Document:

Exhibit 10.9

 

Note: Double underline denotes additions. Strikethrough denotes deletion.

 

THE WARRANT REPRESENTED HEREBY AND THE COMMON
STOCK OR OTHER SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR THE COMMON STOCK OR OTHER SECURITIES ISSUABLE
UPON THE EXERCISE HEREOF NOR ANY INTEREST THEREIN MAY BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SUCH ACT AND SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER.

 

 

Warrant No. PS-1 

Dated:  October 24, 2011

Amended: May 31, 2012

 

 

COMMON STOCK WARRANT

COUPON EXPRESS, INC.

THIS IS TO CERTIFY THAT
for value received, [___________], a [_______________] (the “Holder”), is entitled, subject to the terms
and conditions set forth below, to purchase from Coupon Express, Inc., a Nevada corporation (the “Company”),
_______________ (_____) shares (the “Warrant Shares”) of common stock, par value $0.001 per share, of
the Company (“Common Stock”), at a price per share equal to $0.04 (the “Exercise Price”).
The number of Warrant Shares purchasable upon exercise of this warrant (this “Warrant”) and the Exercise
Price shall be subject to adjustment from time to time as described herein. This Warrant is being issued in connection with the
purchase of Cumulative Convertible Senior Notes pursuant to that certain Cumulative Convertible Senior Note and Warrant Purchase
Agreement, dated as of October 21, 2011 (“Purchase Agreement”), by and among the Company, the Holder
and the other parties thereto.

                                         
1.                       
Manner of Exercise: Expiration Date.

(a)
              
This Warrant shall be exercisable in accordance with this Section 1 and Section 2 below from and after the date
hereof until 5:00 p.m., New York time on October 24, 2016 (the “Expiration Date”). The Holder may, at
any time and from time to time to and until the Expiration Date, exercise this Warrant, for all or any part of the Warrant Shares
purchasable at such time hereunder, by delivering to the Company at its principal office on any business day (i) a written notice
of the Holder's election to exercise this Warrant (an “Exercise Notice”), which Exercise Notice shall
be irrevocable and shall specify the number of Warrant Shares to be purchased, (ii) payment of the aggregate Exercise Price for
the applicable number of Warrant Shares to be purchased by check or wire transfer of immediately available funds to an account
then specified by the Company and (iii) this Warrant (the date on which the foregoing items are delivered to the Company being
hereinafter referred to as the “Exercise Date”). Such Exercise Notice shall be in the form of Annex A
hereto, duly executed by the Holder or its duly authorized agent.

(b)
              
Upon receipt of the items specified in Section 1(a), the Company shall, as promptly as practicable, and in any event
within five (5) business days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder
or its designee a certificate or certificates representing the aggregate number of full Warrant Shares issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereafter provided. The Company understands that a delay in the delivery
of the Warrant Shares could result in economic loss to the Holder. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder or its designee shall be deemed to have become
a Holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(c)
              
If this Warrant is exercised in part, the Company shall, at its expense, at the time of delivery of the certificate
or certificates representing the Warrant Shares being issued, deliver to the Holder a new Warrant evidencing the rights of the
Holder to purchase the unpurchased Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical
to this Warrant.

(d)
              
The Company shall pay any and all issue and other taxes (other than income taxes) that may be payable in respect
of the issuance of this Warrant or any issuance or delivery of Warrant Shares on exercise of this Warrant; provided, however, that
the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Holder of record of this
Warrant in connection with any such exercise.

(e)              
The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of issuance and delivery on the exercise of this Warrant, all shares of Common Stock as shall from time
to time be issuable on the exercise of this Warrant, and, upon such issuance, all of such shares of Common Stock will be validly
issued, fully paid and non-assessable. If at any time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect such exercise of this Warrant for the maximum number of shares of Common Stock then issuable upon exercise
hereunder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation,
obtaining the requisite stockholder approval of any necessary amendment to the Company's Certificate of Incorporation (as amended
from time to time). The Company will not at any time close its stock transfer books in a manner which prevents the timely exercise
of this Warrant.

