6.    Covenants of the Company..............................................15

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      6.1     Stop-Orders...................................................15
      6.2     Listing.......................................................16
      6.3     Market Regulations............................................16
      6.4     Reporting Requirements........................................16
      6.5     Use of Funds..................................................16
      6.6     Access to Facilities..........................................16
      6.7     Taxes.........................................................17
      6.8     Insurance.....................................................17
      6.9     Intellectual Property.........................................18
      6.10    Properties....................................................18
      6.11    Confidentiality...............................................18
      6.12    Required Approvals............................................18
      6.13    Reissuance of Securities......................................19
      6.14    Opinion.......................................................20
      6.15    Margin Stock..................................................20
      6.16    Financing Right of First Refusal..............................20
      6.17    Dissolution of Subsidiaries. .................................21

7.    Covenants of the Purchaser............................................21
      7.1     Confidentiality...............................................21
      7.2     Non-Public Information........................................21
      7.3     Limitation on Acquisition of Common Stock of the Company. ....21

8.    Covenants of the Company and Purchaser Regarding Indemnification......22
      8.1     Company Indemnification.......................................22
      8.2     Purchaser's Indemnification...................................22

9.    Conversion of Convertible Note........................................22
      9.1     Mechanics of Conversion.......................................22

10.   Registration Rights...................................................24
      10.1    Registration Rights Granted...................................24
      10.2    Offering Restrictions.........................................24

11.   Miscellaneous.........................................................24
      11.1    Governing Law.................................................24
      11.2    Survival......................................................24
      11.3    Successors....................................................24
      11.4    Entire Agreement..............................................25
      11.5    Severability..................................................25
      11.6    Amendment and Waiver..........................................25
      11.7    Delays or Omissions...........................................25
      11.8    Notices.......................................................25
      11.9    Attorneys' Fees...............................................26
      11.10   Titles and Subtitles..........................................26
      11.11   Facsimile Signatures; Counterparts............................27
      11.12   Broker's Fees.................................................27
      11.13   Construction..................................................27

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                                LIST OF EXHIBITS
--------------------------------------------------------------------------------
Form of Convertible Term Note.....................................    Exhibit A
Form of Option....................................................    Exhibit B
Form of Opinion...................................................    Exhibit C
Form of Escrow Agreement..........................................    Exhibit D

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                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of July 20, 2005, by and between GREENMAN TECHNOLOGIES, INC., a Delaware
corporation (the "Company"), and Laurus Master Fund, Ltd., a Cayman Islands
company (the "Purchaser").

                                    RECITALS

      WHEREAS, the Company has authorized the sale to the Purchaser of a
Convertible Term Note in the aggregate principal amount of One Million Dollars
($1,000,000) (the "Note"), which Note is convertible into shares of the
Company's common stock, $0.01 par value per share (the "Common Stock") at an
initial fixed conversion price of $0.33 per share of Common Stock ("Fixed
Conversion Price");

      WHEREAS, the Company wishes to issue an option to the Purchaser to
purchase up to 2,413,571 shares of the Company's Common Stock (subject to
adjustment as set forth therein) in connection with Purchaser's purchase of the
Note;

      WHEREAS, Purchaser desires to purchase the Note and the Option (as defined
in Section 2) on the terms and conditions set forth herein; and

      WHEREAS, the Company desires to issue and sell the Note and Option to
Purchaser on the terms and conditions set forth herein.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

      1. Agreement to Sell and Purchase. Pursuant to the terms and conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3), the
Company agrees to sell to the Purchaser, and the Purchaser hereby agrees to
purchase from the Company, a Note in the aggregate principal amount of
$1,000,000 convertible into shares of the Company's Common Stock in accordance
with the terms of the Note and this Agreement. The Note purchased on the Closing
Date shall be known as the "Offering." A form of the Note is annexed hereto as
Exhibit A. The Note will mature on the Maturity Date (as defined in the Note).
Collectively, the Note and Option and Common Stock issuable in payment of the
Note, upon conversion of the Note and upon exercise of the Option are referred
to as the "Securities."

      2. Fees and Option. On the Closing Date:

            (a) The Company will issue and deliver to the Purchaser an Option to
      purchase up to 2,413,571 shares of Common Stock in connection with the
      Offering (the "Option") pursuant to Section 1 hereof. The Option must be
      delivered on the Closing Date. A form of Option is annexed hereto as
      Exhibit B. All the representations, covenants, warranties, undertakings,
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      and indemnification, and other rights made or granted to or for the
      benefit of the Purchaser by the Company are hereby also made and granted
      in respect of the Option and shares of the Company's Common Stock issuable
      upon exercise of the Option (the "Option Shares").

            (b) Subject to the terms of Section 2(d) below, the Company shall
      pay to Laurus Capital Management, LLC, the manager of the Purchaser, a
      closing payment in an amount equal to three and one-half percent (3.50%)
      of the aggregate principal amount of the Note. The foregoing fee is
      referred to herein as the "Closing Payment."

            (c) The Company shall reimburse the Purchaser for its reasonable
      expenses including legal fees and expenses) incurred in connection with
      the preparation and negotiation of this Agreement and the Related
      Agreements (as hereinafter defined), and expenses incurred in connection
      with the Purchaser's due diligence review of the Company and its
      Subsidiaries (as defined in Section 6.8) and all related matters. Amounts
      required to be paid under this Section 2(c) will be paid on the Closing
      Date and shall be $10,000.00 (net of deposits previously paid by the
      Company) for such expenses referred to in this Section 2(c).

            (d) The Closing Payment and the expenses referred to in the
      preceding clause (c) (net of deposits previously paid by the Company)
      shall be paid at closing out of funds held pursuant to a Funds Escrow
      Agreement of even date herewith among the Company, Purchaser, and an
      Escrow Agent (the "Funds Escrow Agreement") and a disbursement letter (the
      "Disbursement Letter").

      3. Closing, Delivery and Payment.

      3.1 Closing. Subject to the terms and conditions herein, the closing of
the transactions contemplated hereby (the "Closing"), shall take place on the
date hereof, at such time or place as the Company and Purchaser may mutually
agree (such date is hereinafter referred to as the "Closing Date").

      3.2 Delivery. Pursuant to the Funds Escrow Agreement in the form attached
hereto as Exhibit D, at the Closing on the Closing Date, the Company will
deliver to the Purchaser, among other things, a Note in the form attached as
Exhibit A representing the aggregate principal amount of $1,000,000 and an
Option in the form attached as Exhibit B in the Purchaser's name representing
2,413,571 Option Shares and the Purchaser will deliver to the Company, among
other things, the amounts set forth in the Disbursement Letter by certified
funds or wire transfer.

      4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows (which representations and
warranties are supplemented by the Company's filings under the Securities
Exchange Act of 1934 referenced in Subsection 4.21 herein (collectively, the
"Exchange Act Filings"), copies of which have been provided to the Purchaser):

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      4.1 Organization, Good Standing and Qualification. Each of the Company and
each of its Subsidiaries is a corporation, partnership or limited liability
company, as the case may be, duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of the Company
and each of its Subsidiaries has the corporate power and authority to own and
operate its properties and assets, to execute and deliver the following
agreements to which it is a party: (i) this Agreement, (ii) the Note and the
Option to be issued in connection with this Agreement, (iii) the Master Security
Agreement dated as of June 30, 2004 between the Company, certain Subsidiaries of
the Company and the Purchaser (as amended, modified or supplemented from time to
time, the "Master Security Agreement"), (iv) the Registration Rights Agreement
relating to the Securities dated as of the date hereof between the Company and
the Purchaser (as amended, modified or supplemented from time to time, the
"Registration Rights Agreement"), (v) the Subsidiary Guaranty dated as of June
30, 2004 made by certain Subsidiaries of the Company (as amended, modified or
supplemented from time to time, the "Subsidiary Guaranty"), (vi) the Stock
Pledge Agreement dated as of June 30, 2004 among the Company, certain
Subsidiaries of the Company and the Purchaser (as amended, modified or
supplemented from time to time, the "Stock Pledge Agreement"), (vii) the Escrow
Agreement dated as of the date hereof among the Company, the Purchaser and the
escrow agent referred to therein, (viii) the Subordination Agreement dated as of
June 30, 2004 among certain affiliates and/or investors in the Company and its
Subsidiaries and the Purchaser, and acknowledged and agreed to by the Company
(as amended, modified or supplemented from time to time, the "Subordination
Agreement"), (ix) the Reaffirmation and Ratification Agreement, dated as of the
date hereof between the Company, certain Subsidiaries of the Company and the
Purchaser (as amended, modified or supplemented from time to time, the
"Reaffirmation Agreement") and (x) all other agreements related to this
Agreement and the Note and referred to herein (the preceding clauses (ii)
through (x), collectively, the "Related Agreements"), (A) to, in the case of the
Company only, issue and sell the Note and the shares of Common Stock issuable
upon conversion of the Note (the "Note Shares"), (B) to, in the case of the
Company only, issue and sell the Option and the Option Shares, and (C) in all
other cases, to carry out the provisions of this Agreement and the Related
Agreements and to carry on its business as presently conducted. Each of the
Company and each of its Subsidiaries is duly qualified and is authorized to do
business and is in good standing as a foreign corporation, partnership or
limited liability company, as the case may be, in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so has not, or could not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the business, assets, liabilities,
condition (financial or otherwise), properties, operations or prospects of the
Company and it Subsidiaries, taken individually and as a whole (a "Material
Adverse Effect").

      4.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the
direct owner of such Subsidiary and its percentage ownership thereof, is set
forth on Schedule 4.2. No Immaterial Subsidiary owns any assets (other than
immaterial assets) or has any liabilities (other than immaterial liabilities).
For the purpose of this Agreement, (x) a "Subsidiary" of any person or entity
means (i) a corporation or other entity whose shares of stock or other ownership
interests having ordinary voting power (other than stock or other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the directors of such corporation, or other persons or
entities performing similar functions for such person or entity, are owned,
directly or indirectly, by such person or entity or (ii) a corporation or other

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entity in which such person or entity owns, directly or indirectly, more than
50% of the equity interests at such time and (y) the "Immaterial Subsidiaries"
shall mean, collectively, GreenMan Technologies of South Carolina, Inc.,
GreenMan Technologies of Oklahoma, Inc., Technical Tire Recycling, Inc.,
Unlimited Tire Technologies, Inc., DuraWear Corporation and GreenMan
Technologies of Louisiana, Inc.

      4.3 Capitalization; Voting Rights.

            (a) The authorized capital stock of the Company, as of the date
      hereof consists of 41,000,000 shares, of which 40,000,000 are shares of
      Common Stock, par value $0.01 per share, 19,225,352 shares of which are
      issued and outstanding, and 1,000,000 are shares of preferred stock, par
      value $1.00 per share of which no shares of preferred stock are issued and
      outstanding. The authorized capital stock of each Subsidiary of the
      Company is set forth on Schedule 4.3.

