Document:

EX-10.1

Exhibit 10.1

SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 16, 2010
(this “Amendment”), to the Existing Credit Agreement (such capitalized term and other
capitalized terms used in this preamble and the recitals to have the meanings set forth in
Article I) is among THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation (the
“Borrower”), KANSAS CITY SOUTHERN, a Delaware corporation (the “Parent”), the
SUBSIDIARY GUARANTORS, the LENDERS, the ISSUING BANKS, the SWING LINE BANK and THE BANK OF NOVA
SCOTIA, as COLLATERAL AGENT and THE ADMINISTRATIVE AGENT.

W I T N E S S E T H:

WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of April 28, 2006 (as
amended, supplemented, amended and restated or otherwise modified prior to the date hereof, the
“Existing Credit Agreement”), among the Borrower, the Parent, the Subsidiary Guarantors,
the Lenders, the Issuing Banks, the Swing Line Bank, the Collateral Agent and the Administrative
Agent, the Lenders have agreed to make, and have made, Advances to the Borrower and the Issuing
Banks and Swing Line Bank have issued and made, respectively, and the Revolving Credit Lenders have
participated in, Letters of Credit and Swing Line Borrowings for the benefit of the Borrower;

WHEREAS, the Borrower has requested certain amendments to the Existing Credit Agreement as
more fully set forth herein; and

WHEREAS, the Lender Parties have agreed to such amendments on the terms and conditions
contained in this Amendment;

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Certain Definitions. The following terms (whether or not underscored)
when used in this Amendment shall have the following meanings (such meanings to be equally
applicable to the singular and plural form thereof):

“Amendment” is defined in the preamble.

“Existing Credit Agreement” is defined in the first recital.

“Second Amendment Effective Date” is defined in Section 3.1.

SECTION 1.2. Existing Credit Agreement Defined Terms. Unless otherwise defined herein
or the context otherwise requires, terms defined in the Existing Credit Agreement and used in this
Amendment shall have the meanings given to them in the Existing Credit Agreement.

ARTICLE II

AMENDMENTS

Effective on the Second Amendment Effective Date, the Existing Credit Agreement is hereby
amended in accordance with the terms of this Article.

SECTION 2.1. Amendments to Article I. Article I of the Existing Credit Agreement is
hereby amended in accordance with Sections 2.1.1 through 2.1.2.

SECTION 2.1.1. Section 1.01 of the Existing Credit Agreement is hereby amended by inserting
the following definitions in the appropriate alphabetical order:

“8% Indenture” means the Indenture, dated as of May 30, 2008, among the Borrower, the
Parent, the Subsidiaries of the Parent from time to time parties thereto and U.S. Bank
National Association, as trustee, as amended, supplemented, amended and restated or
otherwise modified in accordance with the terms of the Loan Documents.

“8% Senior Notes” means the 8% senior unsecured notes of the Borrower issued from time
to time pursuant to the 8% Indenture.

“13% Indenture” means the Indenture, dated as of December 18, 2008, among the Borrower,
the Parent, the Subsidiaries of the Parent from time to time parties thereto and U.S. Bank
National Association, as trustee, as amended, supplemented, amended and restated or
otherwise modified in accordance with the terms of the Loan Documents.

“13% Senior Notes” means the 13% senior unsecured notes of the Borrower issued from
time to time pursuant to the 13% Indenture.

“Extending Lender” means a Lender that, on or prior to 5:00 p.m. on March 16, 2010 (or
such later time or date as shall be specified by notice posted on Intralinks), executes and
delivers to the Administrative Agent (or its counsel) a counterpart of the Second Amendment
whereby it agrees to extend the Termination Date of such Lender’s Revolving Credit
Commitment, Letter of Credit Commitment and Swing Line Commitment (as such terms are defined
under this Agreement in effect prior to the Second Amendment) from April 28, 2011 to
April 28, 2013 and identifying itself as an Extending Lender on the Second Amendment.

“Net Equity Proceeds” means the excess of:

(a) the gross cash proceeds received by the Parent from the sale or
issuance after the Second Amendment Effective Date of its Equity Interest to
other than the Borrower or any of its Subsidiaries over

(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements paid in connection with such sale or
issuance.

“RR Act” is defined in Section 5.02(a)(ix).

“RR Assets” is defined in Section 5.02(a)(ix).

“RR Lien” is defined in Section 5.02(a)(ix).

“Second Amendment” means the Second Amendment, dated as of March 16, 2010, to this
Agreement among the Borrower, the Parent, the Subsidiary Guarantors, the Required Lenders,
the Revolving Credit Lenders that are Extending Lenders, the Issuing Banks, the Swing Line
Bank, the Collateral Agent and the Administrative Agent.

“Second Amendment Effective Date” is defined in the Second Amendment.