(f)                
No fractional shares shall be issued upon the exercise of this Warrant. All shares of Common Stock (including fractions
thereof) issuable upon exercise of this Warrant as to each share of Common Stock shall be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional shares. If, after the aforementioned aggregation, the exercise
of this Warrant would result in the issuance of a fraction of a share of Common Stock, the Company shall, in lieu of issuing any
fractional share, pay the Holder a 

2

sum of cash equal to the Fair Market Value (as defined below) of such fraction on the Exercise
Date.

                                         
2.                       
Net Exercise. Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common
Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice
in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

			
	X

	=

	Y (A-B)

A

			
	Where X

	=

	the number of Warrant Shares to be issued to the
Holder

	            Y

	=

	the number of Warrant Shares purchasable under this
Warrant or, if only a portion of this
Warrant is being exercised, the portion of this Warrant being exercised (at the date of such calculation)

	            A

	=

	the Fair Market Value of one share of Common Stock
(at the date of such calculation)

	            B

	=

	Exercise Price (as adjusted to the date of such
calculation)

For purposes of the above calculation,
the “Fair Market Value” of one share of Common Stock shall be:

(a)
              
the average daily closing Market Price (as defined below) during the period of the most recent 10 trading days, ending
on the last business day before the effective date of exercise of this Warrant, on which the national securities exchanges or over-the-counter
market in which the shares of Common Stock is quoted were open for trading. If the Common Stock is traded on a national securities
exchange or admitted to unlisted trading privileges on such an exchange, or is quoted on the NASDAQ Global Market, the NASDAQ Capital
Market, the OTC Bulletin Board or by OTC Markets Group, Inc. (each, a ”Trading Market”), the Market Price
as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the applicable Trading Market
on such date or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange
or on the applicable Trading Market (the “Market Price”); or

(b)
              
if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted on any
Trading Market, the Fair Market Value shall be determined in good faith by the mutual agreement of the Holder and the Board of
Directors of the Company. In the event of any dispute between the Holder and the Company regarding the determination of Fair Market
Value, at the option of the Holder, the Company shall engage a consulting firm or 

3

investment banking firm selected by the
Holder
to prepare an independent appraisal of the Fair Market Value, which appraisal shall be deemed for purposes hereof to be a conclusive,
final and binding determination of the Fair Market Value. The expenses of such appraisal shall be borne by the Company.

                                         
3.                       
Adjustments. Subject and pursuant to the provisions of this Section 3, the Exercise Price and number of Warrant Shares
subject to this Warrant shall be subject to adjustment from time to time as set forth hereinafter.

(a)
              
If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make
a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number
of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its
outstanding shares of Common Stock any shares of its capital stock, then the number of Warrant Shares purchasable upon exercise
of this Warrant and the Exercise Price in effect immediately prior to the date upon which such change shall become effective, shall
be adjusted by the Company so that the Holder thereafter exercising this Warrant shall be entitled to receive the number of shares
of Common Stock or other capital stock which the Holder would have received if this Warrant had been exercised immediately prior
to such event upon payment of a Exercise Price that has been adjusted to reflect a fair allocation of the economics of such event
to the Holder. Such adjustments shall be made successively whenever any event listed above shall occur.

