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Exhibit 10.39
 

 

$6,314,699.59
September 4, 2009

 
AMENDED AND RESTATED
CONVERTIBLE TERM NOTE
 
This Note and the Common Stock issuable upon conversion hereof (until such time,
if any, as such Common Stock is registered with the Securities and Exchange
Commission pursuant to an effective registration statement) have not been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state securities laws, and may not be sold, offered for sale of otherwise
transferred unless registered or qualified under the Act and applicable state
securities laws or unless the Maker receives an opinion, in form and from
counsel reasonably acceptable to the Maker, that registration, qualification or
other such actions are not required under any such laws.
 
FOR VALUE RECEIVED, GENERAL ENVIRONMENTAL MANAGEMENT, INC., a Nevada corporation
(the “Maker”), hereby promises to pay to CVC California, LLC, a Delaware limited
liability company (“CVC”), or registered assigns (collectively with CVC, the
“Payee”), the sum of Six Million Three Hundred Fourteen Thousand Six Hundred
Ninety-Nine and 59/100 ($6,314,699.59 Dollars (the “Principal”), with interest
thereon, on the terms and conditions set forth herein and in the Amended and
Restated Revolving Credit and Term Loan Agreement of even date herewith by and
between CVC and the Maker (as same may be amended, modified, supplemented and/or
restated from time to time, the “Loan Agreement”).  Terms defined in the Loan
Agreement and not otherwise defined herein shall have the meanings assigned
thereto in the Loan Agreement.
 
Payments of principal of, interest on and any other amounts with respect to this
Convertible Promissory Note (this “Note”) are to be made in lawful money of the
United States of America.
 
Principal and accrued interest of this Note may or shall be convertible into
common stock of the Maker as provided in Section 3 below.
 
1.           Payments.
 
(a)           Interest. This Note shall bear interest (“Interest”) on Principal
amounts outstanding from time to time from the date hereof at the rate of
fourteen (14%) percent per annum; provided, however, that during the continuance
of any Event of Default, the Interest rate hereunder shall be increased to
nineteen (19%) percent per annum.  All Interest shall be computed on the daily
unpaid Principal balance of this Note based on a three hundred sixty (360) day
year, and shall be payable ON DEMAND or, in the absence of demand, monthly in
arrears on the first day of each calendar month commencing November 1, 2009 and
on the maturity hereof.
 
(b)           Principal.  The Principal of this Note shall be payable ON DEMAND
or, in the absence of demand, (i) in seven (7) equal monthly installments of
$138,000 each, due and payable on the first day of each calendar month
commencing December 1, 2009 and continuing through and including June 1, 2010,
and (ii) a final installment due and payable on June 30, 2010 in an amount equal
to the entire remaining Principal balance of this Note.
 
 
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(c)           Non-Business Day.  If any scheduled payment date as aforesaid is
not a business day in the State of California or the State of Florida, then the
payment to be made on such scheduled payment date shall be due and payable on
the next succeeding business day, with additional interest on any Principal
amount so delayed for the period of such delay.
 
2.           Prepayment.
 
(a)           Optional Prepayment of Principal. The unpaid Principal balance of
this Note may, at the Maker’s option, be prepaid in whole or in part, at any
time or from time to time upon twenty (20) days’ prior written notice to the
Payee, provided that the Payee shall retain the right to convert all or any
portion of such Principal amount called for prepayment, together with any or all
Interest accrued thereon, at any time prior to the date fixed for prepayment,
and thereafter until such prepayment is actually made.  Any optional prepayment
of Principal hereunder (other than a prepayment (i) required pursuant to Section
2.02(e) of the Loan Agreement, or (ii) made with the proceeds received from the
sale of any business unit or units, promptly upon receipt of such proceeds)
shall require the simultaneous payment of a prepayment premium as provided in
Section 2.03(c) of the Loan Agreement.
 
(b)           Mandatory Prepayment of Principal.  The Principal of this Note may
be required to be prepaid in accordance with Section 2.07 of the Loan Agreement,
and such prepayment shall, unless made with the proceeds received from the sale
of any business unit or units, be subject to the payment of a prepayment premium
as provided in Section 2.03(c) of the Loan Agreement.  In addition, Principal
and accrued interest of this Note shall be required to be prepaid in the event
and to the extent that and at the same time as there shall be paid any amounts
pursuant to Section 2.2 of that certain Stock Purchase Agreement dated as of
August 17, 2009 by and among MTS Acquisition Company, Inc., the Maker, General
Environmental Management, Inc. (a Delaware corporation), and GEM Mobile
Treatment Services, Inc. (as same may be amended, modified, supplemented and/or
restated from time to time, the “Stock Purchase Agreement”), and no prepayment
premium shall be required in respect thereof.
 
