Document:

Exhibit 4.6

                             FUNDS ESCROW AGREEMENT

      This Agreement (this "Agreement") is dated as of the 30th day of June 2006
among GREENMAN TECHNOLOGIES, INC, a Delaware corporation (the "Company"), Laurus
Master Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP (the "Escrow Agent"):

                              W I T N E S S E T H:

      WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Company
and the Purchaser have entered into an Amended and Restated Security and
Purchase Agreement (the "Security Agreement") for the sale by the Company to the
Purchaser of a secured non-convertible term note (the "Secured Non-Convertible
Note") and a secured non-convertible revolving note (the "Secured
Non-Convertible Revolving Note"), (b) the Company has issued to the Purchaser a
common stock purchase warrant (the "Warrant") in connection with the issuance of
the Secured Non-Convertible Note and the Secured Non-Convertible Revolving Note,
and (c) the Company and the Purchaser have entered into a Registration Rights
Agreement covering the registration of the Company's common stock underlying the
Warrant (the "Registration Rights Agreement");

      WHEREAS, the Company and the Purchaser wish to deliver to the Escrow Agent
copies of the Documents (as hereafter defined) and, following the satisfaction
of all closing conditions relating to the Documents, the Purchaser to deliver
the Escrowed Payment (as hereafter defined), in each case, to be held and
released by Escrow Agent in accordance with the terms and conditions of this
Agreement; and

      WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;

      NOW THEREFORE, the parties agree as follows:

                                   ARTICLE I

                                 INTERPRETATION

      1.1. Definitions. Whenever used in this Agreement, the following terms
shall have the meanings set forth below.

            (a) "Agreement" means this Agreement, as amended, modified and/or
      supplemented from time to time by written agreement among the parties
      hereto.

            (b) "Disbursement Letter" means that certain letter delivered to the
      Escrow Agent by the Company, acceptable in form and substance to the
      Purchaser, setting forth wire instructions and amounts to be funded at the
      Closing.
<PAGE>

            (c) "Documents" means copies of the Disbursement Letter, the
      Security Agreement, the Secured Non-Convertible Note, the Secured
      Non-Convertible Revolving Note, the Warrant and the Registration Rights
      Agreement.

            (d) "Escrowed Payment" means $11,000,000.

            (e) "Servicing Payment" means the servicing payment to be paid to
      Laurus Capital Management, LLC, the fund manager, as set forth on Schedule
      A hereto.

      1.2. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the arrangement with the Escrow Agent
and supersedes all prior agreements, understandings, negotiations and
discussions of the parties, whether oral or written with respect to the
arrangement with the Escrow Agent. There are no warranties, representations and
other agreements made by the parties in connection with the arrangement with the
Escrow Agent except as specifically set forth in this Agreement.

      1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.

      1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, in each case only by a written instrument signed by all parties
hereto, or, in the case of a waiver, by the party waiving compliance. Except as
expressly stated herein, no delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege hereunder
preclude any other or future exercise of any other right, power or privilege
hereunder.

      1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.

      1.6. Law Governing this Agreement; Consent to Jurisdiction. THIS 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. With respect to any
suit, action or proceeding relating to this Agreement or to the transactions
contemplated hereby ("Proceedings"), each party hereto irrevocably submits to
the exclusive jurisdiction of the courts of the County of New York, State of New
York and the United States District court located in the county of New York in
the State of New York. Each party hereto hereby irrevocably and unconditionally
(a) waives trial by jury in any Proceeding relating to this Agreement and for
any related counterclaim and (b) waives any objection which it may have at any
time to the laying of venue of any Proceeding brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings, that such
court does not have jurisdiction over such party. As between the Company and the
Purchaser, the prevailing party shall be entitled to recover from the other
party its reasonable attorneys' fees and costs. In the event that any provision
of this Agreement is determined by a court of competent jurisdiction to be
invalid or unenforceable, then the remainder of this Agreement shall not be
affected and shall remain in full force and effect.

                                        2
<PAGE>

      1.7. Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement 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.