            (b) Except as disclosed on Schedule 4.3, other than: (i) the shares
      reserved for issuance under the Company's stock option plans; and (ii)
      shares which may be granted pursuant to this Agreement and the Related
      Agreements, there are no outstanding options, warrants, rights (including
      conversion or preemptive rights and rights of first refusal), proxy or
      stockholder agreements, or arrangements or agreements of any kind for the
      purchase or acquisition from the Company of any of its securities. Except
      as disclosed on Schedule 4.3, neither the offer, issuance or sale of any
      of the Note or the Option, or the issuance of any of the Note Shares or
      Option Shares, nor the consummation of any transaction contemplated hereby
      will result in a change in the price or number of any securities of the
      Company outstanding, under anti-dilution or other similar provisions
      contained in or affecting any such securities.

            (c) All issued and outstanding shares of the Company's Common Stock:
      (i) have been duly authorized and validly issued and are fully paid and
      nonassessable; and (ii) were issued in compliance with all applicable
      state and federal laws concerning the issuance of securities.

            (d) The rights, preferences, privileges and restrictions of the
      shares of the Common Stock are as stated in the Company's Certificate of
      Incorporation (the "Charter"). The Note Shares and Option Shares have been
      duly and validly reserved for issuance. When issued in compliance with the
      provisions of this Agreement, the Note or Option, as applicable, and the
      Company's Charter, the Note Shares and Option Shares will be validly
      issued, fully paid and nonassessable. When issued in compliance with the
      terms of this Agreement, the Note or the Option, as applicable, and
      Company's Charter, the Securities will be free of any liens or
      encumbrances; provided, however, that the Securities may be subject to
      restrictions on transfer under state and/or federal securities laws as set
      forth herein or as otherwise required by such laws at the time a transfer
      is proposed.

      4.4 Authorization; Binding Obligations. All corporate, partnership or
limited liability company, as the case may be, action on the part of the Company
and each of its Subsidiaries (including the respective officers and directors)
necessary for the authorization of this Agreement and the Related Agreements to
which it is a party, the performance of all obligations of the Company and its

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Subsidiaries hereunder and under the other Related Agreements to which it is a
party at the Closing and, in the case of the Company only, the authorization,
sale, issuance and delivery of the Note and Option has been taken or will be
taken prior to the Closing. This Agreement and the Related Agreements, when
executed and delivered and to the extent it is a party thereto, will be valid
and binding obligations of each of the Company and each of its Subsidiaries,
enforceable against each such person in accordance with their terms, except:

            (a) as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or other laws of general application affecting enforcement of
      creditors' rights; and

            (b) general principles of equity that restrict the availability of
      equitable or legal remedies.

The sale of the Note and the subsequent conversion of the Note into Note Shares
are not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with. The issuance of the
Option and the subsequent exercise of the Option for Option Shares are not and
will not be subject to any preemptive rights or rights of first refusal that
have not been properly waived or complied with.

      4.5 Liabilities. Neither the Company nor any of its Subsidiaries has any
contingent liabilities, except current liabilities incurred in the ordinary
course of business and liabilities disclosed in any Exchange Act Filings.

      4.6 Agreements; ActionExcept as set forth on Schedule 4.6 or as disclosed
in any Exchange Act Filings:

            (a) there are no agreements, understandings, instruments, contracts,
      proposed transactions, judgments, orders, writs or decrees to which the
      Company or any of its Subsidiaries is a party or by which it is bound
      which may involve: (i) obligations (contingent or otherwise) of, or
      payments to, the Company in excess of $50,000 (other than obligations of,
      or payments to, the Company arising from purchase or sale agreements
      entered into in the ordinary course of business); or (ii) the transfer or
      license of any patent, copyright, trade secret or other proprietary right
      to or from the Company (other than licenses arising from the purchase of
      "off the shelf" or other standard products); or (iii) provisions
      restricting the development, manufacture or distribution of the Company's
      products or services; or (iv) indemnification by the Company with respect
      to infringements of proprietary rights.

            (b) Since September 30, 2004, neither the Company nor any of its
      Subsidiaries has: (i) declared or paid any dividends, or authorized or
      made any distribution upon or with respect to any class or series of its
      capital stock; (ii) incurred any indebtedness for money borrowed or any
      other liabilities (other than ordinary course obligations) individually in
      excess of $50,000 or, in the case of indebtedness and/or liabilities
      individually less than $50,000, in excess of $100,000 in the aggregate;

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      (iii) made any loans or advances to any person not in excess, individually
      or in the aggregate, of $100,000, other than ordinary course advances for
      travel expenses; or (iv) sold, exchanged or otherwise disposed of any of
      its assets or rights, other than the sale of its inventory in the ordinary
      course of business.

            (c) For the purposes of subsections (a) and (b) above, all
      indebtedness, liabilities, agreements, understandings, instruments,
      contracts and proposed transactions involving the same person or entity
      (including persons or entities the Company has reason to believe are
      affiliated therewith) shall be aggregated for the purpose of meeting the
      individual minimum dollar amounts of such subsections.

      4.7 Obligations to Related PartiesExcept as set forth on Schedule 4.7,
there are no obligations of the Company or any of its Subsidiaries to officers,
directors, stockholders or employees of the Company or any of its Subsidiaries
other than:

            (a) for payment of salary for services rendered and for bonus
      payments;

            (b) reimbursement for reasonable expenses incurred on behalf of the
      Company and its Subsidiaries;

            (c) for other standard employee benefits made generally available to
      all employees (including stock option agreements outstanding under any
      stock option plan approved by the Board of Directors of the Company); and

            (d) obligations listed in the Company's financial statements or
      disclosed in any of its Exchange Act Filings.

Except as described above or set forth on Schedule 4.7 or as disclosed in any
Exchange Act Filings, none of the officers, directors or, to the best of the
Company's knowledge, key employees or stockholders of the Company or any members
of their immediate families, are indebted to the Company, individually or in the
aggregate, in excess of $50,000 or have any direct or indirect ownership
interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation which
competes with the Company, other than passive investments in publicly traded
companies (representing less than one percent (1%) of such company) which may
compete with the Company. Except as described above or set forth on Schedule 4.7
or as disclosed in any Exchange Act Filings, no officer, director or
stockholder, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company and no
agreements, understandings or proposed transactions are contemplated between the
Company and any such person. Except as set forth on Schedule 4.7 or as disclosed
in any Exchange Act Filings, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.

      4.8 Changes. Since September 30, 2004, except as disclosed in any Exchange
Act Filing or in any Schedule to this Agreement or to any of the Related
Agreements, there has not been:

            (a) any change in the business, assets, liabilities, condition
      (financial or otherwise), properties, operations or prospects of the
      Company or any of its Subsidiaries, which individually or in the aggregate
      which has had, or could reasonably be expected to have, individually or in
      the aggregate, a Material Adverse Effect;

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            (b) any resignation or termination of any officer, key employee or
      group of employees of the Company or any of its Subsidiaries;

            (c) any material change, except in the ordinary course of business,
      in the contingent obligations of the Company or any of its Subsidiaries by
      way of guaranty, endorsement, indemnity, warranty or otherwise;

            (d) any damage, destruction or loss, whether or not covered by
      insurance, which has had, or could reasonably be expected to have,
      individually or in the aggregate, a Material Adverse Effect;

            (e) any waiver by the Company or any of its Subsidiaries of a
      valuable right or of a material debt owed to it;

            (f) any direct or indirect loans made by the Company or any of its
      Subsidiaries to any stockholder, employee, officer or director of the
      Company or any of its Subsidiaries, other than advances made in the
      ordinary course of business;

            (g) any material change in any compensation arrangement or agreement
      with any employee, officer, director or stockholder of the Company or any
      of its Subsidiaries;

            (h) any declaration or payment of any dividend or other distribution
      of the assets of the Company or any of its Subsidiaries;

            (i) any labor organization activity related to the Company or any of
      its Subsidiaries;

            (j) any debt, obligation or liability incurred, assumed or
      guaranteed by the Company or any of its Subsidiaries, except those for
      immaterial amounts and for current liabilities incurred in the ordinary
      course of business;

            (k) any sale, assignment or transfer of any patents, trademarks,
      copyrights, trade secrets or other intangible assets owned by the Company
      or any of its Subsidiaries;

            (l) any change in any material agreement to which the Company or any
      of its Subsidiaries is a party or by which either the Company or any of
      its Subsidiaries is bound which either individually or in the aggregate
      has had, or could reasonably be expected to have, individually or in the
      aggregate, a Material Adverse Effect;

            (m) any other event or condition of any character that, either
      individually or in the aggregate, has had, or could reasonably be expected
      to have, individually or in the aggregate, a Material Adverse Effect; or

            (n) any arrangement or commitment by the Company or any of its
      Subsidiaries to do any of the acts described in subsection (a) through (m)
      above.

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      4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on
Schedule 4.9 or as disclosed in any Exchange Act Filings, each of the Company
and each of its Subsidiaries has good and marketable title to its properties and
assets, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than:

            (a) those resulting from taxes which have not yet become delinquent;

            (b) minor liens and encumbrances which do not materially detract
      from the value of the property subject thereto or materially impair the
      operations of the Company or any of its Subsidiaries; and

            (c) those that have otherwise arisen in the ordinary course of
      business.

All facilities, machinery, equipment, fixtures, vehicles and other properties
owned, leased or used by the Company and its Subsidiaries are in good operating
condition and repair and are reasonably fit and usable for the purposes for
which they are being used. Except as set forth on Schedule 4.9 or as disclosed
in any Exchange Act Filings, the Company and its Subsidiaries are in compliance
with all material terms of each lease to which it is a party or is otherwise
bound.

      4.10 Intellectual Property.

            (a) Each of the Company and each of its Subsidiaries owns or
      possesses sufficient legal rights to all patents, trademarks, service
      marks, trade names, copyrights, trade secrets, licenses, information and
      other proprietary rights and processes necessary for its business as now
      conducted and to the Company's knowledge, as presently proposed to be
      conducted (the "Intellectual Property"), without any known infringement of
      the rights of others. There are no outstanding options, licenses or
      agreements of any kind relating to the foregoing proprietary rights, nor
      is the Company or any of its Subsidiaries bound by or a party to any
      options, licenses or agreements of any kind with respect to the patents,
      trademarks, service marks, trade names, copyrights, trade secrets,
      licenses, information and other proprietary rights and processes of any
      other person or entity other than such licenses or agreements arising from
      the purchase of "off the shelf" or standard products.

            (b) Neither the Company nor any of its Subsidiaries has received any
      communications alleging that the Company or any of its Subsidiaries has
      violated any of the patents, trademarks, service marks, trade names,
      copyrights or trade secrets or other proprietary rights of any other
      person or entity, nor is the Company or any of its Subsidiaries aware of
      any basis therefor.

            (c) The Company does not believe it is or will be necessary to
      utilize any inventions, trade secrets or proprietary information of any of
      its employees made prior to their employment by the Company or any of its
      Subsidiaries, except for inventions, trade secrets or proprietary
      information that have been rightfully assigned to the Company or any of
      its Subsidiaries.

