ex_10-2.htm


    
      

      

    

    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.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    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.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              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.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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

                	 


        

         

      

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    


    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: