Document:

ex_10-20.htm

    
      

      

    

    EXHIBIT
10.20

     

    
      JOINDER
AGREEMENT

       

      Reference
is made to (a) the Revolving Credit and Term Loan Agreement dated as of August
31, 2008 (the “Loan
Agreement”) by and between CVC California, LLC (the “Lender”) and General
Environmental Management, Inc. (the “Borrower”), (b) the
Guaranty Agreement dated as of August 31, 2008 (the “Guaranty”) made by
the Borrower’s Subsidiaries in favor of the Lender, and (c) the Collateral
Agreement dated as of August 31, 2008 (the “Collateral
Agreement”) by and among the Borrower and its Subsidiaries (as “Grantors”) and the
Lender.  All capitalized terms used herein without definition have the
respective meanings ascribed to them in the Loan Agreement.

       

      The
undersigned has become a Wholly-Owned Subsidiary of the
Borrower.  Pursuant to Section 5.11 of the Loan Agreement, Section
4.17 of the Guaranty, and Section 7.15 of the Collateral Agreement, the
undersigned is required to join in, become a party to and agree to be bound by
and comply with the Guaranty and the Collateral Agreement; and pursuant to the
Loan Agreement, it will be an Event of Default if the undersigned fails to join
in and become a party to the Guaranty and the Collateral Agreement.

       

      NOW,
THEREFORE, in consideration of the foregoing and of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned, intending to be legally bound hereby, hereby joins in, becomes a
party to and agrees (jointly and severally with all other Guarantors under the
Guaranty and all other Grantors under the Collateral Agreement) to be bound by
and comply with (i) the Guaranty, as if an original Guarantor thereunder and
signatory thereto, and (ii) the Collateral Agreement, as if an original Grantor
thereunder and signatory thereto, including (without limitation) the grant to
the Lender (as Secured Party under the Collateral Agreement) of liens upon and
security interests in all Collateral (as such term is defined in the Collateral
Agreement) of the undersigned, whether now existing or hereafter arising or
acquired, and wherever located, which grant of liens and security interests is
hereby made and confirmed.

       

      The
undersigned hereby further confirms that all of the information contained in the
Perfection Certificate being delivered by the undersigned to the Lender
concurrently herewith is true and correct on and as the date
hereof.

       

      Neither
this Joinder Agreement nor any obligations hereunder may be assigned by the
undersigned without the prior written consent of the Lender.  This
Joinder Agreement shall be binding upon the undersigned and its successors and
permitted assigns, and shall inure to the benefit of the Lender and its
successors and assigns.

       

      Neither
this Joinder Agreement nor any rights or obligations hereunder may be waived
except pursuant to a written agreement signed by the party to be charged
therewith.  This Joinder Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the New
York General Obligations Law).

       

      IN
WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of this
31st
day of August, 2008.

       

      
        
          	 	 	 	ISLAND
      ENVIRONMENTAL SERVICES, INC.	 
	 	 	 	 	 
	
                   

                	 	
                  By: 
      

                	
                   

                	 
	
                   

                	 	 	
                  
                    Timothy
      J. Koziol

                    Presidentex_10-21.htm

    
      

      

    

    EXHIBIT
10.21

    
    

     

    
      	$6,500,000	
               August 31,
      2008

            

    

     

    
       

      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 Five Hundred Thousand ($6,500,000) Dollars (the “Principal”), with interest
thereon, on the terms and conditions set forth herein and in the 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 nine
and one-half (9.5%) percent per annum; provided, however, that during
the continuance of any Event of Default, the Interest rate hereunder shall be
increased to fourteen and one-half (14.5%) 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 monthly in
arrears on the first day of each calendar month commencing October 1, 2008 and
on the maturity hereof.

       

      (b)           Principal.  The
Principal of this Note shall be payable (i) in twenty-nine (29) equal monthly
installments of $135,416.66 each, due and payable on the first day of each
calendar month commencing April 1, 2009 and continuing through and including
August 1, 2011, and (ii) a final installment due and payable on August 31,
2011 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 made prior to August 1, 2011 (other than a prepayment required
pursuant to Section 2.02(e) of the Loan Agreement) 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, if made or required to be made prior to August 1, 2011, be
subject to the payment of a prepayment premium as provided in Section 2.03(c) of
the Loan Agreement.

