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Exhibit 10.2
 
 
LAURUS MASTER FUND, LTD.
c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017

October 31, 2007

General Environmental Management, Inc., a Nevada corporation
General Environmental Management, Inc., a Delaware corporation
General Environmental Management of Rancho Cordova, LLC
GEM Mobile Treatment Services Inc.
3191 Temple Avenue, Suite 250
Pomona, CA 91768
Attention:  President

Re:         Amendment of, and Joinder to, Existing Financing Documents

Ladies and Gentlemen:
 
Reference is made to (a) the Security Agreement dated as of February 28, 2006 by
and among General Environmental Management, Inc., a Nevada corporation (“Parent”
or a “Company”), General Environmental Management, Inc., a Delaware corporation
(“GEM Del” or a “Company”), General Environmental Management of Rancho Cordova,
LLC, a California limited liability company (“Rancho Cordova” or a “Company,”
and collectively with Parent and GEM Del, the “Companies”) and Laurus Master
Fund, Ltd. (“Laurus”) (as amended, restated, modified and/or supplemented from
time to time, the “Laurus SA”), (b) the Secured Convertible Term Note effective
as of February 28, 2006 made by the Companies in favor of Laurus in the original
principal amount of $2,000,000 (as amended, restated, modified and/or
supplemented from time to time, the “Laurus Convertible Term Note”), (c) the
Secured Non-Convertible Revolving Note effective as of February 28, 2006 made by
the Companies in favor of Laurus in the original principal amount of $5,000,000
(as amended, restated, modified and/or supplemented from time to time, the
“Laurus Revolving Note”), and (d) any and all other promissory notes made by the
Companies, or any of them, in favor of Laurus from time to time (such other
promissory notes together with the Laurus Convertible Term Note and the Laurus
Revolving Note, each a “Laurus Note” and collectively, the “Laurus
Notes”).  Reference is further made to the fact that pursuant to one or more
instruments of assignment, Laurus assigned a portion of its interest in the
Laurus Notes, the Laurus SA, the Ancillary Ageements and in the collateral
security therefor to Valens U.S. SPV I, LLC (“Valens U.S.”) and Valens Offshore
SPV I, Ltd. (“Valens Offshore Ltd.,” and collectively with Valens U.S., the
“Valens Entities”).  Capitalized terms used herein but not defined herein shall
have the meanings ascribed thereto in the Laurus SA.
 
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The Companies have requested that (a) Laurus and the Valens Entities consent to
the Parent and, as applicable, the other Companies and GEM Mobile Treatment
Services, Inc, a California corporation, formerly known as K2M Mobile Treatment
Services, Inc. (“GEM Mobile”) entering into (i) that certain Securities Purchase
Agreement dated as of the date hereof (as amended, restated, modified and/or
supplemented from time to time, the “Valens SPA”) with LV Administrative
Services, Inc., as agent (“Agent”), and Valens U.S. and Valens Offshore SPV II,
Corp. (“Valens Offshore Corp.”), (ii) those certain Secured Convertible Term
Notes each dated as of the date hereof, one in favor of Valens U.S., in the
original principal amount of $647,508.90 and one in favor of Valens Offshore
Corp.  in the original principal amount of $597,700.52 (collectively, as
amended, restated, modified and/or supplemented from time to time, collectively,
the “Valens Notes”) and (iii) the other Related Agreements (as defined in the
Valens SPA, the “Valens Related Agreements” and together with the Valens SPA and
the Valens Notes, the “Valens Agreements”), and (b) GEM Mobile be permitted to
join the Laurus SA as an Eligible Subsidiary and as a Company, and Laurus and
the Valens Entities have agreed to grant such consents and permit such joinder
on the condition that the Companies and GEM Mobile enter into this letter
agreement.
 
In consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Companies and GEM
Mobile hereby agree to, and acknowledge, the following:
 
 
1.
The occurrence of an Event of Default under and as defined in the Valens Notes
or under and as defined in any other Valens Agreement shall constitute an Event
of Default under each Laurus Note, the Laurus SA and each Ancillary Agreement.

 
 
2.
The Laurus Convertible Term Note is hereby amended as follows:

 
 
(a)
The last sentence of Section 2.1(a) is deleted in its entirety and replaced with
the following:

 
“For purposes hereof, subject to Section 3.6 hereof, the initial “Fixed
Conversion Price” means $2.78.”
 
