Document:

OMNIBUS AMENDMENT

     This Omnibus Amendment,  dated September 29, 2006, by and between Windswept
Environmental  Group,  Inc., a Delaware  corporation  (the "Company") and Laurus
Master Fund, Ltd., a Cayman Islands company (the "Purchaser") (this Agreement").

                                    PREAMBLE

     WHEREAS,  Reference is hereby made to each of the (i)  Securities  Purchase
Agreement,  dated June 30,  2005,  between  the  Purchaser  and the  Company (as
amended,  modified or supplemented from time to time, the "Purchase Agreement");
(ii) Secured Convertible Term Note dated June 30, 2005, issued by the Company in
favor of  Purchaser,  in the aggregate  principal  amount of  $5,000,000.00  (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");  and (ix) the Guaranty
dated June 30, 2005 issued by Michael  O'Reilly to the  Purchaser  (as  amended,
modified or supplemented from time to time, the "O'Reilly Guaranty").

     WHEREAS,  each of the  Purchaser,  the Company,  and its  Subsidiaries,  as
applicable,  desire to amend the Purchase  Agreement  and certain of the Related
Agreements as set forth herein.

     NOW, THEREFORE, in consideration of the covenants, agreements and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

<PAGE>

     1. Capitalized terms used herein without  definition are used as defined in
the  Purchase  Agreement  and Related  Agreements,  respectively.  The  Purchase
Agreement and Related  Agreements  are  collectively  referred to herein as (the
"Loan Documents").

     2.  Effective as of the Amendment  Effective Date (as defined  below),  the
Note is hereby  amended and  restated in the form  attached  hereto as Exhibit A
(the "Amended and Restated Note"). For the avoidance of doubt, (i) the amendment
and  restatement  of the  Note as set  forth  in  this  Section  2  shall  be in
substitution  for and not in  satisfaction  of the  Note  and  (ii)  payment  of
principal  otherwise  due and  payable  under the Note on each of July 1,  2006,
August 1, 2006 and  September 1, 2006 shall be deferred  until the Maturity Date
of the Amended and Restated Note.

     3. The Purchase Agreement is hereby amended to (i) delete the last sentence
of Section  7.3 thereof and (ii) to add the  following  Section 7.4  immediately
following the last sentence of Section 7.3:

     "7.4 The  Purchaser  covenants and agrees that it will not at any time take
or attempt to take a seat on the Board of  Directors  or the  management  of the
Company  nor  shall it engage in any  action  that  would  attempt  to  unfairly
influence  or  interfere  with the internal  management  and/or  policies of the
Company ."

     4. The  Registration  Rights  Agreement is hereby amended to delete Section
2(b)  thereof in its  entirety,  as of  September  20,  2006,  and to insert the
following in its stead:

     "(b) Notwithstanding anything contained herein to the contrary, the Company
shall file a Registration Statement covering an aggregate of 5,395,061 shares of
Common  Stock (or, if  different,  such other  number of shares of Common  Stock
actually permitted by the SEC to be registered on the December 2006 Registration
Statement)  on or prior to December 15, 2006 (the  "December  2006  Registration
Statement") which  Registration  Statement shall be declared  effective no later
than February 15, 2007."

     5. The  Registration  Rights  Agreement  is hereby  amended  to delete  the
defined term "Filing  Date"  contained  therein and in its stead,  to insert the
following:

     ""Filing Date" means with respect to the Registration Statement required to
be filed with the SEC in respect of 5,395,061  shares of Common Stock,  December
15, 2006.  For the  avoidance  of doubt,  the Holder may demand that the Company
file a  Registration  Statement,  or such number of  Registration  Statements as
shall  be  necessary  to  register  any  Registrable  Securities  not  otherwise
registered  on the December  2006  Registration  Statement  within 45 days after
written request from the Holder to do so. The  forty-fifth  (45th) day following
each such written request shall be deemed a Filing Date, provided, however, that
the Company  shall only be required to register  any such shares of Common Stock
if permitted by the SEC to be registered."

<PAGE>

     6. The  Registration  Rights  Agreement  is hereby  amended  to delete  the
defined term "Effectiveness  Date" contained therein and in its stead, to insert
the following:

     "Effectiveness   Date"  means  (i)  with  respect  to  the  December   2006
Registration  Statement,  a date no later than  February  15, 2007 and (ii) with
respect  to  each  additional   Registration  Statement  required  to  be  filed
hereunder,  a date no later than sixty (60) days following the applicable Filing
Date."

     7. The  Registration  Rights  Agreement  is hereby  amended  to delete  the
defined term  "Registrable  Securities"  contained  therein and in its stead, to
insert the following:

     "Registrable Securities" means the shares of Common Stock (i) issuable upon
the  conversion  of the  Convertible  Amount  (as such term is  defined  in) the
Amended and Restated  Note,  (ii) issuable  upon  exercise of the Option;  (iii)
issuable upon exercise of the Warrants;  (iv) issuable upon the exercise of that
certain Option to purchase up to 11,145,000 shares of the Company's Common Stock
issued to the  Purchaser  on  September  29,  2006;  and (v) sold,  granted,  or
otherwise  issued by the Company to Laurus after  September 29, 2006 or issuable
to Laurus  upon the  exercise,  conversion  or  exchange  of any other  options,
warrants,  convertible securities or exchangeable  securities acquired by Laurus
from the Company after September 29, 2006."

     8. The  Warrant  is hereby  amended to delete  the  reference  to the 4.99%
contained in Section 10 thereof and in its stead to insert "9.99%."

     9. The Option is hereby  amended to delete to delete the  reference  to the
4.99% contained in Section 1.1 thereof and in its stead to insert "9.99%."