(c)           Interest. Except to the extent that such Interest is converted as
herein provided, each prepayment of Principal shall be accompanied by all
accrued Interest on the Principal amount prepaid or converted accrued to the
date of prepayment or conversion.
 
(d)           Application of Payments.  Any and all prepayments hereunder shall
be applied first to any prepayment premium required under Section 2(a) or 2(b)
above, then to unpaid accrued Interest on the Principal amount being prepaid,
and finally to the remaining Principal installments in inverse order of
maturity.
 
3.           Conversion.
 
(a)           Optional and Mandatory Conversion.  The Payee may, at its option,
upon written notice to the Maker given at any time and from time to time,
convert all or any portion of the unpaid Principal balance of this Note, and/or
any accrued Interest thereon, into shares of common stock of the Maker (“Common
Stock”), at a price of $0.60 per share of Common Stock (as same may be adjusted
from time to time in accordance herewith, the “Conversion Price”).
 
 
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(b)           Mechanics of Conversion.  Upon notice to the Maker of the Payee’s
conversion election as provided in Section 3(a), the Maker shall, in accordance
with Section 3(c), issue to the Payee (or to the Payee’s designee(s) set forth
in the Payee’s conversion election) the number of shares of Common Stock to
which the Payee shall be entitled upon such conversion, and shall deliver or
cause to be delivered to the Payee or such designee(s) the certificates
representing such shares of Common Stock.  All shares of Common Stock issued or
delivered upon any conversion hereunder shall, when issued or delivered, be duly
authorized, validly issued, fully paid and nonassessable.  In lieu of any
fractional shares to which the Payee would otherwise be entitled, the Maker
shall pay cash equal to such fraction multiplied by the per share Conversion
Price.
 
(c)           Issuance of Common Stock Upon Conversion.  Within a reasonable
time, not exceeding five (5) Business Days after the Conversion Date, the Maker
shall deliver or cause to be delivered, to or upon the written order of the
Payee, certificates representing the number of fully paid and nonassessable
shares of Common Stock into which this Note has been converted in accordance
with the provisions of this Section 3.  If so requested by the Maker, the Payee
shall, within a reasonable time (not exceeding five (5) Business Days after
receipt by the Payee of such certificates), surrender this Note to the Maker for
cancellation, against delivery of a replacement Note representing the remaining
balance (if any) of this Note which has not been converted.  Subject to the
following provisions of this Section 3, such conversion shall be deemed to have
occurred on the Conversion Date, so that the Payee of this Note or such Payee’s
designee(s) shall be treated for all purposes as having become the record holder
of such shares of Common Stock at such time.
 
(d)           Taxes on Conversion.  The issuance of certificates for shares for
Common Stock upon the conversion of this Note shall be made without charge by
the Maker to the converting Payee for any tax in respect of the issuance of such
certificates and such certificates shall be issued in the name of, or in such
names as may be directed by, the Payee; provided, however, that the Maker shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance or delivery of any such certificate in a name other
than that of the Payee, and the Maker shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Maker the amount of any such tax or shall have
established to the satisfaction of the Maker that any such tax has been paid;
and further provided, that the Maker shall not be required to pay any income tax
to which the Payee may be subject in respect of the issuance of this Note or the
shares issued upon conversion hereof.
 
(e)           Adjustment of Shares.
 
(i)            Stock Dividends, Distributions or Subdivisions.  In the event
that, at any time and from time to time from and after the date of this Note,
the Maker shall issue additional shares of Common Stock (or securities
convertible into Common Stock) in a stock dividend, stock distribution or
subdivision paid with respect to Common Stock, or declare any dividend or other
distribution payable in additional shares of Common Stock (or securities
convertible into Common Stock) or effect a split or subdivision of the
outstanding shares of Common Stock, then, concurrently with the effectiveness of
such stock dividend, stock distribution or subdivision, the then-effective
Conversion Price shall be proportionately decreased, and the number of shares of
Common Stock issuable upon conversion of this Note shall thus be proportionately
increased.  The Maker shall not, at any time, take any action which would cause
the Conversion Price to be reduced to an amount less than the par value per
share of the class of stock into which this Note is convertible.
 
