THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF
OID, AND THE YIELD TO MATURITY, PLEASE CONTACT MICHAEL O’REILLY, PRESIDENT OF
THE COMPANY, AT (631) 289-5500 WHO WILL PROMPTLY MAKE THIS INFORMATION AVAILABLE
UPON REQUEST.
 
AMENDED AND RESTATED DEMAND NOTE
 
$19,989.00
Dated as of September 24, 2008
 
New York, New York

 
FOR VALUE RECEIVED, Windswept Environmental Group, Inc., a Delaware corporation
(the “Maker”), promises to pay to Valens U.S. SPV I, LLC (the “Payee”), ON
DEMAND, at 335 Madison Avenue, 10th Floor, New York, New York 10017, or at such
other place as may be designated in writing by the holder of this Note, the
principal sum of NINETEEN THOUSAND NINE HUNDRED EIGHTY NINE ($19,989.00)
DOLLARS, together with interest on the unpaid principal balance computed from
the date hereof at 20% per annum, which sum shall be payable in lawful money of
the United States of America. Interest shall be calculated on the basis of the
actual number of days elapsed over a year of 360 days.
 
1.  DEFAULT INTEREST. In addition to any late payment charge which may be due
under this Note, if the principal indebtedness is not paid in full when due, the
Maker shall thereafter, pay interest on the principal sum then remaining unpaid
from the due date until the date on which the principal sum then outstanding is
paid in full (whether before or after judgment), at a rate per annum (calculated
for the actual number of days elapsed on the basis of a 360-day year) equal to
the rate initially payable hereunder plus 4%; provided, however, that such
interest rate shall in no event exceed the maximum interest rate which the Maker
may by law pay.
 
2.  AUTHORITY. The Maker (and the undersigned representatives of the Maker, if
any) represents that the Maker has full power, authority and legal right to
execute and deliver this Note, and that this Note constitutes a valid and
binding obligation of the Maker.
 
3.  DEFINED TERMS. Whenever used, the singular number shall include the plural,
the plural the singular, and the words “Payee” and “Maker” shall include,
respectively, their respective successors and assigns; provided, however, that
the Maker shall in no event or under any circumstance have the right to assign
or transfer its obligations under this Note or the related documents, in whole
or in part, to any other person, party or entity.
 
 
 

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4.  HEADINGS, ETC. The headings and captions of the numbered paragraphs of this
Note are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
 
5.  ENFORCEABILITY. The Maker acknowledges that this Note and the Maker's
obligations under this Note are and shall at all times continue to be absolute
and unconditional in all respects, and shall at all times be valid and
enforceable irrespective of any other agreements or circumstances of any nature
whatsoever which might otherwise constitute a defense to this Note and the
obligations of the Maker under this Note or the obligations of any other person
or party relating to this Note. This Note and the instruments and documents
referred to herein (collectively and as the same may be amended or otherwise
modified from time to time, the “Documents”) set forth the entire agreement and
understanding of the Payee and the Maker, and the Maker absolutely,
unconditionally and irrevocably waives any and all right to assert any set-off,
counterclaim or crossclaim of any nature whatsoever with respect to this Note or
the obligations of the Maker hereunder or thereunder, or the obligations of any
other person or party relating hereto or thereto or to the obligations of the
Maker hereunder or thereunder or otherwise in any action or proceeding brought
by the Payee to collect the Note, or any portion thereof, or to enforce,
foreclose and realize upon the liens and security interests of the Payee in any
collateral (provided, however, that the foregoing shall not be deemed a waiver
of the Maker's right to assert any compulsory counterclaim maintained in a court
of the United States, or of the State of New York if such counterclaim is
compelled under local law or rule of procedure, nor shall the foregoing be
deemed a waiver of the Maker’s right to assert any claim which would constitute
a defense, setoff, counterclaim or crossclaim of any nature whatsoever against
the Payee in any separate action or proceeding). The Maker acknowledges that no
oral or other agreements, conditions, promises, understandings, representations
or warranties exist with respect to this Note or with respect to the obligations
of the Maker under this Note, except those specifically set forth in this Note
and the instruments and documents being signed concurrently herewith.
 
6.  WAIVER. The Maker waives presentment, demand for payment, notice of dishonor
and any or all notices or demands in connection with the delivery, acceptance,
perfor-mance, default or enforcement of this Note and consents to any or all
delays, extensions of time, renewals, release of any party to any document
related to this Note and of any available security therefor, and any and all
waivers or modifications that may be granted or consented to by the Payee with
regard to the time of payment or with respect to any other provisions of any of
the Documents, and agrees that no such action, delay or failure to act on the
part of the Payee shall be construed as a waiver by the Payee of, or otherwise
affect, in whole or in part, its right to avail itself of any remedy with
respect thereto. No notice to or demand on the Maker shall be deemed to be a
waiver of the obligation of the Maker or of the right of the Payee to take
further action without further notice or demand as provided in any of the
Documents.
 
7.  SECURITY INTEREST. The obligations under this Note shall constitute an
“Obligation” as such term is defined in the Master Security Agreement, dated as
of June 30, 2005, by and among the Maker, Trade-Winds Environmental Restoration
Inc., North Atlantic Laboratories, Inc., Environmental Restoration, Inc.,
Restorenet, Inc., the Payee (as assignee of Laurus), Valens Offshore SPV I, Ltd.
(as assignee of Laurus) and PSource Structured Debt Limited (as assignee of
Laurus) (as amended, restated, modified and/or supplemented from time to time,
the “Master Security Agreement”) and shall be secured by liens and the security
interests in the Collateral as such term is defined in the Master Security
Agreement.
 
 
 

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8.  AMENDMENTS. This Note may not be modified, amended, changed or terminated
orally, except by an agreement in writing signed by the Maker and the Payee. No
waiver of any term, covenant or provision of this Note shall be effective unless
given in writing by the Payee and, if so given by the Payee, shall only be
effective in the specific instance in which given.
 
9.  GOVERNING LAW. This Note is and shall be deemed entered into in the State of
New York and shall be governed by and construed in accordance with the laws of
the State of New York, without regard to principles of conflicts of laws.
 
10.  REGISTERED OBLIGATION. This Note shall be registered (and such registration
shall thereafter be maintained) as set forth in the Letter Agreement, dated as
of the date hereof, by the Maker, certain subsidiaries of the Maker, the Payee
and certain affiliates of the Payee (the “Letter Agreement”). Notwithstanding
any document, instrument or agreement relating to this Note to the contrary,
transfer of this Note (or the right to any payments of principal or stated
interest thereunder) may only be effected by (i) surrender of this Note and
either the reissuance by the Maker of this Note to the new holder or the
issuance by the Maker of a new instrument to the new holder or (ii) registration
of such holder as an assignee in accordance with the Letter Agreement.
 
11.  AMENDED AND RESTATED NOTE. This Note amends and restates in its entirety
(and is given in substitution for an not in satisfaction of) the certain Demand
Note dated September 18, 2008 in the original principal amount of $9,378.00 made
by the Maker in favor of Payee.
 

 
 

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

        WINDSWEPT ENVIRONMENTAL GROUP, INC.  
   
   
    By:   /s/ Michael O’Reilly  

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Name: Michael O’Reilly  
Title: President

 
 
 

SIGNATURE PAGE TO
DEMAND NOTE