(b)
              
If any capital reorganization, reclassification of the capital stock of the Company (other than a transaction covered
in Section 3(a) above), consolidation or merger of the Company with another corporation in which the Company is not the survivor
(or if it is the survivor, the shares of Common Stock outstanding prior to such event are converted into cash, securities or other
property in connection therewith), or sale, transfer or other disposition of all or substantially all of the Company’s assets
to another individual, corporation, partnership, trust, limited liability company, association,
joint venture or other entity or group of any kind (each, a "Person") shall be effected, then, as
a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of this
Warrant, such cash, securities or other property as would have been issuable or payable with respect to or in exchange for a number
of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of this Warrant, had such
reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case
appropriate provision shall be made with respect to the rights and interests of each Holder to the end that the provisions hereof
(including, without limitation, provision for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent
as may be practicable in relation to any securities or property thereafter deliverable upon the exercise hereof. The Company shall
not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation
thereof the successor corporation (if 

4

other than the Company) resulting from
such consolidation or merger, or the Person purchasing
or otherwise acquiring such assets or other appropriate Person shall assume by written instrument the obligation to deliver to
the Holder, at the last address of the Holder appearing on the books of the Company, such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to purchase, and the other obligations under this Warrant.
The provisions of this Section 3(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.

(c)
              
In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including
any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 3(a)), or subscription rights or warrants, the Exercise Price to be
in effect after such payment date shall be determined by multiplying the Exercise Price in effect immediately prior to such payment
date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market
Price per share of Common Stock immediately prior to such payment date, less the fair market value (as determined below) of said
assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall
be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately
prior to such payment date. The fair market value of said assets or evidences of indebtedness so distributed shall be determined
in good faith by the mutual agreement of the Holder and the Board of Directors of the Company. In the event that the Board of Directors
of the Company and the Holder are unable to agree upon the fair market value in respect of this Section 3(c), the Company and the
Holder shall jointly select an appraiser, who is experienced in such matters. The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company and the Holder. Such adjustment shall be made
successively whenever such a payment date is fixed.

(d)
              
An adjustment to the Exercise Price shall become effective immediately after the payment date in the case of each
dividend or distribution and immediately after the effective date of each other event which requires an adjustment.

(e)
              
In the event that, as a result of an adjustment made pursuant to this Section 3, the Holder shall become entitled
to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable
upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Warrant Shares contained in this Warrant.

(f)
                
Except as provided in Section 3(g), if and whenever the Company shall issue or sell, or is, in accordance with any
of Sections 3(f)(i) through 3(f)(vi), deemed to have issued or sold, any shares of Common Stock for no 

5

consideration or for a consideration
per share less than the lesser of (i) the Trigger Issuance Price (as defined below) in effect immediately prior to the time of
such issue or sale and (ii) $0.02, then and in each such case (a "Trigger Issuance") the then-existing
Exercise Price, shall be reduced, as of the close of business on the effective date of the Trigger Issuance, by multiplying the
then-existing Exercise Price by a ratio where the numerator is the Net Consideration Per Share (as defined below), if any, with
respect to such Trigger Issuance and the denominator is the lesser of (i) the Trigger Issuance Price in effect immediately prior
to the time of such Trigger Issuance and (ii) $0.02; provided, however, that in no event shall the Exercise Price after giving
effect to such Trigger Issuance be greater than the Exercise Price in effect prior to such Trigger Issuance. For example, in the
case of a Trigger Issuance with consideration of $.01 per share and a then-existing Exercise Price of $.04, the Exercise Price
would be reduced to $.02 ((.01/.02) X .04). “Trigger Issuance Price” shall mean the lesser of (i) the
Exercise Price in effect immediately prior to any Trigger Issuance, and (ii) the lowest Net Consideration Per Share from all Trigger
Issuances from and after the issuance date of this Warrant.

For purposes
of this Section 3(f), the following Sections 3(f)(i) to (f)(vi) shall also be applicable:

i.
                       
Issuances of Warrants, Options and Rights to Common Stock or Convertible Securities.

1.
     
For the purposes of this Section 3(f), the issuance of any warrants, options, subscription or purchase rights with respect
to shares of Common Stock and the issuance of securities convertible into or exchangeable for shares of Common Stock, or the issuance
of any warrants, options, subscription or purchase rights with respect to such convertible or exchangeable securities (collectively,
"Common Stock Equivalents"), shall be deemed an issuance of Common Stock.

2.
     
Any obligation, agreement or undertaking to issue Common Stock Equivalents at any time in the future shall be deemed to
be an issuance at the time of such obligation, agreement or undertaking is made or arises.

3.
     
No adjustment of the Exercise Price shall be made under this Section 3(f)(i) upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise, conversion or exchange of any Common Stock Equivalents if any adjustment shall previously
have been made upon the issuance of such Common Stock Equivalents as above provided. No adjustment shall be made upon exercise,
conversion or exchange of any Common Stock Equivalents if no adjustment was required by the initial issuance of the Common Stock
Equivalents.

6

ii.
                  
"Net Consideration Per Share" shall mean (i) with in case of an issuance of Common Stock, the amount
equal to the total amount of consideration, if any, received by the Company for such issuance divided by the aggregate number of
shares of Common Stock issued, and (ii) in the case of an issuance of Common Stock Equivalents, the total amount of consideration,
if any, received by the Company for such issuance plus the minimum amount of consideration, if any, payable to the Company upon
exercise, conversion or exchange thereof, divided by the aggregate number of shares of Common Stock that would be issued if all
such Common Stock Equivalents were exercised, exchanged or converted for Common Stock. The Net Consideration Per Share which may
be received by the Company shall be determined in each instance as of the date of issuance of Common Stock Equivalents, without
giving effect to any possible future upward price adjustments or rate adjustments which may be applicable with respect to such
Common Stock Equivalents.

iii.
                    
Adjustments for Cancellation or Expiration of Common Stock Equivalents. Any adjustment of the Exercise Price with
respect to this paragraph which relates to Common Stock Equivalents shall be disregarded if, as and when all of such Common Stock
Equivalents expire or are canceled without being exercised, so that the Exercise Price immediately upon such cancellation or expiration
shall be equal to the Exercise Price in effect at the time of the issuance of the expired or canceled Common Stock Equivalents,
with such additional adjustments as would have been made to the Exercise Price had the expired or canceled Common Stock Equivalents
not been issued.

iv.
                   
Should the Net Consideration Per Share of any Common Stock Equivalents be decreased from time to time, then, upon the effectiveness
of each such change, the Exercise Price will be that which would have been obtained (y) had the adjustments made upon the issuance
of such Common Stock Equivalents been made upon the basis of the actual Net Consideration Per Share of such securities, and (z)
had adjustments made to the Exercise Price since the date of issuance of such Common Stock Equivalents been made to such Exercise
Price as adjusted pursuant to (y) above.

v.
                     
Stock Dividends for Holders of Capital Stock other than Common Stock. In the event that the Company shall make or
issue, or shall fix a record date for the determination of holders of any capital stock of the Company (other than Common Stock)
entitled to receive a dividend or other distribution payable in Common Stock or Common Stock Equivalents, then such Common Stock
or Common Stock Equivalents issued in payment of such dividend shall be deemed to have been issued without consideration.

vi.
                   
Consideration other than Cash. For purposes of this Section 3(f), if a part or all of the consideration received
by the Company in connection with the issuance of shares of the Common Stock or Common Stock Equivalents consists of property other
than cash, such consideration shall be deemed to have a fair market value as is

7

reasonably determined in good faith by the Board
of Directors and holders of Warrants representing a majority of the aggregate Common Stock issuable upon the exercise of all
then outstanding Warrants issued under the Purchase Agreement. Holder. In the event of any dispute between
the such Holder holders and the Board of Directors regarding the determination
of fair market value, at the option of the such Holder holders, the Company shall
engage a consulting firm or investment banking firm selected by the Holder to prepare an independent appraisal of the fair market
value of such property to be distributed, which appraisal shall be deemed for purposes hereof to be a conclusive, final and binding
determination of the fair market value of such property. The expenses of such appraisal shall be borne by the Company.

(g)
              
Exceptions. Section 3(f) shall not apply to, and the Company shall not be required to make any adjustment
to the Exercise Price in connection with the issuance of (wu) up to an aggregate amount of twenty million
(20,000,000) shares of Common Stock, or options exercisable therefor (such number to be equitably adjusted in the event of stock
splits, stock dividends, recapitalizations or other similar events) issued to officers, directors, consultants or employees of
the Company or any subsidiary in connection with services performed or to be performed, pursuant to the Company’s 2011 Non-Qualified
Stock Option Plan or any other qualified or non-qualified stock option plan or agreement, stock purchase plan or agreement, employee
stock ownership plan, consulting agreement or other arrangements, agreements or plans approved by a majority of the Board of Directors
and (i) the holders of a majority of the outstanding shares of Series A Convertible Preferred Stock, par value $.0001 per
share or (ii) if a majority of the outstanding aggregate principal amount of Senior Notes (as defined in the Amended Certificate
of Designations filed on or about May 30, 2012) shall not have been converted into Series A Preferred Stock at such time, a majority
of the then outstanding aggregate principal balance of the Senior Notes; (xv) any shares of Common
Stock issuable upon conversion, exercise or exchange of Common Stock Equivalents that are issued and outstanding as date of the
Purchase Agreement; provided such Common Stock Equivalents are not amended after the date of the Purchase Agreement; (yw)
any shares issuable in accordance with the terms of the (i) Yellow Box Master Lease Agreement dated as of June 17, 2011; (ii)
SB Communications, Inc. Consulting Agreement dated as of October 5, 2009; (x) one million four hundred thousand (1,400,000)
shares of Common Stock for issuance as payment of interest on notes outstanding as of October 24, 2011; (y) any Common Stock, Common
Stock Equivalents or other securities issued or issuable under the Transaction Documents (as defined in the Purchase Agreement
or the Cumulative Convertible Senior Note and Warrant Purchase Agreement dated as of May 31, 2012; and (z) any of the circumstances
in which an adjustment is made under Sections 3(a)-3(c).

(h)
              
Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of
entitling them (i) to receive a dividend or other distribution payable in Common Stock or Common Stock Equivalents, or (ii) to
subscribe for or purchase Common Stock or Common Stock Equivalents, then such record date shall be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other

8

distribution or the date of the granting of such right of subscription or purchase, as the case may be.

(i)
                 
Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, if any, and the disposition of any
such shares (other than the cancellation or retirement thereof) shall be considered an issue or sale of Common Stock for the purpose
of Section 3(f).

(j)
                 
Upon any adjustment to the Exercise Price pursuant to Section 3(f), the number of Warrant Shares purchasable hereunder
shall be adjusted by multiplying such number of Warrant Shares by a fraction, the numerator of which shall be the Exercise Price
in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately thereafter.

(k)
               
No Avoidance. The Company shall not, by amendment of its Certificate of Incorporation, By-Laws or other organizational
documents, or through any reorganization, transfer of assets, consolidation, merger, dissolution, sale of securities or other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Section
3 by the Company, but shall at all times in good faith assist in the carrying out of all provisions of this Section 3. Without
limiting the generality of the foregoing, the Company shall not consolidate with or merge into any other Person or permit any such
Person to consolidate with or merge into the Company (if the Company is not the surviving Person) or transfer all or substantially
all of the assets of the Company to another Person, unless such other Person shall expressly assume in writing and will be bound
by all of the terms of this Warrant, including the provisions of Section 3(b). If any event occurs as to which the other provisions
of this Section 3 are not strictly applicable or, if strictly applicable, would not fairly protect the rights of the Holder in
accordance with the essential intent and principles of this Warrant, then the Board of Directors shall make an adjustment in the
provisions of this Warrant, in accordance with such essential intent and principles, so as to protect such rights.