 
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(ii)           Combinations or Consolidations.  In the event that, at any time
and from time to time from and after the date of this Note, the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, then, concurrently
with the effectiveness of such combination or consolidation, the then-effective
Conversion Price shall be proportionately increased, and the number of shares of
Common Stock issuable upon conversion of this Note shall thus be proportionately
decreased.
 
(iii)           Other Dividends or Distributions.  If the Maker, at any time or
from time to time after the issuance of this Note, makes a distribution to the
holders of Common Stock which is payable in securities of the Maker other than
Common Stock, then, in each such event, provision shall be made so that the
Payee shall receive upon conversion of this Note, in addition to the number of
shares of Common Stock, the amount of such securities of the Maker which would
have been received if the portion of this Note so converted had been exercised
for Common Stock on the date of such event, subject to adjustments subsequent to
the date of such event with respect to such distributed securities which shall
be on terms as nearly equivalent as practicable to the adjustments provided in
this Section 3(e)(iii) and all other adjustments under this
Section 3(e).  Nothing contained in this Section 3(e)(iii) shall be deemed to
permit the payment of any distribution in violation of the Loan Agreement.
 
(iv)           Merger, Consolidation or Exchange.  If, at any time or from time
to time after the date of this Note, there occurs any merger, consolidation,
arrangement or statutory share exchange of the Maker with or into any other
person or entity, then, in each such event, provision shall be made so that the
Payee shall receive upon conversion of this Note the kind and amount of shares
and other securities and property (including cash) which would have been
received upon such merger, consolidation, arrangement or statutory share
exchange by the Payee if the portion of this Note so converted had been
exercised for shares of Common Stock immediately prior to such merger,
consolidation, arrangement or statutory share exchange, subject to adjustments
for events subsequent to the effective date of such merger, consolidation,
arrangement or statutory share exchange with respect to such shares and other
securities which shall be on terms as nearly equivalent as practicable to the
adjustments provided in this Section 3(e)(iv) and all other adjustments under
this Section 3(e).  Nothing contained in this Section 3(e)(iv) shall be deemed
to permit any such transaction in violation of the Loan Agreement.
 
 
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(v)           Recapitalization or Reclassification.  If, at any time or from
time to time after the date of this Note, the shares of Common Stock issuable
upon conversion of this Note are changed into the same or a different number of
securities of any class of the Maker, whether by recapitalization,
reclassification or otherwise (other than a merger, consolidation, arrangement
or statutory share exchange provided for elsewhere in this Section 3(e)), then,
in each such event, provision shall be made so that the Payee shall receive upon
conversion of this Note the kind and amount of securities or other property
which would have been received in connection with such recapitalization,
reclassification or other change by the Payee if the portion of this Note so
converted had been converted immediately prior to such recapitalization,
reclassification or change, subject to adjustments for events subsequent to the
effective date of such recapitalization, reclassification or other change with
respect to such securities which shall be on terms as nearly equivalent as
practicable to the adjustments provided in this Section 3(e)(v) and all other
adjustments under this Section 3(e).
 
(vi)           Extraordinary Dividends or Distributions.  If, at any time or
from time to time after the date of this Note, the Maker shall declare a
dividend or any other distribution upon the Common Stock payable otherwise than
out of current earnings, retained earnings or earned surplus and otherwise than
in shares of Common Stock, then the Conversion Price in effect immediately prior
to such declaration shall be reduced by an amount equal, in the case of a
dividend or distribution in cash, to the amount thereof payable per share of
Common Stock or, in the case of any other dividend or distribution, to the value
thereof per share of Common Stock at the time such dividend or distribution was
declared, as determined by the Board of Directors of the Maker in good
faith.  Such reductions shall take effect as of the date on which a record is
taken for the purposes of the subject dividend or distribution, or, if a record
is not taken, the date as of which the holders of record of Common Stock
entitled to such dividend or distribution are to be determined.  Nothing
contained in this Section 3(e)(vi) shall be deemed to permit the payment of any
dividend in violation of the Loan Agreement.
 
 
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(vii)         Dilutive Issuances.  (A)  If the Maker, at any time or from time
to time, issues or sells any Additional Shares of Common Stock (as defined
below), other than as provided in the foregoing subsections of this
Section 3(e), for a price per share (which, in the case of options, warrants,
convertible securities or other rights, includes the amounts paid therefor plus
the exercise price, conversion price or other such amounts payable thereunder)
that is less than the Conversion Price then in effect, then and in each such
case, the then applicable Conversion Price shall automatically be reduced as of
the opening of business on the date of such issue or sale, to a price determined
by multiplying the Conversion Price then in effect by a fraction (i) the
numerator of which shall be (A) the number of share of Common Stock deemed
outstanding (as determined below) immediately prior to such issue or sale, plus
(B) the number of shares of Common Stock which the aggregate consideration
received by the Maker for the total number of Additional Shares of Common Stock
so issued would purchase at the Conversion Price then in effect, and (ii) the
denominator of which shall be the number of shares of Common Stock deemed
outstanding (as defined below) immediately prior to such issue or sale plus the
total number of Additional Shares of Common Stock so issued; provided, however,
that upon the expiration or other termination of options, warrants or other
rights to purchase or acquire Common Stock which triggered any adjustment under
this Section 3(e)(vii), and upon the expiration or termination of the right to
convert or exchange convertible or exchangeable securities (whether by reason of
redemption or otherwise) which triggered any adjustment under this Section
3(e)(vii), if any thereof shall not have been exercised, converted or exchanged,
as applicable, the number of shares of Common Stock deemed to be outstanding
pursuant to this Section 3(e)(vii) shall be reduced by the number of shares as
to which options, warrants and rights to purchase or acquire Common Stock shall
have expired or terminated unexercised, and as to which conversion or exchange
rights shall have expired or terminated unexercised, and such number of shares
shall no longer be deemed to be outstanding; and the Conversion Price then in
effect shall forthwith be readjusted and thereafter be the price that it would
have been had adjustment been made on the basis of the issuance only of the
shares of Common Stock actually issued.  For purposes of the preceding sentence,
the number of shares of Common Stock deemed to be outstanding as of a given date
shall be the sum of (x) the number of shares of Common Stock actually
outstanding, (y) the number of shares of Common Stock into which this Note could
be converted on the day immediately preceding the given date, and (z) the number
of shares of Common Stock which could be obtained through the exercise or
conversion of all other rights, options and convertible securities outstanding
on the day immediately preceding the given date.  For purposes hereof,
“Additional Shares of Common Stock” shall mean all shares of Common Stock, and
all options, warrants, convertible securities or other rights to purchase or
acquire Common Stock, issued by the Maker other than (i) shares of Common Stock
issued pursuant to the exercise of options, warrants or convertible securities
outstanding on September 1, 2009 (including, without limitation, all of the
Warrants issued pursuant to the Loan Agreement), or hereafter issued from time
to time pursuant to and in accordance with stock purchase or stock option plans
as in effect on September 1, 2009, and (ii) shares of Common Stock and/or
options, warrants or other Common Stock purchase rights for up to an aggregate
of 2,000,000 shares of Common Stock (such number to be subject to adjustment in
accordance with Sections 3(e)(i) and 3(e)(ii) above), provided that, in each
case, such options, warrants or other rights (A) have an exercise price per
share of Common Stock equal to or greater than the then-current fair market
value of a share of Common Stock, as determined in good faith by the Board of
Directors of the Maker or the Compensation Committee thereof, and (B) are issued
to employees, officers or directors of, or consultants to, the Maker or any
Subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Maker’s Board of Directors or the
Compensation Committee thereof, and by the Maker’s stockholders.
 
(B)           In the event that the exercise price, conversion price, purchase
price or other price at which shares of Common Stock are purchasable pursuant to
any options, warrants, convertible securities or other rights to purchase or
acquire Common Stock is reduced at any time or from time to time (other than
under or by reason of provisions designed to protect against dilution), then,
upon such reduction becoming effective, the Conversion Price then in effect
hereunder shall forthwith be decreased to such Conversion Price as would have
been obtained had the adjustments made and required under this Section 3(e)(vii)
upon the issuance of such options, warrants, convertible securities or other
rights been made upon the basis of (and the total consideration received
therefor) (i) the issuance of the number of shares of Common Stock theretofore
actually delivered upon the exercise, conversion or exchange of such options,
warrants, convertible securities or other rights, (ii) the issuance of all of
the Common Stock and all other options, warrants, convertible securities and
other rights to purchase or acquire Common Stock issued after the issuance of
the modified options, warrants, convertible securities or other rights, and
(iii) the original issuance at the time of the reduction of any such options,
warrants, convertible securities or other rights then still outstanding.
 