      4.11 Compliance with Other Instruments. Neither the Company nor any of its
Subsidiaries is in violation or default of (x) any term of its Charter or
Bylaws, or (y) of any provision of any indebtedness, mortgage, indenture,

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contract, agreement or instrument to which it is party or by which it is bound
or of any judgment, decree, order or writ, which violation or default, in the
case of this clause (y), has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. The
execution, delivery and performance of and compliance with this Agreement and
the Related Agreements to which it is a party, and the issuance and sale of the
Note by the Company and the other Securities by the Company each pursuant hereto
and thereto, will not, with or without the passage of time or giving of notice,
result in any such material violation, or be in conflict with or constitute a
default under any such term or provision, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or any of its Subsidiaries or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to the Company, its business or operations or any of its
assets or properties.

      4.12 Litigation. Except as set forth on Schedule 4.12 hereto or as
disclosed in any Exchange Act Filings, there is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company or any of its Subsidiaries that prevents the Company or any
of its Subsidiaries from entering into this Agreement or the other Related
Agreements, or from consummating the transactions contemplated hereby or
thereby, or which has had, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or any change in the
current equity ownership of the Company or any of its Subsidiaries, nor is the
Company aware that there is any basis to assert any of the foregoing. Neither
the Company nor any of its Subsidiaries is a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company or any of its Subsidiaries currently pending or which the Company
or any of its Subsidiaries intends to initiate.

      4.13 Tax Returns and Payments. Each of the Company and each of its
Subsidiaries has timely filed all tax returns (federal, state and local)
required to be filed by it. All taxes shown to be due and payable on such
returns, any assessments imposed, and all other taxes due and payable by the
Company or any of its Subsidiaries on or before the Closing, have been paid or
will be paid prior to the time they become delinquent. Except as set forth on
Schedule 4.13 or as disclosed in any Exchange Act Filings, neither the Company
nor any of its Subsidiaries has been advised:

            (a) that any of its returns, federal, state or other, have been or
      are being audited as of the date hereof; or

            (b) of any deficiency in assessment or proposed judgment to its
      federal, state or other taxes.

The Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the date of this Agreement that is not adequately
provided for.

      4.14 Employees. Except as set forth on Schedule 4.14 or as disclosed in
any Exchange Act Filings, neither the Company nor any of its Subsidiaries has
any collective bargaining agreements with any of its employees. There is no
labor union organizing activity pending or, to the Company's knowledge,

                                        9
<PAGE>

threatened with respect to the Company or any of its Subsidiaries. Except as
disclosed in the Exchange Act Filings or on Schedule 4.14, neither the Company
nor any of its Subsidiaries is a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other employee compensation
plan or agreement. To the Company's knowledge, no employee of the Company or any
of its Subsidiaries, nor any consultant with whom the Company or any of its
Subsidiaries has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Company or any of its Subsidiaries because of the nature of the business to be
conducted by the Company or any of its Subsidiaries; and to the Company's
knowledge the continued employment by the Company or any of its Subsidiaries of
its present employees, and the performance of the Company's and its
Subsidiaries' contracts with its independent contractors, will not result in any
such violation. Neither the Company nor any of its Subsidiaries is aware that
any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with their duties to the Company or any of its Subsidiaries. Neither
the Company nor any of its Subsidiaries has received any notice alleging that
any such violation has occurred. Except for employees who have a current
effective employment agreement with the Company or any of its Subsidiaries, no
employee of the Company or any of its Subsidiaries has been granted the right to
continued employment by the Company or any of its Subsidiaries or to any
material compensation following termination of employment with the Company or
any of its Subsidiaries. Except as set forth on Schedule 4.14 or as disclosed in
any Exchange Act Filings, the Company is not aware that any officer, key
employee or group of employees intends to terminate his, her or their employment
with the Company or any of its Subsidiaries, nor does the Company or any of its
Subsidiaries have a present intention to terminate the employment of any
officer, key employee or group of employees.

      4.15 Registration Rights and Voting Rights. Except as set forth on
Schedule 4.15 and except as disclosed in Exchange Act Filings, neither the
Company nor any of its Subsidiaries is presently under any obligation, and
neither the Company nor any of its Subsidiaries has granted any rights, to
register any of the Company's or its Subsidiaries' presently outstanding
securities or any of its securities that may hereafter be issued. Except as set
forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, to the
Company's knowledge, no stockholder of the Company or any of its Subsidiaries
has entered into any agreement with respect to the voting of equity securities
of the Company or any of its Subsidiaries.

      4.16 Compliance with Laws; Permits. Neither the Company nor any of its
Subsidiaries is in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which has had, or could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. No governmental
orders, permissions, consents, approvals or authorizations are required to be
obtained and no registrations or declarations are required to be filed in
connection with the execution and delivery of this Agreement or any other
Related Agreement and the issuance of any of the Securities, except such as has
been duly and validly obtained or filed, or with respect to any filings that
must be made after the Closing, as will be filed in a timely manner. Each of the
Company and its Subsidiaries has all material franchises, permits, licenses and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

                                       10
<PAGE>

      4.17 Environmental and Safety Laws. Neither the Company nor any of its
Subsidiaries is in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation. Except as set forth on
Schedule 4.17, no Hazardous Materials (as defined below) are used or have been
used, stored, or disposed of by the Company or any of its Subsidiaries or, to
the Company's knowledge, by any other person or entity on any property owned,
leased or used by the Company or any of its Subsidiaries. For the purposes of
the preceding sentence, "Hazardous Materials" shall mean:

            (a) materials which are listed or otherwise defined as "hazardous"
      or "toxic" under any applicable local, state, federal and/or foreign laws
      and regulations that govern the existence and/or remedy of contamination
      on property, the protection of the environment from contamination, the
      control of hazardous wastes, or other activities involving hazardous
      substances, including building materials; or

            (b) any petroleum products or nuclear materials.

      4.18 Valid Offering. Assuming the accuracy of the representations and
warranties of the Purchaser contained in this Agreement, the offer, sale and
issuance of the Securities will be exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and will have
been registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws.

      4.19 Full Disclosure. Each of the Company and each of its Subsidiaries has
provided the Purchaser with all information requested by the Purchaser in
connection with its decision to purchase the Note and Option, including all
information the Company and its Subsidiaries believe is reasonably necessary to
make such investment decision. Neither this Agreement, the Related Agreements,
the exhibits and schedules hereto and thereto nor any other document delivered
by the Company or any of its Subsidiaries to Purchaser or its attorneys or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, contain any untrue statement of a material fact nor omit to
state a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances in which they are made, not
misleading. Any financial projections and other estimates provided to the
Purchaser by the Company or any of its Subsidiaries were based on the Company's
and its Subsidiaries' experience in the industry and on assumptions of fact and
opinion as to future events which the Company or any of its Subsidiaries, at the
date of the issuance of such projections or estimates, believed to be
reasonable.

      4.20 Insurance. Each of the Company and each of its Subsidiaries has
general commercial, product liability, fire and casualty insurance policies with
coverages which the Company believes are customary for companies similarly
situated to the Company and its Subsidiaries in the same or similar business.

                                       11
<PAGE>

      4.21 SEC Reports. Except as set forth on Schedule 4.21, the Company has
filed all proxy statements, reports and other documents required to be filed by
it under the Securities Exchange Act 1934, as amended (the "Exchange Act"). The
Company has furnished the Purchaser with copies of: (i) its Annual Report on
Form 10-KSB for its fiscal year ended September 30, 2004; (ii) its Quarterly
Reports on Form 10-QSB for its fiscal quarters ended December 31, 2004 and March
31, 2005; and (iii) the Form 8-K filings which it has made during the current
fiscal year to date (collectively, the "SEC Reports"). Except as set forth on
Schedule 4.21, each SEC Report was, at the time of its filing, in substantial
compliance with the requirements of its respective form and none of the SEC
Reports, nor the financial statements (and the notes thereto) included in the
SEC Reports, as of their respective filing dates, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

      4.22 Listing. The Company's Common Stock is listed for trading on the
American Stock Exchange ("AMEX") and satisfies all requirements for the
continuation of such listing. The Company has not received any notice that its
Common Stock will be delisted from AMEX or that its Common Stock does not meet
all requirements for listing.

      4.23 No Integrated Offering. Neither the Company, nor any of its
Subsidiaries or affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security (other than a concurrent offering to the Purchaser in
connection with the Security Agreement, dated as of the date hereof, by and
between the Company, certain Subsidiaries of the Company and the Purchaser (as
amended, modified or supplemented from time to time, the "Security Agreement"))
under circumstances that would cause the offering of the Securities pursuant to
this Agreement or any of the Related Agreements to be integrated with prior
offerings by the Company for purposes of the Securities Act which would prevent
the Company from selling the Securities pursuant to Rule 506 under the
Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or Subsidiaries take
any action or steps that would cause the offering of the Securities to be
integrated with other offerings.

      4.24 Stop Transfer. The Securities are restricted securities as of the
date of this Agreement. Neither the Company nor any of its Subsidiaries will
issue any stop transfer order or other order impeding the sale and delivery of
any of the Securities at such time as the Securities are registered for public
sale or an exemption from registration is available, except as required by state
and federal securities laws.

      4.25 Dilution. The Company specifically acknowledges that its obligation
to issue the shares of Common Stock upon conversion of the Note and exercise of
the Option is binding upon the Company and enforceable regardless of the
dilution such issuance may have on the ownership interests of other shareholders
of the Company.

      4.26 Patriot Act. The Company certifies that, to the best of Company's
knowledge, neither the Company nor any of its Subsidiaries has been designated,
and is not owned or controlled, by a "suspected terrorist" as defined in
Executive Order 13224. The Company hereby acknowledges that the Purchaser seeks
to comply with all applicable laws concerning money laundering and related

                                       12
<PAGE>

activities. In furtherance of those efforts, the Company hereby represents,
warrants and agrees that: (i) none of the cash or property that the Company or
any of its Subsidiaries will pay or will contribute to the Purchaser has been or
shall be derived from, or related to, any activity that is deemed criminal under
United States law; and (ii) no contribution or payment by the Company or any of
its Subsidiaries to the Purchaser, to the extent that they are within the
Company's and/or its Subsidiaries' control shall cause the Purchaser to be in
violation of the United States Bank Secrecy Act, the United States International
Money Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Company shall
promptly notify the Purchaser if any of these representations ceases to be true
and accurate regarding the Company or any of its Subsidiaries. The Company
agrees to provide the Purchaser any additional information regarding the Company
or any of its Subsidiaries that the Purchaser deems necessary or convenient to
ensure compliance with all applicable laws concerning money laundering and
similar activities. The Company understands and agrees that if at any time it is
discovered that any of the foregoing representations are incorrect, or if
otherwise required by applicable law or regulation related to money laundering
similar activities, the Purchaser may undertake appropriate actions to ensure
compliance with applicable law or regulation, including but not limited to
segregation and/or redemption of the Purchaser's investment in the Company. The
Company further understands that the Purchaser may release confidential
information about the Company and its Subsidiaries and, if applicable, any
underlying beneficial owners, to proper authorities if the Purchaser, in its
sole discretion, determines that it is in the best interests of the Purchaser in
light of relevant rules and regulations under the laws set forth in subsection
(ii) above.

