Exhibit 10.1

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) OR UNDER ANY STATE SECURITIES LAWS AND HAVE BEEN ISSUED AND
SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, TO THE EFFECT THAT SUCH A REGISTRATION STATEMENT IS
UNNECESSARY IN RESPECT OF A PARTICULAR SALE, OFFER, PLEDGE, HYPOTHECATION OR
OTHER TRANSFER.

HC INNOVATIONS, INC.

SENIOR SECURED NOTE

 

 

$2,400,000

 

No. 10-09-09

New York, New York

This 12% Senior Secured Note (the “Note”), dated October 19, 2009, is issued by
HC Innovations, Inc., a Delaware corporation (the “Company”), to Brahma Finance
(BVI) Limited (the “Holder”).

          FOR VALUE RECEIVED, the Company hereby unconditionally promises to pay
to the order of the Holder, in lawful money of the United States of America and
in immediately available funds, the principal sum of Two Million Four Hundred
Thousand Dollars ($2,400,000) (the “Principal Amount”). Interest shall accrue
from the date hereof on the unpaid Principal Amount of this Note at a rate equal
to one percent (1%) per calendar month or part thereof. Interest shall be
compounded monthly on the first day of each calendar month, beginning on the
first day of the first calendar month following the date of this Note, and shall
continue to accrue and compound until such Principal Amount, together with any
fees, costs or charges due hereunder, is paid in full. Interest shall be
calculated on the basis of the actual number of days elapsed and shall be paid
as provided in Section 2 of this Note.

          1.           Defined Terms. Capitalized terms used but not defined
herein have the meanings set forth in Annex A hereto.

          2.           Payments.

 

 

 

               (a)           Maturity. This Note will mature and the entire
unpaid Principal Amount, together with accrued and unpaid interest thereon,
shall become due and payable in full on or before the earlier of (i) the date of
consummation by the parties thereto of the transactions contemplated by that
certain Standby Purchase Agreement dated as of August 4, 2009 between the
Company and the Holder, and (ii) February 28, 2010 (the “Maturity Date”).

 

 

 

               (b)           Payments. All payments under this Note shall be
made in lawful money of the United States of America at such place as the Holder
may from time to time designate in writing to the Company.

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               (c)           Application of Payments. All payments shall be
credited first to accrued interest then due and payable and the remainder
applied to principal; provided, however, that if an Event of Default, as defined
in Section 6 hereof, has occurred and is continuing, payments shall be credited
first to the expenses of collection.

 

 

 

               (d)           Prepayment. The Company may, at any time prior to
the Maturity Date, upon notice as provided below, prepay the Principal Amount,
in whole or in part, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment. The Company will give
the Holder written notice (a “Prepayment Notice”) of each optional prepayment
under this Section 2(d) not less than five Business Days prior to the date fixed
for such prepayment. Each such notice shall specify the date fixed for
prepayment, the principal amount of this Note to be prepaid on such date, and
the interest to be paid on the prepayment date with respect to such principal
amount being prepaid. The principal amount of this Note to be prepaid shall
mature and become due and payable on the date fixed for such prepayment,
together with interest on such principal amount accrued to such date. From and
after such date, unless the Company shall fail to pay such principal amount when
so due and payable, together with the interest, as aforesaid, interest on such
principal amount shall cease to accrue.

 

 

 

               (e)           Fees. The Company shall pay to the Holder or its
designee the following fees: (i) on the date of this Note an arrangement fee in
an amount equal to two percent (2%) of the Principal Amount, and (ii) all of the
Holder’s reasonable legal and professional costs incurred in connection with the
transactions contemplated by this Note and the other Transaction Documents.

          3.           Guaranty and Security Agreement. This Note is entitled to
the benefit of that certain Guaranty and Security Agreement (the “Guaranty and
Security Agreement”), dated of even date herewith, granted by the Company and
the Subsidiary Guarantors in favor of the Holder, pursuant to which the Company
and the Subsidiary Guarantors have guaranteed the Company’s obligations
hereunder and pursuant to which the Holder has been granted a security interest
in the Collateral.