 
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(C)           In no event shall an adjustment under this Section 3(e)(vii) be
made if it would result in an increase in the then applicable Conversion Price.
 
(viii)        Certificate of Adjustment.  Whenever the Conversion Price and/or
the number of share of Common Stock receivable upon conversion of this Note is
adjusted, the Maker shall promptly deliver to the Payee a certificate of
adjustment, setting forth the Conversion Price and/or shares of Common Stock
issuable after adjustment, a brief statement of the facts requiring the
adjustment and the computation by which the adjustment was made.  The
certificate of adjustment shall be prima facie evidence of the correctness of
the adjustment.
 
(ix)           Successive Application.  The provisions of this Section 3(e)
shall be applicable successively to each event described herein which may occur
subsequent to the date of this Note and prior to the conversion in full of this
Note.
 
(x)            Fractional Shares.  No fractional shares of Common Stock shall be
issuable by reason of any adjustments made pursuant to this Section 3(e); and in
lieu of any such fractional shares, the Maker shall pay cash therefor in
accordance with Section 3(b) above.
 
(f)           No Impairment. The Maker will not, by amendment of its
incorporation documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder but will at all times in good
faith assist in the carrying out of all the provisions of this Section 3 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the Payee of this Note against impairment.  In
the event of any merger or consolidation in which the Maker is not the surviving
entity, the Maker shall make appropriate arrangements in order that, upon any
subsequent conversion of this Note, the Payee shall become entitled to receive
the same securities or other consideration that such Payee would have received
had such conversion been made immediately prior to the consummation of such
merger or consolidation, subject to further adjustments, of the type provided in
this Note, with respect to any events relating to any such securities occurring
subsequent to the consummation of such merger or consolidation.
 
(g)           Common Stock Reserved.  The Maker shall at all times reserve and
keep available out of its authorized but unissued Common Stock such number of
shares of Common Stock as shall from time to time be sufficient to effect the
full conversion of this Note into Common Stock.
 
(h)           Restricted Securities.  The shares of Common Stock issuable to the
Payee hereunder (the “Shares”) may not, at the time of issuance, have been
registered under any federal or state securities laws, and may constitute
“restricted securities” within the meaning of federal and state securities
laws.  By its receipt of Shares, if the Shares are not then the subject of an
effective registration statement under the Securities Act, the Payee will be
deemed to acknowledge and confirm that it is receiving such Shares for its own
account for investment, and not with a view to the resale or distribution
thereof in violation of any federal or state securities laws.
 
 
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4.           Loan Documents.  This Note is the Convertible Term Note issued
pursuant to the terms of the Loan Agreement and is secured pursuant to the
provisions of certain “Security Documents” referred to in the Loan
Agreement.  This Note is entitled to all of the benefits of the Loan Agreement
and in said Security Documents, including provisions governing the payment and
the acceleration of maturity hereof, which agreements and instruments are hereby
incorporated by reference herein and made a part hereof.  The occurrence and
continuance of an Event of Default under the Loan Agreement shall constitute a
default under this Note and shall entitle the Payee to accelerate the entire
indebtedness hereunder and take such other action as may be provided for in the
Loan Agreement and/or in any and all other instruments evidencing and/or
securing the indebtedness under this Note, or as may be provided under the law.
 
5.           Communications and Notices.  Except as otherwise specifically
provided herein, all communications and notices provided for in this Note shall
be sent by reputable overnight courier or facsimile to the Payee at the Payee’s
address as provided to the Secretary of the Maker from time to time and, if to
the Maker, at 3191 Temple Avenue, Suite 250, Pomona, California 91768,
Attention: Timothy J. Koziol, Fax # (909) 444-8356.  Any notice sent by
overnight courier shall be deemed given on the third (3rd) Business Day after
being deposited with the courier with all charges prepaid or billed to the
account of the sender. Any notice sent by facsimile shall be deemed received on
the date on which such notice is sent if such notice is sent during normal
business hours at the point of receipt (or otherwise on the next succeeding
Business Day).  The Maker and the Payee may from time to time change their
respective addresses or fax numbers, for purposes of this Section 5, by written
notice to the other parties; provided, however, that notice of such change shall
be effective only upon receipt.
 
