Document:

ex10-49.htm

    
      

      

    

    Exhibit
10.49

     

     

    PROMISSORY
“SELLER’S NOTE”

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE.  THIS SECURITY
IS “RESTRICTED” AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM.

    

    THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY
NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY, WHICH SHALL NOT BE UNREASONABLY WITHHELD, AND
THEN ONLY: (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A; (II)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT; (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE); (IV) TO AN
INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3); OR
(7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
COMPANY A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (IN THE FORM OF WHICH CAN BE OBTAINED FROM
THE COMPANY) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (V) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

    

    

    GENERAL
ENVIRONMENTAL MANAGEMENT, INC.

    6.5%
SECOND-PRIORITY SENIOR SECURED PROMISSORY NOTE

    

    
      
        	
                NUMBER:  USER

              	
                $­­­­­­­­2,000,000.00

              
	
                POMONA,
      CALIFORNIA

              	
                NOVEMBER
      6, 2009

              

      

    

    

    FOR VALUE RECEIVED, GENERAL ENVIRONMENTAL MANAGEMENT,
INC., a Nevada corporation (the “Company”), promises to pay to
UNITED STATES ENVIRONMENTAL
RESPONSE, LLC, a California limited liability company (the latest of any
registered holder of this Note is herein referred to as the “Holder”), in United States
dollars (in immediately available funds) the principal sum of TWO MILLION DOLLARS
($2,000,000) together with (i) interest accrued thereon from the date of
this Note on the unpaid principal balance outstanding from time to time; and
(ii) other costs and expenses payable or to become payable on the terms of this
Note.  The Company will not, and will instruct any transfer agent not
to, register on the books of the Company the transfer of this Note unless the
conditions specified in the legend set out in capital letters at the top of this
Note are satisfied.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    This Note
is the “Seller’s Note” in the series of six promissory notes (the “Notes”) made
by the Company pursuant to the terms and conditions of that certain Stock
Purchase Agreement dated as of November 6, 2009 by and among the Company and the
other parties thereto (the “Stock Purchase Agreement”),
the other Notes in the series being designated in the Stock Purchase Agreement
as the Note One, Note Two, Note Three, Note Four and Note Five (herein the
“Junior
Notes”).

    

    1.         
  Interest
Rate.  Interest on this Note shall accrue on all amounts
outstanding from the date hereof until the payment in full of all
outstanding principal of, and interest and costs and expenses payable on, this
Note at the rate of (A) Six and One Half Percent (6.5%) before the occurrence of
any Event of Default (as defined hereinafter), hereunder and, (B) Nine and One
Half Percent (9.5%) per annum after and during the continuance of any Event of
Default, provided that
in no event shall the interest rate be higher than the maximum rate permitted by
applicable law.   Interest on this Note shall be compounded
monthly and calculated on the basis of the actual number of days elapsed and a
360-day year.

    

    2.          
 Payment Schedule.
Payment of the outstanding principal of this Note shall be due and payable in
four (4) installments (“Installments”) as follows: (A)
one Installment on the earlier of (i) March 12, 2010 or (ii) the date GEM
shall have fully paid and satisfied (other than by any refinancing) its Senior
Lender Debt (as defined in the Stock Purchase Agreement), such Installment to
be in the principal amount of Two Hundred Fifty Thousand Dollars ($250,000)
and accrued interest on this Note; (B) a second Installment on June 30 2010 in
the principal amount of Five Hundred Thousand Dollars ($500,000) and accrued
interest on this Note; (C) a third Installment on January 1, 2011 in the
principal amount of One Million Dollars ($1,000,000) and accrued interest on
this Note; and (D) a final Installment March 31, 2011 on of all residual
principal and accrued interest on this Note.  “Installment Dates” means each
of the four dates specified in the preceding sentence. Schedule A to this Note
sets forth the schedule and amount of such Installments. Notwithstanding the
foregoing, (E) all outstanding principal and interest shall become due and
payable on the date, if any, on which the principal amount, or part thereof, of
this Note is accelerated; and (F) the amount of principal specified in any
Prepayment Notice (as defined hereafter) shall be payable on the date specified
for such payment in that Notice of Prepayment.  On each Installment
Date, all interest accrued at a rate higher than 6.5% per annum shall also be
payable.  Costs and expenses such as may become payable hereunder are
payable at the earlier of (i) demand of the Holder; or (ii) the next succeeding
Installment Date.  All payments hereunder are payable at any United
States address or by wire transfer to any United States bank account, in each
case as the Holder may designate from time to time to the
Company.  Whenever any payment to be made hereunder would otherwise
become due on a date which is not a Business Day (as hereinafter defined), the
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest with
respect to such payment.  “Business Day” means any day on
which banks in the City of Los Angeles, California are generally open for
business.

    

    
      
        
        

      

      
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    3.          
  Seniority; Enforcement; Subrogation.