 
(b)
Section 1.3 is deleted in its entirety and replaced with the following:

 
“1.3  Principal Payments.  Amortizing payments of the aggregate principal amount
outstanding under this Note at any time (the “Principal Amount”) shall be made,
jointly and severally, by the Companies on March 1, 2008 and on the first
business day of each succeeding month thereafter through and including the
Maturity Date (each, an “Amortization Date”).  Subject to Article III below,
commencing on the first Amortization Date, the Companies shall make, jointly and
severally, monthly payments to the Holder on each Repayment Date, each such
payment in the amount of $30,303.03 together with any accrued and unpaid
interest on such portion of the Principal Amount plus any and all other unpaid
amounts which are then owing under this Note, the Security Agreement and/or any
other Ancillary Agreement (collectively, the “Monthly Amount”).  Any outstanding
Principal Amount together with any accrued and unpaid interest and any and all
other unpaid amounts which are then owing by the Companies to the Holder under
this Note, Security Agreement and/or any other Ancillary Agreement shall be due
and payable on the Maturity Date.”
 
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3.
In the event the Parent prepays its Obligations (as defined in the Master
Security Agreement dated as of the date hereof among the Companies, GEM Mobile
and the Agent for the ratable benefit of Valens U.S. and Valens Offshore Corp.,
as the same may be amended, restated, modified and/or superseded from time to
time), whether by voluntarily redeeming the Valens Notes in accordance with
Section 2.3 thereof (“Valens Voluntary Prepayment”) or as required pursuant to
any of the Valens Agreements (“Valens Mandatory Prepayment”), then the Companies
shall jointly and severally repay in full to Laurus and the Valens Entities, on
the date (“Mandatory Prepayment Date”) any such Valens Voluntary Prepayment is
made to or for the benefit of Valens U.S. and Valens Offshore Corp., or in the
case of a Valens Mandatory Prepayment, when such Valens Mandatory Prepayment is
due, all outstanding Obligations owing by the Companies and GEM Mobile, or any
of them, to Laurus and the Valens Entities, including, without limitation, the
Redemption Amount as set forth in Section 2.3 of the Laurus Convertible Term
Note and all early payment fees required to be paid pursuant to Section 17 of
the Laurus SA.  On the Mandatory Prepayment Date, all of Laurus’ and the Valens
Entities’ obligations to make Revolving Loans to the Companies shall terminate
and thereafter Laurus shall have no further obligation to fund any Revolving
Loan or extend any other credit to any of the Companies or GEM Mobile.

 
 
4.
GEM Mobile is hereby joined (i) to the Laurus SA as an Eligible Subsidiary and a
Company for all purposes, (ii) to the Laurus Convertible Term Note as a Company
for all purposes, and (iii) to the Laurus Revolving Note as a Company for all
purposes.

 
 
5.
GEM Mobile agrees that, upon its execution hereof, it will be bound by all
terms, conditions and duties applicable to an Eligible Subsidiary and/or a
Company under the Laurus SA.  Without limitation of the foregoing and in
furtherance thereof, as security for the due and punctual payment of the
Obligations, GEM Mobile hereby pledges, hypothecates, assigns, transfers, sets
over and delivers to Laurus and the Valens Entities and grants to Laurus and the
Valens Entities a security interest in all Collateral, if any, now owned or, to
the extent provided in the Laurus SA, hereafter acquired by it, and hereby
ratifies and confirms its grant of a security interest in the Collateral as
defined in and pursuant to that certain Certain Subsidiaries of General
Environmental Management, Inc. Master Security Agreement dated as of March 1,
2006, between Laurus and GEM Mobile, as amended, restated, modified and/or
supplemented from time to time.

 
 
6.
GEM Mobile agrees that, upon its execution hereof, it will become a Company for
all purposes under the Laurus Convertible Term Note and the Laurus Revolving
Note, and will be bound by all terms, conditions and duties applicable to a
Company under the Laurus Convertible Term Note and the Laurus Revolving Note,
including, without limitation, the joint and several obligation to repay to the
Holders thereof the Principal Amount (as defined in the Laurus Convertible Term
Note and the Laurus Revolving Note, as applicable) and all interest, fees, costs
and expenses provided for therein in accordance with the terms thereof.

 
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7.
In connection with the grant by GEM Mobile, pursuant to Paragraph 5 above, of a
security interest in all of its right, title and interest in the Collateral in
favor of Laurus and the Valens Entities, GEM Mobile agrees (i) to execute (if
necessary) and deliver to Laurus and the Valens Entities financing statements,
in form acceptable to Laurus and the Valens Entities, as Laurus and the Valens
Entities may request or as are necessary or desirable in the opinion of Laurus
and the Valens Entities to establish and maintain a valid, enforceable first
priority perfected security interest in the Collateral owned by GEM Mobile, (ii)
authorizes Laurus and the Valens Entities to file any such financing statements
without the signature of GEM Mobile where permitted by law (such authorization
includes the description of the Collateral as “all assets and all personal
property, whether now owned and/or hereafter acquired” of GEM Mobile (or any
substantially similar variation thereof)), and (iii) agrees to execute and
deliver to Laurus and the Valens Entities assignments of United States
trademarks, patents and copyrights (and the respective applications therefor) to
the extent required by Laurus and the Valens Entities.

