REAFFIRMATION AND RATIFICATION AGREEMENT
July
17,
2007
Laurus
Master Fund, Ltd.
c/o
Laurus Capital Management, LLC
000
Xxxxxxx Xxxxxx 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Reference
is hereby made to each of the (i) Securities Purchase Agreement, dated
June 30, 2005, between Laurus Master Fund, Ltd. (the “Purchaser”) and
Windswept Environmental Group, Inc. (the “Company”) (as amended, modified or
supplemented from time to time, the "Purchase Agreement"); (ii) Amended and
Restated Secured Convertible Term Note dated September 29, 2006, issued by
the
Company in favor of Purchaser, in the aggregate principal amount of
$5,942,175.00 (as amended, modified or supplemented from time to time, the
"Note"); (iii) Option Agreement (as amended, modified or supplemented from
time
to time, the "Option"), dated June 30, 2005, between the Purchaser and the
Company granting Purchaser the right to purchase 30,395,179 shares of the
Company's common stock, par value $0.0001 per share (the "Common Stock") at
an
exercise price of $.0001 per share; (iv) Common Stock Purchase Warrant (as
amended, modified or supplemented from time to time, the "Warrant"), dated
June
30, 2005, issued by the Company to Purchaser granting Purchaser the right to
purchase 13,750,000 shares of the Common Stock; (v) Master Security Agreement
(as amended, modified or supplemented from time to time, the "Security
Agreement"), dated June 30, 2005, by and among the Purchaser, the Company and
its wholly owned subsidiaries, Trade-Winds Environmental Restoration Inc.,
a New
York corporation ("Trade-Winds"), and North Atlantic Laboratories, Inc., a
New
York corporation ("North Atlantic" and together with Trade-Winds, the
"Subsidiaries"); (vi) Funds Escrow Agreement (the "Escrow Agreement"), dated
June 30, 2005, by and among the Purchaser, the Company and Loeb & Loeb LLP;
(vii) Registration Rights Agreement, dated June 30, 2005, by and between the
Purchaser and the Company (as amended, modified or supplemented from time to
time, the "Registration Rights Agreement"); (viii) Stock Pledge Agreement dated
June 30, 2005, by and among the Purchaser, the Company and the Subsidiaries
(as
amended, modified or supplemented from time to time, the "Pledge Agreement");
(ix) the Guaranty dated June 30, 2005 issued by Xxxxxxx X’Xxxxxx to the
Purchaser (as amended, modified or supplemented from time to time, the “O’Reilly
Guaranty”); and (x) Subsidiary Guarantee, dated June 30, 2005, issued by each of
the Subsidiaries to the Purchaser (as amended, modified or supplemented from
time to time, the “Subsidiary Guarantee”). (the documents referred to in each of
the preceding clauses (i) through (x) are collectively referred to herein as
the
“Existing Security and Guaranty Agreements”).
To
induce
Laurus to provide additional financial accommodations to the Company evidenced
by (i) that certain Second Amended and Restated Secured Term Note, dated the
date hereof, made by the Company in favor of Laurus (as amended, modified or
supplemented from time to time, the “Amended and Restated Laurus Term Note”)
each of the Company, Trade-Winds and North Atlantic hereby jointly and
severally:
(a) represents
and warrants to Laurus that it has reviewed and approved the terms and
provisions of Amended and Restated Laurus Term Note and the documents,
instruments and agreements entered into in connection therewith;
(b) acknowledges,
ratifies and confirms that all indebtedness incurred by, and all other
obligations and liabilities of, each of the Company, Trade-Winds and North
Atlantic under the Amended and Restated Laurus Term Note are (i) “Obligations”
under, and as defined in the Subsidiary Guaranty, (ii) “Obligations” under, and
as defined in, the Master Security Agreement and (iii) “Obligations” under, and
as defined in, the Stock Pledge Agreement;
(c) acknowledges,
ratifies and confirms that each of the Amended and Restated Laurus Term Note
are
“Documents” under, and as defined in, each of the Subsidiary Guaranty, the
Master Security Agreement and the Stock Pledge Agreement ;
(d) acknowledges,
ratifies and confirms that all of the terms, conditions, representations and
covenants contained in the Existing Security and Guaranty Agreements are in
full
force and effect and shall remain in full force and effect after giving effect
to the execution and effectiveness of each of the Amended and Restated Laurus
Term Note;
(e) represents
and warrants that no offsets, counterclaims or defenses exist as of the date
hereof with respect to any of the undersigned’s obligations under any Existing
Security and Guaranty Agreement;
(f) acknowledges,
ratifies and confirms the grant by each of the Company, Trade-Winds and North
Atlantic to Laurus of a security interest in the assets of (including the equity
interests owned by) each of the Company, Trade-Winds and North Atlantic,
respectively, as more specifically set forth in the Existing Security and
Guaranty Agreements; and
(g) The
Company shall use the net proceeds from its sale of the Amended and Restated
Term Note solely for working capital purposes. Under no condition will the
proceeds from the sale of the Amended and Restated Term Note be used by the
Company, Trade-Winds or North Atlantic to reduce existing debt of the Company,
Trade-Winds or North Atlantic including but not limited to monies owed to
Spotless Plastics (USA), Inc. The Company agrees to furnish the Purchaser with
all written evidence that it may reasonably require with documenting such use
of
proceeds.
[The
remainder of this page is intentionally left blank]
2
This
letter agreement shall be governed by and construed in accordance with the
laws
of the State of New York.
|
Very
truly yours,
|
|
|
WINDSWEPT
ENVIRONMENTAL
GROUP,
INC.
|
|
|
By:
|
/s/Xxxxxxx X’Xxxxxx |
|
Name:
|
|
|
Title
|
|
|
TRADE-WINDS
ENVIRONMENTAL
RESTORATION
INC.
|
|
|
By:
|
/s/Xxxxxxx X’Xxxxxx |
|
Name:
|
|
|
Title
|
|
|
NORTH
ATLANTIC LABORATORIES,
INC.
|
|
|
By:
|
/s/Xxxxxxx X’Xxxxxx |
|
Name:
|
|
|
Title
|
|
Acknowledged
and Agreed to by:
|
By:
|
/s/Xxxxx Grin |
|
Name:
|
|
|
Title:
|
|
3