     

    3.1           Certain Definitions.  For
purposes of Paragraph 3, “Company” means the Company on
a consolidated basis   As to the Company: (i) “Senior Debt” means all Debt
outstanding from the Company to ComVest Capital LLC (the “ComVest Debt”), as of the date
of this Note, and includes any increase in the amount of indebtedness owed to
ComVest, and when it has been fully repaid, the ComVest Debt shall no longer be
part of the Senior Debt calculation;  and (ii) “Junior Debt” means all Debt,
whether now or hereafter incurred or outstanding, other than the Senior Debt and
this Note.  "Debt"
as to any person or entity (including the Company) (any such person or entity,
the “Obligor”) means:
(a) all obligations incurred by the Obligor in respect of borrowed money; (b)
all obligations owing by the Obligor to the seller or lessor of any real or
personal property under leases that are treated as "finance leases"; (c), or any
other creditor, bank or person in respect of amounts paid under letters of
credit, acceptances or other similar instruments; (d) any other obligations of
the Obligor that constitute a balance sheet liability of the Obligor, from time
to time; (e) all Guarantees issued by the Obligor in respect of any of the
foregoing items of Debt; (f) all liabilities (choate or conditional), principal
of and premium, if any, and interest (including without limitation, interest
accruing or that would have accrued but for the filing of a bankruptcy,
reorganization or other insolvency proceeding whether or not such interest
constitutes an allowed claim in such proceeding) on, and any and all other fees,
charges, expense reimbursement obligations, indemnities and other amounts owing
or which may become owing (whether or not then payable) pursuant to the terms
of, or any settlement or compromise of, all leases, accounts payable, trade
debt, agreements, documents and instruments providing for, creating, securing,
guaranteeing or evidencing or otherwise entered into in connection with all such
debt; (g) all deferrals, renewals, extensions, refundings, replacements,
refinancings and restructuring of and amendments, modification and supplements
to any Debt described above.  For purposes of this Paragraph 3, the term
"Guarantee" means, as to
any person, any obligation of such person guaranteeing or intended to guarantee
any indebtedness, including without limitation leases, dividends, principal,
premium, interest, penalties, fees, reimbursements, indemnifications, damages,
and other expenses payable under the terms of the documentation governing such
indebtedness.

     

    3.2           No New Debt Senior to Senior
Debt. After the date of this Note, the Company, Santa Clara Waste Water
Company, a California corporation (“SCWW”) or California Living Waters, Inc.
shall not incur any Debt, other than debt incurred to replace the indebtedness
to the National Bank of California, the terms of which purport to be senior to
any of the Notes.  All new debt of the Company, SCWW and CLW shall be
Junior Debt to any of the Notes.  

     

    3.3           Debt
Priority.  Obligations under this Note are senior to all Junior
Debt on the terms set forth in Paragraph 4.  Obligations under this
Note shall be junior to the Senior Debt only to the extent of the express terms,
such as existed on the date this Note, of the Senior Debt.   In
the event that the Company shall fail to comply with any of the covenants or
other agreements contained in any agreement or instrument relating to Senior
Debt or an event of default shall occur with respect to Senior Debt other than a
Payment Default, which default or event of default shall not have been cured or
waived (a "Covenant
Default"), the Company shall give prompt written notice of such Covenant
Default to the Holder.

     

    3.4           Subrogation.  In the
event that the Holder shall be required to turn over any payment or distribution
under this Note to the holders of Senior Debt (or to any court) to be applied to
Senior Debt, the full amount of such payment shall automatically be added to the
principal amount of this Note and the Holder shall become subrogated to the
rights of the Senior Debt holders to the extent of such payments to such Senior
Debt holder or holders or court.

     

    
      
        
        

      

      
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    3.5           Continuing
Effect.  The provisions of this Paragraph 3 are not intended to
impair and shall not impair as between the Company and the Holder the obligation
of the Company to pay Holder all amounts owing under this Note.  All
rights and interests under this Note, and all agreements and obligations of the
Company under this Paragraph 3 shall remain in full force and effect
irrespective of (i) any lack of validity or unenforceability of any agreement or
instrument relating to any Senior Debt, or (ii) any other circumstances that
might otherwise constitute a defense available to, or a discharge of, any
Holders of this Note or the Company.

     

    3.6           Event of Default Not
Affected.  Notwithstanding the foregoing in this Paragraph 3,
the failure of the Company to timely pay, according to the terms of this Note
other than this Paragraph 3, any amount payable on such other terms shall
constitute an Event of Default hereunder.

     

    4.           
Seniority of This Note.

     

    4.1           Bankruptcy
Event.  In the event of any liquidation, dissolution or winding
up of the Company, or of any execution, sale, receivership, insolvency,
arrangement, marshalling of assets or liabilities, composition, assignment for
the benefit of creditors, bankruptcy, liquidation, readjustment, reorganization
or other similar proceeding relative to the Company or its debts, its property
or its operations, whether voluntary or involuntary (each of the foregoing, a
"Bankruptcy Event"),
this Note shall be irrevocably paid in full in cash or other immediately
available funds before any payment is made upon the Junior Debt. In the event of
any such Bankruptcy Event, any payment or distribution of any kind or character,
whether in cash, property or securities that shall be made upon or in respect of
Junior Debt shall be promptly remitted to the Holder of this Note and applied in
payment of this Note unless and until the this Note shall have been irrevocably
paid or satisfied in full.

     

    4.2           Payment Default on This Note.
In the event the Company shall fail to timely pay amounts payable hereunder, (in
this Paragraph 4, a "Payment
Default"), then no cash payment shall be made by the Company on account
of Junior Debt, whether for principal, interest or otherwise, or for the
purchase, acquisition or retirement thereof, unless and until such this Note
shall have been irrevocably paid in full.