      5. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows (such representations and
warranties do not lessen or obviate the representations and warranties of the
Company set forth in this Agreement):

      5.1 No Shorting. The Purchaser or any of its affiliates and investment
partners has not, will not and will not cause any person or entity, directly or
indirectly, to engage in "short sales" of the Company's Common Stock as long as
the Note shall be outstanding.

      5.2 Requisite Power and Authority. The Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
corporate action on Purchaser's part required for the lawful execution and
delivery of this Agreement and the Related Agreements have been or will be
effectively taken prior to the Closing. Upon their execution and delivery, this
Agreement and the Related Agreements will be valid and binding obligations of
Purchaser, enforceable in accordance with their terms, except:

            (a) as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or other laws of general application affecting enforcement of
      creditors' rights; and

            (b) as limited by general principles of equity that restrict the
      availability of equitable and legal remedies.

                                       13
<PAGE>

      5.3 Investment Representations. Purchaser understands that the Securities
are being offered and sold pursuant to an exemption from registration contained
in the Securities Act based in part upon Purchaser's representations contained
in the Agreement, including, without limitation, that the Purchaser is an
"accredited investor" within the meaning of Regulation D under the Securities
Act of 1933, as amended (the "Securities Act"). The Purchaser confirms that it
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect to
the Note and the Option to be purchased by it under this Agreement and the Note
Shares and the Option Shares acquired by it upon the conversion of the Note and
the exercise of the Option, respectively. The Purchaser further confirms that it
has had an opportunity to ask questions and receive answers from the Company
regarding the Company's and its Subsidiaries' business, management and financial
affairs and the terms and conditions of the Offering, the Note, the Option and
the Securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to the Purchaser or to
which the Purchaser had access.

      5.4 Purchaser Bears Economic Risk. The Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. The Purchaser must bear the economic risk
of this investment until the Securities are sold pursuant to: (i) an effective
registration statement under the Securities Act; or (ii) an exemption from
registration is available with respect to such sale.

      5.5 Acquisition for Own Account. The Purchaser is acquiring the Note and
Option and the Note Shares and the Option Shares for the Purchaser's own account
for investment only, and not as a nominee or agent and not with a view towards
or for resale in connection with their distribution.

      5.6 Purchaser Can Protect Its Interest. The Purchaser represents that by
reason of its, or of its management's, business and financial experience, the
Purchaser has the capacity to evaluate the merits and risks of its investment in
the Note, the Option and the Securities and to protect its own interests in
connection with the transactions contemplated in this Agreement and the Related
Agreements. Further, Purchaser is aware of no publication of any advertisement
in connection with the transactions contemplated in the Agreement or the Related
Agreements.

      5.7 Accredited Investor. Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.

      5.8 Legends.

            (a) The Note shall bear substantially the following legend:

            "THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
            NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE
            COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD,

                                       14
<PAGE>

            OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
            EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES
            UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
            COUNSEL REASONABLY SATISFACTORY TO GREENMAN TECHNOLOGIES, INC. THAT
            SUCH REGISTRATION IS NOT REQUIRED."

            (b) The Note Shares and the Option Shares, if not issued by DWAC
      system (as hereinafter defined), shall bear a legend which shall be in
      substantially the following form until such shares are covered by an
      effective registration statement filed with the SEC:

            "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
            UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
            STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
            SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
            REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE
            STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
            GREENMAN TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

            (c) The Option shall bear substantially the following legend:

            "THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
            OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS OPTION AND
            THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE
            SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
            EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION OR THE UNDERLYING
            SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE
            SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
            GREENMAN TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

      6. Covenants of the Company. The Company covenants and agrees with the
Purchaser as follows:

      6.1 Stop-Orders. The Company will advise the Purchaser, promptly after it
receives notice of issuance by the Securities and Exchange Commission (the
"SEC"), any state securities commission or any other regulatory authority of any
stop order or of any order preventing or suspending any offering of any

                                       15
<PAGE>

securities of the Company, or of the suspension of the qualification of the
Common Stock of the Company for offering or sale in any jurisdiction, or the
initiation of any proceeding for any such purpose.

      6.2 Listing. The Company shall promptly secure the listing of the shares
of Common Stock issuable upon conversion of the Note and upon the exercise of
the Option on the AMEX (the "Principal Market") upon which shares of Common
Stock are listed (subject to official notice of issuance) and shall maintain
such listing so long as any other shares of Common Stock shall be so listed. The
Company will maintain the listing of its Common Stock on the Principal Market,
and will comply in all material respects with the Company's reporting, filing
and other obligations under the bylaws or rules of the AMEX and such other
exchanges, as applicable.

      6.3 Market Regulations. The Company shall notify the SEC, the National
Association of Securities Dealers ("NASD") and applicable state authorities, in
accordance with their requirements, of the transactions contemplated by this
Agreement, and shall take all other necessary action and proceedings as may be
required and permitted by applicable law, rule and regulation, for the legal and
valid issuance of the Securities to the Purchaser and promptly provide copies
thereof to the Purchaser.

      6.4 Reporting Requirements. The Company will timely file with the SEC all
reports required to be filed pursuant to the Exchange Act and refrain from
terminating its status as an issuer required by the Exchange Act to file reports
thereunder even if the Exchange Act or the rules or regulations thereunder would
permit such termination.

      6.5 Use of Funds. The Company agrees that it will use the proceeds of the
Note and the Option for immaterial equipment purchases and general working
capital purposes only.

      6.6 Access to Facilities. Each of the Company and each of its Subsidiaries
will permit any representatives designated by the Purchaser (or any successor of
the Purchaser), upon reasonable notice and during normal business hours, at such
person's expense and accompanied by a representative of the Company, to:

            (a) visit and inspect any of the properties of the Company or any of
      its Subsidiaries;

            (b) examine the corporate and financial records of the Company or
      any of its Subsidiaries (unless such examination is not permitted by
      federal, state or local law or by contract) and make copies thereof or
      extracts therefrom; and

            (c) discuss the affairs, finances and accounts of the Company or any
      of its Subsidiaries with the directors, officers and independent
      accountants of the Company or any of its Subsidiaries.

Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries
will provide any material, non-public information to the Purchaser unless the
Purchaser signs a confidentiality agreement and otherwise complies with
Regulation FD, under the federal securities laws.

                                       16
<PAGE>

      6.7 Taxes. Each of the Company and each of its Subsidiaries will promptly
pay and discharge, or cause to be paid and discharged, when due and payable, all
lawful taxes, assessments and governmental charges or levies imposed upon the
income, profits, property or business of the Company and its Subsidiaries;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company and/or such Subsidiary shall have set
aside on its books adequate reserves with respect thereto, and provided,
further, that the Company and its Subsidiaries will pay all such taxes,
assessments, charges or levies forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefor.

      6.8 Insurance. Each of the Company and its Subsidiaries will keep its
assets which are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, explosion and other risks
customarily insured against by companies in similar business similarly situated
as the Company and its Subsidiaries; and the Company and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons and property to the extent and in the
manner which the Company reasonably believes is customary for companies in
similar business similarly situated as the Company and its Subsidiaries and to
the extent available on commercially reasonable terms. The Company, and each of
its Subsidiaries will jointly and severally bear the full risk of loss from any
loss of any nature whatsoever with respect to the assets pledged to the
Purchaser as security for its obligations hereunder and under the Related
Agreements. At the Company's and each of its Subsidiaries' joint and several
cost and expense in amounts and with carriers reasonably acceptable to
Purchaser, the Company and each of its Subsidiaries shall (i) keep all its
insurable properties and properties in which it has an interest insured against
the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary
in the case of companies engaged in businesses similar to the Company's or the
respective Subsidiary's including business interruption insurance; (ii) maintain
a bond in such amounts as is customary in the case of companies engaged in
businesses similar to the Company's or the respective Subsidiary's insuring
against larceny, embezzlement or other criminal misappropriation of insured's
officers and employees who may either singly or jointly with others at any time
have access to the assets or funds of the Company or any of its Subsidiaries
either directly or through governmental authority to draw upon such funds or to
direct generally the disposition of such assets; (iii) maintain public and
product liability insurance against claims for personal injury, death or
property damage suffered by others; (iv) maintain all such worker's compensation
or similar insurance as may be required under the laws of any state or
jurisdiction in which the Company or the respective Subsidiary is engaged in
business; and (v) furnish Purchaser with (x) copies of all policies and evidence
of the maintenance of such policies at least thirty (30) days before any
expiration date, (y) excepting the Company's workers' compensation policy,
endorsements to such policies naming Purchaser as "co-insured" or "additional
insured" and appropriate loss payable endorsements in form and substance
satisfactory to Purchaser, naming Purchaser as loss payee, and (z) evidence that
as to Purchaser the insurance coverage shall not be impaired or invalidated by
any act or neglect of the Company or any Subsidiary and the insurer will provide
Purchaser with at least thirty (30) days notice prior to cancellation. The
Company and each Subsidiary shall instruct the insurance carriers that in the
event of any loss thereunder, the carriers shall make payment for such loss to
the Company and/or the Subsidiary and Purchaser jointly. In the event that as of

                                       17
<PAGE>

the date of receipt of each loss recovery upon any such insurance, the Purchaser
has not declared an event of default with respect to this Agreement or any of
the Related Agreements, then the Company and/or such Subsidiary shall be
permitted to direct the application of such loss recovery proceeds toward
investment in property, plant and equipment that would comprise "Collateral"
secured by Purchaser's security interest pursuant to its security agreement,
with any surplus funds to be applied toward payment of the obligations of the
Company to Purchaser. In the event that Purchaser has properly declared an event
of default with respect to this Agreement or any of the Related Agreements, then
all loss recoveries received by Purchaser upon any such insurance thereafter may
be applied to the obligations of the Company hereunder and under the Related
Agreements, in such order as the Purchaser may determine. Any surplus (following
satisfaction of all Company obligations to Purchaser) shall be paid by Purchaser
to the Company or applied as may be otherwise required by law. Any deficiency
thereon shall be paid by the Company or the Subsidiary, as applicable, to
Purchaser, on demand.

      6.9 Intellectual Property. Each of the Company and each of its
Subsidiaries shall maintain in full force and effect its existence, rights and
franchises and all licenses and other rights to use Intellectual Property owned
or possessed by it and reasonably deemed to be necessary to the conduct of its
business.

      6.10 Properties. Each of the Company and each of its Subsidiaries will
keep its properties in good repair, working order and condition, reasonable wear
and tear excepted, and from time to time make all needful and proper repairs,
renewals, replacements, additions and improvements thereto; and each of the
Company and each of its Subsidiaries will at all times comply with each
provision of all leases to which it is a party or under which it occupies
property if the breach of such provision could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

      6.11 Confidentiality. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of the Purchaser, unless
expressly agreed to by the Purchaser or unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement. Notwithstanding the foregoing, the Company may disclose Purchaser's
identity and the terms of this Agreement to its current and prospective debt and
equity financing sources.

      6.12 Required Approvals. (I) For so long as twenty-five percent (25%) of
the principal amount of the Note is outstanding, the Company, without the prior
written consent of the Purchaser, shall not, and shall not permit any of its
Subsidiaries to:

            (a) (i) directly or indirectly declare or pay any dividends, other
      than dividends paid to the Company or any of its wholly-owned
      Subsidiaries, (ii) issue any preferred stock that is manditorily
      redeemable by the holder thereof prior to the one year anniversary of the
      Maturity Date or (iii) redeem any of its preferred stock or other equity
      interests;

            (b) liquidate, dissolve or effect a material reorganization (it
      being understood that in no event shall the Company dissolve, liquidate or
      merge with any other person or entity (unless the Company is the surviving
      entity);

                                       18
<PAGE>

            (c) become subject to (including, without limitation, by way of
      amendment to or modification of) any agreement or instrument which by its
      terms would (under any circumstances) restrict the Company's or any of its
      Subsidiaries right to perform the provisions of this Agreement, any
      Related Agreement or any of the agreements contemplated hereby or thereby;

            (d) materially alter or change the scope of the business of the
      Company and its Subsidiaries taken as a whole;

            (e) (i) create, incur, assume or suffer to exist any indebtedness
      (exclusive of trade debt and debt incurred to finance the purchase of
      equipment (not in excess of five percent (5%) per annum of the fair market
      value of the Company's assets) whether secured or unsecured other than (x)
      the Company's indebtedness to Laurus, (y) indebtedness set forth on
      Schedule 6.12(e) attached hereto and made a part hereof and any
      refinancings or replacements thereof on terms no less favorable to the
      Purchaser than the indebtedness being refinanced or replaced, and (z) any
      debt incurred in connection with the purchase of assets in the ordinary
      course of business, or any refinancings or replacements thereof on terms
      no less favorable to the Purchaser than the indebtedness being refinanced
      or replaced; (ii) cancel any debt owing to it in excess of $50,000 in the
      aggregate during any 12 month period; (iii) assume, guarantee, endorse or
      otherwise become directly or contingently liable in connection with any
      obligations of any other Person, and except the endorsement of negotiable
      instruments by the Company for deposit or collection or similar
      transactions in the ordinary course of business or guarantees of
      indebtedness otherwise permitted to be outstanding pursuant to this clause
      (e); and

            (f) with respect to the Company and each of its Subsidiaries (other
      than GreenMan Technologies of Iowa, Inc. ("GreenMan Iowa"), GreenMan
      Technologies of California, Inc. ("GreenMan California") and the
      Immaterial Subsidiaries) transfer any of their respective assets, or merge
      with or consolidate into, or maintain any assets in, make any investments
      in or make any loans or advances to, GreenMan Iowa, GreenMan California or
      any Immaterial Subsidiary, other than immaterial asset transfers, assets
      maintained, investments, loans or advances, in each case, made in the
      ordinary course of business.

(II) The Company, without the prior written consent of the Purchaser, shall not,
and shall not permit any of its Subsidiaries to, create or acquire any
Subsidiary after the date hereof unless (i) such Subsidiary is a wholly-owned
Subsidiary of the Company and (ii) such Subsidiary becomes a party to the Master
Security Agreement, the Stock Pledge Agreement and the Subsidiary Guaranty
(either by executing a counterpart thereof or an assumption or joinder agreement
in respect thereof) and, to the extent required by the Purchaser, satisfies each
condition of this Agreement and the Related Agreements as if such Subsidiary
were a Subsidiary on the Closing Date.

      6.13 Reissuance of Securities. The Company agrees to reissue certificates
representing the Securities without the legends set forth in Section 5.8 above
at such time as:

                                       19
<PAGE>

            (a) the holder thereof is permitted to dispose of such Securities
      pursuant to Rule 144(k) under the Securities Act; or

            (b) upon resale subject to an effective registration statement after
      such Securities are registered under the Securities Act.

The Company agrees to cooperate with the Purchaser in connection with all
resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions
necessary to allow such resales provided the Company and its counsel receive
reasonably requested representations from the selling Purchaser and broker, if
any.

      6.14 Opinion. On the Closing Date, the Company will deliver to the
Purchaser an opinion acceptable to the Purchaser from the Company's external
legal counsel. The Company will provide, at the Company's expense, such other
legal opinions in the future as are deemed reasonably necessary by the Purchaser
(and acceptable to the Purchaser) in connection with the conversion of the Note
and exercise of the Option.

      6.15 Margin Stock. The Company will not permit any of the proceeds of the
Note or the Option to be used directly or indirectly to "purchase" or "carry"
"margin stock" or to repay indebtedness incurred to "purchase" or "carry"
"margin stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect.

      6.16 Financing Right of First Refusal. (a) The Company hereby grants to
the Purchaser a right of first refusal to provide any Additional Financing (as
defined below) to be issued by the Company and/or any of its Subsidiaries,
subject to the following terms and conditions. Prior to the incurrence of
additional indebtedness or the issuance of any additional equity interests (an
"Additional Financing"), in each case, after the date hereof, the Company and/or
any Subsidiary of the Company, as the case may be, shall notify the Purchaser of
its intention to enter into such Additional Financing, together with the terms
that such proposed Additional Financing will be subject to. In connection
therewith, the Company and/or the applicable Subsidiary thereof shall submit a
fully executed term sheet (a "Proposed Term Sheet") to the Purchaser setting
forth the terms, conditions and pricing of any such Additional Financing (such
financing to be negotiated on "arm's length" terms and the terms thereof to be
negotiated in good faith) proposed to be entered into by the Company and/or such
Subsidiary. The Purchaser shall have the right, but not the obligation, to agree
to provide such Additional Financing to the Company and/or such Subsidiary on
terms no less favorable than those outlined in Proposed Term Sheet within ten
business days of receipt of any such Proposed Term Sheet. If the provisions of
the Purchaser's term sheet are at least as favorable to the Company or such
Subsidiary, as the case may be, as the provisions of the Proposed Term Sheet,
the Company and/or such Subsidiary shall enter into the Additional Financing
outlined in the Purchaser's term sheet. Notwithstanding anything in the
foregoing to the contrary, the term "Additional Financing" shall not include (x)
trade accounts payable or (y) indebtedness incurred at the time of acquisition
of equipment so long as the proceeds of such indebtedness are used to pay all or
a portion of the purchase price of such equipment.

                                       20
<PAGE>

            (b) The Company will not, and will not permit its Subsidiaries to,
agree, directly or indirectly, to any restriction with any person or entity
which limits the ability of the Purchaser to consummate an Additional Financing
with the Company or any of its Subsidiaries.

      6.17 Dissolution of Subsidiaries. On or prior to thirty 30 days following
the Closing Date (or such longer period as the Purchaser may agree to in its
sole discretion), the Company shall, or shall cause, the dissolution of each
Immaterial Subsidiary or cause each such Immaterial Subsidiary to become party
to each of the Subsidiary Guaranty, Master Security Agreement and Stock Pledge
Agreement through execution of a joinder agreement in form and substance
satisfactory to the Purchaser.

      6.18 Authorization and Reservation of Shares. The Company shall at all
times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the conversion of the Note and exercise of the Options.

      7. Covenants of the Purchaser. The Purchaser covenants and agrees with the
Company as follows:

      7.1 Confidentiality. The Purchaser agrees that it will not disclose, and
will not include in any public announcement, the name of the Company, unless
expressly agreed to by the Company or unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement.

      7.2 Non-Public Information. The Purchaser agrees not to effect any sales
in the shares of the Company's Common Stock while in possession of material,
non-public information regarding the Company if such sales would violate
applicable securities law.

      7.3 Limitation on Acquisition of Common Stock of the Company.
Notwithstanding anything to the contrary contained in this Agreement, any
Related Agreement or any document, instrument or agreement entered into in
connection with any other transactions between the Purchaser and the Company,
the Purchaser may not acquire stock in the Company (including, without
limitation, pursuant to a contract to purchase, by exercising an option or
warrant, by converting any other security or instrument, by acquiring or
exercising any other right to acquire, shares of stock or other security
convertible into shares of stock in the Company, or otherwise, and such
contracts, options, warrants, conversion or other rights shall not be
enforceable or exercisable) to the extent such stock acquisition would cause any
interest (including any original issue discount) payable by the Company to the
Purchaser not to qualify as "portfolio interest" within the meaning of Section
881(c)(2) of the Code, by reason of Section 881(c)(3) of the Code, taking into
account the constructive ownership rules under Section 871(h)(3)(C) of the Code
(the "Stock Acquisition Limitation"). The Stock Acquisition Limitation shall
automatically become null and void without any notice to the Company upon the
earlier to occur of either (a) the Company's delivery to the Purchaser of a
Notice of Redemption (as defined in the Note) or (b) the existence of an Event
of Default (as defined in the Note) at a time when the average closing price of
the Company's common stock as reported by Bloomberg, L.P. on the Principal
Market for the immediately preceding five trading days is greater than or equal
to 150% of the Fixed Conversion Price (as defined in the Note).

                                       21
<PAGE>

      8. Covenants of the Company and Purchaser Regarding Indemnification.

      8.1 Company Indemnification. The Company agrees to indemnify, hold
harmless, reimburse and defend the Purchaser, each of the Purchaser's officers,
directors, agents, affiliates, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Purchaser which results, arises out of or is based upon: (i) any
misrepresentation by the Company or any of its Subsidiaries or breach of any
warranty by the Company or any of its Subsidiaries in this Agreement, any other
Related Agreement or in any exhibits or schedules attached hereto or thereto; or
(ii) any breach or default in performance by Company or any of its Subsidiaries
of any covenant or undertaking to be performed by Company or any of its
Subsidiaries hereunder, under any other Related Agreement or any other agreement
entered into by the Company and/or any of its Subsidiaries and Purchaser
relating hereto or thereto.

      8.2 Purchaser's Indemnification. Purchaser agrees to indemnify, hold
harmless, reimburse and defend the Company and each of the Company's officers,
directors, agents, affiliates, control persons and principal shareholders, at
all times against any claim, cost, expense, liability, obligation, loss or
damage (including reasonable legal fees) of any nature, incurred by or imposed
upon the Company which results, arises out of or is based upon: (i) any
misrepresentation by Purchaser or breach of any warranty by Purchaser in this
Agreement or in any exhibits or schedules attached hereto or any Related
Agreement; or (ii) any breach or default in performance by Purchaser of any
covenant or undertaking to be performed by Purchaser hereunder, or any other
agreement entered into by the Company and Purchaser relating hereto.