       

      (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 $3.00 per share of Common Stock (as same may be
adjusted from time to time in accordance herewith, the “Conversion
Price”).  In addition, if (i) there is not then continuing
any Default or Event of Default under and as defined in the Loan Agreement,
(ii) the Common Stock is then traded or listed for trading on any national
securities exchange, the Nasdaq Global Market, the Nasdaq Select Market or any
other Nasdaq market, or the OTC Bulletin Board, (iii) there is then in
effect a valid registration statement under the Securities Act of 1933, as
amended (the “Act”), in
respect of the Common Stock issued and issuable upon conversion of this Note and
upon exercise of the Warrants issued pursuant to the Loan Agreement, or such
Common Stock (assuming cashless exercise of the Warrants) is otherwise freely
tradable without volume limitation under Rule 144 or another general
registration exemption under the Act, such that all such shares of Common Stock
will be freely tradable immediately upon issuance at such time, (iv) the Maker
is current in all of its required filings with the Securities and Exchange
Commission and all other regulatory filings, (v) the reported Trading Price (as
hereinafter defined) of the Common Stock for each of the twenty (20) consecutive
trading days immediately prior thereto has been equal to or greater than 150% of
the Conversion Price in effect on each such trading day, and (vi) the average
daily trading volume of the Common Stock as reported by the principal exchange
or trading medium on which the Common Stock is listed or quoted has been equal
to or greater than 100,000 shares (such number to be 

       

      
        
          
          

        

        
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      subject
to adjustment on a proportionate basis in the event of each and every stock
split, stock dividend, combination of shares, recapitalization or other such
event respecting the Common Stock which may occur subsequent to the date hereof)
during the three (3) months immediately prior thereto, then the Maker may,
upon five (5) business days’ prior written notice to the Payee, require the
Payee to convert all or any portion of the Principal of this Note into shares of
Common Stock at the Conversion Price then in effect; and in the event of any
such conversion at the option of the Maker, the Maker shall give written notice
thereof to the Payee certifying as to the satisfaction of the foregoing
conditions (including a detailed schedule of Trading Prices and volumes for
purposes of the foregoing clauses (v) and (vi)), and shall pay to the Payee,
simultaneously with the delivery of stock certificates in accordance with
Section 3(c), all unpaid accrued Interest on the Principal amount so
converted.  As used herein, the term “Trading Price” on any relevant
date means the closing sale price (or, if no closing sale price is reported, the
last reported sale price) of the Common Stock (regular way).  The
effective date of any conversion hereunder is herein referred to as the “Conversion
Date.”  To the extent that this Note is converted only in part,
then such conversion shall be treated as a prepayment of the Principal amount
converted in accordance with Section 2(d) above, provided that no prepayment
premium shall be required in respect of any conversion.

       

      (b)           Mechanics of
Conversion.  Upon
notice to the Maker of the Payee’s conversion election as provided in Section
3(a), or upon notice to the Payee of the Maker’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, or in any direction given to the Maker in response to the Maker’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.

       

      
        
          
          

        

        
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      (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.

       

      (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.

       

      
        
          
          

        

        
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      (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.

       

      (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 August 31, 2008
(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 August 31, 2008,
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.

       

      
        
          
          

        

        
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      (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.

       

      (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.

       

      
        
          
          

        

        
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      (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.

       

      4.           
 Loan
Documents.  This
Note is the 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.

       

      
        
          
          

        

        
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      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.

       

      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.

       

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      IN
WITNESS WHEREOF, the Maker has executed this Note on the date first above
written.

       

      
        
          	 	 	 	
                  GENERAL
      ENVIRONMENTAL MANAGEMENT, INC.

                	 
	 	 	 	 	 
	
                   

                	 	
                  By: 
      

                	
                   

                	 
	
                   

                	 	 	
                  Timothy
      J. Koziol

                  
                    Chief
      Executive Officer

                  

                	 

        

      

       

       

       

      10

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