                                   ARTICLE II

                APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT

      2.1. Appointment. The Company and the Purchaser hereby irrevocably
designate and appoint the Escrow Agent as their escrow agent for the purposes
set forth herein, and the Escrow Agent by its execution and delivery of this
Agreement hereby accepts such appointment under the terms and conditions set
forth herein.

      2.2. Copies of Documents to Escrow Agent. On or about the date hereof, the
Purchaser and the Company shall deliver to the Escrow Agent copies of the
Documents executed by such parties.

      2.3. Delivery of Escrowed Payment to Escrow Agent. Following the
satisfaction of all closing conditions relating to the Documents (other than the
funding of the Escrowed Payment), the Purchaser shall deliver to the Escrow
Agent the Escrowed Payment. At such time, the Escrow Agent shall hold the
Escrowed Payment as agent for the Company, subject to the terms and conditions
of this Agreement.

      2.4. Intention to Create Escrow Over the Escrowed Payment. The Purchaser
and the Company intend that the Escrowed Payment shall be held in escrow by the
Escrow Agent and released from escrow by the Escrow Agent only in accordance
with the terms and conditions of this Agreement.

                                  ARTICLE III

                                RELEASE OF ESCROW

      3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Escrowed Payment from escrow as follows:

            (a) Upon receipt by the Escrow Agent of (i) oral instructions from
      David Grin and/or Eugene Grin (each of whom is a director of the
      Purchaser) consenting to the release of the Escrowed Payment from escrow
      in accordance with the Disbursement Letter following the Escrow Agent's
      receipt of the Escrowed Payment, (ii) the Disbursement Letter, and (iii)
      the Escrowed Payment, the Escrowed Payment shall promptly be disbursed in
      accordance with the Disbursement Letter. The Disbursement Letter shall
      include, without limitation, Escrow Agent's authorization to retain from
      the Escrowed Payment Escrow Agent's fee for acting as Escrow Agent
      hereunder and the Closing Payment for delivery to Laurus Capital
      Management, LLC in accordance with the Disbursement Letter.

                                        3
<PAGE>

            (b) Upon receipt by the Escrow Agent of a final and non-appealable
      judgment, order, decree or award of a court of competent jurisdiction (a
      "Court Order") relating to the Escrowed Payment, the Escrow Agent shall
      remit the Escrowed Payment in accordance with the Court Order. Any Court
      Order shall be accompanied by an opinion of counsel for the party
      presenting the Court Order to the Escrow Agent (which opinion shall be
      satisfactory to the Escrow Agent) to the effect that the court issuing the
      Court Order is a court of competent jurisdiction and that the Court Order
      is final and non-appealable.

      3.2. Acknowledgement of Company and Purchaser; Disputes. The Company and
the Purchaser acknowledge that the only terms and conditions upon which the
Escrowed Payment are to be released from escrow are as set forth in Sections 3
and 4 of this Agreement. The Company and the Purchaser reaffirm their agreement
to abide by the terms and conditions of this Agreement with respect to the
release of the Escrowed Payment. Any dispute with respect to the release of the
Escrowed Payment shall be resolved pursuant to Section 4.2 or by written
agreement between the Company and Purchaser.

                                   ARTICLE IV

                           CONCERNING THE ESCROW AGENT

      4.1. Duties and Responsibilities of the Escrow Agent. The Escrow Agent's
duties and responsibilities shall be subject to the following terms and
conditions:

            (a) The Purchaser and the Company acknowledge and agree that the
      Escrow Agent (i) shall not be required to inquire into whether the
      Purchaser, the Company or any other party is entitled to receipt of any
      Document or all or any portion of the Escrowed Payment; (ii) shall not be
      called upon to construe or review any Document or any other document,
      instrument or agreement entered into in connection therewith; (iii) shall
      be obligated only for the performance of such duties as are specifically
      assumed by the Escrow Agent pursuant to this Agreement; (iv) may rely on
      and shall be protected in acting or refraining from acting upon any
      written notice, instruction, instrument, statement, request or document
      furnished to it hereunder and believed by the Escrow Agent in good faith
      to be genuine and to have been signed or presented by the proper person or
      party, without being required to determine the authenticity or correctness
      of any fact stated therein or the propriety or validity or the service
      thereof; (v) may assume that any person purporting to give notice or make
      any statement or execute any document in connection with the provisions
      hereof has been duly authorized to do so; (vi) shall not be responsible
      for the identity, authority or rights of any person, firm or company
      executing or delivering or purporting to execute or deliver this Agreement
      or any Document or any funds deposited hereunder or any endorsement
      thereon or assignment thereof; (vii) shall not be under any duty to give
      the property held by Escrow Agent hereunder any greater degree of care
      than Escrow Agent gives its own similar property; and (viii) may consult
      counsel satisfactory to Escrow Agent (including, without limitation, Loeb
      & Loeb, LLP or such other counsel of Escrow Agent's choosing), the opinion
      of such counsel to be full and complete authorization and protection in
      respect of any action taken, suffered or omitted by Escrow Agent hereunder
      in good faith and in accordance with the opinion of such counsel.

                                        4
<PAGE>

            (b) The Purchaser and the Company acknowledge that the Escrow Agent
      is acting solely as a stakeholder at their request and that the Escrow
      Agent shall not be liable for any action taken by Escrow Agent in good
      faith and believed by Escrow Agent to be authorized or within the rights
      or powers conferred upon Escrow Agent by this Agreement. The Purchaser and
      the Company hereby, jointly and severally, indemnify and hold harmless the
      Escrow Agent and any of Escrow Agent's partners, employees, agents and
      representatives from and against any and all actions taken or omitted to
      be taken by Escrow Agent or any of them hereunder and any and all claims,
      losses, liabilities, costs, damages and expenses suffered and/or incurred
      by the Escrow Agent arising in any manner whatsoever out of the
      transactions contemplated by this Agreement and/or any transaction related
      in any way hereto, including the fees of outside counsel and other costs
      and expenses of defending itself against any claims, losses, liabilities,
      costs, damages and expenses arising in any manner whatsoever out the
      transactions contemplated by this Agreement and/or any transaction related
      in any way hereto, except for such claims, losses, liabilities, costs,
      damages and expenses incurred by reason of the Escrow Agent's gross
      negligence or willful misconduct. The Escrow Agent shall owe a duty only
      to the Purchaser and the Company under this Agreement and to no other
      person.

            (c) The Purchaser and the Company shall jointly and severally
      reimburse the Escrow Agent for its reasonable out-of-pocket expenses
      (including counsel fees (which counsel may be Loeb & Loeb LLP or such
      other counsel of the Escrow Agent's choosing) incurred in connection with
      the performance of its duties and responsibilities hereunder, which shall
      not (subject to Section 4.1(b)) exceed $3,000.

            (d) The Escrow Agent may at any time resign as Escrow Agent
      hereunder by giving five (5) business days prior written notice of
      resignation to the Purchaser and the Company. Prior to the effective date
      of resignation as specified in such notice, the Purchaser and Company will
      issue to the Escrow Agent a joint instruction authorizing delivery of the
      Documents and the Escrowed Payment to a substitute Escrow Agent selected
      by the Purchaser and the Company. If no successor Escrow Agent is named by
      the Purchaser and the Company, the Escrow Agent may apply to a court of
      competent jurisdiction in the State of New York for appointment of a
      successor Escrow Agent, and deposit the Documents and the Escrowed Payment
      with the clerk of any such court, and/or otherwise commence an
      interpleader or similar action for a determination of where to deposit the
      same.

            (e) The Escrow Agent does not have and will not have any interest in
      the Documents and the Escrowed Payment, but is serving only as escrow
      agent, having only possession thereof.

                                        5
<PAGE>

            (f) The Escrow Agent shall not be liable for any action taken or
      omitted by it in good faith and reasonably believed by it to be authorized
      hereby or within the rights or powers conferred upon it hereunder, nor for
      action taken or omitted by it in good faith, and in accordance with advice
      of counsel (which counsel may be Loeb & Loeb, LLP or such other counsel of
      the Escrow Agent's choosing), and shall not be liable for any mistake of
      fact or error of judgment or for any acts or omissions of any kind except
      to the extent any such liability arose from its own willful misconduct or
      gross negligence.

            (g) This Agreement sets forth exclusively the duties of the Escrow
      Agent with respect to any and all matters pertinent thereto and no implied
      duties or obligations shall be read into this Agreement.

            (h) The Escrow Agent shall be permitted to act as counsel for the
      Purchaser or the Company, as the case may be, in any dispute as to the
      disposition of the Documents and the Escrowed Payment, in any other
      dispute between the Purchaser and the Company, whether or not the Escrow
      Agent is then holding the Documents and/or the Escrowed Payment and
      continues to act as the Escrow Agent hereunder.

            (i) The provisions of this Section 4.1 shall survive the resignation
      of the Escrow Agent or the termination of this Agreement.

      4.2. Dispute Resolution; Judgments. Resolution of disputes arising under
this Agreement shall be subject to the following terms and conditions:

            (a) If any dispute shall arise with respect to the delivery,
      ownership, right of possession or disposition of the Documents and/or the
      Escrowed Payment, or if the Escrow Agent shall in good faith be uncertain
      as to its duties or rights hereunder, the Escrow Agent shall be
      authorized, without liability to anyone, to (i) refrain from taking any
      action other than to continue to hold the Documents and the Escrowed
      Payment pending receipt of a joint instruction from the Purchaser and the
      Company, (ii) commence an interpleader or similar action, suit or
      proceeding for the resolution of any such dispute; and/or (iii) deposit
      the Documents and the Escrowed Payment with any court of competent
      jurisdiction in the State of New York, in which event the Escrow Agent
      shall give written notice thereof to the Purchaser and the Company and
      shall thereupon be relieved and discharged from all further obligations
      pursuant to this Agreement. The Escrow Agent may, but shall be under no
      duty to, institute or defend any legal proceedings which relate to the
      Documents and the Escrowed Payment. The Escrow Agent shall have the right
      to retain counsel if it becomes involved in any disagreement, dispute or
      litigation on account of this Agreement or otherwise determines that it is
      necessary to consult counsel which such counsel may be Loeb & Loeb LLP or
      such other counsel of the Escrow Agent's choosing.

            (b) The Escrow Agent is hereby expressly authorized to comply with
      and obey any Court Order. In case the Escrow Agent obeys or complies with
      a Court Order, the Escrow Agent shall not be liable to the Purchaser and
      the Company or to any other person, firm, company or entity by reason of
      such compliance.

                                        6
<PAGE>

                                   ARTICLE V

                                 GENERAL MATTERS

      5.1. Termination. This escrow shall terminate upon disbursement of the
Escrowed Payment in accordance with the terms of this Agreement or earlier upon
the agreement in writing of the Purchaser and the Company or resignation of the
Escrow Agent in accordance with the terms hereof.

      5.2. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given one (1) day after being sent by telecopy (with copy delivered by
overnight courier, regular or certified mail):

            If to the Company, to:  c/o GreenMan Technologies of Minnesota, Inc.
                                    12498 Wyoming Avenue South
                                    Savage, MN 55378

                                    Attention: Lyle Jenson, President, GreenMan
                                    Technologies, Inc.
                                    Telephone: 952-894-5280
                                    Facsimile: 952-894-5061

With a copy to: Morse, Barnes-Brown& Pendleton
                Reservoir Place, 1601 Trapelo Road
                Waltham, MA 02451
Attention:      Carl Barnes, Esq.
Telephone:
                -----------------------------
Facsimile:
                -----------------------------

      (a)    If to the Purchaser, to:        Laurus Master Fund, Ltd.
                                             M&C Corporate Services Limited,
                                             P.O. Box 309 GT, Ugland House
                                             South Church Street, George Town
                                             Grand Cayman, Cayman Islands
                                             Fax:        345-949-8080
                                             Attention:  John Tucker, Esq.

      (b)    If to the Escrow Agent, to:     Loeb & Loeb LLP
                                             345 Park Avenue
                                             New York, New York 10154
                                             Fax:        (212) 407-4990
                                             Attention:  Scott J. Giordano, Esq.

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

      5.3. Interest. The Escrowed Payment shall not be held in an interest
bearing account nor will interest be payable in connection therewith.

                                        7
<PAGE>

      5.4. Assignment; Binding Agreement. Neither this Agreement nor any right
or obligation hereunder shall be assignable by any party without the prior
written consent of the other parties hereto. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

      5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

      5.6. Counterparts/Execution. This Agreement may be executed in any number
of counterparts and by different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same agreement. This Agreement may
be executed by facsimile transmission.

                                        8
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

                             COMPANY:

                             GREENMAN TECHNOLOGIES, INC.

                             By:_______________________________________________
                                 Name:
                                 Title:

                             PURCHASER:

                             LAURUS MASTER FUND, LTD.

                             By:_______________________________________________
                                 Name:
                                 Title:

                             ESCROW AGENT:

                             LOEB & LOEB LLP

                             By:_______________________________________________
                                 Name:
                                 Title:

                                        9
<PAGE>

                      SCHEDULE A TO FUNDS ESCROW AGREEMENT

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PURCHASER                                         PRINCIPAL NOTE AMOUNT
----------------------------------------------------------------------------------------------
<S>                                               <C>
LAURUS MASTER FUND, LTD.,                         Secured Non-Convertible Note in an
M&C Corporate Services Limited,                   aggregate principal amount of $11,000,000;
P.O. Box 309 GT,                                  and Secured Non-Convertible Revolving Note
Ugland House, South Church Street,                in an aggregate principal amount of
George Town, Grand Cayman, Cayman Islands         $5,000,000
Fax: 345-949-8080
----------------------------------------------------------------------------------------------
TOTAL                                             $16,000,000
----------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------
FUND MANAGER                                      SERVICING PAYMENT
----------------------------------------------------------------------------------------------
LAURUS CAPITAL MANAGEMENT, L.L.C.                 Servicing payment payable in connection
825 Third Avenue, 14th Floor                      with investment by Laurus Master Fund,
New York, New York 10022                          Ltd. for which Laurus Capital Management,
Fax: 212-541-4434                                 LLC is the Manager.
----------------------------------------------------------------------------------------------
TOTAL                                             $20,000
----------------------------------------------------------------------------------------------

WARRANTS

----------------------------------------------------------------------------------------------
WARRANT RECIPIENT                                 WARRANTS IN CONNECTION WITH OFFERING
----------------------------------------------------------------------------------------------
LAURUS MASTER FUND, LTD.                          Warrant  exercisable into 3,586,429 shares
M&C Corporate Services Limited,                   of common stock of the Company issuable in
P.O. Box 309 GT,                                  connection with the Secured
Ugland House, South Church Street,                Non-Convertible Note and the Secured
George Town, Grand Cayman, Cayman Islands         Non-Convertible Revolving Note.
Fax: 345-949-8080
----------------------------------------------------------------------------------------------
TOTAL                                             Warrants exercisable into 3,586,429 shares
                                                  of common stock of the Company
----------------------------------------------------------------------------------------------
</TABLE>Exhibit 10.1

                             SUBORDINATION AGREEMENT

      This Subordination Agreement (this "Agreement") is entered into as of the
15th day of March, 2006, by and among Nicholas DeBenedictis and Nancy
DeBenedictis are collectively referred to herein as the "Subordinated Lenders"
and each, a "Subordinated Lender"), and Laurus Master Fund, Ltd. (the "Senior
Lender"), and acknowledged and agreed to by Greenman Technologies, Inc., a
Delaware corporation (the "Company"). Unless otherwise defined herein,
capitalized terms used herein shall have the meaning provided such terms in the
Securities Purchase Agreement referred to below.