6.           Governing Law.  This Note shall be construed in accordance with and
governed by the laws of the State of New York, except to the extent superseded
by Federal enactments.
 
7.           Assignment.  This Note shall be binding upon and shall inure to the
benefit of the respective successors and permitted assigns of the parties
hereto, provided that the Maker may not assign any of its rights or obligations
hereunder without the prior written consent of the Payee.
 
8.           Waiver and Amendment.  No waiver of a right in any instance shall
constitute a continuing waiver of successive rights, and any one waiver shall
govern only the particular matters waived.  Neither any provision of this Note
nor any performance hereunder may be amended or waived except pursuant to an
agreement in writing signed by the party against whom enforcement thereof is
sought.  Except as otherwise expressly provided in this Note, the Maker hereby
waives diligence, demand, presentment for payment, protest, dishonor,
nonpayment, default, notice of any and all of the foregoing, and any other
notice or action otherwise required to be given or taken under the law in
connection with the delivery, acceptance, performance, default, enforcement or
collection of this Note, and expressly agrees that this Note, or any payment
hereunder, may be extended, modified or subordinated (by forbearance or
otherwise) from time to time, without in any way affecting the liability of the
Maker.  The Maker further waives the benefit of any exemption under the
homestead exemption laws, if any, or any other exemption, appraisal or
insolvency laws, and consents that the Payee may release or surrender, exchange
or substitute any personal property or other collateral security now held or
which may hereafter be held as security for the payment of this Note.
 
 
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9.           Usury Savings Clause.  All agreements between the Maker and the
Payee are hereby expressly limited to provide that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Payee for the use, forbearance or detention of the indebtedness evidenced hereby
exceed the maximum amount which the Payee is permitted to receive under
applicable law.  If, from any circumstances whatsoever, fulfillment of any
provision hereof or of the Loan Agreement or any Loan Document thereunder, at
the time performance of such provision shall be due, shall involve transcending
the limit of validity prescribed by law, then, ipso facto, the obligation to be
fulfilled shall automatically be reduced to the limit of such validity, and if
from any circumstance the Payee shall ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal balance of any of
the Maker’s Obligations (as such term is defined in the Loan Agreement) to the
Payee, and not to the payment of interest hereunder.  To the extent permitted by
applicable law, all sums paid or agreed to be paid for the use, forbearance or
detention of the indebtedness evidenced by this Note shall be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full, to the end that the rate or amount of interest on account
of such indebtedness does not exceed any applicable usury ceiling.  As used
herein, the term “applicable law” shall mean the law in effect as of the date
hereof, provided, however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note shall be
governed by such new law as of its effective date.  This provision shall control
every other provision of all agreements between the Maker and the Payee.
 
10.         Collection Costs.  In the event that the Payee shall place this Note
in the hands of an attorney for collection during the continuance of any Event
of Default, the Maker shall further be liable to the Payee for all costs and
expenses (including reasonable attorneys’ fees) which may be incurred by the
Payee in enforcing this Note, all of which costs and expenses shall be
obligations under and part of this Note; and the Payee may take judgment for all
such amounts in addition to all other sums due hereunder.
 
11.         Effect on Prior Note.  This Note, together with the Term Note of
even date herewith in the principal amount of $5,600,000 issued by the Maker to
CVC, amends, restates and supersedes in its entirety the Convertible Term Note
dated August 31, 2008 in the principal amount of $6,900,000 issued by the Maker
to CVC, provided that this Note does not effect a novation of the outstanding
obligations under such prior Convertible Term Note (all of which obligations
continue and shall henceforth be evidenced by this Note and the Term Note
referred to in this paragraph).
 
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IN WITNESS WHEREOF, the Maker has executed this Note on the date first above
written.
 

     
GENERAL ENVIRONMENTAL MANAGEMENT, INC.,
a Nevada corporation
           
 
  By: 
/s/
 
 
   
Name:
Title:
 

 
 
 
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