SECTION 2.1.2. Section 1.01 of the Existing Credit Agreement is further amended as follows:

(a) Clause (b) of the definition of “Applicable Commitment Fee Rate” is amended in its
entirety to read as follows:

(b) (i) from the Effective Date until the Second Amendment
Effective Date, as determined by this Agreement as in effect
immediately prior to the Second Amendment Effective Date, and
thereafter, a percentage as set forth below per annum determined by
reference to the Leverage Ratio as set forth in the most recent
officer’s certificate received by the Administrative Agent pursuant
to Section 5.03(b) or Section 5.03(c):

	 	 	 	 	 
	 	 	Applicable Commitment Fee Rate for
	Leverage Ratio	 	Revolving Credit Commitment
	Level I

	 	

	 

	 	

	less than or equal to 2.50:1.00

	 	 	0.500	%
	 

	 	 	 	 
	Level II

	 	

	 

	 	

	greater than 2.50:1.00 but less than

or equal to 3.00:1.00

	 	

0.500%

	 

	 	 	 	 
	Level III

	 	

	 

	 	

	greater than 3.00:1.00 but less than

or equal to 3.50:1.00

	 	

0.500%

	 

	 	 	 	 
	Level IV

	 	

	 

	 	

	greater than 3.50:1.00

	 	 	0.625	%
	 

	 	 	 	 

(b) Clause (a)(ii) of the definition of “Applicable Margin” is hereby amended in its
entirety to read as follows:

(ii) from the Effective Date until the Second Amendment Effective
Date, as determined by this Agreement as in effect immediately prior
to the Second Amendment Effective Date, and thereafter, a percentage
as set forth below per annum determined by reference to the Leverage
Ratio, as set forth in the most recent officer’s certificate
received by the Administrative Agent pursuant to Section 5.03(b) or
Section 5.03(c); provided, that the Applicable Margin for each
Revolving Credit Advance shall be no less than Level III for the
period from the Second Amendment Effective Date to the date that the
financial information required pursuant to Section 5.03(c) for the
fiscal quarter ending June 30, 2010 is delivered to the
Administrative Agent:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable Margin for
	 	 	Applicable Margin for	 	Eurodollar Rate
	 	 	Base Rate Revolving	 	Revolving Credit
	Leverage Ratio	 	Credit Advances	 	Advances
	Level I

	 	

	 	

	 

	 	

	 	

	less than or equal to

2.50:1.00

	 	

1.25%
	 	

2.25%

	 

	 	 	 	 	 	 	 	 
	Level II

	 	

	 	

	 

	 	

	 	

	greater than 2.50:1.00

but less than or equal to

3.00:1.00

	 	

1.50%
	 	

2.50%

	 

	 	 	 	 	 	 	 	 
	Level III

	 	

	 	

	 

	 	

	 	

	greater than 3.00:1.00

but less than or equal to

3.50:1.00

	 	

1.75%
	 	

2.75%

	 

	 	 	 	 	 	 	 	 
	Level IV

	 	

	 	

	 

	 	

	 	

	greater than 3.50:1.00

	 	 	2.25	%	 	 	3.25	%
	 

	 	 	 	 	 	 	 	 

(c) The definition of “EBITDA” is hereby amended by (i) deleting the word “and” at the
end of clause (a)(iii), and (ii) adding a new clause (a)(v) after clause (a)(iv), to read
in its entirety as follows:

and (v) any premiums or other debt retirement costs paid with Net
Equity Proceeds in connection with a redemption, prepayment or
defeasance of Debt under Section 5.02(i)(vi).

(d) The definition of “Loan Documents” is amended by deleting the word “and” and
inserting a comma in its place prior to clause (viii), and adding “and (ix) the Second
Amendment” after the words “Secured Hedge Agreements” in such definition.

(e) Clause (b) of the definition of “Net Cash Proceeds” is hereby amended in its
entirety to read as follows:

(b) with respect to the incurrence or issuance of any Debt by the Parent or any of
its Subsidiaries (other than (x) Debt permitted pursuant to Section 5.02(b)(i),
(iii), (iv) and (v)), the excess of (i) the sum of 100% of the cash and Cash
Equivalents (or, in the case of Debt incurred pursuant to Section 5.02(b)(i)(K), 50%
of the cash and Cash Equivalents) received in connection with such incurrence or
issuance over (ii) the underwriting discounts and commissions or other similar
payments, and other out-of-pocket costs, fees, commissions, premiums and expenses
incurred by the Parent or any of its Subsidiaries in connection with such incurrence
or issuance to the extent such amounts were not deducted in determining the amount
referred to in clause (i); and

(f) The eighth line of the definition of “Obligations” is amended by adding the words
“(including, without limitation, Post Petition Interest)” after the word “interest”
appearing in such eighth line.

(g) The definition of “Termination Date” is hereby amended by deleting the date “April
28, 2011” appearing in clause (b)(i) and inserting the date “April 28, 2013” in its place.

SECTION 2.2. Amendment to Article II. Article II of the Existing Credit Agreement is
hereby amended in accordance with Section 2.2.1.

SECTION 2.2.1. Clause (b)(vi) of Section 2.06 of the Existing Credit Agreement is hereby
amended by deleting each reference to “the 2002 Senior Notes Indenture” and inserting “the 13%
Indenture” in its place.

SECTION 2.3. Amendments to Article V. Article V of the Existing Credit Agreement is
hereby amended in accordance with Sections 2.3.1 through 2.3.4.

SECTION 2.3.1. Clause (i) of Section 5.01 of the Existing Credit Agreement is hereby amended
by adding the following text at the end of such clause:

In addition to the foregoing, the Borrower shall promptly, after any
RR Assets are no longer the subject of any RR Lien, execute and
deliver and cause each Loan Party whose assets are no longer subject
to any RR Lien to execute and deliver, any further instruments and
documents and take and cause each such Loan Party to take all such
other action as the Collateral Agent may deem reasonably necessary
or desirable to obtain the full benefits of or in perfecting and
preserving the Liens of such mortgages, pledges, assignments,
security agreement supplements, intellectual property security
agreement supplements, and security agreements on the assets and
property that is no longer the subject of a RR Lien.