                                   BACKGROUND

      WHEREAS, the Senior Lender has made a loan to the Company pursuant to, and
in accordance with (i) that certain Securities Purchase Agreement, dated as of
June 30, 2004 (as amended, modified or supplemented from time to time, the "June
2004 Securities Purchase Agreement"), by and between the Company and the Senior
Lender, (ii) the Related Agreements referred to in the June 2004 Securities
Purchase Agreement, (iii) that certain Security Agreement, dated as of June 30,
2004 (as amended, restated, modified and/or supplemented from time to time, the
"June 2004 Security Agreement"), by and among the Company, certain subsidiaries
of the Company party thereto and the Senior Lender, (iv) the Ancillary
Agreements referred to in the June 2004 Security Agreement, (v) that certain
Securities Purchase Agreement, dated as of July 20, 2005 (as amended, modified
or supplemented from time to time, the "July 2005 Securities Purchase
Agreement"), by and between the Company and the Senior Lender, and (vi) the
Related Agreements referred to in the 2005 Securities Purchase Agreement.

      WHEREAS, the Subordinated Lenders are officers and/or directors of the
Company and have made loans to the Company.

      NOW, THEREFORE, each Subordinated Lender and the Senior Lender agree as
follows:

                                      TERMS

      1. All obligations of each the Company and/or any of its Subsidiaries to
the Senior Lender, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent or now or hereafter existing, or due or to
become due are referred to as "Senior Liabilities". Any and all loans made by
the Subordinated Lenders to the Company and/or any of its Subsidiaries, together
with all other obligations of the Company and/or any of its Subsidiaries to any
Subordinated Lender (in each case, including any interest, fees or penalties
related thereto), howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent or now or hereafter existing, or due or to
become due are referred to as "Junior Liabilities". It is expressly understood
and agreed that the term "Senior Liabilities", as used in this Agreement, shall
include, without limitation, any and all interest, fees and penalties accruing
on any of the Senior Liabilities after the commencement of any proceedings
referred to in paragraph 4 of this Agreement, notwithstanding any provision or
rule of law which might restrict the rights of the Senior Lender, as against the
Company, its Subsidiaries or anyone else, to collect such interest, fees or
penalties, as the case may be.
<PAGE>

      2. Except as expressly otherwise provided in this Agreement or as the
Senior Lender may otherwise expressly consent in writing, the payment of the
Junior Liabilities shall be postponed and subordinated to the payment in full of
all Senior Liabilities. Furthermore, no payments or other distributions
whatsoever in respect of any Junior Liabilities shall be made, nor shall any
property or assets of the Company or any of its Subsidiaries be applied to the
purchase or other acquisition or retirement of any Junior Liability.
Notwithstanding anything to the contrary contained in this paragraph 2 or
elsewhere in this Agreement, the Company and its Subsidiaries may make regularly
scheduled interest payments to the Subordinated Lenders with respect to the
Junior Liabilities, so long as (i) no Event of Default has occurred and is
continuing at the time of any such payment and (ii) the rate of interest is with
respect to the Junior Liabilities is not increased from that in effect on the
date hereof.

      3. Each Subordinated Lender hereby subordinates all security interests
that have been, or may be, granted the by Company and/or any of its Subsidiaries
to such Subordinated Lender in respect of the Junior Liabilities, to the
security interests granted by the Company and/or any of its Subsidiaries to the
Senior Lender in respect of the Senior Liabilities.

      4. In the event of any dissolution, winding up, liquidation, readjustment,
reorganization or other similar proceedings relating to the Company and/or any
of its Subsidiaries or to its creditors, as such, or to its property (whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency or receivership, or upon an assignment for the benefit of creditors,
or any other marshalling of the assets and liabilities of the Company and/or any
of its Subsidiaries, or any sale of all or substantially all of the assets of
the Company and/or any of its Subsidiaries, or otherwise), the Senior
Liabilities shall first be paid in full before any Subordinated Lender shall be
entitled to receive and to retain any payment or distribution in respect of any
Junior Liability.

      5. Each Subordinated Lender will mark his books and records so as to
clearly indicate that their respective Junior Liabilities are subordinated in
accordance with the terms of this Agreement. Each Subordinated Lender will
execute such further documents or instruments and take such further action as
the Senior Lender may reasonably request from time to time request to carry out
the intent of this Agreement.

      6. Each Subordinated Lender hereby waives all diligence in collection or
protection of or realization upon the Senior Liabilities or any security for the
Senior Liabilities.