 
 
8.
Without limiting the foregoing, GEM Mobile hereby makes and undertakes, as the
case may be, each covenant, representation and warranty made by, and as (i) each
Company and/or Eligible Subsidiary pursuant to the Laurus SA, (ii) each Company
pursuant to the Laurus Convertible Term Note, and (iii) each Company pursuant to
the Laurus Revolving Note, in each case as of the date hereof (except to the
extent any such representation or warranty relates solely to an earlier date, in
which case such representation or warranty shall be true and correct as of such
earlier date), and agrees to be bound by all covenants, agreements and
obligations of an Eligible Subsidiary and a Company pursuant to and under the
Laurus SA, Laurus Convertible Term Note and the Laurus Revolving Note, and all
other Ancillary Agreements to which it is or becomes a party.

 
 
9.
Each of Schedules 7(c), 7(p), 12(b), 12(c), 12(f), 12(g), 12(i), 12(l), 12(m),
12(n), 12(o), 12(q), 12(u), 12(aa), 13(l)(i) of the Laurus SA is hereby amended
by supplementing such Schedule with the information for GEM Mobile contained on
Schedules 7(c), 7(p), 12(b), 12(c), 12(f), 12(g), 12(i), 12(l), 12(m), 12(n),
12(o), 12(q), 12(u), 12(aa), 13(l)(i) attached hereto as Annex 1.

 
 
10.
From and after the execution and delivery hereof by the parties hereto, this
letter shall constitute an Ancillary Agreement for all purposes of the Laurus SA
and the Ancillary Agreements.

 
Except as specifically set forth herein, the Laurus SA, the Laurus Notes and the
other Ancillary Agreements (collectively, the “Laurus Agreements”) shall remain
in full force and effect, and are hereby ratified and confirmed.  The execution,
delivery and effectiveness of this letter agreement shall not operate as a
waiver of any right, power or remedy of Laurus, nor constitute a waiver of any
provision of any of the Laurus Agreements.  This letter agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and shall be governed by and construed in accordance with
the laws of the State of New York.
 
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This letter agreement may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement.  Any signature
delivered by a party by facsimile or electronic transmission shall be deemed to
be an original signature hereto.
 
 

    Very truly yours,                 LAURUS MASTER FUND, LTD.            
 
 
By: 
 
 
 
   
Name:
 
 
   
Title:
 

 

    VALENS U.S. SPV I, LLC                
By: 
VALENS CAPITAL MANAGEMENT, LLC,
its investment manager
           
 
 
By: 
 
 
 
   
Name:
 
 
   
Title: Authorized Signatory
 

 

   
VALENS OFFSHORE SPV I, LTD.
               
By: 
VALENS CAPITAL MANAGEMENT, LLC,
its investment manager
           
 
 
By: 
 
 
 
   
Name:
 
 
   
Title: Authorized Signatory
 

 
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CONSENTED AND AGREED TO THIS 31ST DAY OF OCTOBER, 2007:

GENERAL ENVIRONMENTAL MANAGEMENT, INC.,
a Nevada corporation
 
 
By: _________________________
Name:
Title:
GENERAL ENVIRONMENTAL MANAGEMENT, INC.,
a Delaware corporation
 
 
By: _________________________
Name:
Title:
   
GENERAL ENVIRONMENTAL MANAGEMENT OF RANCHO CORDOVA, LLC,
a California limited liability company
 
 
By: _________________________
Name:
Title:
GEM MOBILE TREATMENT SERVICES INC.
 
 
By: _________________________
Name:
Title:

 
REAFFIRMATION
 
The undersigned hereby acknowledges and consents to the terms and conditions of
the foregoing letter agreement and confirms and agrees that each Laurus
Agreement to which it is a party remains in full force and effect in accordance
with its terms and is hereby reaffirmed and ratified by the undersigned, and the
undersigned hereby confirms that the representations and warranties contained in
each Laurus Agreement to which it is a party are (before and after giving effect
to this letter agreement) true and correct.

GEM MOBILE TREATMENT SERVICES INC.
 
 
By: _________________________
Name:
Title: