EXHIBIT 10.1
OMNIBUS AMENDMENT

This Omnibus Amendment (this “Amendment”), dated as of September 2, 2008, by and
between Windswept Environmental Group, Inc., a Delaware corporation (the
“Company”), Valens Offshore SPV I, Ltd., a Cayman Islands company (“VOFSPVI”),
PSource Structured Debt Limited, a Guernsey company (“PSource”), Valens U.S. SPV
I, LLC, a Delaware limited liability company (“VUSSPVI” and together with
PSource 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 that certain Amended and Restated Secured Convertible Term Note, dated as
of September 29, 2006, issued by the Company to Laurus Master Fund, Ltd., a
Cayman Islands company (“Laurus”), and subsequently assigned in full by Laurus
to VOFSPVI, PSource 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 and Holders, as applicable, agree that since the issuance
of the September 2006 Convertible Note, the Company is past due on the
following: (i) the principal portion of certain Monthly Amounts occurring prior
to the Amendment Effective Date (the aggregate of all such unpaid principal, the
“Pastdue Principal”), and (ii) certain regularly scheduled payments of interest
on the Principal Amount (the aggregate of all such unpaid interest, the “Pastdue
Interest”, and together with the Pastdue Principal, “Pastdue Amounts”);
 
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:
 
1. Each of VOFSPVI, PSource, VUSSPVI and the Company consent to the deferral of
the Monthly Amount (i.e. $100,000.00) under the September 2006 Convertible Note
otherwise due on September 2, 2008 (the “Deferred Amount”) on the terms, and
subject to the conditions, set forth herein.
 
2. The Company hereby covenants and agrees that the Deferred Amount and the
Pastdue Amounts equaling $19,041.83 shall be payable in full on the earlier of
(i) the date that the Company receives any payment resulting from or pertaining
to any past or current litigation involving the Company or (ii) November 1,
2008.
 
 
 

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3. From and after October 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.
 
4. In consideration of the Holders agreement to the transactions contemplated
hereby, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby agrees to pay
to the Holders the aggregate sum of $35,000.00 as additional interest
(“Additional Interest”) with respect to the outstanding principal amount
evidenced by the September 2006 Convertible Note. The Additional Interest shall
be deemed fully earned on the date hereof and shall be paid ratably to the
Holders of the September 2006 Convertible Note ($5,179.62 to VOFSPVI, $1,365.43
to VUSSPVI, $28,454.96 to PSource), at such time as the Company is required to
repay all of the outstanding principal balance evidenced by the September 2006
Convertible Note, whether at the Maturity Date, upon acceleration, prepayment or
otherwise. The parties hereby agree that the fair market value of the Additional
Interest (as reasonably determined by the parties) received by the Holders in
consideration of the amendments herein made by the Holders hereunder is hereby
designated as additional interest. The parties hereto further agree to file all
applicable tax returns in accordance with such characterizations set forth
above, treating each obligation to each Holder as a separate obligation, 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 the Holders under the Loan Documents.
 
5. The Company hereby further consents and agrees to provide the Agent, no later
than September 15, 2008, with written documentation indicating the hiring of an
advisor to help the Company pursue strategic alternatives, including but not
limited to, a potential sale of the Company.

6. The 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.
 
7. 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.
 
8. 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.
 
 
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9. 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.

COMPANY:
 
HOLDERS:
     
Windswept Environmental Group, Inc.
 
Valens Offshore SPV I, Ltd.
By: Valens Capital Management, LLC,
its investment manager
     
By:
  /s/ Michael O’Reilly
 
By:
  /s/ Scott Bluestein
Name:
  Michael O’Reilly
 
Name:
  Scott Bluestein
Title:
  President
 
Title:
  Authorized Signatory

 
Valens U.S. SPV I, LLC
By: Valens Capital Management, LLC,
its investment manager 
 
By:
  /s/ Scott Bluestein
Name:
  Scott Bluestein
Title:
  Authorized Signatory

 
PSOURCE STRUCTURED DEBT LIMITED
 
By:
  /s/ Soondra Appavoo
Name:
  Soondra Appavoo
Title:
  Managing Director, PSource Capital
Limited, its Investment Consultant

 

AGENT:   
LV Administrative Service, Inc. as Agent
 
By:
  /s/ Scott Bluestein
Name:
  Scott Bluestein
Title:
  Authorized Signatory

 
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AGREED AND ACKNOWLEDGED:
 
TRADE-WINDS ENVIRONMENTAL
RESTORATION INC.
 
By:
  /s/ Michael O’Reilly
Name:
  Michael O’Reilly
Title:
  President

NORTH ATLANTIC LABORATORIES, INC.
 
By:
  /s/ Michael O’Reilly
Name:
  Michael O’Reilly
Title:
  President

ENVIRONMENTAL RESTORATION, INC.
 
By:
  /s/ Michael O’Reilly
Name:
  Michael O’Reilly
Title:
  President

RESTORENET, INC.
 
By:
  /s/ Michael O’Reilly
Name:
  Michael O’Reilly
Title:
  President

 
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