SECTION 2.3.2. Clause (a) of Section 5.02 of the Existing Credit Agreement is hereby amended
(i) by deleting the word “and” at the end of clause (a)(vii), (ii) adding the words “or by clause
(ix)” after the words “permitted by clauses (i) through (vi);” in the first line of clause
(a)(viii); and (iii) adding a new clause (a)(ix), to read in its entirety as follows:

(ix) Liens upon or in real and personal property or equipment of
the Borrower or any of its Subsidiaries to secure Debt (the “RR
Assets”) incurred solely under and for purposes consistent with
Title V of the Railroad Revitalization and Regulatory Reform Act of
1976 as amended (45 U.S.C. 821 et seq.) (the
“RR Act”), which Liens on such RR Assets may rank senior to the
Liens of the Secured Obligations in favor of the Secured Parties
(unless such Liens are in favor of a Loan Party or an Affiliate of a
Loan Party (any such senior Lien referred to as an “RR Lien”)), and
the Lenders hereby agree that the Administrative Agent is hereby
authorized and directed (without the need for any further consent of
the Lender Parties) to release the Lien in favor of the Lender
Parties on any RR Assets which shall constitute an RR Lien in favor
of holders of Debt under Section 5.02(b)(i)(K) (so long as the
release on the Lien on such RR Assets does not constitute a release
of all or substantially all of the Collateral (that secures the
Obligations of the Loan Parties under the Loan Documents) in any
transaction or series of related transactions); provided, however,
that no RR Lien shall extend to or cover any property other than the
RR Assets that are the subject of the project for which the Borrower
or its Subsidiary has submitted a request to the Secretary of
Transportation (or similar authority) under the RR Act for financial
assistance (or the bridge Debt in lieu thereof), and no extension,
renewal or replacement of RR Liens shall extend to or cover any
property or assets not theretofore subject to the RR Lien being
extended, renewed or replaced; and provided further that the Debt
secured by RR Liens permitted by this clause (ix) shall be permitted
by and incurred solely under Section 5.02(b)(i)(K);

SECTION 2.3.3. Clause (b)(i) of Section 5.02 of the Existing Credit Agreement is hereby
amended by (i) deleting the period at the end of clause (b)(i)(J) and inserting “; and” in its
place, and inserting a new clause (b)(i)(K), to read in its entirety as follows:

(K) Debt incurred by the Borrower or a Subsidiary in a principal
amount not to exceed $150,000,000 at any time outstanding, which
Debt may be incurred only if (i) both before and after giving effect
thereto, no Default shall have occurred and be continuing or would
result therefrom, (ii) the Debt shall be incurred under the RR Act
or such Debt shall be incurred as a bridge to a refinancing for Debt
to be incurred under the RR Act, and the proceeds thereof used
solely for purposes consistent with the RR Act, (iii) the Debt shall
not have a maturity date earlier than the Termination Date in
respect of the Revolving Credit Commitment, (iv) the fair market
value (as determined in a commercially reasonable manner by the
Borrower) of the RR Assets used to secure Debt under this clause
shall not exceed the amount of the Debt that is being secured by
such RR Assets, (v) the Debt shall not provide for more than 25% of
the original principal amount to amortize over the term of this
Agreement, and (vi) no later than the Prepayment Date following the
incurrence of any Debt under this clause, the Borrower shall have
made a mandatory prepayment of the Advances with the Net Cash
Proceeds of such Debt pursuant to Section 2.06(b)(ii).

SECTION 2.3.4. Clause (i) of Section 5.02 of the Existing Credit Agreement is hereby amended
by (i) deleting the word “and” immediately prior to subclause (v) and inserting a comma in its
place, and (ii) adding a new subclause (vi) to read in its entirety as follows:

, and (vi) redemptions, prepayments or defeasance of (A) the 8% Notes and
the 13% Notes (and premium thereon) in accordance with the terms of the 8%
Indenture and the 13% Indenture, respectively, and (B) any other senior or
subordinated Debt and premium thereon (whether secured or unsecured) of the
Borrower or of any Subsidiaries, in each case solely with Net Equity
Proceeds; provided, that such redemptions, prepayments or defeasance
are made within 60 days following the issuance of the Equity Interests of
the Parent giving rise to such Net Equity Proceeds,

ARTICLE III

CONDITIONS TO EFFECTIVENESS

SECTION 3.1. This Amendment shall become effective upon the date (the “Second Amendment
Effective Date”) when each of the following conditions set forth in this Article shall have
been satisfied.

SECTION 3.1.1. Execution of Counterparts. The Administrative Agent shall have
received this Amendment, duly executed and delivered by an authorized officer of the Parent, the
Borrower, each Subsidiary Guarantor, each Revolving Credit Lender, the Issuing Banks, the Swing
Line Bank and the Required Lenders, the Collateral Agent and the Administrative Agent.

SECTION 3.1.2. Amendment Fee. The Administrative Agent shall have received for the
account of each Lender that has executed and delivered a copy of this Amendment to the
Administrative Agent or its counsel (Orrick, Herrington, and Sutcliff, LLP, 666 Fifth Avenue, New
York, New York (facsimile number 212-506-5151); Attention Lisa Cohen) no later than 5:00 p.m. (New
York time) on March 16, 2010 all amendment fees that are payable on the Second Amendment Effective
Date.