          4.           Representations and Warranties. The Company hereby
represents and warrants to the Holder on the date of this Note as set forth in
Annex B hereto.

          5.           Payment of Additional Amounts.

          (a)         All payments made by the Entities to the Holder pursuant
to the Transaction Documents will be made free and clear of and without
withholding or deduction for or on account of any present or future Taxes
imposed or levied by or on behalf of the United States or any political
subdivision or taxing authority thereof or therein (“US Taxes”), unless the
Entity is required to withhold or deduct any amount for or on account of US
Taxes by law or by the interpretation or administration thereof. If any Entity
is required to withhold or deduct any amount for or on account of US Taxes from
any payment made hereunder, such Entity will pay such additional amounts
(“Additional Amounts”) as may be necessary so that the net amount received by
the Holder (including Additional Amounts) after such withholding or deduction
will not be less than the amount the Holder would have received if such US Taxes
had not been withheld or deducted; provided, however, that no such Additional
Amounts will be payable with respect to a payment made hereunder with respect to
any US Taxes which would not have been imposed, payable or due:

          (i)         but for the fact that the Holder is or was a domiciliary,
national or resident of, or engages or engaged in business, maintains or
maintained a permanent establishment or is or was physically present in the
United States, or otherwise has some present or former connection with the
United States other than the mere holding or enforcement of the Transaction
Documents or the receipt of principal or interest in respect thereof; or

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          (ii)         but for the failure of the Holder to comply with a
request by the Entity to satisfy any certification, identification or other
reporting requirements which the Holder is legally entitled to satisfy, whether
imposed by statute, treaty, regulation, administrative practice or otherwise,
concerning the nationality, residence or connection with the United States of
the Holder.

          (b)         The obligation of the Entities to pay Additional Amounts
in respect of US Taxes shall not apply with respect to (i) any estate,
inheritance, gift, sales, transfer, personal property or any similar Tax or (ii)
any Tax which is payable otherwise than by deduction or withholding from
payments made under or with respect to the Transaction Documents.

          (c)         The Entities, as applicable, will:

          (i)          make any required withholding or deduction;

          (ii)         remit the full amount deducted or withheld to the
relevant authority (the “Taxing Authority”) in accordance with applicable law;

          (iii)       obtain certified copies of tax receipts evidencing the
payment of any Taxes so deducted or withheld from each Taxing Authority imposing
such taxes; and

          (iv)        promptly send such certified copies of tax receipts to the
Holder. The Entities will attach to each certified copy a certificate stating
that the amount of withholding tax evidenced by the certified copy was paid in
connection with payments in respect of the Transaction Documents.

          6.           Events of Default

          For purposes of this Note, an “Event of Default” shall exist if any of
the following conditions or events shall occur and be continuing:

 

 

 

               (a)           the Company defaults in the payment of any
principal on this Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or

 

 

 

               (b)           the Company defaults in the payment of any interest
on, or other amount payable in respect of, this Note for more than five (5)
Business Days after the same becomes due and payable; or

 

 

 

               (c)           the Company defaults in the performance of or
compliance with any term contained herein or in any other Transaction Document
(other than those referred to in paragraphs (a) and (b) of this Section 6); or

 

 

 

               (d)           (i) a default shall occur in the observance or
performance of any covenant or agreement contained in the Guarantee and Security
Agreement by any Subsidiary Guarantor and such default shall continue beyond the
period of grace, if any, allowed with respect thereto, or (ii) the Guarantee and
Security Agreement shall cease to be in full force and effect for any reason
whatsoever, including, without limitation, a determination by any governmental
body or court that such agreement is invalid, void or unenforceable against any
Subsidiary Guarantor or (iii) any Subsidiary Guarantor shall contest or deny the
validity or enforceability of any of its obligations under the Guarantee and
Security Agreement; or

 

 

 

               (e)           (i) a default shall occur in the observance or
performance of any covenant or agreement contained in any Security Document and
such default shall continue beyond the period

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of grace, if any, allowed with respect thereto, or (ii) any Security Document
creating or granting a Lien on any Collateral shall cease to be in full force
and effect, or (iii) the Company or any Subsidiary Guarantor shall deny or
disaffirm the validity of any such Lien; or