     

    4.3           Covenant Default on This
Note.   In the event that the Company shall fail to comply
with any of the covenants or other agreements contained in the Stock Purchase
Agreement, or any guarantee or other agreement or instrument relating to this
Note or an Event of Default shall occur with respect to this Note (other than a
Payment Default) which default or event of default shall not have been cured or
waived (in this Paragraph 4, a "Covenant Default"), and a
holder of Junior Debt shall have received written notice of such Covenant
Default from the Company or any Holder of this Note or any representative
thereof, then no cash payment shall be made after receipt of such written notice
by that holder of Junior Debt, in each case, on account of that Junior Debt,
whether for principal, interest or otherwise, unless and until such this Note
shall have been irrevocably paid in full or until such Covenant Default shall
have been cured or waived.

     

    4.4           Junior Debt Restricted on Note
Default. If there shall exist a continuing default under this Note, the
holders of Junior Debt shall not take any action to collect, or to pursue any
other remedy with respect to, accelerated principal on Junior Debt prior to the
earlier of: (i) (x) the irrevocable payment in full of all this Note in cash or
other immediately available funds, and (y) the termination of all guarantees of
this Note; or (ii) the occurrence or commencement of a Bankruptcy Event, and in
the event that an involuntary Bankruptcy Event is commenced against the Company,
such involuntary Bankruptcy Event is not dismissed, bonded, stayed, vacated or
discharged within 60 days of commencement thereof.

     

    
      
        
        

      

      
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    4.5           Certain Payments Held in
Trust.  In the event that the holder of any Junior Debt shall
receive any payment or distribution of assets that such holder is not entitled
to retain under the provisions of this Note, such holder shall hold any amount
so received in trust for the benefit of the Holder of this Note, shall segregate
such assets from other assets held by such Holder and shall on demand forthwith
turn over such payment or distribution (without liability for interest thereon)
to the Holder of this Note in the form received (with any necessary endorsement)
to be applied to this Note. Upon such payment to the Holder of this Note, the
full amount of such payment shall automatically be added to the principal amount
of this Note.

     

    4.6           Third Party Beneficiaries; Specific
Performance; Continuing Effect.  The provisions of this
Paragraph 4 are for the benefit of the Holder of this Note (and the Holder’s
successors and assigns) and shall be enforceable by the Holder directly against
holders of Junior Debt.  No Holder of this Note shall be prejudiced in
its right to enforce subordination of Junior Debt by any act or failure to act
by the Company or anyone in custody of the Company's assets or property. Any
Holder of this Note is hereby authorized to demand specific performance of the
provisions of this Paragraph 4 applicable to it, whether or not the Company
shall have complied with any of the provisions of this Note applicable to this
Note. Holders of Junior Debt shall not, to the full extent permitted by law, be
entitled to any defense based on the adequacy of a remedy at law, which might be
asserted as a bar to such specific performance. The provisions of this Paragraph
4 shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of this Note is rescinded or must otherwise be returned by the
Holder of this Note upon the bankruptcy, insolvency or reorganization of the
Company or otherwise, all as though such payment had not been
made.  The provisions of this Paragraph 4 are not intended to impair
and shall not impair as between the Company and Holder the obligation of the
Company to pay Holder all amounts owing under this Note.  All rights
and interests under this Note, and all agreements and obligations of the Holder
of this Note and the Company under this Paragraph 4 shall remain in full force
and effect irrespective of (i) any lack of validity or unenforceability of any
agreement or instrument relating to this Note, or (ii) any other circumstances
that might otherwise constitute a defense available to Senior Debt or the
Company, or a discharge of this Note.

     

    4.7           Certain Notices. The Company
agrees, for the benefit of the holders of this Note, that in the event that this
Note shall become due and payable before the expressed maturity of any
Installment because of the occurrence of an Event of Default hereunder, the
Company will give prompt notice in writing of such happening to the holders of
this Note.

     

    
      
        
        

      

      
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    4.8           Event of Default Not
Affected.  Notwithstanding the foregoing in this Paragraph 4,
the failure of the Company to timely pay, according to the terms of this Note
other than this Paragraph 4, any amount payable on such other terms shall
constitute an Event of Default hereunder.

     

    5.          
 Security Interest.
This Note is secured by all of the capital stock of California Living
Waters, Incorporated, a California corporation (“CLW”) and of SCWW, by, and
pursuant to the terms of, that certain a Security Agreement dated
November 5, 2009 by and among the Company, the initial Holders of this Note and
the Junior Notes.

     

    6.           
 Guarantee.  This
Note is the “Seller’s Note” as defined in, and being in part the subject of,
that certain Corporate
Guarantee dated as of November 5, 2009, by the Company and GEM
Environmental Management Inc., and that certain CLW Guarantee dated November 5,
2009  by California Living Waters Inc.

     

    7.            
Events of Default. 
“Default” means any
event which is, or after notice or passage of time, or both, would be, an Event
of Default.  “Event
of Default” means any of the following:

     

     (a) 
the Company shall fail to pay in full any principal, accrued interest or
otheramounts due to Holder under this Note when due and payable. If an Event of
Defaultshall occur under and as defined in this Paragraph,
then  Holder shall give notice to the Purchaser of such breach, and
Purchaser shall have 10 days from the receipt of such notice to cure the
default. Notwithstanding, default interest, if applicable shall commence upon
the default and shall continue until the default is cured in accordance with
this Paragraph;

    

     (b)  the
Company shall default in the performance of or compliance with any covenant,
agreement or other obligation of the Company contained in this Note that is not
remedied, waived or cured within five (5) days following such default in
performance or noncompliance;

     

     (c)  any representation or
warranty of the Company contained herein or in the Stock Purchase Agreement
shall prove to have been false or incorrect in any material respect as of the
date of this Note;

     

     (d)  the Company shall
default (as principal, guarantor or other surety) in the payment of any
principal of, premium (if any) or interest on, any indebtedness for borrowed
money to any other party, or shall default in the performance of or compliance
with any other obligation contained in the documentation evidencing or securing
any such other indebtedness, and in connection with such default such
indebtedness becomes due and payable prior to the date it would otherwise become
due and payable, or the Company shall fail to pay such indebtedness at its
stated maturity;

     

    
      
        
        

      

      
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    (e) 
other than on terms approved in writing beforehand by the Holder, (i) the
Company's dissolution, termination of existence, suspension or discontinuance of
business or ceasing to operate as a going concern; (ii) the appointment of a
receiver, trustee, custodian or similar official, for the Company or any
material portion of the property or assets of the Company; (iii) the conveyance
of any material portion of the assets of the Company to a trustee, mortgage or
liquidating agent or an assignment for the benefit of creditors by the Company;
(iv) the commencement of any proceeding, whether federal or state, relating to
bankruptcy, insolvency, dissolution, reorganization, composition, renegotiations
of outstanding indebtedness, arrangement or otherwise to the relief of debtors
or the readjustment of indebtedness, by or against the Company, which is not
stayed, vacated or released within sixty (60) days of commencement; (v) the
consent by the Company to the action, appointment, conveyance, or commencement
of any of the foregoing; or (vi) any Company corporate action in furtherance of
any of the foregoing.

     

     (f) 
entry of a final judgment or judgments, that are not stayed, bonded or
discharged within thirty (30) days, the aggregate unpaid liabilities thereon are
in excess of $250,000 (excluding insured portions) against the Company or for
which the Company is otherwise responsible;

     

     (g) 
there shall occur, or the Company shall enter into any agreement providing for,
a Change of Control (as defined below) of the Company; the term “Change of Control” shall mean
any transaction or series of related transactions (including without limitation
any reorganization, merger, consolidation, sale of assets or sale of stock) that
will result in (i) the sale of all or substantially all of the assets of
the Company, (ii) a change in ownership of 50% or more of the Company’s
then outstanding capital stock, in one or a series of transactions occurring
within a period of six (6) months, other than any such change of ownership
resulting from the sale by the Company of its securities in connection with one
or more financing transactions, or (iii) a consolidation or merger of the
Company with or into any other corporation or corporations (or other corporate
reorganization) immediately after which the shareholders of the Company hold
less than fifty percent (50%) of the voting power of the surviving
corporation.

     

    Upon the
occurrence of any Event of Default described in Paragraph (a), (d), (e), or (g)
above, all outstanding principal of this Note and all accrued but unpaid
interest thereon shall be accelerated automatically, without any further action
by any party, and shall become immediately due and payable notwithstanding any
other provision of this Note, without presentment, demand, protest, notice of
protest or other notice of dishonor of any kind, all of which are hereby
expressly waived by the Company; and upon the occurrence of any other Event of
Default described in the other subparagraphs above in this Paragraph, Holder
may, at Holder’s option exercisable at any time thereafter, by notice to the
Company in writing, accelerate this Note and declare the entire outstanding
principal balance of this Note and all accrued but unpaid interest thereon
immediately due and payable, without presentment, demand, protest, notice of
protest or other notice of dishonor of any kind, all of which are hereby
expressly waived by the Company.   Holder may enforce its rights under
this Note and otherwise at law or in equity or both.   All
remedies available to Holder under this Note or otherwise shall be cumulative,
and no course of dealing between the Company and Holder or any delay or omission
in exercising any power or right shall operate as a waiver thereof.  The
Company shall notify the Holder immediately in writing of the occurrence of any
Event of Default, which notification shall include a summary of the material
facts relating to such Event of Default and shall specify the date on which such
Event of Default occurred.

     

    
      
        
        

      

      
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              8.

            	
                 
      [INTENTIONALLY LEFT BLANK]

            

    

     

    9.            
Prepayment.  The
Company may prepay this Note in whole or from time to time in part, together
with all accrued interest on this Note (or portion being prepaid) without
penalty or premium of any kind, provided that the Company
shall have given the Holder of this Note written notice (a “Notice of Prepayment”)
specifying (A) a date certain (the “Prepayment Date”) on which the
Company thereby commits to make such prepayment; and (B) the principal amount of
that prepayment.  To be effective, a Notice of Prepayment must have
been received by the Holder of this Note not later than 14 days prior to the
Prepayment Date. Upon Holder’s receipt Notice of Prepayment, the Prepayment Date
shall thereby become the Installment Date for the principal amount of prepayment
specified in the Notice of Prepayment

     

    10.           Order of Application of
Payments.  All payments to be applied against this Note and the
amounts from time to time payable hereunder, shall be applied in the following
order of priority: (i) against costs and expenses of each and every Event of
Default, if any, (including with relationship to the Holder’s rights and duties
toward holders of Senior Debt and/or Junior Debt and/or in any proceeding or
suits related to such Event of Default); (ii) against all outstanding interest
payable at an increased rate hereunder by reason of any Default; (iii) against
all outstanding interest payable at the base rate of 6.5%; (iv) against any
other non-principal monetary rights the Holder may come to have against the
company by reason of this Note; (v) against prepayment of principal pursuant to
a Notice of Prepayment; (vi) against past-due principal Installments, on this
Note, in the sequence of such past-due Installments, oldest to most recent;
(vii) against the outstanding principal of this Note, in reverse order of the
scheduled Installment Dates of those principal Installments.

     

    11.           Expenses of
Enforcement.  The Company agrees to reimburse the Holder upon
demand for all reasonable out-of-pocket expenses, all costs and expenses
(including reasonable attorneys fees, accountants’ fees, collection agency fees,
and experts’ fees) of the Holder in connection with the enforcement (including
the negotiation and settlement of the terms of any workout or creditors’
committee or similar proceeding) in connection with the Holder’s enforcement of
the Company’s obligations hereunder.

     

    12.           No Rights As A Shareholder.
Nothing contained in this Note shall be construed as conferring upon the Holder
or any other person the right to vote or consent or to receive notice as a
shareholder in respect of meetings of shareholders for the election of directors
of the Company or any other matters or any rights whatsoever as a shareholder of
the Company.

     

    13.           Lost, Stolen or Mutilated
Note. 
If this Note is lost, stolen, mutilated or destroyed, the Company will,
on such reasonable terms with respect to indemnity or otherwise as it may in its
discretion impose, issue a new Note of like denomination, tenor, and date as
this Note.  Any such new Note shall constitute an original contractual
obligation of the Company, and the lost, stolen, mutilated or destroyed, as
applicable, shall be null and void.

     

    
      
        
        

      

      
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    14.           Notices.  All
notices and other communications required or permitted hereunder shall be in
writing and shall be deemed effectively given upon personal delivery; upon
confirmed transmission by telecopy if sent during normal business hours of the
recipient (or if not, on the next business day of the recipient); three days
after deposit with the United States Post Office, by registered or certified
mail, postage prepaid; or otherwise upon delivery by hand or by messenger or one
day after deposit with a nationally recognized overnight courier
service.  Concurrently with the initiation of any such notice, the
sender shall make a good faith effort to send the addressee a copy of such
notice by electronic mail and to alert the addressee by telephone. Each of the
Company and the Holder may, by notice to the other, specify for itself from time
to time address specifications different from the initial address specifications
as follows:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	If
      to the Company, addressed to:
	 	 	 
	 	 	
                                      General
      Environmental Management, Inc.

                                    
	 	 	
                                      Attention:
      Tim Koziol, CEO

                                    
	 	 	
                                      3194
      Temple Ave, Ste. 250

                                    
	 	 	
                                      Pomona,
      California 91768

                                    
	 	 	
                                      Facsimile
      No.:  909.444.9900

                                    
	 	 	
                                      Telephone
      No.: 909.444.9500

                                    
	 	 	
                                      Email:
      Tim.Koziol@go-gem.com

                                    
	 	 	 
      
	 	 	
                                      With
      copy to:

                                    
	 	 	
                                      Patrick
      Lund

                                    
	 	 	
                                      Lund
      LAW Group

                                    
	 	 	
                                      1451
      Quail Street, Suite 202

                                    
	 	 	
                                      Newport
      Beach, CA 92660

                                    
	 	 	
                                      Facsimile
      number: 949.250.4503

                                    
	 	 	
                                      Telephone
      No.: 949.250.4230

                                    
	 	 	
                                      Email:
      ricklund@lundlawgroup.com

                                    
	 	 	 
      
	 	If
      to Holder, addressed to:
	 	 
	 	 	
                                      United
      States Environmental Response, LLC

                                    
	 	 	
                                      4255
      Harbour Island Lane

                                    
	 	 	
                                      Oxnard,
      CA  93035

                                    
	 	 	
                                      Facsimile
      number: 805.382.1313

                                    
	 	 	
                                      Telephone
      No.: 805.850.8922

                                    
	 	 	
                                      Email:
      canondougedwards@yahoo.com

                                    
	 	 	 
      
	 	 	
                                      With
      a copy to:

                                    
	 	 	
                                      Steven
      A. O’Rourke Professional Corporation

                                    
	 	 	
                                      Attention:
      Steven A. O’Rourke

                                    
	 	 	
                                      21700
      Oxnard St., Suite 1160

                                    
	 	 	
                                      Woodland
      Hills, CA 91367

                                    
	 	 	
                                      Facsimile
      number: 818.530.4306

                                    
	 	 	
                                      Telephone
      No.: 805.807.1346

                                    
	 	 	
                                      Email:
      Steve@CalCorpLaw.com

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    15.           Waiver.   The
undertakings of the Company hereunder shall remain in full force and effect
without regard to, and shall not be impaired by, (a) any exercise or
nonexercise, or any waiver by the Holder of any right, remedy, power or
privilege under any of the Notes, (b) any amendment to or modification of
the Stock Purchase Agreement or any of the Notes or any GEM or SCWW guarantee
thereof, or (c) the release or discharge or termination of any security or
guarantee for any of the obligations under the Stock Purchase Agreement or any
of the Notes, whether or not shall have notice or knowledge of any of the
foregoing. The Holder’s prior recourse to any part or all collateral, if any,
under the Notes shall not constitute a condition of any demand, suit or
proceeding for payment or collection of the obligations under this
Note.  No act, failure or delay by the Holder shall constitute a
waiver by the Holder of its rights and remedies hereunder or otherwise. No
single or partial waiver by the Holder of any default or right or remedy that it
may have shall operate as a waiver of any other default, right or remedy or of
the same default, right or remedy on a future occasion. The Company waives to
the maximum extent permitted by applicable law presentment, notice of dishonor
and protest, notice of intent to accelerate and notice of acceleration of all
instruments included in or evidencing any of the obligations under this Note,
and any and all other notices and demands whatsoever.