SECTION 3.1.3. Upfront Fee. The Administrative Agent shall have received for the
account of each Extending Lender all upfront fees that are payable on the Second Amendment
Effective Date.

SECTION 3.1.4. Fees and Expenses. The Administrative Agent shall have received all of
its reasonable and documented fees and out-of-pocket expenses incurred in connection with the
negotiation, preparation, execution and delivery of this Amendment, including all invoiced fees and
disbursements of Orrick, Herrington & Sutcliffe LLP, counsel to the Administrative Agent.

SECTION 3.1.5. Legal Opinions. The Administrative Agent shall have an opinion of
Sonnenschein Nath & Rosenthal LLP, New York counsel for the Borrower dated the Second Amendment
Effective Date, addressed to each the Lenders and the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent.

ARTICLE IV

MISCELLANEOUS PROVISIONS

SECTION 4.1. Representations and Warranties. To induce the Lenders to enter into this
Amendment the Loan Parties represent and warrant to the Lender Parties that as of the Second
Amendment Effective Date:

(a) this Amendment constitutes the legal, valid and binding obligation of the Parent,
the Borrower and the Subsidiary Guarantors, enforceable against each of them in accordance
with its terms;

(b) both before and after giving effect to this Amendment all of the statements set
forth in clauses (a)(i) and (a)(ii) of Section 3.02 of the Existing Credit Agreement are
true and correct; and

(c) no authorizations, consents or approvals by or with any other Person is required
for the execution and delivery by, or for the effectiveness or enforceability against, any
Loan Party, of this Amendment.

SECTION 4.2. Effect of Amendment. The parties hereto agree as follows:

(a) This Amendment shall not constitute an amendment or waiver of or consent to any
provision of the Existing Credit Agreement or any other Loan Document not expressly referred
to herein and shall not be construed as an amendment, waiver or consent to any action on the
part of any Loan Party that would require an amendment, waiver or consent of any Lender
Party under any of the Loan Documents except as expressly stated herein. Except as
expressly amended hereby, the provisions of the Existing Credit Agreement and the Loan
Documents shall remain unchanged and shall continue to be, and shall remain, in full force
and effect in accordance with their respective terms.

(b) On and after the Second Amendment Effective Date, each reference in the Existing
Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like
import, and each reference to the Existing Credit Agreement in any other Loan Document shall
be deemed a reference to the Existing Credit Agreement as amended hereby. This Amendment,
executed pursuant to the Existing Credit Agreement, shall constitute a “Loan Document” for
all purposes of the Existing Credit Agreement and the other Loan Documents and shall be
construed, administered and applied in accordance with all of the terms and provisions of
the Credit Agreement.

SECTION 4.3. Costs and Expenses. The Borrower agrees to reimburse the Administrative
Agent for its out-of-pocket expenses in connection with this Amendment, including the fees, charges
and disbursements of counsel for the Administrative Agent.

SECTION 4.4. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns.

SECTION 4.5. Headings. The headings of this Amendment are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof.

SECTION 4.6. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts (including by facsimile or
electronic copy), each of which when so executed and delivered shall be deemed an original and all
of said counterparts taken together shall be deemed to constitute one and the same instrument.

SECTION 4.7. GOVERNING LAW. THIS AMENDMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly
executed and delivered by their respective proper and duly authorized officers as of the day and
year first above written.

	 	 	 
	THE KANSAS CITY SOUTHERN RAILWAY COMPANY
	By:
	 	/s/ Paul J. Weyandt

	 	 	 

	 	 	Name: Paul J. Weyandt

Title: Senior Vice President – Finance and Treasurer

	KANSAS CITY SOUTHERN

as Guarantor
	By:
	 	/s/ Paul J. Weyandt

	 	 	 

	 	 	Name: Paul J. Weyandt

Title: Senior Vice President – Finance and Treasurer

	GATEWAY EASTERN RAILWAY COMPANY

as Guarantor
	By:
	 	/s/ Paul J. Weyandt

	 	 	 

	 	 	Name: Paul J. Weyandt

Title: Vice President and Treasurer

	SOUTHERN DEVELOPMENT COMPANY

as Guarantor
	By:
	 	/s/ Michael R. Haverty

	 	 	 

	 	 	Name: Michael R. Haverty

Title: President

	THE KANSAS CITY NORTHERN RAILWAY

COMPANY

as Guarantor
	By:
	 	/s/ Paul J. Weyandt

	 	 	 

	 	 	Name: Paul J. Weyandt

Title: Vice President and Treasurer

	 	 	 
	TRANS-SERVE, INC.
	 	 	as Guarantor
	By:	 	/s/ Paul J. Weyandt
	 	 	Name:	 	 	Paul J. Weyandt
	 	 	Title:	Vice President and Treasurer
	PABTEX, Inc.
	 	 	as Guarantor
	By:	 	/s/ Michael R. Haverty
	 	 	Name:	 	 	Michael R. Haverty
	 	 	Title:	President
	SOUTHERN INDUSTRIAL SERVICES, INC.
	 	 	as Guarantor
	By:	 	/s/ Michael R. Haverty
	 	 	Name: Michael R. Haverty
	 	 	Title:	President
	VEALS, INC.
	 	 	as Guarantor
	By:	 	/s/ Michael R. Haverty
	 	 	Name:	 	 	Michael R. Haverty
	 	 	Title: President

	 	 	 
	THE BANK OF NOVA SCOTIA, in
its capacity as Swing Line
Bank and Issuing Bank
	By:
	 	/s/ Mark Sparrow

	 	 	 

	 	 	Name: Mark Sparrow

Title: Director

1

	 	 	 
	THE BANK OF NOVA SCOTIA, in
	its capacity as Collateral
	Agent and Administrative Agent
	By: /s/ Mark Sparrow
	Name: Mark Sparrow
	Title: Director
	LENDER SIGNATURE PAGE FOR OTHER THAN EXTENDING LENDERS

	 	 	 
	[INSERT NAME OF LENDER]
	By:
	 	

	 	 	Name:

	 	 	Title:

2

LENDER SIGNATURE PAGE FOR EXTENDING LENDER

INDICATE THAT YOU ELECT TO BE AN EXTENDING LENDER BY EXECUTING THE SIGNATURE BLOCK BELOW.

SIGNATURE BLOCK FOR EXTENDING LENDER

[NAME OF REVOLVING CREDIT LENDER]

By:  

Name:

Title:

3EXHIBIT 10.7

CONVERTIBLE SECURED PROMISSORY NOTE

ISSUE AMOUNT                                                   U.S.  $22,000
FACE AMOUNT                                                    U.S.  $26,400
INTEREST RATE                                                  20% per year
ISSUANCE DATE                                                  June 12, 2009

FOR VALUE RECEIVED, Vital Products, Inc., a Delaware corporation (the
"Company"), hereby promises to pay The Cellular Connection Ltd., an Ontario
corporation, (the "Holder") the Face Amount, subject to further adjustment as
described below, in such amounts, at such times and on such terms and
conditions as are specified herein (this "Note").

Article 1.  Advancement and Fees

The Holder agrees to pay forty-seven thousand five hundred dollars ($22,000)
to the Company upon the issuance of this Note as an inducement fee.

Article 2.  Maturity

The Face Amount of this Note is payable June 11, 2010 (the "Maturity
Date").

Notwithstanding any provision to the contrary in this Note, the Company may
pay in full to the Holder the Face Amount, or any balance remaining thereof,
in readily available funds at any time and from time to time without penalty
("Prepayment").

Article 3.  Interest

The outstanding Face Amount of the Note shall increase by 20% on
June 12, 2010. The outstanding Face Amount of the Note shall increase by
another 20% on June 12, 2011 and again on each one year anniversary of
June 12, 2011 until the Note has been paid in full.

Article 4.  Collateral

The Holder may elect to secure a portion of the Company's assets not to
exceed 200% of the Face Amount of the Note, including, but not limited to,
accounts receivable, cash, marketable securities, equipment, building, land
or inventory (the "Collateral").

Article 5.  Defaults and Remedies

Article 5.1.  Events of Default

An "Event of Default" or "Default" occurs if the Company does not pay the
Face Amount of this Note within five (5) business days after the Maturity
Date.

Upon the occurrence of an Event of Default, the Holder may:

* Transfer any or all of the Collateral into its name, or into the name of
its nominee or nominees;

<PAGE>

* Exercise all corporate rights with respect to the Collateral, including,
without limitation, all rights of conversion, exchange, subscription or any
other rights, privileges or options pertaining to any shares of the Collateral
as if it were the absolute owner thereof, including, but without limitation,
the right to exchange, at its discretion, any or all of the Collateral upon
the merger, consolidation, amalgamation, reorganization, recapitalization or
other readjustment of the Company thereof, or upon the exercise by the Company
of any right, privilege or option pertaining to any of the Collateral, and, in
connection therewith, to deposit and deliver any and all of the Collateral
with any committee, depository, transfer agent, registrar or other designated
agent upon such terms and conditions as it may determine, all without liability
except to account for property actually received by it; and

* Subject to any requirement of applicable law including, for greater
certainty, the Personal Property Security Act (Ontario), sell, assign and
deliver the whole or, from time to time, any part of the Collateral at the
time held by the Holder, at any private sale or at public auction, with or
without demand, advertisement or notice of the time or place of sale or
adjournment thereof or otherwise (all of which are hereby waived, except such
notice as is required by applicable law and cannot be waived), for cash or
credit or for other property for immediate or future delivery, and for such
price or prices and on such terms as the Pledgee in its sole discretion may
determine, or as may be required by applicable law.

Article 5.2  Conversion Privilege

(a) The Holder shall have the right to convert the Note into shares of the
    Company's common stock (the "Common Stock") at any time prior to the
    Maturity Date.  The number of shares of Common Stock issuable upon the
    conversion of the Note shall be determined pursuant to Article 5.3.  Any
    fractional shares that occur as a result of conversion shall be rounded up
    or down, as the case may be, to the nearest whole share.

(b) In the event all or any portion of the Note remains outstanding on the
    Maturity Date (the "Residual Amount"), the unconverted portion of such Note
    will automatically be converted into shares of Common Stock on such date in
    the manner set forth in Article 5.3.

Article 5.3 Conversion Procedure.

(a) The Residual Amount may be converted, in whole or in part, any time and
    from time to time, prior to the Maturity Date.  Such conversion shall be
    effectuated by surrendering to the Company, or its attorney, the Note to
    be converted together with a facsimile or original of the signed notice
    of conversion (the "Notice of Conversion").   The date on which the Notice
    of Conversion is effective ("Conversion Date") shall be deemed to be the
    date on which the Holder has delivered to the Company a facsimile or
    original of the signed Notice of Conversion, as long as the original Note
    to be converted is received by the Company within five (5) business days
    thereafter.  At such time that the original Note has been received by the
    Company, the Holder can elect whether a reissuance of the Note is
    warranted, or whether the Company can retain the Note as a continual
    conversion by the Holder.  Notwithstanding the above, any Notice of
    Conversion received on or after 4:00 P.M. EST shall be deemed to have been
    received the following business day (receipt being via a confirmation of
    the time such facsimile to the Company is received).

<PAGE>

(b) Common Stock to be Issued - Upon any conversion of the Note, and upon
    receipt by the Company or its attorney of a facsimile or original of the
    Holder's signed Notice of Conversion, the Company shall instruct its
    transfer agent to issue stock certificates without restrictive legends
    or stop transfer instructions, if at that time the aforementioned
    registration statement described in Article 5.1 has been declared
    effective (or with proper restrictive legends if the registration
    statement has not as yet been declared effective), in such denominations
    to be specified at conversion representing the number of shares of Common
    Stock issuable upon such conversion, as applicable.  In the event that
    the Note is aged one year and deemed sellable under Rule 144, the Company
    shall, upon a Notice of Conversion, instruct the transfer agent to issue
    free trading certificates without restrictive legends, subject to other
    applicable securities laws.  The Company is responsible for all costs
    associated with the issuance of the shares, including, but not limited
    to, fees associated with the opinion letter, FedEx of the certificates
    and any other costs that arise.  The Company shall act as registrar and
    shall maintain an appropriate ledger containing the necessary information
    with respect to the Note.  The Company warrants that no instructions,
    other than these instructions, have been given or will be given to the
    transfer agent and that the Common Stock shall otherwise be freely resold,
    except as may be set forth herein or subject to applicable law.

(c) Conversion Rate - The Holder is entitled to convert the Note, plus accrued
    interest, anytime prior to the Maturity Date, at 75% of the average of the
    lowest closing bid price during the fifteen (15) trading days immediately
    preceding the Conversion Date.  No fractional shares or script representing
    fractions of shares will be issued upon conversion, but rather the number
    of shares issuable shall be rounded up or down, as the case may be, to the
    nearest whole share.

(d) Nothing contained in the Note shall be deemed to establish or require the
    payment of interest to the Holder at a rate in excess of the maximum rate
    permitted by governing law.  In the event that the rate of interest
    required to be paid exceeds the maximum rate permitted by governing law,
    the rate of interest required to be paid thereunder shall be automatically
    reduced to the maximum rate permitted under the governing law and such
    excess shall be returned with reasonable promptness by the Holder to the
    Company.

(e) It shall be the Company's responsibility to take all necessary actions
    and to bear all such costs to issue the Common Stock as provided herein,
    including the responsibility and cost for delivery of an opinion letter to
    the transfer agent, if so required.  The Holder shall be treated as a
    shareholder of record on the date Common Stock is issued to the Holder.  If
    the Holder shall designate another person as the entity in the name of
    which the stock certificates issuable upon conversion of the Note are to
    be issued prior to the issuance of such certificates, the Holder shall
    provide to the Company evidence that either no tax shall be due and payable
    as a result of such transfer or that the applicable tax has been paid by
    the Holder or such person. Upon surrender of any Notes that are to be
    converted in part, the Company shall issue to the Holder a new Note equal
    to the unconverted amount, if so requested in writing by the Holder.

<PAGE>

(f) Within five (5) business days after receipt of the documentation referred
    to above in Article 5.2, the Company shall deliver a certificate for the
    number of shares of Common Stock issuable upon the conversion.  In the
    event the Company does not make delivery of the Common Stock as instructed
    by the Holder within five (5) business days after the Conversion Date,
    then in such event the Company shall pay to the Holder one percent (1%)
    in cash of the dollar value of the amount remaining on the Note after
    said conversion, compounded daily, per each day after the fifth (5th)
    business day following the Conversion Date that the Common Stock is not
    delivered to the Holder.

    The Company acknowledges that its failure to deliver the Common Stock
    within five (5) business days after the Conversion Date will cause the
    Holder to suffer damages in an amount that will be difficult to ascertain.
    Accordingly, the parties agree that it is appropriate to include in this
    Note a provision for liquidated damages.  The parties acknowledge and
    agree that the liquidated damages provision set forth in this section
    represents the parties' good faith effort to quantify such damages, and,
    as such, agree that the form and amount of such liquidated damages are
    reasonable and will not constitute a penalty.  The payment of liquidated
    damages shall not relieve the Company from its obligations to deliver the
    Common Stock pursuant to the terms of this Note.

(g) The Company shall at all times reserve (or make alternative written
    arrangements for reservation or contribution of shares) and have available
    all Common Stock necessary to meet conversion of the Note by the Holder
    of the entire amount of the Note then outstanding.  If, at any time the
    Holder submits a Notice of Conversion and the Company does not have
    sufficient authorized but unissued shares of Common Stock (or alternative
    shares of Common Stock as may be contributed by stockholders of the
    Company) available to effect, in full, a conversion of the Note
    (a "Conversion Default," the date of such default being referred to
    herein as the "Conversion Default Date"), the Company shall issue to
    the Holder all of the shares of Common Stock which are available, and
    the Notice of Conversion as to any Note requested to be converted but
    not converted (the "Unconverted Note") may be deemed null and void upon
    written notice sent by the Holder to the Company.  The Company shall
    provide notice of such Conversion Default ("Notice of Conversion
    Default") to the Holder, by facsimile within three (3) business days
    of such default (with the original delivered by overnight mail or two
    day courier), and the Holder shall give notice to the Company by
    facsimile within five (5) business days of receipt of the original
    Notice of Conversion Default (with the original delivered by overnight
    mail or two day courier) of its election to either nullify or confirm
    the Notice of Conversion.