 

 

 

          (f)           any representation or warranty made in writing by or on
behalf of the Company or any Subsidiary Guarantor or by any officer of the
Company or any Subsidiary Guarantor in any Transaction Document or in any
writing furnished in connection therewith proves to have been false or incorrect
in any material respect on the date as of which made; or

 

 

 

          (g)           any of the following occur: (i) the Company or any
Subsidiary is in default (as principal or as guarantor or other surety) in the
payment of any principal of, interest on, or other amount payable in respect of,
any Indebtedness other than the Note that is outstanding in an aggregate
principal amount of at least $250,000 beyond any period of grace provided with
respect thereto, or (ii) the Company or any Subsidiary is in default in the
performance of or compliance with any term of any instrument, mortgage,
indenture or other agreement relating to any Indebtedness other than the Note in
an aggregate principal amount of at least $250,000 or any other condition
exists, and as a consequence of such default or condition such Indebtedness has
become, or has been declared, due and payable or is capable of being declared
due and payable before its stated maturity or before its regularly scheduled
dates of payment, or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time or the right of the
holder of Indebtedness to convert such Indebtedness into equity interests), the
Company or any Subsidiary has become obligated to purchase or repay Indebtedness
other than the Note before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount of at
least $250,000; or.

 

 

 

          (h)           the Company or any Subsidiary (i) admits in writing its
inability generally to pay its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or

 

 

 

          (i)           a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company or any
of its Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Subsidiaries, or any such petition shall be filed against the Company or any of
its subsidiaries and such petition shall not be dismissed within sixty (60)
days; or

 

 

 

          (j)           a final judgment or judgments at any one time
outstanding for the payment of money aggregating at least $250,000 are rendered
against one or more of the Company or any of its subsidiaries and which
judgments are not, within sixty (60) days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within sixty (60)
days after the expiration of such stay.

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          7.           Remedies.

          (a)           If an Event of Default with respect to the Company
described in paragraph (h) or (i) of Section 6 has occurred, this Note shall
automatically become immediately due and payable.

          (b)           If any other Event of Default has occurred and is
continuing, the Holder may at any time by written notice to the Company, declare
this Note to be immediately due and payable.

          (c)           Upon this Note becoming due and payable under this
Section 7, whether automatically or by declaration, this Note will forthwith
mature and the entire unpaid principal amount of this Note, plus (i) all accrued
and unpaid interest thereon (to the full extent permitted by applicable law),
and (ii) all other amounts payable in connection with this Note, shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived.

          (d)           If any Event of Default has occurred and is continuing,
and irrespective of whether this Note has become or been declared immediately
due and payable, the Holder may proceed to protect and enforce its rights by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any other
Transaction Document, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

          (e)           No course of dealing and no delay on the part of the
Holder in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice the holder’s rights, powers or remedies. No
right, power or remedy conferred by this Note or by any other Transaction
Document upon the Holder shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise. Without limiting the obligations of the Company
regarding transaction expenses, the Company will pay to the Holder on demand
such further amounts as shall be sufficient to cover all costs and expenses of
the Holder incurred in any enforcement or collection hereunder including,
without limitation, the reasonable attorneys’ fees, expenses and disbursements
of the Holder.

          8.           Waiver. Except as otherwise provided herein, the Company
waives presentment and written demand for payment, notice of dishonor, protest
and notice of protest of this Note, and shall pay all costs of collection when
incurred, including, without limitation, reasonable attorneys’ fees, costs and
other expenses. THE COMPANY WAIVES ITS RIGHTS TO A JURY TRIAL IN CONNECTION WITH
ANY CLAIMS ARISING UNDER THIS NOTE TO THE FULLEST EXTENT PERMITTED BY LAW. The
right to plead any and all statutes of limitations as a defense to any demands
hereunder is hereby waived to the fullest extent permitted by law.