     10. In connection with the  consummation of the  transactions  contemplated
hereby,  on the date hereof,  the Company will issue an option to purchase up to
11,145,000  shares of its Common Stock to the  Purchaser,  in the form  attached
hereto as Exhibit B (the  "September  2006  Option").  Laurus  verifies that the
          ---------
investor  representations  made in  Section 3 of the  Amendment  and Fee  Waiver
Agreement,  dated August 25, 2006,  between the parties hereto,  remain accurate
and that it is purchasing the September 2006 Option for investment purposes.

     11. In connection with the  consummation of the  transactions  contemplated
hereby,  on the date hereof the  Purchaser  shall execute and deliver a proxy to
either the Company or an unrelated third party in such form as the parties shall
mutually agree.

     12. The Purchaser hereby agrees,  that upon the date that the Company shall
have irrevocably repaid or the Purchaser shall have converted,  on and after the
date hereof, an aggregate of $1,842,175 of the outstanding  principal balance of
the Amended and Restated Note in cash or other immediately  available funds, the
Purchaser shall be deemed to release Michael O'Reilly from the O'Reilly Guaranty
without further action by any party hereto.

<PAGE>

     13. The Company shall reserve from its authorized and unissued Common Stock
a  sufficient  number of shares to provide for the issuance of all of the shares
of Common Stock issuable upon (i) the conversion of the Convertible Amount under
the Amended and  Restated  Note,  (ii) the  exercise of the  Warrant,  (iii) the
exercise of the Option and (iv) the exercise of the September  2006 Option.  The
Company represents that upon issuance,  such shares of Common Stock will be duly
and validly issued, fully paid and non-assessable.

     14. The Company  understands that it has an affirmative  obligation to make
prompt public disclosure of material  agreements and material amendments to such
agreements.  It is the Company's  determination that this Amendment is material.
The Company  agrees to file an 8-K within 4 business days of the date hereof and
in the form otherwise prescribed by the SEC.

     15. The  amendments set forth above shall be effective as of the date first
above  written  (the  "Amendment  Effective  Date") on the date when each of the
Company  and the  Purchaser  shall  have  executed  and the  Company  shall have
delivered to Purchaser its respective counterpart to this Amendment.

     16. Except as specifically set forth in this Amendment,  there are no other
amendments, modifications or waivers to the Loan Documents, and all of the other
forms,  terms and  provisions  of the Loan  Documents  remain in full  force and
effect.

     17. The Company hereby represents and warrants to the Purchaser that (i) no
Event of Default (as defined in the Amended  and  Restated  Note)  exists on the
date  hereof,  (ii) on the date  hereof,  all  representations,  warranties  and
covenants  made by the Company in connection  with the Loan Documents were true,
correct  and  complete  when  made  and  (iii) on the  date  hereof,  all of the
Company's and its Subsidiaries' covenant requirements have been met.

     18. From and after the Amendment Effective Date, all references in the Loan
Documents  shall be deemed to be references to the Loan  Documents,  as the case
may be, as modified hereby.

     19.  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.

     20. This  Amendment  supersedes,  as of the date  hereof,  the terms of the
several Amendment and Fee Waiver Agreements entered into by the parties hereto.

                            [signature page follows]

<PAGE>

     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:                               PURCHASER:

WINDSWEPT ENVIRONMENTAL GROUP, INC.    LAURUS MASTER FUND, LTD.

By:     /s/Michael O'Reilly            By:      /s/Eugene Grin
       ----------------------------            ----------------------------
Name:   Michael O'Reilly               Name:    Eugene Grin
       ----------------------------            ----------------------------
Title:  President                      Title:   Director
       ----------------------------            ----------------------------

With respect to Section 12 only:

     /s/Michael O'Reilly
   -------------------------------
     Michael O'ReillyTHIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO WINDSWEPT ENVIRONMENTAL GROUP, INC. THAT SUCH REGISTRATION IS
NOT REQUIRED.

               AMENDED AND RESTATED SECURED CONVERTIBLE TERM NOTE
               --------------------------------------------------

     FOR  VALUE  RECEIVED,  WINDSWEPT  ENVIRONMENTAL  GROUP,  INC.,  a  Delaware
corporation  (the  "Company"),  promises to pay to LAURUS MASTER FUND, LTD., c/o
M&C Corporate  Services  Limited,  P.O. Box 309 GT,  Ugland House,  South Church
Street,  George Town,  Grand Cayman,  Cayman  Islands,  Fax:  345-949-8080  (the
"Holder") or its registered assigns or successors in interest, on order, the sum
of Five Million Nine Hundred Forty Two Thousand One Hundred Seventy Five Dollars
($5,942,175),  or, if different,  the  aggregate  principal  amount  outstanding
hereunder together with any accrued and unpaid interest hereon, on June 30, 2009
(the "Maturity  Date") if not sooner paid.  This note amends and restates in its
entirety  (and is given in  substitution  for and not in  satisfaction  of) that
certain  promissory  amended  and  restated  note  in the  principal  amount  of
$7,350,000 issued by the Company in favor of Holder on October 6, 2005.

     Capitalized  terms used herein without  definition  shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
June 30, 2005 by and between  the Company and the Holder (as  amended,  modified
and/or supplemented from time to time, the "Purchase Agreement").

     The  following  terms shall  apply to this  Amended  and  Restated  Secured
Convertible  Term Note (this "Note"):

                                   ARTICLE I
                         CONTRACT RATE AND AMORTIZATION

     1.1 Contract Rate.  Subject to Sections 4.2 and 5.10,  interest  payable on
         -------------
the outstanding  principal  amount of this Note (the  "Principal  Amount") shall
accrue at a rate per  annum  equal to the  "prime  rate"  published  in The Wall
                                                                        --------
Street  Journal from time to time (the "Prime  Rate"),  plus two percent  (2.0%)
---------------
(the "Contract Rate").  The Contract Rate shall be increased or decreased as the
case may be for each  increase or decrease in the Prime Rate in an amount  equal
to such  increase or decrease in the Prime Rate;  each change to be effective as
of the day of the change in the Prime Rate. Subject to Section 1.2, the Contract
Rate shall not at any time be less than seven and one quarter  percent  (7.25%).
Interest  shall be (i)  calculated  on the  basis of a  360-day  year,  and (ii)
payable  monthly,  in  arrears,  commencing  on the first

<PAGE>

business day of each consecutive  calendar month hereafter through and including
the  Maturity  Date,  and on the  Maturity  Date,  whether  by  acceleration  or
otherwise.

     1.2 Contract  Rate  Adjustments  and  Payments.  The Contract Rate shall be
         ------------------------------------------
calculated on the last business day of each calendar month hereafter (other than
for  increases  or  decreases  in the Prime Rate which shall be  calculated  and
become effective in accordance with the terms of Section 1.1) until the Maturity
Date (each a  "Determination  Date") and shall be subject to  adjustment  as set
forth herein.  If (i) the Company shall have registered such number of shares of
the  Common  Stock as then may be  required  to be  registered  pursuant  to the
Registration Rights Agreement on a registration  statement declared effective by
the Securities and Exchange  Commission  (the "SEC"),  and (ii) the market price
(the "Market  Price") of the Common Stock as reported by Bloomberg,  L.P. on the
Principal  Market  for  the  five  (5)  trading  days  immediately  preceding  a
Determination  Date exceeds the then  applicable  Fixed  Conversion  Price by at
least twenty-five  percent (25%), the Contract Rate for the succeeding  calendar
month  shall  automatically  be reduced by 200 basis  points (200 b.p.) (2%) for
each incremental  twenty-five  percent (25%) increase in the Market Price of the
Common Stock above the then applicable Fixed Conversion  Price.  Notwithstanding
the foregoing (and anything to the contrary contained herein), in no event shall
the Contract Rate at any time be less than zero percent (0%).

     1.3 Monthly  Payments.  Subject to Article III below,  payments of $100,000
         -----------------
per month  (the  "Monthly  Amount")  shall be made by the  Company to the Holder
beginning on the first business day of each succeeding  month hereafter  through
and including the Maturity Date (each,  an "Payment  Date").  The Monthly Amount
shall be applied first towards any accrued and unpaid interest,  second,  to any
                 -----                                           ------
and all other unpaid  amounts which are then owing under this Note, the Purchase
Agreement and/or any other Related Agreement (other than principal) and third to
                                                                        -----
the repayment of the Principal Amount. Any outstanding Principal Amount together
with any accrued and unpaid  interest and any and all other unpaid amounts which
are then  owing by the  Company to the Holder  under  this  Note,  the  Purchase
Agreement  and/or any other  Related  Agreement  shall be due and payable on the
Maturity Date. Notwithstanding anything in this Section 1.3 to the contrary, the
principal portion of the Monthly Amounts otherwise due and payable on October 1,
2006, November 1, 2006 and December 1, 2006 (each a "Principal Deferred Period",
and collectively,  the "Principal Deferred Periods") shall be due and payable in
full on the Maturity  Date;  for the  avoidance  of doubt,  the interest and fee
portion of such  Monthly  Amounts  shall be due and  payable on each  respective
Principal Deferred Period.

     1.4 Mandatory Prepayment. If at any time on or before the Maturity Date the
         --------------------
Company  shall  have at least  $1,000,000  in cash and cash  equivalents,  fifty
percent (50%) of any additional cash or cash equivalents received by the Company
in  excess  of  such  $1,000,000  shall  be paid to the  Holder  as a  mandatory
prepayment of this Note.

                                      -2-

<PAGE>

                                   ARTICLE II
                            CONVERSION AND REDEMPTION

     2.1 Payment of Monthly Amount.
         -------------------------

     (a) Payment in Cash or Common Stock. If the Monthly Amount (or a portion of
         -------------------------------
such  Monthly  Amount if not all of the  Monthly  Amount may be  converted  into
shares of Common  Stock  pursuant to Section 3.2) is required to be paid in cash
pursuant to Section  2.1(b),  then the Company shall pay the Holder an amount in
cash equal to 100% of the Monthly Amount (or such portion of such Monthly Amount
to be paid in cash) due and owing to the Holder on the Amortization Date. If the
Monthly  Amount (or a portion of such  Monthly  Amount if not all of the Monthly
Amount may be converted  into shares of Common Stock pursuant to Section 3.2) is
required to be paid in shares of Common Stock  pursuant to Section  2.1(b),  the
number  of such  shares  to be  issued  by the  Company  to the  Holder  on such
Amortization  Date (in respect of such portion of the Monthly  Amount  converted
into shares of Common  Stock  pursuant to Section  2.1(b)),  shall be the number
determined  by dividing  (i) the portion of the Monthly  Amount  converted  into
shares of Common Stock, by (ii) the then applicable Fixed Conversion  Price. For
purposes hereof,  subject to Section 3.6 hereof,  the initial "Fixed  Conversion
Price"  means $ 0.09.

     (b) Monthly Amount Conversion Conditions.  Subject to Sections 2.1(a), 2.2,
         ------------------------------------
and 3.2 hereof,  the Holder  shall  convert into shares of Common Stock all or a
portion of the Monthly  Amount due on each  Amortization  Date if the  following
conditions (the  "Conversion  Criteria") are satisfied:  (i) the average closing
price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market
for the five (5) trading days immediately preceding such Amortization Date shall
be  greater  than or equal to 110% of the  Fixed  Conversion  Price and (ii) the
amount of such  conversion does not exceed thirty percent (30%) of the aggregate
dollar  trading  volume of the Common  Stock for the period of  twenty-two  (22)
trading days immediately  preceding such Amortization Date. If subsection (i) of
the Conversion Criteria is met but subsection (ii) of the Conversion Criteria is
not met as to the entire Monthly Amount, the Holder shall convert only such part
of the Monthly Amount that meets  subsection  (ii) of the  Conversion  Criteria.
Notwithstanding anything to the contrary contained herein, in no event shall the
Holder  convert  in excess  of an  aggregate  of  $1,942,175  (the  "Convertible
Amount").  Immediately  upon conversion by the Holder of the Convertible  Amount
into Common Stock,  no further  amounts due and payable under this Note shall be
convertible.

     2.2 No  Effective  Registration.  Notwithstanding  anything to the contrary
         ---------------------------
herein,  none of the Company's  obligations  to the Holder may be converted into
Common Stock unless (a) either (i) an effective current  Registration  Statement
(as defined in the Registration  Rights Agreement) covering the shares of Common
Stock to be issued in connection with satisfaction of such obligations exists or
(ii) an exemption from registration for resale of all of the Common Stock issued
and issuable is available  pursuant to Rule 144 of the Securities Act and (b) no
Event of Default (as hereinafter defined) exists and is continuing,  unless such
Event of Default is cured within any applicable cure period or otherwise  waived
in writing by the Holder.

                                      -3-

<PAGE>

     2.3  Optional  Redemption  in  Cash.  The  Company  may  prepay  this  Note
          ------------------------------
("Optional  Redemption")  by  paying to the  Holder a sum of money  equal to one
hundred twenty percent (120%) of the Principal  Amount  outstanding at such time
together  with  accrued but unpaid  interest  thereon and any and all other sums
due,  accrued or payable to the Holder  arising  under this Note,  the  Purchase
Agreement or any other Related Agreement (the "Redemption  Amount")  outstanding
on the Redemption  Payment Date (as defined below). The Company shall deliver to
the  Holder  a  written  notice  of  redemption  (the  "Notice  of  Redemption")
specifying  the date for  such  Optional  Redemption  (the  "Redemption  Payment
Date"),  which date shall be ten (10) business days after the date of the Notice
of Redemption (the  "Redemption  Period").  A Notice of Redemption  shall not be
effective  with  respect  to any  portion  of this Note for which the Holder has
previously  delivered a Notice of  Conversion  (as  hereinafter  defined) or for
conversions  elected to be made by the Holder pursuant to Section 3.3 during the
Redemption  Period. The Redemption Amount shall be determined as if the Holder's
conversion  elections had been  completed  immediately  prior to the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must
be paid in good funds to the Holder.  In the event the Company  fails to pay the
Redemption Amount on the Redemption Payment Date as set forth herein,  then such
Redemption Notice will be null and void.

                                   ARTICLE III
                           HOLDER'S CONVERSION RIGHTS

     3.1  Optional  Conversion.  Subject to the terms set forth in this  Article
          --------------------
III, the Holder shall have the right, but not the obligation,  to convert all or
any  portion of the issued  and  outstanding  Principal  Amount  and/or  accrued
interest  and fees due and payable  (in an amount not to exceed the  Convertible
Amount)  into fully paid and  nonassessable  shares of Common Stock at the Fixed
Conversion  Price.  The shares of Common Stock to be issued upon such conversion
and/or  pursuant to Section  2.1(b) are herein  referred to as, the  "Conversion
Shares."

     3.2 Conversion Limitation. Notwithstanding anything herein to the contrary,
         ---------------------
in no event  shall the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon  conversion of which the sum of (1) the
number of  shares  of Common  Stock  beneficially  owned by the  Holder  and its
Affiliates  (other than shares of Common Stock which may be deemed  beneficially
owned  through  the  ownership  of the  unconverted  portion  of the Note or the
unexercised or  unconverted  portion of any other security of the Holder subject
to a limitation on exercise or conversion analogous to the limitations contained
herein)  and (2) the  number  of  shares  of  Common  Stock  issuable  upon  the
conversion  of the portion of this Note with respect to which the  determination
of this  proviso is being made,  would  result in  beneficial  ownership  by the
Holder  and  its  Affiliates  of any  amount  greater  than  9.99%  of the  then
outstanding  shares  of  Common  Stock  (whether  or  not,  at the  time of such
exercise, the Holder and its Affiliates  beneficially own more than 9.99% of the
then outstanding  shares of Common Stock). As used herein,  the term "Affiliate"
means any person or entity  that,  directly  or  indirectly  through one or more
intermediaries,  controls or is controlled by or is under common  control with a
person or entity,  as such terms are used in and construed  under Rule 144 under
the Securities Act. For purposes of the second  preceding  sentence,  beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended,  and Regulations 13D-G  thereunder,  except as
otherwise  provided in clause (1) of such sentence.  For any reason at any time,
upon the written or oral request of the Holder, the

                                      -4-

<PAGE>

Company  shall within one (1) business day confirm  orally and in writing to the
Holder the  number of shares of Common  Stock then  outstanding.  The  preceding
limitations  set forth herein (x) may be waived by the Holder upon  provision of
no less than  sixty-one  (61) days' prior written  notice to the Company and (y)
shall  automatically  become null and void (i)  following  notice to the Company
upon the occurrence and during the  continuance of an Event of Default,  or (ii)
upon receipt by the Holder of a Notice of Redemption.

     3.3 Mechanics of Holder's  Conversion.  In the event that the Holder elects
         ---------------------------------
to convert  this Note into Common  Stock,  the Holder  shall give notice of such
election by  delivering  an  executed  and  completed  notice of  conversion  in
substantially the form of Exhibit A hereto  (appropriate  completed) ("Notice of
Conversion")  to the  Company  and such  Notice of  Conversion  shall  provide a
breakdown in reasonable  detail of the Principal  Amount,  accrued  interest and
fees that are being converted.  On each Conversion Date (as hereinafter defined)
and in  accordance  with its Notice of  Conversion,  the  Holder  shall make the
appropriate  reduction to the  Principal  Amount,  accrued  interest and fees as
entered in its records and shall provide  written  notice thereof to the Company
within two (2) business  days after the  Conversion  Date.  Each date on which a
Notice of  Conversion  is delivered or  telecopied  to the Company in accordance
with the provisions  hereof shall be deemed a Conversion  Date (the  "Conversion
Date").  Pursuant to the terms of the Notice of  Conversion,  the  Company  will
issue  instructions  to the transfer agent  accompanied by an opinion of counsel
within one (1)  business  day of the date of the  delivery to the Company of the
Notice  of  Conversion  and shall  cause  the  transfer  agent to  transmit  the
certificates  representing the Conversion  Shares to the Holder by crediting the
account of the Holder's  designated broker with the Depository Trust Corporation
("DTC") through its Deposit  Withdrawal Agent Commission  ("DWAC") system within
three (3) business days after receipt by the Company of the Notice of Conversion
(the "Delivery  Date"). In the case of the exercise of the conversion rights set
forth herein the conversion privilege shall be deemed to have been exercised and
the Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Company of the Notice of Conversion.  The
Holder shall be treated for all purposes as the record holder of the  Conversion
Shares,  unless the Holder  provides  the Company  written  instructions  to the
contrary.

     3.4 Late Payments.  The Company understands that a delay in the delivery of
         -------------
the Conversion  Shares in the form required  pursuant to this Article beyond the
Delivery Date could result in economic loss to the Holder.  As  compensation  to
the Holder for such loss, in addition to all other rights and remedies which the
Holder may have under this Note, applicable law or otherwise,  the Company shall
pay late payments to the Holder for any late  issuance of  Conversion  Shares in
the form required  pursuant to this Article II upon  conversion of this Note, in
the amount equal to $500 per business day after the Delivery  Date.  The Company
shall make any payments  incurred  under this Section in  immediately  available
funds upon  demand.

     3.5 Conversion Mechanics. The number of shares of Common Stock to be issued
         --------------------
upon each  conversion  of this Note shall be determined by dividing that portion
of the  principal  and  interest and fees to be  converted,  if any, by the then
applicable Fixed Conversion  Price. In the event of any conversions of a portion
of  the  outstanding  Principal  Amount  pursuant  to  this  Article  III,  such
conversions  shall  be  deemed  to  constitute  conversions  of the  outstanding
Principal  Amount  applying to Monthly  Amounts for the  remaining  Amortization
Dates in chronological  order.

                                      -5-

<PAGE>

     3.6 Adjustment  Provisions.  The Fixed Conversion Price and number and kind
         ----------------------
of shares or other securities to be issued upon conversion  determined  pursuant
to this  Note  shall  be  subject  to  adjustment  from  time to time  upon  the
occurrence  of  certain  events  during the period  that this  conversion  right
remains  outstanding,  as follows:

     (a) Reclassification. If the Company at any time shall, by reclassification
         ----------------
or  otherwise,  change the Common  Stock into the same or a different  number of
securities of any class or classes, this Note, as to the unpaid Principal Amount
and accrued interest  thereon,  shall thereafter be deemed to evidence the right
to purchase an adjusted  number of such  securities  and kind of  securities  as
would have been issuable as the result of such change with respect to the Common
Stock (i) immediately prior to or (ii) immediately after, such  reclassification
or  other  change  at  the  sole  election  of the  Holder.

     (b) Stock Splits, Combinations and Dividends. If the shares of Common Stock
         ----------------------------------------
are  subdivided or combined into a greater or smaller number of shares of Common
Stock,  or if a dividend  is paid on the  Common  Stock or any  preferred  stock
issued by the  Company in shares of Common  Stock,  the Fixed  Conversion  Price
shall be  proportionately  reduced  in case of  subdivision  of  shares or stock
dividend or  proportionately  increased in the case of combination of shares, in
each  such case by the ratio  which the total  number of shares of Common  Stock
outstanding  immediately after such event bears to the total number of shares of
Common Stock  outstanding  immediately  prior to such event.

     3.7 Reservation of Shares.  During the period the conversion  right exists,
         ---------------------
the Company  will  reserve  from its  authorized  and  unissued  Common  Stock a
sufficient number of shares to provide for the issuance of all of the Conversion
Shares upon the full  conversion of this Note. The Company  represents that upon
issuance,  the Conversion Shares will be duly and validly issued, fully paid and
non-assessable.  The  Company  agrees  that  its  issuance  of this  Note  shall
constitute full authority to its officers,  agents,  and transfer agents who are
charged with the duty of executing and issuing stock certificates to execute and
issue the necessary  certificates for the Conversion  Shares upon the conversion
of this Note.

     3.8 Registration  Rights. The Holder has been granted  registration  rights
         --------------------
with respect to the Conversion  Shares as set forth in the  Registration  Rights
Agreement.