    The Company acknowledges that its failure to maintain a sufficient
    number of authorized but unissued shares of Common Stock to effect, in
    full, a conversion of the Note will cause the Holder to suffer damages
    in an amount that will be difficult to ascertain.  Accordingly, the
    parties agree that it is appropriate to include in this Note a provision
    for liquidated damages.

<PAGE>

(h) If, by the fifth (5th) business day after the Conversion Date of any
    portion of the Note to be converted (the "Delivery Date"), the transfer
    agent fails for any reason to deliver the Common Stock upon conversion by
    the Holder and after such Delivery Date, the Holder purchases, in an open
    market transaction or otherwise, shares of Common Stock (the "Covering
    Shares") solely in order to make delivery in satisfaction of a sale of
    Common Stock by the Holder (the "Sold Shares"), which delivery such Holder
    anticipated to make using the Common Stock issuable upon conversion
    (a "Buy-In"), the Company shall pay to the Holder, in addition to any
    other amounts due to the Holder pursuant to this Note, and not in lieu
    thereof, the Buy-In Adjustment Amount (as defined below).  The "Buy In
    Adjustment Amount" is the amount equal to the excess, if any, of (x) the
    Holder's total purchase price (including brokerage commissions, if any)
    for the Covering Shares over (y) the net proceeds (after brokerage
    commissions, if any) received by the Holder from the sale of the Sold
    Shares.  The Company shall pay the Buy-In Adjustment Amount to the Holder
    in immediately available funds within five (5) business days of written
    demand by the Holder.  By way of illustration and not in limitation of
    the foregoing, if the Holder purchases shares of Common Stock having a
    total purchase price (including brokerage commissions) of $11,000 to
    cover a Buy-In with respect to shares of Common Stock it sold for net
    proceeds of $10,000, the Buy-In Adjustment Amount which the Company
    will be required to pay to the Holder will be $1,000.

(i) The Company shall defend, protect, indemnify and hold harmless the
    Holder and all of its shareholders, officers, directors, employees,
    counsel, and direct or indirect investors and any of the foregoing
    person's agents or other representatives (including, without limitation,
    those retained in connection with the transactions contemplated by this
    Agreement, collectively, the "Article 5.3(i) Indemnitees") from and
    against any and all actions, causes of action, suits, claims, losses,
    costs, penalties, fees, liabilities and damages, and expenses in
    connection therewith (irrespective of whether any such Article 5.3(i)
    Indemnitee is a party to the action for which indemnification hereunder
    is sought), and including reasonable attorneys' fees and disbursements
    (the "Article 5.3(i) Indemnified Liabilities"), incurred by any
    Article 5.3(i) Indemnitee as a result of, or arising out of, or
    relating to (i) any misrepresentation or breach of any representation
    or warranty made by the Company in this Note or any other certificate,
    instrument or document contemplated hereby or thereby, (ii) any breach
    of any covenant, agreement or obligation of the Company contained in
    this Note or any other certificate, instrument, or document contemplated
    hereby or thereby, (iii) any cause of action, suit, or claim brought or
    made against such Article 5.3(i) Indemnitee by a third party and arising
    out of or resulting from the execution, delivery, performance, or
    enforcement of the Note or any other certificate, instrument, or document
    contemplated hereby or thereby, (iv) any transaction financed or to be
    financed in whole or in part, directly or indirectly, with the proceeds
    of the issuance of the Common Stock underlying the Note, or (v) the
    status of the Holder or holder of the Note as an investor in the Company,
    except insofar as any such misrepresentation, breach or any untrue
    statement, alleged untrue statement, omission, or alleged omission is
    made in reliance upon and in conformity with written information
    furnished to the Company by the Holder which is specifically intended
    by the Holder to be relied upon by the Company, including for use in
    the preparation of any such registration statement, preliminary
    prospectus, or prospectus, or is based on illegal trading of the Common
    Stock by the Holder. To the extent that the foregoing undertaking by the
    Company may be unenforceable for any reason, the Company shall make the
    maximum contribution to the payment and satisfaction of each of the
    Indemnified Liabilities that is permissible under applicable law.  The
    indemnity provisions contained herein shall be in addition to any cause
    of action or similar rights the Holder may have, and any liabilities the
    Holder may be subject to.

<PAGE>

Article 6.  Mergers

    The Company shall not consolidate or merge into, or transfer all or
    substantially all of its assets to, any person, unless such person
    assumes in writing the obligations of the Company under this Note and
    immediately after such transaction no Event of Default exists.  Any
    reference herein to the Company shall refer to such surviving or
    transferee corporation and the obligations of the Company shall terminate
    upon such written assumption.  Failure to do so will constitute an Event
    of Default under this Note and the Holder may immediately seek to take
    actions as described under Article 5 of this Note.

Article 7.  Notices

    Any notices, consents, waivers or other communications required or
    permitted to be given under the terms of this Note must be in writing
    and will be deemed to have been delivered (i) upon receipt, when
    delivered personally, (ii) upon receipt, when sent by facsimile (provided
    a confirmation of transmission is mechanically or electronically generated
    and kept on file by the sending party), or (iii) one (1) day after deposit
    with a nationally recognized overnight delivery service, in each case
    properly addressed to the party to receive the same.