          9.           Successors and Assigns; Assignment. The provisions of
this Note shall inure to the benefit of and be binding on any successor to the
Company and shall extend to any holder hereof. The Holder may assign this Note
to any of its affiliates. Subject to the preceding sentence, this Note may be
transferred only upon surrender of the original Note for registration of
transfer, duly endorsed, or accompanied by a duly executed written instrument of
transfer in form satisfactory to the Company. Thereupon, a new note for the same
Principal Amount and interest will be issued to, and registered in the name of,
the transferee. Interest and principal are payable only to the registered holder
of this Note.

          10.           Further Assurances. The Company shall, at any time and
from time to time, upon the written request of the Holder, execute and deliver
to the Holder such further documents and instruments and do such other acts and
things as the Holder may reasonably request in order to effectuate fully the
purpose and intent of this Note.

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          11.          Notices. Any notices, demands, consents or other
communications that are given or made hereunder shall be in writing and shall be
given or made to any party hereto by physical delivery, U.S. mail (registered or
certified mail, postage prepaid, return receipt requested) or overnight courier
or by transmission by facsimile to such party at its, his or her address (or
facsimile number) set forth below, or such other address (or facsimile number)
as shall have been specified by like notice by such party:

 

 

 

 

If to the Company:

 

 

 

HC Innovations, Inc.

 

 

10 Progress Drive

 

 

Shelton, CT 06484

 

 

Tel: (203) 538-8012

 

 

Fax: (203) 926-0594

 

 

Attention: John Randazzo

 

 

 

 

With a copy to:

 

 

 

Gersten Savage, LLP

 

 

600 Lexington Avenue, 9th Floor

 

 

New York, New York 10022

 

 

Telephone: (212) 752-9700

 

 

Facsimile: (212) 980-5192

 

 

Attention: Jay M. Kaplowitz, Esq.

 

 

 

 

If to the Holder:

 

 

 

Brahma Finance (BVI) Limited

 

 

Le Roccabella

 

 

24 Avenue Princesse Grace

 

 

Monte-Carlo, MC 98000

 

 

Monaco

 

 

Telephone: +33 643 916 999

 

 

Attention: Nicholas Barham

 

 

 

 

          With a copy to:

 

 

 

Thompson Hine LLP

 

 

335 Madison Avenue, 12th Floor

 

 

New York, New York 10017

 

 

Tel: (212) 908-3975

 

 

Fax: (212) 344-6101

 

 

Attention: John Clapp, Esq.

Each such notice, demand, consent or other communication shall be effective upon
receipt in the case of physical delivery or overnight courier, upon confirmation
of receipt by or on behalf of the addressee in the case of transmission by
facsimile if received prior to 5:00 p.m., New York time, and, if received after
5:00 p.m., New York time, on the next Business Day immediately after the date of
such receipt, and five Business Days after deposit in the U.S. mails in the case
of mailing.

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          12.          Amendments. This Note may not be amended, modified or
terminated in whole or in part, except in writing, executed by each of the
Parties.

          13.          Loss of Note. Upon receipt by the Company of reasonable
evidence of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and reasonable indemnity (in case of loss, theft or
destruction) or surrender and cancellation of such Note (in the case of
mutilation), the Company will make and deliver in lieu of such Note a new Note
of like tenor.

          14.          Maximum Interest. In no event shall the amount of
interest (and any other sums or amounts that are deemed to constitute interest
under applicable legal requirements) due or payable in connection with this Note
exceed the maximum rate of interest designated by applicable legal requirements
(the “Maximum Amount”), and in the event such excess payment is inadvertently
paid by the Company or inadvertently received by the Holder, then such excess
sum shall be credited as a payment of the Principal Amount on the Note, and if
in excess of the outstanding Principal Amount of the Note, shall be immediately
returned to the Company upon such determination. It is the express intent hereof
that the Company not pay and the Holder not receive, directly or indirectly,
interest in excess of the Maximum Amount.

          15.          Construction and Interpretation. The headings or titles
of the sections of this Note are intended for ease of reference only and shall
have no effect whatsoever on the construction or interpretation of any provision
of this Note. All provisions of this Note have been negotiated at arms length,
each party having legal counsel, and this Note shall not be construed for or
against any party by reason of the authorship or alleged authorship of any
provision hereof. The language in this Note shall be construed as to its fair
meaning and not strictly for or against any party.