     3.9 Issuance of New Note.  Upon any partial  conversion of this Note, a new
         --------------------
Note  containing the same date and provisions of this Note shall, at the request
of the Holder,  be issued by the Company to the Holder for the principal balance
of this Note and interest which shall not have been  converted or paid.  Subject
to the  provisions  of Article IV of this Note,  the  Company  shall not pay any
costs,  fees or any other  consideration  to the Holder for the  production  and
issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

     4.1 Events of Default.  The  occurrence of any of the following  events set
         -----------------
forth in this  Section  4.1 shall  constitute  an event of  default  ("Event  of
Default")  hereunder:

                                      -6-

     (a) Failure to Pay. The Company  fails to pay when due any  installment  of
         --------------
principal,  interest or other fees hereon in accordance herewith, or the Company
fails to pay any of the other  Obligations  (under  and as defined in the Master
Security Agreement) when due, and, in any such case, such failure shall continue
for a period of three (3) business  days  following the date upon which any such
payment was due.

     (b) Breach of Covenant. The Company or any of its Subsidiaries breaches any
         ------------------
covenant or any other term or condition of this Note in any material respect and
such  breach,  if subject to cure,  continues  for a period of thirty  (30) days
after the occurrence thereof.

     (c) Breach of Representations and Warranties. Any representation,  warranty
         ----------------------------------------
or statement made or furnished by the Company or any of its Subsidiaries in this
Note, the Purchase Agreement or any other Related Agreement shall at any time be
false or  misleading  in any  material  respect  on the date as of which made or
deemed made.

     (d)  Default  Under Other  Agreements.  The  occurrence  of any default (or
          --------------------------------
similar  term) in the  observance  or  performance  of any  other  agreement  or
condition  relating to any indebtedness or contingent  obligation of the Company
or any of its  Subsidiaries  beyond the period of grace,  if any,  the effect of
which default is to cause, or permit the holder or holders of such  indebtedness
or beneficiary or  beneficiaries  of such contingent  obligation to cause,  such
indebtedness  to become  due prior to its  stated  maturity  or such  contingent
obligation to become payable;

     (e) Material  Adverse  Effect.  Any change or the  occurrence  of any event
         -------------------------
which  could  reasonably  be  expected to have a Material  Adverse  Effect;

     (f) Bankruptcy. The Company or any of its Subsidiaries shall (i) apply for,
         ----------
consent to or suffer to exist the  appointment  of, or the taking of  possession
by, a  receiver,  custodian,  trustee  or  liquidator  of  itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
of creditors,  (iii) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect),  (iv) be  adjudicated  a bankrupt or insolvent,
(v) file a petition seeking to take advantage of any other law providing for the
relief of debtors,  (vi) acquiesce to, without challenge within ten (10) days of
the filing thereof,  or failure to have dismissed,  within thirty (30) days, any
petition filed against it in any involuntary case under such bankruptcy laws, or
(vii) take any action for the purpose of  effecting  any of the  foregoing;

     (g) Judgments.  Attachments or levies in excess of $75,000 in the aggregate
         ---------
are made upon the  Company or any of its  Subsidiary's  assets or a judgment  is
rendered  against the  Company's  property  involving  a liability  of more than
$75,000 which shall not have been vacated,  discharged,  stayed or bonded within
thirty (30) days from the entry thereof;

     (h)  Insolvency.  The  Company or any of its  Subsidiaries  shall  admit in
          ----------
writing its inability,  or be generally  unable, to pay its debts as they become
due or cease  operations  of its present  business;

                                      -7-

<PAGE>

     (i) Change in Control.  The  occurrence  of any of the  following:  (i) any
         -----------------
"Person" or "group"  (as such terms are  defined in Sections  13(d) and 14(d) of
the Exchange Act, as in effect on the date hereof) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly,  of 20% or more on a fully  diluted  basis of the  then  outstanding
voting  equity  interest of the Company  (other than a "Person" or "group"  that
beneficially owns 20% or more of such outstanding voting equity interests of the
Company on the date  hereof),  (ii) the Board of Directors of the Company  shall
cease to consist of a majority of the  Company's  board of directors on the date
hereof (or directors appointed by a majority of the board of directors in effect
immediately  prior  to such  appointment)  or (iii)  the  departure  of  Michael
O'Reilly from senior management of the Company;

     (j) Indictment; Proceedings. The indictment or threatened indictment of the
         -----------------------
Company or any of its  Subsidiaries  or any executive  officer of the Company or
any  of  its  Subsidiaries  under  any  criminal  statute,  or  commencement  or
threatened  commencement of criminal or civil proceeding  against the Company or
any of its  Subsidiaries  or any executive  officer of the Company or any of its
Subsidiaries  pursuant  to which  statute or  proceeding  penalties  or remedies
sought or available include  forfeiture of any of the property of the Company or
any of its Subsidiaries;

     (k) The Purchase Agreement and Related Agreements.  (i) An Event of Default
         ---------------------------------------------
shall occur under and as defined in the Purchase  Agreement or any other Related
Agreement,  (ii) the Company or any of its Subsidiaries shall breach any term or
provision  of the  Purchase  Agreement  or any other  Related  Agreement  in any
material respect and such breach, if capable of cure, continues unremedied for a
period of thirty (30) days after the  occurrence  thereof,  (iii) the Company or
any of its  Subsidiaries  attempts to terminate,  challenges the validity of, or
its liability under, the Purchase Agreement or any Related  Agreement,  (iv) any
proceeding  shall be brought to challenge  the validity,  binding  effect of the
Purchase Agreement or any Related Agreement or (v) the Purchase Agreement or any
Related  Agreement ceases to be a valid,  binding and enforceable  obligation of
the Company or any of its  Subsidiaries  (to the extent such persons or entities
are a party  thereto);