Article 8.  Time

    Where this Note authorizes or requires the payment of money or the
    performance of a condition or obligation on a Saturday or Sunday or a
    holiday in which the United States Stock Markets ("US Markets") are
    closed ("Holiday"), or authorizes or requires the payment of money or the
    performance of a condition or obligation within, before or after a period
    of time computed from a certain date, and such period of time ends on a
    Saturday or a Sunday or a Holiday, such payment may be made or condition
    or obligation performed on the next succeeding business day, and if the
    period ends at a specified hour, such payment may be made or condition
    performed, at or before the same hour of such next succeeding business
    day, with the same force and effect as if made or performed in accordance
    with the terms of this Note.  A "business day" shall mean a day on which
    the US Markets are open for a full day or half day of trading.

Article 9.  No Assignment

    This Note shall not be assigned.

Article 10.  Rules of Construction

    In this Note, unless the context otherwise requires, words in the singular
    number include the plural, and in the plural include the singular, and
    words of the masculine gender include the feminine and the neuter, and
    when the tense so indicates, words of the neuter gender may refer to any
    gender.  The numbers and titles of sections contained in this Note are
    inserted for convenience of reference only, and they neither form a part
    of this Note nor are they to be used in the construction or interpretation
    hereof.  Wherever, in this Note, a determination of the Company is required
    or allowed, such determination shall be made by a majority of the Board of
    Directors of the Company and, if it is made in good faith, it shall be
    conclusive and binding upon the Company and the Holder.

<PAGE>

Article 11.  Governing Law

    The validity, terms, performance and enforcement of this Note shall be
    governed and construed by the provisions hereof and in accordance with the
    laws of the State of Delaware applicable to agreements that are negotiated,
    executed, delivered and performed solely in the State of Delaware.

Article 12.  Waiver

    The Holder's delay or failure at any time or times hereafter to require
    strict performance by Company of any undertakings, agreements or covenants
    shall not waiver, affect, or diminish any right of the Holder under this
    Note to demand strict compliance and performance herewith. Any waiver by
    the Holder of any Event of Default shall not waive or affect any other
    Event of Default, whether such Event of Default is prior or subsequent
    thereto and whether of the same or a different type.  None of the
    undertakings, agreements and covenants of the Company contained in this
    Note, and no Event of Default, shall be deemed to have been waived by the
    Holder, nor may this Note be amended, changed or modified, unless such
    waiver, amendment, change or modification is evidenced by an instrument
    in writing specifying such waiver, amendment, change or modification and
    signed by the Holder.

Article 13.  Senior Obligation

    The Company shall cause this Note and all other existing Notes with the
    Holder ("Holder's Debt") to be senior in right of payment to all other
    indebtedness of the Company.

Article 14.  Miscellaneous

(a) All pronouns and any variations thereof used herein shall be deemed to
    refer to the masculine, feminine, impersonal, singular or plural, as the
    identity of the person or persons may require.

(b) Neither this Note nor any provision hereof shall be waived, modified,
    changed, discharged, terminated, revoked or canceled, except by an
    instrument in writing signed by the party effecting the same against whom
    any change, discharge or termination is sought.

(c) This Note may be executed in two or more counterparts, all of which taken
    together shall constitute one instrument.  Execution and delivery of this
    Note by exchange of facsimile copies bearing the facsimile signature of a
    party shall constitute a valid and binding execution and delivery of this
    Note by such party.  Such facsimile copies shall constitute enforceable
    original documents.

(d) This Note represents the FINAL AGREEMENT between the Company and the
    Holder and may not be contradicted by evidence of prior, contemporaneous,
    or subsequent oral agreements of the parties, there are no unwritten oral
    agreements among the parties.

 <PAGE>

(e) The execution, delivery and performance of this Note by the Company and
    the consummation by the Company of the transactions contemplated hereby and
    thereby will not (i) result in a violation of the Certificate of
    Incorporation, any Certificate of Designations, Preferences and Rights of
    any outstanding series of preferred stock of the Company or the By-laws,
    or (ii) conflict with, or constitute a material default (or an event which
    with notice or lapse of time or both would become a material default)
    under, or give to others any rights of termination, amendment, acceleration
    or cancellation of, any material agreement, contract, indenture mortgage,
    indebtedness or instrument to which the Company or any of its Subsidiaries
    is a party, or result in a violation of any law, rule, regulation, order,
    judgment or decree, including United States federal and state securities
    laws and regulations and the rules and regulations of the principal
    securities exchange or trading market on which the Common Stock is traded
    or listed (the "Principal Market"), applicable to the Company or any of
    its Subsidiaries or by which any property or asset of the Company or any
    of its Subsidiaries is bound or affected.

    Any misrepresentations shall be considered a breach of contract and
    Default under this Note and the Holder may seek to take actions as
    described under Article 5 of this Note.

                            [signature page follows]

IN WITNESS WHEREOF, the Company has duly executed this Note as of the Issuance
Date first written above.

VITAL PRODUCTS, INC.                    The Cellular Connection Ltd.

By: /s/Michael Levine                   By: /s/Stuart Turk
---------------------                   --------------------
Name:  Michael Levine                   Name: Stuart Turk
Title:    CEO                           Title:   President

<PAGE>

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