[signature page follows]

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THIS NOTE HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW YORK, STATE OF NEW
YORK, UNITED STATES OF AMERICA. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCLUDING
CONFLICT OF LAWS PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY
OTHER JURISDICTION.

 

 

COMPANY:

Date: October 19, 2009

 

 

HC INNOVATIONS, INC.

 

 

 

 

By:

 

 

 

 

 

Name:

John Randazzo

 

Title:

Interim Chief Executive Officer

 

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Annex A

Definitions

“Business Day” means any day, other than a Saturday, Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.

“Collateral” shall have the meaning ascribed to such term in the Guarantee and
Security Agreement.

“Entities” means the Company and its Subsidiaries.

“Fundamental Documents” means the documents by which any Person (other than an
individual) establishes its legal existence or which govern its internal
affairs. For example, the “Fundamental Documents” of a corporation would be its
articles of incorporation/certificate of incorporation and code of
regulations/bylaws.

“GAAP” shall mean generally accepted accounting principles in the United States
of America and statements and interpretations (if applicable) issued by the
Financial Accounting Standards Board, or any successor body, as in effect from
time to time, unless otherwise stated.

“Governmental Entity” means any foreign, federal, state, municipal or other
government, governmental department, commission, board, bureau, agency or
instrumentality, or any court, tribunal or arbitrator.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money; (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments; (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets acquired by such Person; (d) all obligations of such Person
in respect of the deferred purchase price of property or assets or services; (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property or assets owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed; (f) all guarantees by such
Person of Indebtedness of others; (g) all capital leases of such Person (as
within the meaning of GAAP); (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guarantee; and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances. Indebtedness of any person shall not include
current accounts payable incurred in the ordinary course of business of such
Person. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.

“Law” means any foreign, federal, state or local constitution, law, statute,
treaty, rule, directive, regulation, requirement, ordinance and any similar
provision having the force or effect of law or any Order.

“Lien” means any security interest, pledge, lien, bailment (in the nature of a
pledge or for purposes of security), mortgage, security agreement, deed of
trust, grant of a power to confess judgment, conditional sale or title retention
agreement (including any lease in the nature thereof), claim, charge, escrow,
encumbrance, easement, reservation, restriction, cloud, preemptive right, right
of first refusal or first offer, option, commitment or other similar agreement,
arrangement, contract, commitment, understanding

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or obligation, whether written or oral and whether or not relating in any way to
credit or the borrowing of money.

“Material Adverse Effect” means a material adverse effect on the business,
operations, properties, assets, condition (financial or otherwise), prospects or
results of operations of the Company and its Subsidiaries, taken as a whole.

“Order” means any judgment, writ, decree, declaration, injunction, order,
stipulation, compliance agreement or settlement agreement issued or imposed by,
or entered into with, a Governmental Entity or arbitrator.

“Permit” shall mean any permit, license, authorization, registration, franchise,
approval, consent, certificate, variance, waiver, variance or clearance and
similar rights obtained, or required to be obtained, from Governmental Entities.

“Permitted Liens” means (i) Liens for Taxes not yet due and payable, (ii)
workers or unemployment compensation Liens arising in the ordinary course of
business of the Company or its Subsidiaries, consistent with past practice,
(iii) mechanic’s, materialman’s, supplier’s, vendor’s or similar Liens arising
in the ordinary course of business of the Company and its Subsidiaries,
consistent with past practice, securing amounts that are not delinquent; (iv)
zoning or deed restrictions, public utility easements, rights of way, minor
title irregularities and similar matters relating to any real property of the
Company or its Subsidiaries, in all such cases having no effect which is
materially adverse as a practical matter on the ownership or use of any such
real estate in question, as such property is used in the ordinary course of
business of by the Company and its Subsidiaries; and (v) any Lien granted to the
Holder created pursuant to the Guarantee and Security Agreement for the benefit
of the Holder.

“Person” shall be construed as broadly as possible and shall include an
individual, a corporation, a company, an association, a joint stock company, a
partnership (including a limited liability partnership), a limited liability
company, a joint venture, a trust or an unincorporated organization and a
Governmental Entity.

