OMNIBUS AMENDMENT AND WAIVER
This
Omnibus Amendment and Waiver (this “Amendment”),
dated
as of April 30, 2008, by and between Windswept Environmental Group, Inc., a
Delaware corporation (the “Company”),
Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”),
Valens Offshore SPV I, Ltd., a Cayman Islands company (“VOFSPVI”),
Valens U.S. SPV I, LLC, a Delaware limited liability company (“VUSSPVI”
and
together with Laurus and VOFSPVI, the “Holders”
and
each, a “Holder”)
and LV
Administrative Services, Inc. as agent (the “Agent”)
for
the benefit of each of the Holders, amends (i) that certain Amended and Restated
Secured Convertible Term Note, dated as of September 29, 2006, issued by the
Company to Laurus, and subsequently assigned in part by Laurus to VOFSPVI and
VUSSPVI (as previously, and as maybe, amended, modified, or supplemented from
time to time, the “September
2006 Convertible Note”).
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the September 2006 Convertible Note. Reference is also made
to
the Securities Purchase Agreement, dated as of June 30, 2005, by and between
the
Company and Laurus (as amended, modified or supplemented from time to time,
the
“Purchase
Agreement”
and
together with the September 2006 Convertible Note and the Related Agreements
as
defined in the Purchase Agreement, the “Loan
Documents”).
PREAMBLE
WHEREAS,
the
Company and Holders, as applicable, have agreed to make certain changes to
the
September 2006 Convertible Note as set forth herein; and
WHEREAS,
the
Company has agreed to make certain payments as set forth herein.
NOW,
THEREFORE,
in
consideration of the above, and for other good and valuable consideration,
the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
Waiver
and Amendment
1. Notwithstanding
the terms and conditions of (i) that certain Omnibus Amendment to Warrant,
Waiver to Note and Lockup Agreement dated as of March 31, 2008 by and among
the
Company, Laurus, VOFSPVI, VUSSPVI, Agent and PSource Structured Debt Limited
and
(ii) that certain waiver dated as of February 29, 2008 by the Company, Laurus,
VOFSPVI and VUSSPVI, the parties hereby acknowledge that principal and/or
interest payments due under the terms of the September 2006 Convertible Note,
on
March 1, 2008, April 1, 2008 and May 1, 2008 are hereby waived and deferred
(all
such amounts the “Deferred
Amounts”)
on the
terms, and subject to the conditions, set forth herein.
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2. The
Company hereby covenants and agrees that the Deferred Amounts shall be payable
in full on the earlier to occur of the Maturity Date and the date upon which
all
obligations arising under the Loan Documents have been paid in full. For the
avoidance of doubt, from and after June 1, 2008, regularly scheduled amortizing
Monthly Amounts required pursuant to the terms of the September 2006 Convertible
Note will be due and payable per the terms and on the date set forth in the
September 2006 Convertible Note.
3. In
consideration of the foregoing, the Company hereby agrees that, on the earlier
to occur of the Maturity Date and the date upon which all obligations arising
under the Loan Documents have been paid in full, the Company shall pay $50,000
in cash to Agent (the “Holder
Payment”)
which
Holder Payment shall be distributed by the Agent to each Holder as follows:
$2,653.08
to VOFSPVI (the “VOF
Payment”)
$1,950.93
to VUSSPVI (the “VUS
Payment”)
$45,395.99
to Laurus (the “Laurus
Payment”)
In
respect of the Laurus Payment only, Laurus and the Company hereby agree that
the
fair market value of the Laurus Payment (as reasonably determined by the
parties) received in consideration of the amendments to the September 2006
Convertible Note made hereunder is hereby designated as interest and,
accordingly, shall be treated, on a pro rata basis, as a reduction of the
remaining stated Principal Amount (which reduced Principal Amount shall be
treated as the issue price) of the September 2006 Convertible Note for U.S.
federal income tax purposes under and pursuant to Treasury Regulation Sections
1.1001-3(e)(2)(iii), 1.1273-2(g)(2)(ii) and 1.1274-2(b)(1). The parties further
agree to file all applicable tax returns in accordance with such
characterization and shall not take a position on any tax return or in any
judicial or administrative proceeding that is inconsistent with such
characterization. Notwithstanding the foregoing, nothing contained in this
paragraph shall or shall be deemed to modify or impair in any manner whatsoever
the Company’s obligations from time to time owing to Laurus under the
Loan Documents.