     

    16.           Headings;
Interpretation.  The headings and captions used in this Note
are used only for convenience and are not to be considered in construing or
interpreting this Note.  The Company and the Holder have participated
jointly in the negotiation and drafting of this Note.  If an ambiguity
or question of intent or interpretation arises, this Note shall be construed as
if drafted jointly by the Company and the Holder and no presumption or burden of
proof shall arise favoring or disfavoring either of them by virtue of the
authorship of any of the provisions of this Note.  Any reference to
any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.  The words “include” or “including” shall mean
“include, without limitation” or “including, without limitation,” as the case
may be, and the language following “include” or “including” shall not be deemed
to set forth an exhaustive list.

     

    17.           Time of
Essence.  Time shall be of the essence in the performance of
the obligations of the Company hereunder.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    18.           Severability.  If,
for any reason, a court of competent jurisdiction finds any provision of this
Note, or any portion hereof, to be unenforceable, such decision shall not affect
the validity of the remaining portion, which remaining portion shall continue in
full force and effect as if this Note had been executed with the invalid portion
thereof eliminated therefrom or modified to the extent permitted by
law.

     

    19.           Governing Law. THIS NOTE AND
THE RIGHTS OF THE HOLDER UNDER IT WILL BE GOVERNED BY AND CONSTRUED IN ALL
RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF
CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
CALIFORNIA.   The Company submits to and agrees to the exclusive
jurisdiction of the state and federal courts sitting in the city of Los Angeles,
California, in any action or proceeding arising out of or relating to this Note
and agrees that all claims in respect of the action or proceeding may be, and
shall be, heard and determined in any such court.  The Company waives
any defense of inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety or other security that might be required
of any other party with respect thereto.  The Holder may make service
of process by sending or delivering a copy of the process to the Company at the
address and in the manner provided for the giving of notices
above.  Nothing in this Paragraph, however, shall affect the right of
any of the Holder to serve legal process in any other manner permitted by law or
in equity.  The Company and the Holder shall be bound by a final
judgment in any action or proceeding so brought, which shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law
or in equity. In the event of any action or suit based upon or arising out of
any alleged breach of any provision of this Note, the prevailing party will be
entitled to recover from the other party reasonable attorneys' fees and other
costs of such action or suit.

     

    IN WITNESS WHEREOF, the
Company has duly executed this Note as of the day and year first above
written.

     

    
      
        	 	
                GENERAL
      ENVIRONMENTAL MANAGEMENT, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	Timothy J.
      Koziol, CEO	 
	 	 	 	 
	 	 	 	 

      

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

     

     

    13ex45.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 4.5

 

WARRANT EXERCISE OR EXCHANGE AGREEMENT

 

THIS WARRANT EXERCISE OR EXCHANGE AGREEMENT (the “Agreement”) is dated as of October 21, 2009, among HepaLife Technologies, Inc., a Florida corporation (the “Company”) and the holders identified on Schedule A hereto (each a “Holder” collectively the “Holders”).

 

WHEREAS, pursuant to the terms of the Subscription Agreements dated as of May 23, 2008 between the Company and each of the Holders (the “Subscription Agreements”), the Warrant Holders purchased an aggregate of 12,989,830 Series C Warrant (the “Series C Warrants”) to purchase an additional share of our common stock (the “Warrant Shares”), at an exercise price of $0.34 per share (the “Exercise Price”). 

 

WHEREAS, the Company and Holders desire to Exercise or exchange the Series C Warrant on the terms set forth in this Agreement.  Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Subscription Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Seller and the Purchaser agree as follows:

 

ARTICLE I

EXERCISE OR EXCHANGE

 

1.1         Holder’s Option.  

 

              (a)           Each Holder agrees to either: (i) exchange all Series C Warrants for shares of the Company’s common stock, on the basis of one (1) share of common stock (“Exchange Shares”) for every two (2) shares of the Company’s common stock purchasable by such Holder pursuant to the Series C Warrants (the “Securities Exchange Option”).  No fractional shares shall be issued in exchange for the Series C Warrants; or (ii) exercise all of its respective Series C Warrants to purchase the Company’s common stock (the “Exercise Shares”) at a reduced exercise price of $0.10 per Warrant Share (the “Warrant Exercise Option”). The Exchange Shares and the Warrant Shares are sometimes herein referred to as the “Securities.”

 

                (b)             Each Holder shall make its election as to which option it wishes to exercise on the signature page hereto.

 

1.2          The Closing

 

Upon satisfaction of the conditions set forth in Sections 1.3, the Closing shall occur at the offices of Sierchio & Company, LLP, 430 Park Avenue, New York, NY or such other location as the parties shall mutually agree.  The date of the Closing is hereinafter referred to as the “Closing Date.”  The Closing shall occur no later than October 31, 2009.  The Closing date shall be established by the Company and notice thereof given to the Holder.

 

 

 

 

1.3                Deliveries

 

(a)           Warrant Exercise Option.