     (l)  Stop  Trade.  An SEC stop  trade  order or  Principal  Market  trading
          -----------
suspension of the Common Stock shall be in effect for five (5) consecutive  days
or five (5) days during a period of ten (10) consecutive days,  excluding in all
cases a  suspension  of all trading on a  Principal  Market,  provided  that the
Company shall not have been able to cure such trading  suspension  within thirty
(30) days of the notice  thereof or list the Common  Stock on another  Principal
Market within sixty (60) days of such notice;  or

     (m) Failure to Deliver  Common Stock or  Replacement  Note.  The  Company's
         ------------------------------------------------------
failure  to  deliver  Common  Stock to the  Holder  pursuant  to and in the form
required by this Note and the Purchase Agreement and, if such failure to deliver
Common Stock shall not be cured  within two (2) business  days or the Company is
required to issue a replacement Note to the Holder and the Company shall fail to
deliver such  replacement  Note within seven (7) business  days; or

     (n)  Reserved  and  Authorized   Shares.  The  Company's  failure  to  have
          ----------------------------------
authorized  and  reserved  for  issuance  such number of shares of Common  Stock
sufficient to

                                      -8-

<PAGE>

provide for the issuance of all of the shares of Common Stock  issuable upon the
full conversion of the Convertible Amount of this Note, the Warrant, the Option,
and the  option to  purchase  up to  11,145,000  shares  of Common  Stock of the
Company issued to the Holder and dated as of the date hereof (the "New Option").

     4.2 Default  Interest.  Following the occurrence and during the continuance
         -----------------
of an Event of Default,  the Company shall pay additional  interest on this Note
in an  amount  equal  to  two  percent  (2%)  per  month,  and  all  outstanding
obligations  under this Note,  the  Purchase  Agreement  and each other  Related
Agreement,  including unpaid interest, shall continue to accrue interest at such
additional  interest  rate from the date of such Event of Default until the date
such Event of Default is cured or waived.

     4.3 Default Payment. Following the occurrence and during the continuance of
         ---------------
an Event of Default,  the Holder, at its option, may demand repayment in full of
all obligations and liabilities  owing by Company to the Holder under this Note,
the Purchase  Agreement and/or any other Related  Agreement and/or may elect, in
addition to all rights and remedies of the Holder  under the Purchase  Agreement
and the other Related  Agreements  and all  obligations  and  liabilities of the
Company  under the  Purchase  Agreement  and the other  Related  Agreements,  to
require the Company to make a Default Payment ("Default  Payment").  The Default
Payment  shall be 110% of the  outstanding  principal  amount of the Note,  plus
accrued but unpaid interest, all other fees then remaining unpaid, and all other
amounts  payable  hereunder.  The Default  Payment shall be applied first to any
fees  due and  payable  to the  Holder  pursuant  to  this  Note,  the  Purchase
Agreement,  and/or the other  Related  Agreements,  then to  accrued  and unpaid
interest due on this Note and then to the outstanding  principal balance of this
Note. The Default Payment shall be due and payable  immediately on the date that
the Holder has exercised its rights pursuant to this Section 4.3.

                                   ARTICLE V
                                 MISCELLANEOUS

     5.1 Conversion  Privileges.  The conversion privileges set forth in Article
         ----------------------
III shall remain in full force and effect immediately from the date hereof until
the date this Note is indefeasibly paid in full and irrevocably terminated.

     5.2 Cumulative Remedies. The remedies under this Note shall be cumulative.
         -------------------

     5.3 Failure or  Indulgence  Not Waiver.  No failure or delay on the part of
         ----------------------------------
the Holder  hereof in the exercise of any power,  right or  privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other  right,  power or  privilege.  All  rights  and  remedies  existing
hereunder  are  cumulative  to, and not  exclusive  of,  any rights or  remedies
otherwise available.

     5.4 Notices.  Any notice herein  required or permitted to be given shall be
         -------
in writing and shall be deemed  effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal  business hours of the recipient,  if not, then on the next business day,
(c) five days after having been sent by  registered

                                      -9-
<PAGE>

or certified mail,  return receipt  requested,  postage prepaid,  or (d) one day
after deposit with a nationally  recognized  overnight courier,  specifying next
day delivery,  with written verification of receipt. All communications shall be
sent to the Company at the address provided in the Purchase  Agreement  executed
in  connection  herewith(except  that  copies of  notices  shall also be sent to
Moomjian & Waite, LLP 100 Jericho Quadrangle,  Suite 225 Jericho New York 11753)
Attn;  Gary  Moomjian,  Esq.,  and to the Holder at the address  provided in the
Purchase  Agreement for such Holder,  with a copy to John E. Tucker,  Esq.,  825
Third  Avenue,  14th Floor,  New York,  New York 10022,  facsimile  number (212)
541-4434, or at such other address as the Company or the Holder may designate by
ten days  advance  written  notice  to the  other  parties  hereto.  A Notice of
Conversion  shall be deemed  given  when  made to the  Company  pursuant  to the
Purchase Agreement.

     5.5 Amendment  Provision.  The term "Note" and all references  thereto,  as
         --------------------
used  throughout  this  instrument,   the  Purchase  Agreement  or  any  Related
Agreement,  shall  mean this  instrument  as  originally  executed,  or if later
amended or supplemented,  then as so amended or supplemented,  and any successor
instrument as such  successor  instrument  may be amended or  supplemented.

     5.6  Assignability.  This Note shall be binding  upon the  Company  and its
          -------------
successors  and  assigns,  and shall  inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements  of the Purchase  Agreement.  The Company may not assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported  assignment without such consent being null and void.

     5.7 Cost of  Collection.  In case of any Event of Default  under this Note,
         -------------------
the  Company  shall pay the Holder  reasonable  costs of  collection,  including
reasonable  attorneys' fees.