      7. No Subordinated Lender will without the prior written consent of the
Senior Lender: (a) attempt to enforce or collect any Junior Liability or any
rights in respect of any Junior Liability; or (b) commence, or join with any
other creditor in commencing, any bankruptcy, reorganization or insolvency
proceedings with respect to the Company and/or any of its Subsidiaries.

      8. The Senior Lender may, from time to time, at its sole discretion and
without notice to any Subordinated Lender, take any or all of the following
actions: (a) retain or obtain a security interest in any property to secure any

                                       -2-
<PAGE>

of the Senior Liabilities; (b) retain or obtain the primary or secondary
obligation of any other obligor or obligors with respect to any of the Senior
Liabilities; (c) extend or renew for one or more periods (whether or not longer
than the original period), alter or exchange any of the Senior Liabilities, or
release or compromise any obligation of any nature of any obligor with respect
to any of the Senior Liabilities; and (d) release their security interest in, or
surrender, release or permit any substitution or exchange for, all or any part
of any property securing any of the Senior Liabilities, or extend or renew for
one or more periods (whether or not longer than the original period) or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such property.

      9. The Senior Lender may, from time to time, whether before or after any
discontinuance of this Agreement, without notice to any Subordinated Lender,
assign or transfer any or all of the Senior Liabilities or any interest in the
Senior Liabilities; and, notwithstanding any such assignment or transfer or any
subsequent assignment or transfer of the Senior Liabilities, such Senior
Liabilities shall be and remain Senior Liabilities for the purposes of this
Agreement, and every immediate and successive assignee or transferee of any of
the Senior Liabilities or of any interest in the Senior Liabilities shall, to
the extent of the interest of such assignee or transferee in the Senior
Liabilities, be entitled to the benefits of this Agreement to the same extent as
if such assignee or transferee were the Senior Lender, as applicable; provided,
however, that, unless the Senior Lender shall otherwise consent in writing, the
Senior Lender shall have an unimpaired right, prior and superior to that of any
such assignee or transferee, to enforce this Agreement, for the benefit of the
Senior Lender, as to those of the Senior Liabilities which the Senior Lender has
not assigned or transferred.

      10. The Senior Lender shall not be prejudiced in its rights under this
Agreement by any act or failure to act of any Subordinated Lender, or any
noncompliance of any Subordinated Lender with any agreement or obligation,
regardless of any knowledge thereof which the Senior Lender may have or with
which the Senior Lender may be charged; and no action of the Senior Lender
permitted under this Agreement shall in any way affect or impair the rights of
the Senior Lender and the obligations of any Subordinated Lender under this
Agreement.

      11. No delay on the part of the Senior Lender in the exercise of any right
or remedy shall operate as a waiver of such right or remedy, and no single or
partial exercise by the Senior Lender of any right or remedy shall preclude
other or further exercise of such right or remedy or the exercise of any other
right or remedy; nor shall any modification or waiver of any of the provisions
of this Agreement be binding upon the Senior Lender except as expressly set
forth in a writing duly signed and delivered on behalf of the Senior Lender. For
the purposes of this Agreement, Senior Liabilities shall have the meaning set
forth in Section 1 above, notwithstanding any right or power of any Subordinated
Lender or anyone else to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or defense shall
affect or impair the agreements and obligations of any Subordinated Lender under
this Agreement.

      12. This Agreement shall be binding upon each Subordinated Lender and upon
the heirs, legal representatives, successors and assigns of each Subordinated
Lender and the successors and assigns of any Subordinated Lender.

                                       -3-
<PAGE>

      13. This Agreement shall be construed in accordance with and governed by
the laws of New York without regard to conflict of laws provisions. Wherever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

                            [signature page follows]

                                      -4-
<PAGE>

      IN WITNESS WHEREOF, this Agreement has been made and delivered this 15th
day of March 2006.

                            By:_________________________
                            Name: Nicholas DeBenedictis

                            By:_________________________
                            Name: Nancy DeBenedictis

                            LAURUS MASTER FUND, LTD.

                            By:_________________________
                            Name:
                            Title:

        Acknowledged and Agreed to by:

        GREENMAN TECHNOLOGIES, INC.

        By:________________________
           Name:
           Title:

                                       -5-

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