4. The
waiver and amendments set forth above shall be effective as of the date first
above written (the “Amendment
Effective Date”)
if
each of the Company, the Holders and the Agent shall have duly executed this
Amendment and the Company shall have delivered to the Agent its respective
counterpart to this Amendment.
5. Except
as
specifically set forth in this Amendment or as previously agreed to in writing
by the appropriate parties, there are no other amendments, modifications or
waivers to the Loan Documents, and all other forms, terms and provisions of
the
Loan Documents remain in full force and effect.
6. The
Company hereby represents and warrants to the Holders that (i) after giving
effect to this Amendment, no Event of Default (as defined in the Loan Documents)
exists on the date hereof, (ii) on the date hereof, after giving effect to
this
Amendment, all representations and warranties made by the Company in connection
with the Loan Documents, as amended, modified or supplemented continues to
be
true, correct and complete as of the first date given and (iii) on the date
hereof, after giving effect to this Amendment, all of the Company’s and its
Subsidiaries’ covenant requirements have been met.
7. This
Amendment shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of and be
enforceable by each of the parties hereto and their respective successors and
permitted assigns. THIS
AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAW OF THE STATE OF NEW YORK.
This
Amendment may be executed in any number of counterparts, each of which shall
be
an original, but all of which shall constitute one instrument.
[signature
page follows]
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IN
WITNESS WHEREOF,
each of
the parties hereto has executed this Amendment or has caused this Amendment
to
be executed on its behalf by a representative duly authorized, all as of the
date first above set forth.
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COMPANY:
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HOLDERS:
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Windswept
Environmental Group, Inc.
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Laurus
Master Fund, Ltd.
By:
Laurus Capital Management, LLC, its investment manager
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By:
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/s/
Xxxxxxx X’Xxxxxx
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By:
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/s/
Xxxxx Xxxxxxxxx
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Name:
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Xxxxxxx
X’Xxxxxx
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Name:
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Xxxxx
Xxxxxxxxx
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Title:
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President/CEO
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Title:
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Authorized
Signatory
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Valens
Offshore SPV I, Ltd.
By:
Valens Capital Management, LLC, its investment manager
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By:
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/s/
Xxxxx Xxxxxxxxx
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Name:
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Xxxxx
Xxxxxxxxx
|
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Title:
|
Authorized
Signatory
|
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Valens
U.S. SPV I, LLC
By:
Valens Capital Management, LLC, its investment manager
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By:
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/s/
Xxxxx Xxxxxxxxx
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Name:
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Xxxxx
Xxxxxxxxx
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Title:
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Authorized
Signatory
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AGENT:
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LV
Administrative Service, Inc. as Agent
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By:
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/s/
Xxxxx Xxxxxxxxx
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Name:
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Xxxxx
Xxxxxxxxx
|
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Title:
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Authorized
Signatory
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AGREED
AND ACKNOWLEDGED:
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TRADE-WINDS
ENVIRONMENTAL RESTORATION INC.
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By:
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/s/
Xxxxxxx X’Xxxxxx
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Name:
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Xxxxxxx
X’Xxxxxx
|
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Title:
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President/CEO
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NORTH
ATLANTIC LABORATORIES, INC.
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By:
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/s/
Xxxxxxx X’Xxxxxx
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Name:
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Xxxxxxx
X’Xxxxxx
|
|
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Title:
|
President/CEO
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ENVIRONMENTAL
RESTORATION, INC.
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By:
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/s/
Xxxxxxx X’Xxxxxx
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Name:
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Xxxxxxx
X’Xxxxxx
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Title:
|
President/CEO
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RESTORENET,
INC.
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By:
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/s/
Xxxxxxx X’Xxxxxx
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Name:
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Xxxxxxx
X’Xxxxxx
|
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Title:
|
President/CEO
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