 

             (i)            On the Closing Date, the Company shall deliver or cause to be delivered to each Holder having elected to effect the Warrant Exercise Option certificate(s) evidencing the Exercise Shares  

 registered in the name of such Holder.       

 

             (ii)            On or prior to the Closing Date, each Holder having elected to effect the Warrant Exercise Option shall deliver or cause to be delivered to the Company the following:

 

(1)         the total purchase price for the exercise of the Class C Warrants at the reduced Exercise Price; and

 

(2)         such Holder’s Series C Warrant.

 

                                (b)           Securities Exchange Option

             

             (i) On the Closing Date, the Company shall deliver or cause to be delivered to each Holder having elected to effect the Securities Exchange Option certificate(s) evidencing the Exchange Shares registered in the name of such Holder.

 

                                (ii)  On or prior to the Closing Date, each Holder having elected to effect the Securities Exchange Option shall deliver or cause to be delivered to the Company such Holder’s Series C Warrant.

 

1.4                Termination

 

This Agreement shall be null and void if it is not executed, delivered and countersigned by the Company and  each Holder no later than 5:00 pm (EDST) on October 31, 2009 (the “Expiration Date”).  The Exchange Shares and Warrant Shares will not be delivered upon the execution of this Agreement. The Company’s obligations hereunder are further subject to the satisfaction by all of the Holders of the delivery requirements set forth in Section 1.3 hereof.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

2.1          Representations and Warranties of the Company.  The Company hereby makes the following representations and warranties to the Purchaser:

 

(a)                 The Company has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect that affect creditors’ rights generally, and by legal and equitable limitations on the availability of specific remedies.

 

(b)                 The execution, delivery and performance by the Company of this Agreement and consummation by the Company of the transactions contemplated hereby do not and will not: (i) violate the organizational documents of the Company, (ii) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Company; (iii) violate any provision of any federal or state statute, rule or regulation which is, to the Company’s knowledge, applicable to the Company; or (iv) violate any contract to which the Company or any of its assets or properties are bound, or conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of , any agreement, indenture or instrument to which Company is a party.  No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by the Company of this Agreement or the consummation of the transactions contemplated hereby.

 

(c)                 The Exchange Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens.

 

(d)                 The Warrant Shares are subject to the Company’s registration statement (SEC File No. 333-160472) as filed with the Securities and Exchange Commission (the “Commission”), which the Company agrees to maintain current for a period of six months following the Closing Date, and with respect to which agrees to file, if required, a post effective amendment reflecting the re-pricing of Exercise Price in accordance with this Agreement. 

 

(e)                 The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act

 

(f)                  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates or as subsequently amended, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing or subsequent amendment.  Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(g)                 The Company has taken no action that would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

(h)                 Neither the Company nor any other Person acting on its behalf, will provide any Holder or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Holder shall have executed a written agreement regarding the confidentiality and use of such information.  The Company understands and confirms that each Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

(i)                   Assuming the accuracy of each of the representations and warranties set forth in Section 2.2 of this Agreement, the securities to be issued pursuant to this Agreement are exempt from the registration requirements of the Securities Act.

 

2.2                Representations and Warranties of the Holders.  Each Holder for itself only hereby represents, warrants and agrees as of the date hereof:

                

                (a)           The Holder has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by the Holder and constitutes the legal, valid and binding obligation of such Holder, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect that affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies.

 

                (b)           The execution, delivery and performance by such Holder of this Agreement and consummation by the Holder of the transactions contemplated hereby do not and will not: (i) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Holder; (ii) violate any provision of any  

 federal or state statute, rule or regulation which is, to the Holder’s knowledge, applicable to the Holder; or (iii) violate any contract to which the Holder is a party or by which such Holder or any of its respective assets or properties are bound.  No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by the Holder of this Agreement.

 

            (c)        The Holder is an “accredited investor.”

 

                (d)           The Holder is aware of the Company’s business affairs and financial condition, and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire securities pursuant to this Agreement, and acknowledges that following the Closing, the Company may complete such transactions, including, but not limited to  mergers, acquisitions and financings all on terms and conditions which the Company in its sole discretion deem acceptable or advisable, the effect of some or all of which will be a dilution of such Holder’s equity ownership in the Company.

                

                (e)           The Holder is acquiring the Exchange Shares or Warrant Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that except as provided below in paragraph (h) of this section, by making the representations herein, such Holder does not agree to hold the Exchange Shares or Warrant Shares for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

 

(f)                  The Holder has taken no action that would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

(g)                 Other than consummating the transactions contemplated hereunder, Holder has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Holder, executed any purchases or sales, including short sales, of the securities of the Company during the period commencing from the time that such Holder first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder until the date hereof. Notwithstanding the foregoing, in the case of a Holder that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Holder’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Holder’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the securities covered by this Agreement.

 

(h)                 The Securities issued pursuant to this Agreement shall bear a legend substantially as follows: 

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY. 

 

                (i)            The Exchange Shares shall be deemed “restricted” securities within the meaning of Rule 144 (as defined below) and shall bear the forgoing legend for a period of six months following the Closing Date. For two years from the date of this Agreement, the Company covenants that it will file the reports required to be filed under the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, in the event that the Company is not required to file such reports, it will make publicly available information as set forth in Rule 144(c) promulgated under the Securities Act), and it will take such further action as the Holder may reasonably request, or to the extent required from time to time to enable the Holder to sell its Securities without registration under the Securities Act within the limitation of the exemption provided by and to the extent applicable (a) Rule 144 under the  

 Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission (collectively, “Rule 144”).  

 

ARTICLE III

MISCELLANEOUS

 

3.1          Entire Agreement; Amendments.  The Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

3.2          Amendments; Waivers.  No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the Holders or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.  

 

3.3          Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  

 

3.4          No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

3.5          Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery). Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.  If either party shall commence an action or proceeding to enforce any provisions of the documents contemplated herein, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

3.6          Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.

 

                                3.7          Severability.  In case any one or more of the provisions of this Agreement shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affecting or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision which shall be a reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

3.8          Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be: (i) if to the Company to: 60 State Street, Suite 700, Boston, MA 02109 and (ii) if to the Holders to the addresses set forth on signature pages hereto.

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

HepaLife Technologies, Inc.                                                                           

                                                 

 

 

 

By: ___________________________________

 

Name: Frank Menzler

Title: Chief Executive Officer and President

 

 

 

SIGNATURE PAGES FOR HOLDERS ON FOLLOWING PAGES

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               ALPHA CAPITAL ANSTALT    

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above and further elects to (mark one):

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               MICHAEL & BETSY BRAUSER TBE

 

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

BRIO CAPITAL L.P.

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

CHASE MORTGAGE, INC.

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

CHESTNUT RIDGE PARTNERS, LP 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

ROBERT S. COLMAN TRUST UDT 3/13/85

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

CRANSHIRE CAPITAL LP 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

GRQ CONSULTANTS INC. 401K 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

IRA FBO JOHN P. O’SHEA

PERSHING LLC AS CUSTODIAN

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

MELECHDAVID INC.

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

PALLADIUM CAPITAL ADVISORS, LLC

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

PERISCOPE PARTNERS L.P.

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

JOSEPH SIERCHIO

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

WHALEHAVEN CAPITAL FUND LIMITED

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

IN WITNESS WHEREOF, the parties hereto have caused this WARRANT EXERCISE OR EXCHANGE AGREEMENT to be duly executed by their respective authorized signatories as of the date first indicated above.

 

[  ] Effect the Share Exchange; or

 

[   ] Effect the Warrant Exercise.

 

	
Name of Holder: 

	
               

1420525 ALBERTA LTD.

 

 

	
Signature of Authorized Signatory of Holder:

	
 

 

	
Name of Authorized Signatory:

	
            

 

	
Title of Authorized Signatory:

	
                                                                                 

 

	
Email Address of Authorized Signatory:

	
        

 

	
Fax Number of Authorized Signatory:

	
         

 

 

Address for Notice of Holder:

 

 

 

 

 

Address for Delivery of Exchange Shares or Warrant Shares (if not same as address for notice):

 

 

 

 

[FINAL SIGNATURE PAGE]

 

 

 

 

Schedule A

 

 

 

	
 Column 1

	
 Column 2

 

	
 Column 3

 

	
Column 4

 

	
Column 5

 

	
Warrant Holders

 

	
No. of Series C Warrants Owned

 

 

	
No. of Shares That Would be Received in the Share Exchange

Option

	
No. of Shares That Would be Received in the Warrant Exercise Option

	
Aggregate Purchase Price in the Warrant Exercise Option

 

	
ALPHA CAPITAL ANSTALT

	
2,352,941

	
1,176,471

	
2,352,941

	
$235,294.10

	
MICHAEL & BETSY BRAUSER TBE

	
1,176,471

	
588,236

	
1,176,471

	
$117,647.10

	
BRIO CAPITAL L.P.

	
235,294

	
117,647

	
235,294

	
$23,529.40

	
CHASE MORTGAGE, INC.

	
350,000

	
175,000

	
350,000

	
$35,000.00

	
CHESTNUT RIDGE PARTNERS, LP

	
588,235

	
294,118

	
588,235

	
$58,823.50

	
ROBERT S. COLMAN TRUST UDT 

3/13/85

	
706,000

	
353,000

	
706,000

	
$70,600.00

	
CRANSHIRE CAPITAL LP

	
352,941

	
176,471

	
352,941

	
$35,294.10

	
GRQ CONSULTANTS INC. 401K

	
2,352,941

	
1,176,471

	
2,352,941

	
$235,294.10

	
IRA FBO JOHN P. O’SHEA

PERSHING LLC AS CUSTODIAN 

	
590,000

	
295,000

	
590,000

	
$59,000.00

	
MELECHDAVID INC.

	
250,000

	
125,000

	
250,000

	
$25,000.00

	
PALLADIUM CAPITAL ADVISORS, LLC(

	
213,713

	
106,857

	
213,713

	
$21,371.30

	
PERISCOPE PARTNERS L.P.

	
294,118

	
147,059

	
294,118

	
$29,411.80

	
JOSEPH SIERCHIO

	
50,000

	
25,000

	
50,000

	
$5,000.00

	
WHALEHAVEN CAPITAL FUND LIMITED

	
1,411,764

	
705,882

	
1,411,764

	
$141,176.40

	
1420525 ALBERTA LTD.

	
2,065,412

	
1,032,706

	
2,065,412

	
$206,541.20

	
 

	
 

		
 

	
 

	
TOTAL 

	
12,989,830

	
6,494,918.00

	
12,989,830

	
$1,298,983.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]