     5.8 Governing  Law,  Jurisdiction  and Waiver of Jury Trial.
         -------------------------------------------------------

     (a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH  THE  LAWS OF THE  STATE OF NEW  YORK,  WITHOUT  REGARD  TO  PRINCIPLES  OF
CONFLICTS OF LAW.

     (b) THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED  IN THE  COUNTY  OF NEW YORK,  STATE OF NEW YORK  SHALL  HAVE  EXCLUSIVE
JURISDICTION  TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES  BETWEEN THE COMPANY,
ON THE ONE HAND, AND THE HOLDER,  ON THE OTHER HAND,  PERTAINING TO THIS NOTE OR
ANY OF THE OTHER RELATED  AGREEMENTS OR TO ANY MATTER  ARISING OUT OF OR RELATED
TO THIS  NOTE OR ANY OF THE  RELATED  AGREEMENTS;  PROVIDED,  THAT  THE  COMPANY
                                                   --------
ACKNOWLEDGES  THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED  OUTSIDE  OF THE  COUNTY OF NEW YORK,  STATE OF NEW  YORK;  AND  FURTHER
                                                                         -------
PROVIDED,  THAT  NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE
--------
HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY

                                      -10-

<PAGE>

OTHER  JURISDICTION TO COLLECT THE OBLIGATIONS,  TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE OBLIGATIONS,  OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE HOLDER.  THE  COMPANY  EXPRESSLY  SUBMITS AND  CONSENTS IN
ADVANCE TO SUCH THE COMPANY HEREBY WAIVES ANY OBJECTION  WHICH IT MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION,  IMPROPER VENUE OR FORUM NON CONVENIENS. THE
                                                       --------------------
COMPANY  HEREBY  WAIVES  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT  AND OTHER
PROCESS  ISSUED  IN ANY SUCH  ACTION OR SUIT AND  AGREES  THAT  SERVICE  OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE  AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE  PREPAID.  (c) THE COMPANY  DESIRES  THAT ITS  DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,  TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL  SYSTEM AND OF  ARBITRATION,  THE COMPANY HERETO
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER AND THE COMPANY ARISING OUT OF, CONNECTED WITH,  RELATED OR INCIDENTAL TO
THE  RELATIONSHIP  ESTABLISHED  BETWEEN THEM IN CONNECTION  WITH THIS NOTE,  ANY
OTHER  RELATED  AGREEMENT OR THE  TRANSACTIONS  RELATED  HERETO OR THERETO.

     5.9  Severability.  In the event that any provision of this Note is invalid
          ------------
or  unenforceable  under  any  applicable  statute  or rule of  law,  then  such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any such provision which may prove invalid or  unenforceable  under any law
shall not affect the validity or  enforceability  of any other provision of this
Note.

     5.10  Maximum  Payments.  Nothing  contained  herein  shall  be  deemed  to
           -----------------
establish  or require  the  payment of a rate of  interest  or other  charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest  required to be paid or other charges hereunder exceed the maximum rate
permitted  by such law,  any  payments in excess of such  maximum  rate shall be
credited  against amounts owed by the Company to the Holder and thus refunded to
the Company.

     5.11  Security  Interest  and  Guarantee.  The  Holder  has been  granted a
           ----------------------------------
security  interest (i) in certain assets of the Company and its  Subsidiaries as
more fully  described  in the  Master  Security  Agreement  dated as of the date
hereof and (ii)  pursuant  to the Stock  Pledge  Agreement  dated as of the date
hereof. The obligations of the Company under this Note are guaranteed by certain
Subsidiaries of the Company pursuant to the Subsidiary  Guaranty dated as of the
date hereof.

                                      -11-

<PAGE>

     5.12   Construction.   Each  party  acknowledges  that  its  legal  counsel
            ------------
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

     5.13  Registered  Obligation.  This  Note is  intended  to be a  registered
           ----------------------
obligation within the meaning of Treasury  Regulation Section  1.871-14(c)(1)(i)
and the Company (or its agent) shall  register this Note (and  thereafter  shall
maintain  such  registration)  as to both  principal  and any  stated  interest.
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 Company of this Note to the new holder or
the  issuance by the  Company of a new  instrument  to the new  holder,  or (ii)
transfer  through a book entry system  maintained by the Company (or its agent),
within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B)

       [Balance of page intentionally left blank; signature page follows]

                                      -12-

<PAGE>

     IN WITNESS  WHEREOF,  the Company has caused this Secured  Convertible Term
Note to be signed in its name effective as of this 29th day of September 2006.

                                     WINDSWEPT ENVIRONMENTAL GROUP, INC.

                                     By:  /s/Michael O'Reilly
                                        ---------------------------------
                                        Name:   Michael O'Reilly
                                        Title:  President

WITNESS:

/s/Arthur Wasserspring
----------------------------------

                                      -13-

<PAGE>

                                    EXHIBIT A
                                    ---------

                              NOTICE OF CONVERSION
                              --------------------

        (To be executed by the Holder in order to convert all or part of
              the Secured Convertible Term Note into Common Stock)

[Name and Address of Holder]

     The  undersigned  hereby  converts  $          of the Monthly Amount due on
                                          ---------
[specify  applicable  Payment  Date]  under the  Amended  and  Restated  Secured
Convertible  Term Note dated as of  September  29, 2006 (the  "Note")  issued by
Windswept  Environmental  Group,  Inc. (the  "Company") by delivery of shares of
Common  Stock of the Company  ("Shares")  on and subject to the  conditions  set
forth in the Note.

1.   Date of Conversion:
                             --------------------------

2.   Shares To Be Delivered:
                             --------------------------

                                       By:
                                          -----------------------------

                                       Name:
                                            ---------------------------

                                       Title:
                                             --------------------------

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