      9. Conversion of Convertible Note.

      9.1 Mechanics of Conversion.

            (a) Provided the Purchaser has notified the Company of the
      Purchaser's intention to sell the Note Shares and the Note Shares are
      included in an effective registration statement or are otherwise exempt
      from registration when sold: (i) upon the conversion of the Note or part
      thereof, the Company shall, at its own cost and expense, take all
      necessary action (including the issuance of an opinion of counsel
      reasonably acceptable to the Purchaser following a request by the
      Purchaser) to assure that the Company's transfer agent shall issue shares
      of the Company's Common Stock in the name of the Purchaser (or its
      nominee) or such other persons as designated by the Purchaser in
      accordance with Section 9.1(b) hereof and in such denominations to be
      specified representing the number of Note Shares issuable upon such
      conversion; and (ii) the Company warrants that no instructions other than
      these instructions have been or will be given to the transfer agent of the
      Company's Common Stock and that after the Effectiveness Date (as defined
      in the Registration Rights Agreement) the Note Shares issued will be
      freely transferable subject to the prospectus delivery requirements of the
      Securities Act and the provisions of this Agreement, and will not contain
      a legend restricting the resale or transferability of the Note Shares.

                                       22
<PAGE>

            (b) Purchaser will give notice of its decision to exercise its right
      to convert the Note or part thereof by telecopying or otherwise delivering
      an executed and completed notice of the number of shares to be converted
      to the Company (the "Notice of Conversion"). The Purchaser will not be
      required to surrender the Note until the Purchaser receives a credit to
      the account of the Purchaser's prime broker through the DWAC system (as
      defined below), representing the Note Shares or until the Note has been
      fully satisfied. Each date on which a Notice of Conversion is telecopied
      or delivered to the Company in accordance with the provisions hereof shall
      be deemed a "Conversion Date." Pursuant to the terms of the Notice of
      Conversion, the Company will issue instructions to the transfer agent
      accompanied by an opinion of counsel within one (1) business day of the
      date of the delivery to the Company of the Notice of Conversion and shall
      cause the transfer agent to transmit the certificates representing the
      Conversion Shares to the Holder by crediting the account of the
      Purchaser's prime broker with the Depository Trust Company ("DTC") through
      its Deposit Withdrawal Agent Commission ("DWAC") system within three (3)
      business days after receipt by the Company of the Notice of Conversion
      (the "Delivery Date").

            (c) The Company understands that a delay in the delivery of the Note
      Shares in the form required pursuant to Section 9 hereof beyond the
      Delivery Date could result in economic loss to the Purchaser. In the event
      that the Company fails to direct its transfer agent to deliver the Note
      Shares to the Purchaser via the DWAC system within the time frame set
      forth in Section 9.1(b) above and the Note Shares are not delivered to the
      Purchaser by the Delivery Date, as compensation to the Purchaser for such
      loss, the Company agrees to pay late payments to the Purchaser for late
      issuance of the Note Shares in the form required pursuant to Section 9
      hereof upon conversion of the Note in the amount equal to the greater of:
      (i) $500 per business day after the Delivery Date; and (ii) the
      Purchaser's actual damages from such delayed delivery. Notwithstanding the
      foregoing, the Company will not owe the Purchaser any late payments if the
      delay in the delivery of the Note Shares beyond the Delivery Date is
      solely out of the control of the Company and the Company is actively
      trying to cure the cause of the delay. The Company shall pay any payments
      incurred under this Section in immediately available funds upon demand
      and, in the case of actual damages, accompanied by reasonable
      documentation of the amount of such damages. Such documentation shall show
      the number of shares of Common Stock the Purchaser is forced to purchase
      (in an open market transaction) which the Purchaser anticipated receiving
      upon such conversion, and shall be calculated as the amount by which (A)
      the Purchaser's total purchase price (including customary brokerage
      commissions, if any) for the shares of Common Stock so purchased exceeds
      (B) the aggregate principal and/or interest amount of the Note, for which
      such Conversion Notice was not timely honored.

Nothing contained herein or in any document referred to herein or delivered in
connection herewith shall be deemed to establish or require the payment of a
rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest or dividends required to
be paid or other charges hereunder exceed the maximum amount permitted by such
law, any payments in excess of such maximum shall be credited against amounts
owed by the Company to a Purchaser and thus refunded to the Company.

                                       23
<PAGE>

      10. Registration Rights.

      10.1 Registration Rights Granted. The Company hereby grants registration
rights to the Purchaser pursuant to a Registration Rights Agreement dated as of
even date herewith between the Company and the Purchaser.

      10.2 Offering Restrictions. Except as previously disclosed in the SEC
Reports or in the Exchange Act Filings, or stock or stock options granted to
employees or directors of the Company (these exceptions hereinafter referred to
as the "Excepted Issuances"), neither the Company nor any of its Subsidiaries
will issue any securities with a continuously variable/floating conversion
feature which are or could be (by conversion or registration) free-trading
securities (i.e. common stock subject to a registration statement) prior to the
full repayment or conversion of the Note (together with all accrued and unpaid
interest and fees related thereto) (the "Exclusion Period").

      11. Miscellaneous.

      11.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT BY EITHER
PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND EACH RELATED AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS
OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BOTH
PARTIES AND THE INDIVIDUALS EXECUTING THIS AGREEMENT AND THE RELATED AGREEMENTS
ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND
WAIVE TRIAL BY JURY. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY
RELATED AGREEMENT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE
UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED
INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED
MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW. ANY SUCH PROVISION WHICH
MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY
OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT OR ANY RELATED
AGREEMENT.

      11.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the Purchaser and the
closing of the transactions contemplated hereby to the extent provided therein.
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.

      11.3 Successors. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, heirs, executors and administrators of the parties hereto and shall

                                       24
<PAGE>

inure to the benefit of and be enforceable by each person who shall be a holder
of the Securities from time to time, other than the holders of Common Stock
which has been sold by the Purchaser pursuant to Rule 144 or an effective
registration statement. Purchaser may not assign its rights hereunder to a
competitor of the Company.

      11.4 Entire Agreement. This Agreement, the Related Agreements, the
exhibits and schedules hereto and thereto and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and no party shall be
liable or bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.

      11.5 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

      11.6 Amendment and Waiver.

            (a) This Agreement may be amended or modified only upon the written
      consent of the Company and the Purchaser.

            (b) The obligations of the Company and the rights of the Purchaser
      under this Agreement may be waived only with the written consent of the
      Purchaser.

            (c) The obligations of the Purchaser and the rights of the Company
      under this Agreement may be waived only with the written consent of the
      Company.

      11.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement or the Related
Agreements, shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. All remedies, either under this Agreement or the Related
Agreements, by law or otherwise afforded to any party, shall be cumulative and
not alternative.

      11.8 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given:

            (a) upon personal delivery to the party to be notified;

            (b) when sent by confirmed facsimile if sent during normal business
      hours of the recipient, if not, then on the next business day;

            (c) three (3) business days after having been sent by registered or
      certified mail, return receipt requested, postage prepaid; or

            (d) one (1) day after deposit with a nationally recognized overnight
      courier, specifying next day delivery, with written verification of
      receipt.

                                       25
<PAGE>

All communications shall be sent as follows:

        If to the Company, to:       GreenMan Technologies, Inc.
                                     7 Kimball Lane
                                     Building A
                                     Lynnefield, MA 01940

                                     Attention: Chief Financial Officer
                                     Facsimile: 781-224-0114

                                     with a copy to:
                                     Morse, Barnes-Brown & Pendleton
                                     Reservoir Place
                                     1601 Trapelo Road
                                     Waltham, MA 02451
                                     Attention: Carl F. Barnes, Esq.
                                     Facsimile: 781-622-5933

        If to the Purchaser, to:     Laurus Master Fund, Ltd.
                                     c/o Ironshore Corporate Services ltd.
                                     P.O. Box 1234 G.T.
                                     Queensgate House, South Church Street
                                     Grand Cayman, Cayman Islands
                                     Facsimile: 345-949-9877

                                     with a copy to:

                                     John E. Tucker, Esq.
                                     825 Third Avenue 14th Floor
                                     New York, NY 10022
                                     Facsimile: 212-541-4434

or at such other address as the Company or the Purchaser may designate by
written notice to the other parties hereto given in accordance herewith.

      11.9 Attorneys' Fees. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including, without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

      11.10 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

                                       26
<PAGE>

      11.11 Facsimile Signatures; Counterparts. This Agreement may be executed
by facsimile signatures and in any number of counterparts, each of which shall
be an original, but all of which together shall constitute one instrument.

      11.12 Broker's Fees. Except as set forth on Schedule 11.12 hereof, each
party hereto represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated herein.
Each party hereto further agrees to indemnify each other party for any claims,
losses or expenses incurred by such other party as a result of the
representation in this Section 11.12 being untrue.

      11.13 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement and the Related Agreements
and, therefore, stipulates that the rule of construction that ambiguities are to
be resolved against the drafting party shall not be applied in the
interpretation of this Agreement to favor any party against the other.

             [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                       27
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                                 PURCHASER:

GREENMAN TECHNOLOGIES, INC.              LAURUS MASTER FUND, LTD.

By:    /s/ Robert H. Davis               By:    /s/ Eugene Gin
       -------------------------------          --------------------------------
Name:  Robert H. Davis                   Name:  Eugene Gin
       -------------------------------          --------------------------------
Title: President/CEO                     Title: Director
       -------------------------------          --------------------------------

                                       28
<PAGE>

                                    EXHIBIT A

                            FORM OF CONVERTIBLE NOTE

                                       A-1
<PAGE>

                                    EXHIBIT B

                                 FORM OF OPTION

                                       B-1
<PAGE>

                                    EXHIBIT C

                                 FORM OF OPINION

                                       C-1
<PAGE>

                                    EXHIBIT D

                            FORM OF ESCROW AGREEMENT

                                       D-2Exhibit 4.2

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO GREENMAN TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

                          SECURED CONVERTIBLE TERM NOTE

      FOR VALUE RECEIVED, GREENMAN TECHNOLOGIES, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o
Ironshore Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate House, South
Church Street, Grand Cayman, Cayman Islands, Fax: 345-949-9877 (the "Holder") or
its registered assigns or successors in interest, on order, the sum of One
Million Dollars ($1,000,000), together with any accrued and unpaid interest
hereon, on June 30, 2007 (the "Maturity Date") if not sooner paid.

      Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower and the Holder (the "Purchase Agreement").

The following terms shall apply to this Note:

                                    ARTICLE I
                             INTEREST & AMORTIZATION

      1.1(a) Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest
payable on this Note shall accrue at a rate per annum (the "Interest Rate")
equal to the "prime rate" published in The Wall Street Journal from time to
time, plus one and three quarter percent (1.75%). The prime rate shall be
increased or decreased as the case may be for each increase or decrease in the
prime rate in an amount equal to such increase or decrease in the prime rate;
each change to be effective as of the day of the change in such rate. Subject to
Section 1.1(b) hereof, the Interest Rate shall not be less than five percent
(5%). Interest shall be (i) calculated on the basis of a 360 day year, and (ii)
payable monthly, in arrears, commencing on August 1, 2005 and on the first
business day of each consecutive calendar month thereafter until the Maturity
Date (and on the Maturity Date), whether by acceleration or otherwise (each, a
"Repayment Date").

      1.1 (b) Interest Rate Adjustment. The Interest Rate shall be calculated on
the last business day of each month hereafter until the Maturity Date (each a
"Determination Date") and shall be subject to adjustment as set forth herein. If
(i) the Borrower shall have registered the shares of the Borrower's common stock
underlying each of the conversion of the Note and that certain warrant issued to
Holder on a registration statement declared effective by the Securities and
Exchange Commission (the "SEC"), and (ii) the market price (the "Market Price")

                                       1
<PAGE>

of the Common Stock as reported by Bloomberg, L.P. on the Principal Market (as
defined below) for the five (5) trading days immediately preceding a
Determination Date exceeds the then applicable Fixed Conversion Price by at
least twenty five percent (25%), the Interest Rate for the succeeding calendar
month shall automatically be reduced by 200 basis points (200 b.p.) (2.0.%) for
each incremental twenty five percent (25%) increase in the Market Price of the
Common Stock above the then applicable Fixed Conversion Price. If (i) the
Borrower shall not have registered the shares of the Borrower's common stock
underlying the conversion of the Note and that certain warrant issued to Holder
on a registration statement declared effective by the SEC and which remains
effective, and (ii) the Market Price of the Common Stock as reported by
Bloomberg, L.P. on the principal market for the five (5) trading days
immediately preceding a Determination Date exceeds the then applicable Fixed
Conversion Price by at least twenty five percent (25%), the Interest Rate for
the succeeding calendar month shall automatically be decreased by 100 basis
points (100 b.p.) (1.0.%) for each incremental twenty five percent (25%)
increase in the Market Price of the Common Stock above the then applicable Fixed
Conversion Price. Notwithstanding the foregoing (and anything to the contrary
contained in herein), in no event shall the Interest Rate be less than zero
percent (0%).

      1.2 Minimum Monthly Principal Payments. Amortizing payments of the
aggregate principal amount outstanding under this Note at any time (the
"Principal Amount") shall begin on February 1, 2006 and shall recur on the first
business day of each succeeding month thereafter until the Maturity Date (each,
an "Amortization Date"). Subject to Article 3 below, beginning on the first
Amortization Date, the Borrower shall make monthly payments to the Holder on
each Repayment Date, each in the amount of $58,823.53 together with any accrued
and unpaid interest to date on such portion of the Principal Amount plus any and
all other amounts which are then owing under this Note, the Purchase Agreement
or any other Related Agreement but have not been paid (collectively, the
"Monthly Amount"). Any Principal Amount that remains outstanding on the Maturity
Date shall be due and payable on the Maturity Date.

                                   ARTICLE II
                              CONVERSION REPAYMENT

      2.1 (a) Payment of Monthly Amount in Cash or Common Stock. Each month by
the fifth (5th) business day prior to each Amortization Date (the "Notice
Date"), the Holder shall deliver to Borrower a written notice in the form of
Exhibit B attached hereto converting the Monthly Amount payable on the next
Repayment Date in either cash or Common Stock, or a combination of both (each, a
"Repayment Notice"). If a Repayment Notice is not delivered by the Holder on or
before the applicable Notice Date for such Repayment Date, then the Borrower
shall pay the Monthly Amount due on such Repayment Date in cash. Any portion of
the Monthly Amount paid in cash on a Repayment Date, shall be paid to the Holder
an amount equal to 102% of the Monthly Amount due and owing to Holder on the
Repayment Date. If the Holder converts all or a portion of the Monthly Amount in
shares of Common Stock as provided herein, the number of such shares to be
issued by the Borrower to the Holder on such Repayment Date shall be the number
determined by dividing (x) the portion of the Monthly Amount to be paid in
shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For
purposes hereof, the initial "Fixed Conversion Price" means $0.33.

                                       2
<PAGE>

      (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2,
and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount
due on each Repayment Date in shares of Common Stock if the average closing
price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market
for the five (5) trading days immediately preceding such Repayment Date was
greater than or equal to 110% of the Fixed Conversion Price, provided, however,
that such conversions shall not exceed twenty five percent (25%) of the
aggregate dollar trading volume of the Common Stock for the five (5) day trading
period immediately preceding delivery of a Notice of Conversion to the Borrower.
Any part of the Monthly Amount due on a Repayment Date that the Holder has not
converted into shares of Common Stock shall be paid by the Borrower in cash on
such Repayment Date. Any part of the Monthly Amount due on such Repayment Date
which must be paid in cash shall be paid in cash at the rate of 102% of the
Monthly Amount otherwise due on such Repayment Date, within three (3) business
days of the applicable Repayment Date.

      2.2 No Effective Registration. Notwithstanding anything to the contrary
herein, none of the Borrower's obligations to the Holder may be converted into
Common Stock unless (i) either (x) an effective current Registration Statement
(as defined in the Registration Rights Agreement) covering the shares of Common
Stock to be issued in connection with satisfaction of such obligations exists or
(y) an exemption from registration of the Common Stock is available to pursuant
to Rule 144 of the Securities Act and (ii) no Event of Default hereunder exists
and is continuing, unless such Event of Default is cured within any applicable
cure period or is otherwise waived in writing by the Holder in whole or in part
at the Holder's option.

      Any amounts converted by the Holder pursuant to this Section 2.2 shall be
deemed to constitute payments of outstanding fees, interest and principal
arising in connection with Monthly Amounts for the remaining Repayment Dates, in
chronological order.

      2.3 Optional Redemption in Cash. The Borrower will have the option of
prepaying this Note ("Optional Redemption") by paying to the Holder a sum of
money equal to one hundred twenty percent (120%) of the principal amount of this
Note together with accrued but unpaid interest thereon and any and all other
sums due, accrued or payable to the Holder arising under this Note, the Purchase
Agreement, or any Related Agreement (the "Redemption Amount") outstanding on the
day written notice of redemption (the "Notice of Redemption") is given to the
Holder. The Notice of Redemption shall specify the date for such Optional
Redemption (the "Redemption Payment Date") which date shall be seven (7)
business days after the date of the Notice of Redemption (the "Redemption
Period"). A Notice of Redemption shall not be effective with respect to any
portion of this Note for which the Holder has a pending election to convert
pursuant to Section 3.1, or for conversions initiated or made by the Holder
pursuant to Section 3.1 during the Redemption Period. The Redemption Amount
shall be determined as if such Holder's conversion elections had been completed
immediately prior to the date of the Notice of Redemption. On the Redemption
Payment Date, the Redemption Amount must be paid in good funds to the Holder. In
the event the Borrower fails to pay the Redemption Amount on the Redemption
Payment Date as set forth herein, then such Redemption Notice will be null and
void.

                                       3
<PAGE>

                                   ARTICLE III
                                CONVERSION RIGHTS

      3.1. Holder's Conversion Rights. The Holder shall have the right, but not
the obligation, to convert all or any portion of the then aggregate outstanding
principal amount of this Note, together with interest and fees due hereon, into
shares of Common Stock subject to the terms and conditions set forth in this
Article III. The Holder may exercise such right by delivery to the Borrower of a
written notice of conversion not less than one (1) day prior to the date upon
which such conversion shall occur.

      3.2 Conversion Limitation. Notwithstanding anything contained herein to
the contrary, the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible into that number of Conversion
Shares which would exceed (a) the difference between (i) 4.99% of the issued and
outstanding shares of Common Stock and (ii) the number of shares of Common Stock
beneficially owned by the Holder or (b) twenty five percent (25%) of the
aggregate dollar trading volume of the Common Stock for the five (5) day trading
period immediately preceding delivery of a Notice of Conversion to the Borrower.
For purposes of the immediately preceding sentence, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and
Regulation 13d-3 thereunder. The Conversion Share limitation described in this
Section 3.2 shall automatically become null and void following notice to the
Company upon the occurrence and during the continuance of an Event of Default,
or upon 90 days prior notice to the Company, except that at no time shall the
number of shares of Common Stock beneficially owned by the Holder a exceed
19.99% of the outstanding shares of Common Stock. Notwithstanding anything
contained herein to the contrary, the number of shares of Common Stock issuable
by the Company and acquirable by the Holder at a price below $0.29 per share
pursuant to the terms of this Note, the Purchase Agreement, any other Related
Agreement, any Existing Holder Agreement (as defined below) or otherwise, shall
not exceed an aggregate of 3,843,148 shares of Common Stock (subject to
appropriate adjustment for stock splits, stock dividends, or other similar
recapitalizations affecting the Common Stock) (the "Maximum Common Stock
Issuance"), unless the issuance of Common Stock hereunder in excess of the
Maximum Common Stock Issuance shall first be approved by the Company's
shareholders. If at any point in time and from time to time the number of shares
of Common Stock issued pursuant to the terms of this Note, the Purchase
Agreement, any other Related Agreement, any Existing Holder Agreement or
otherwise, together with the number of shares of Common Stock that would then be
issuable by the Company to the Holder in the event of a conversion or exercise
pursuant to the terms of this Note, the Purchase Agreement, any other Related
Agreement, any Existing Holder Agreement or otherwise, would exceed the Maximum
Common Stock Issuance but for this Section 3.2, the Company shall promptly call
a shareholders meeting to solicit shareholder approval for the issuance of the

                                       4
<PAGE>

shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.
Notwithstanding anything contained herein to the contrary, the provisions of
this Section 3.2 are irrevocable and may not be waived by the Holder or the
Company. The term "Existing Holder Agreements" shall mean each of the Securities
Purchase Agreement, dated as of June 30, 2004 between the Borrower and the
Holder and each Related Agreement referred to therein (each as amended, modified
or supplemented).

      3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion
("Notice of Conversion") to the Borrower and such Notice of Conversion shall
provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees being converted. On each Conversion Date (as hereinafter
defined) and in accordance with its Notice of Conversion, the Holder shall make
the appropriate reduction to the Principal Amount, accrued interest and fees as
entered in its records and shall provide written notice thereof to the Borrower
within two (2) business days after the Conversion Date. Each date on which a
Notice of Conversion is delivered or telecopied to the Borrower in accordance
with the provisions hereof shall be deemed a Conversion Date (the "Conversion
Date"). A form of Notice of Conversion to be employed by the Holder is annexed
hereto as Exhibit A.

      (b) Pursuant to the terms of the Notice of Conversion, the Borrower will
issue instructions to the transfer agent accompanied by an opinion of counsel
within one (1) business day of the date of the delivery to Borrower of the
Notice of Conversion and shall cause the transfer agent to transmit the
certificates representing the Conversion Shares to the Holder by crediting the
account of the Holder's designated broker with the Depository Trust Corporation
("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within
three (3) business days after receipt by the Borrower of the Notice of
Conversion (the "Delivery Date"). In the case of the exercise of the conversion
rights set forth herein the conversion privilege shall be deemed to have been
exercised and the Conversion Shares issuable upon such conversion shall be
deemed to have been issued upon the date of receipt by the Borrower of the
Notice of Conversion. The Holder shall be treated for all purposes as the record
holder of such Common Stock, unless the Holder provides the Borrower written
instructions to the contrary.

      3.4 Conversion Mechanics.

      (a) The number of shares of Common Stock to be issued upon each conversion
of this Note shall be determined by dividing that portion of the principal and
interest and fees to be converted, if any, by the then applicable Fixed
Conversion Price. In the event of any conversions of outstanding principal
amount under this Note in part pursuant to this Article III, such conversions
shall be deemed to constitute conversions of outstanding principal amount
applying to Monthly Amounts for the remaining Repayment Dates in chronological
order.

                                       5
<PAGE>

      (b) The Fixed Conversion Price and number and kind of shares or other
securities to be issued upon conversion is subject to adjustment from time to
time upon the occurrence of certain events, as follows:

      A. Stock Splits, Combinations and Dividends. If the shares of Common Stock
are subdivided or combined into a greater or smaller number of shares of Common
Stock, or if a dividend is paid on the Common Stock in shares of Common Stock,
the Fixed Conversion Price or the Conversion Price, as the case may be, shall be
proportionately reduced in case of subdivision of shares or stock dividend or
proportionately increased in the case of combination of shares, in each such
case by the ratio which the total number of shares of Common Stock outstanding
immediately after such event bears to the total number of shares of Common Stock
outstanding immediately prior to such event.

      B. During the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. The Borrower agrees that its
issuance of this Note shall constitute full authority to its officers, agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.

      C. Share Issuances. Subject to the provisions of this Section 3.4, if the
Borrower shall at any time prior to the conversion or repayment in full of the
Principal Amount issue any shares of Common Stock or securities convertible into
Common Stock to a person other than the Holder (except (i) pursuant to
Subsections A or B above; (ii) pursuant to options, warrants, or other
obligations to issue shares outstanding on the date hereof as disclosed to
Holder in writing; (iii) pursuant to options that may be issued under any
employee incentive stock option and/or any qualified stock option plan adopted
by the Borrower; or (iv) shares of Common Stock not to exceed 250,000 in the
aggregate (as calculated on the date hereof and appropriately adjusted for any
subdivision, combination or similar event), so long as (x) such shares are
restricted and do not become freely or publicly traded in any respect prior to
the one year anniversary of the issuance thereof , (y) such shares are issued at
a price per share no lees than 100% of the average closing price of the Common
Stock for the 10 days prior to the issuance thereof and (z) such shares are
issued in connection with acquisitions, joint ventures and other business
development initiatives) for a consideration per share (the "Offer Price") less
than the Fixed Conversion Price in effect at the time of such issuance, then the
Fixed Conversion Price shall be immediately reset to such lower Offer Price at
the time of issuance of such securities. For purposes hereof, the issuance of
any security of the Borrower convertible into or exercisable or exchangeable for
Common Stock shall result in an adjustment to the Fixed Conversion Price at the
time of issuance of such securities.

      D. Reclassification, etc. If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of securities as would have been issuable as the result of such change with
respect to the Common Stock immediately prior to such reclassification or other
change.

                                       6
<PAGE>

      3.5 Issuance of New Note. Upon any partial conversion of this Note, a new
Note containing the same date and provisions of this Note shall, at the request
of the Holder, be issued by the Borrower to the Holder for the principal balance
of this Note and interest which shall not have been converted or paid. The
Borrower will pay no costs, fees or any other consideration to the Holder for
the production and issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

      Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest and
other fees then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable. In the event of such an acceleration, within five
(5) days after written notice from Holder to Borrower (each occurrence being a
"Default Notice Period") the amount due and owing to the Holder shall be 130% of
the outstanding principal amount of the Note (plus accrued and unpaid interest
and fees, if any) (the "Default Payment"). If, with respect to any Event of
Default, the Borrower cures the Event of Default within any applicable grace
period, the Event of Default will be deemed to no longer exist and any rights
and remedies of Holder pertaining to such Event of Default will be of no further
force or effect. The Default Payment shall be applied first to any fees due and
payable to Holder pursuant to the Note or the Related Agreements, then to
accrued and unpaid interest due on the Note and then to outstanding principal
balance of the Note.

      The occurrence of any of the following events set forth in Sections 4.1
through 4.9, inclusive, is an "Event of Default":

      4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails
to pay when due any installment of principal, interest or other fees hereon in
accordance herewith, or the Borrower fails to pay when due any amount due under
any other promissory note issued by Borrower, and in any such case, such failure
shall continue for a period of three (3) business days following the date upon
which any such payment was due.

      4.2 Breach of Covenant. The Borrower breaches any covenant or any other
term or condition of this Note or the Purchase Agreement in any material
respect, or the Borrower or any of its Subsidiaries breaches any covenant or any
other term or condition of any Related Agreement in any material respect and,
any such case, such breach, if subject to cure, continues for a period of thirty
(30) days after the occurrence thereof.

      4.3 Breach of Representations and Warranties. Any representation or
warranty made by the Borrower in this Note or the Purchase Agreement, or by the
Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such
case, be false or misleading in any material respect on the date that such
representation or warranty was made or deemed.

                                       7
<PAGE>

      4.4 Receiver or Trustee; Bankruptcy. The Borrower or any Subsidiary of the
Borrower shall (i) apply for, consent to, or suffer to exist the appointment of,
or the taking of possession by, a receiver, custodian, trustee, liquidator or
other fiduciary of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of creditors, (iii) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vi) acquiesce to, or fail to have dismissed, within sixty (60) days, any
petition filed against it in any involuntary case under such bankruptcy laws, or
(vii) take any action for the purpose of effecting any of the foregoing..

      4.5 Judgments. Any money judgment, writ or similar final process shall be
entered or filed against the Borrower or any of its Subsidiaries or any of their
respective property or other assets for more than $50,000, and shall remain
unvacated, unbonded or unstayed for a period of thirty (30) business days.

      4.6 Stop Trade. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for five (5) consecutive days
or five (5) days during a period of ten (10) consecutive days, excluding in all
cases a suspension of all trading on a Principal Market, provided that the
Borrower shall not have been able to cure such trading suspension within thirty
(30) days of the notice thereof or list the Common Stock on another Principal
Market within sixty (60) days of such notice. The "Principal Market" for the
Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap Market,
NASDAQ National Market System, American Stock Exchange, or New York Stock
Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock, or any securities exchange or other
securities market on which the Common Stock is then being listed or traded.

      4.7 Failure to Deliver Common Stock or Replacement Note. The Borrower
shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in
the form required by this Note, and Section 9 of the Purchase Agreement, if such
failure to timely deliver Common Stock shall not be cured within two (2)
business days or (ii) to deliver a replacement Note to Holder within seven (7)
business days following the required date of such issuance pursuant to this
Note, the Purchase Agreement or any Related Agreement (to the extent required
under such agreements).

      4.8 Default Under Related Agreements or Other Agreements. The occurrence
and continuance of any Event of Default (as defined in the Purchase Agreement or
any Related Agreement) or any event of default (or similar term) under any other
indebtedness, including, without limitation under any of the Existing Holder
Agreements, and such default shall not be cured within any applicable cure
period as provided for in such agreement or under such other indebtedness.

      4.9 Change in Control. The occurrence of a change in the controlling
ownership of the Borrower.

                                       8
<PAGE>

                           DEFAULT RELATED PROVISIONS

      4.11 Payment Grace Period. Following the occurrence and continuance of an
Event of Default beyond any applicable cure period hereunder, the Borrower shall
pay the Holder a default interest rate of eight percent (8.0%) per annum on all
amounts due and owing under the Note, which default interest shall be payable
upon demand.

      4.12 Conversion Privileges. The conversion privileges set forth in Article
III shall remain in full force and effect immediately from the date hereof and
until this Note is paid in full.

      4.13 Cumulative Remedies. The remedies under this Note shall be
cumulative.

                                    ARTICLE V
                                  MISCELLANEOUS

      5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

      5.2 Notices. Any notice herein required or permitted to be given shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
Borrower at the address provided in the Purchase Agreement executed in
connection herewith, and to the Holder at the address provided in the Purchase
Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third
Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434,
or at such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.

      5.3 Amendment Provision. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument issued pursuant to Section 3.5
hereof, as it may be amended or supplemented.

      5.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement. This Note shall not be assigned by the
Borrower without the consent of the Holder.

                                       9
<PAGE>

      5.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder.

      5.6 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

      5.7 Security Interest and Guarantee. The Holder has been granted a
security interest (i) in certain assets of the Borrower and its Subsidiaries as
more fully described in the Master Security Agreement dated as of the date
hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date
hereof. The obligations of the Borrower under this Note are guaranteed by
certain Subsidiaries of the Borrower pursuant to the Subsidiary Guaranty dated
as of the date hereof.

      5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

      5.9 Cost of Collection. If default is made in the payment of this Note,
the Borrower shall pay to Holder reasonable costs of collection, including
reasonable attorney's fees.

       [Balance of page intentionally left blank; signature page follows.]

                                       10
<PAGE>

      IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to
be signed in its name effective as of this 20th day of July 2005.

                                    GREENMAN TECHNOLOGIES, INC.

                                    By:    /s/ Robert H. Davis
                                    Name:  Robert H. Davis
                                    Title: President / CEO

WITNESS:

/s/ Charles E. Coppa

                                       11
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be executed by the Holder in order to convert all or part of the Note into
Common Stock

[Name and Address of Holder]

The Undersigned hereby converts $_________ of the principal due on [specify
applicable Repayment Date] under the Convertible Term Note issued by GreenMan
Technologies, Inc. dated July 20, 2005 by delivery of Shares of Common Stock of
GreenMan Technologies, Inc. on and subject to the conditions set forth in
Article III of such Note.

1.    Date of Conversion      _______________________

2.    Shares To Be Delivered: _______________________

                                    By:_______________________________
                                    Name:_____________________________
                                    Title:____________________________

                                       12
<PAGE>

                                    EXHIBIT B

                                CONVERSION NOTICE

(To be executed by the Holder in order to convert all or part of a Monthly
Amount into Common Stock)

[Name and Address of Holder]

Holder hereby converts $_________ of the Monthly Amount due on [specify
applicable Repayment Date] under the Convertible Term Note issued by GreenMan
Technologies, Inc. (the "Company") dated July 20, 2005 by delivery of Shares of
Common Stock of GreenMan Technologies, Inc. on and subject to the conditions set
forth in Article III of such Note.

1.    Fixed Conversion Price: $_______________________

2.    Amount to be paid: $_______________________

3.    Shares To Be Delivered (2 divided by 1): __________________

4.    Cash payment to be made by Company : $_____________________

Date: ____________                  LAURUS MASTER FUND, LTD.

                                    By:_______________________________
                                    Name:_____________________________
                                    Title:______________________________

                                       13

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