“Security Document” means any and all of the security agreements, pledge
agreements and/or collateral assignments among the Collateral Agent and the
Company and the Subsidiary Guarantors which secure the obligations of the
Company and/or the Subsidiary Guarantors under the Transaction Documents,
whether in existence on the date hereof or hereafter entered into, in each case
as supplemented, amended, modified, renewed and replaced.

“Subsidiary” means with respect to any Person, any other Person of which at
least fifty percent (50%) of the shares of stock or other interests entitled to
vote in the election of the members of the board of directors of such other
Person or comparable Persons performing similar functions at such other Person
(excluding shares or other interests entitled to vote only upon the failure to
pay dividends thereon or other contingencies) are at the time owned or
controlled, directly or indirectly through one or more Subsidiaries, by such
Person. Unless the context otherwise requires, the term “Subsidiary” means a
Subsidiary of the Company.

“Subsidiary Guarantors” means those Subsidiaries of the Company that will
execute the Guarantee and Security Agreement.

“Taxes” means, with respect to any Person, (i) all income taxes (including any
tax on or based upon net income, gross income, income as specially defined,
earnings, profits or selected items of income, earnings or profits) and all
gross receipts, sales, use, ad valorem, transfer, franchise, license,
withholding, payroll,

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employment, excise, severance, stamp, occupation, premium, property or windfall
profits taxes, alternative or add-on minimum taxes, customs duties, levies,
imposts, and other taxes, fees, assessments or charges of any kind whatsoever,
together with all interest and penalties, additions to tax and other additional
amounts, in each case imposed by any taxing authority (domestic or foreign) on
such Person (if any) and (ii) any liability for the payment of any amount of the
type described in clause (i) above as a result of (A) being a “transferee”
(within the meaning of Section 6901 of the Code or any other applicable Law) of
another Person, (B) being a member of an affiliated, combined or consolidated
group or (C) a contractual arrangement or otherwise.

“Transaction Documents” shall mean this Note, the Guarantee and Security
Agreement and any other document or instrument executed and delivered by the
Company in connection with this Note.

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Annex B

Representations and Warranties

          The Company hereby represents and warrants to the Holder on the date
of issuance of this Note as follows:

Corporate Existence and Power

          Each of the Entities has been duly incorporated or organized, as the
case may be, is validly existing as a corporation, partnership or limited
liability company, as applicable, and is in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate power and authority to own or lease and operate its properties and to
conduct its business as it is presently conducted and as proposed to be
conducted. Each of the Entities is duly qualified as a foreign corporation,
partnership or limited liability company, as applicable, to transact business
and is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property, the
conduct of its business or otherwise, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate,
result in a Material Adverse Effect. The Company has made available to, and, to
the extent requested, delivered to, the Holder true, correct and complete copies
of (i) the Certificate of Incorporation of the Company, together with all
amendments and any other modifications thereto (the “Company Certificate of
Incorporation”), and (ii) the Bylaws of the Company, together with all
amendments and any other modifications thereto (the “Company Bylaws”). The
Company is not in violation or breach of any of the terms, conditions or
provisions of the Company Certificate of Incorporation or the Company Bylaws.
Each of the Subsidiaries of the Company has made available to, and, to the
extent requested, delivered to, the Holder true, correct and complete copies of
its Fundamental Documents, together with all amendments and any other
modifications thereto. None of the Subsidiaries of the Company is in violation
or breach of any of the terms, conditions or provisions of its respective
Fundamental Documents.

Subsidiaries and Affiliates

          All of the issued and outstanding capital stock or other equity or
ownership interests of each Subsidiary of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and, except as contemplated
by the Transaction Documents, are owned by the Company, directly or through
Subsidiaries, free and clear of any Lien or adverse claim.

Authorization

          Each of the Entities has the requisite corporate power and authority
to execute and deliver the Transaction Documents to which it is a party and to
perform its obligations under such Transaction Documents. The execution and
delivery by each of the Entities of the Transaction Documents to which it is a
party and the performance by each such entity of its obligations under such
Transaction Documents have been duly authorized by all necessary corporate or
other organizational action on its or their part and no other proceedings on its
or their part are necessary to authorize the execution and delivery of such
Transaction Documents or its or their performance of its or their obligations
under such Transaction Documents.

Due Execution and Delivery; Binding Obligations

          Each Transaction Document to which one or more of the Entities is a
party has been duly executed and delivered by an authorized representative of
each such entity, and each such Transaction

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Document constitutes the legal, valid and binding obligation of the respective
Entities, enforceable against each of them in accordance with its terms, except
as such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or conveyance or similar laws relating to or
limiting creditors’ rights generally or by equitable principles relating to
enforceability.

Issuance of Note

          The Company has all necessary power and authority to issue the Note.
The Note has been duly authorized by all necessary corporate action by the
Company.

Collateral

          (a) The right, title and interest of the Company and each of its
Subsidiaries, as applicable, in the Collateral is free and clear of all Liens
except for (i) the Lien granted in favor of the Holder under the Guarantee and
Security Agreement (ii) Permitted Liens and (iii) as contemplated by that
certain Guarantee and Amended and Restated Security Agreement dated as of
December 23, 2008 (the “Prior Security Agreement”), and no financing statements
in respect of the Collateral will be on file in favor of any person other than
the Holder and the Collateral Agent under the Prior Security Agreement; (b) the
Guarantee and Security Agreement creates valid security interests in, and Liens
on, the Collateral covered thereby securing the obligations of the Company and
each of its Subsidiaries to the Holder, (c) the representations and warranties
of the Company and each of its Subsidiaries in the Guarantee and Security
Agreement will be true and correct (if such representations and warranties are
not qualified with respect to materiality, in which case such representations
will be true and correct in all respects) in all material respects; (d) upon the
filing and recording of financing statements in the appropriate jurisdictions,
the Lien securing the obligations of the Company and each of its Subsidiaries to
the Holder will have been duly perfected as to the Collateral as to which
perfection may be accomplished pursuant to the applicable Uniform Commercial
Code or other applicable law in such jurisdictions; and (e) the Lien of the
Guarantee and Security Agreement shall be prior to any other Lien on any of the
Collateral, other than Permitted Liens.

No Conflict or Violation

          The execution and delivery by each Entity of each Transaction Document
to which it is a party, and the performance by each Entity of its obligations
under each such Transaction Document, will not result in any conflict with, or
result in a violation or breach of any of the terms, conditions or provisions
of, or constitute (with or without due notice, lapse of time or both) a default
under, or give rise to a right of termination, cancellation or acceleration of
any obligation under, or result in the creation of any Lien (other than a
Permitted Lien, any Lien granted under the Guarantee and Security Agreement and
any Lien granted under the Prior Security Agreement) upon any of the properties
or assets of any Entity under, (a) the respective Fundamental Documents of the
Entities, (b) any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other agreement or instrument to which any Entity is a party
or by which it or any of them may be bound, or to which any of the property or
assets of any Entity is subject; or (c) any Law, Order or Permit applicable to
any one or more of the Entities or to which any of their respective properties
or assets is subject, except, in the case of clauses (b) and (c) above, such
conflicts, violations, breaches, defaults, rights or Liens (excluding any of the
foregoing arising under, or in connection with, the Securities Act), which would
not, either individually or in the aggregate, result in a Material Adverse
Effect or affect the enforceability of the Transaction Documents.

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Consents and Approvals

          The execution and delivery by the Entities of each Transaction
Document to which they are a party, and the performance by the Entities of their
obligations under each such Transaction Document, do not and will not require
any consent, approval, license, permit, order or authorization of, or any
registration, notification, declaration or filing with, any Person (including,
without limitation, any Governmental Entity), except for (a) such as have been
obtained or made and are in full force and effect, (b) the filing of any notice
with a Governmental Entity which may be required subsequent to the date of this
Note under the Securities Act, any state securities laws or the rules and
regulations promulgated thereunder (and which, if required, will be filed on a
timely basis as may be so required), and (c) any such consents or approvals of,
or filings with, any Persons who are not Governmental Entities, the failure of
which to be obtained would not result, either individually or in the aggregate,
in a Material Adverse Effect or affect the enforceability of the Transaction
Documents.

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