(l)
                 
The Company acknowledges that the Holder has acquired the Warrant in reliance on a pre-investment capitalization
of 456,344,941 shares (the “Baseline Shares”) of Common Stock outstanding, on a fully diluted and as converted and
exercised basis, as of the date of the Purchase Agreement. The Company has undertaken to obtain waivers of the application of the
Anti-Dilution Adjustments (as defined below) from the holders of various instruments previously issued that contain certain “weighted
average ratchet” or “full ratchet” anti-dilution adjustments (the “Anti-Dilution Adjustments”).
The Corporation agrees that if, on the date which is 90 days after the closing of those transactions contemplated by the
Transaction Documents (as defined in the Purchase Agreement) on or before September 30, 2012 (the “Measurement
Date”) the total number of shares of Common Stock issued or issuable upon conversion or exercise of any Common Stock Equivalents
outstanding immediately prior but after giving effect to the transactions contemplated by the Purchase Agreement is, or becomes,
as a result of any issuances of Common Stock or Common Stock Equivalents up to and through the date of the investments made pursuant
to the 

9

Transaction Documents, greater than the
Baseline Shares as a result of the operation of the Anti-Dilution Adjustments (such
number hereinafter referred to as the “Additional Common Stock Equivalent Shares”), the Exercise Price as of the date
of the Purchase Agreement (the “Initial Exercise Price”) shall be decreased, retroactive to the date of the Purchase
Agreement, to reflect the same valuation based on the adjusted amount of shares of Common Stock issued or issuable as follows:
The Initial Exercise Price shall be adjusted by multiplying (i) the Initial Exercise Price by (ii) the quotient of (A) 1 divided
by (B) the quotient of (x) the sum of 456,344,941 plus the total number of Additional Common Stock Equivalent Shares divided by
(y) 456,344,941. For example, given the .04 Initial Exercise Price, if the total number of shares of Common Stock issued or issuable
upon conversion or exercise of any Common Stock Equivalents, as of the measurement Date, exceeds the Baseline Shares by 30,000,000
shares, the Exercise Price would be adjusted to 0.03753 (.04 X (1/((456,344,941 + 30,000,000)/456,344,941). The adjustments, if
any, to the Initial Exercise Price pursuant to this Section 3(L) shall also apply to applications, if any, of the Anti-Dilution
Adjustments after the Measurement Date. Any adjustments otherwise provided for elsewhere in this Warrant shall be recalculated
using the decreased Initial Exercise Price, once the decrease (if any) has been determined (whether at the Measurement Date or
at any time thereafter and for as many times as applicable), so that such other adjustments (if any) will only be those that would
have been made had the decreased Initial Exercise Price been in effect on the date of the Purchase Agreement. In the case of any
adjustments to the Initial Exercise Price, the Baseline Trigger Issuance Price shall also be decreased to an amount equal to the
Initial Exercise Price as adjusted pursuant to this Section 3(l) multiplied by 0.5. For purposes of the Warrant “Baseline
Trigger Issuer in Price” shall mean $.02, as adjusted by this Section 3(l). In no event shall the number of Baseline Shares
be deemed to have been reduced as a result of any cancellation of Common Stock or Common Stock Equivalents or any other factors,
and all such Baseline Shares shall be deemed outstanding for purposes of the adjustments set forth herein.

                                         
4.                       
Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation
of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

                                         
5.                       
Notices to Holder. Upon the happening of any event requiring an adjustment of the Exercise Price, the Company shall
promptly give written notice thereof to the Holder at the address appearing in the records of the Company, stating the adjusted
Exercise Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. Failure to give such notice to the Holder or any defect therein
shall not affect the legality or validity of the event giving rise to, or the, subject adjustment.

                                         
6.                       
Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default
or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will
not be adequate, and that such terms may be specifically enforced by a decree for the specific 

10

performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or otherwise.

                                         
7.                       
Negotiability, Registration Rights, etc. This Warrant is issued upon the following terms, all of which the Holder
hereof by the taking hereof consents and agrees:

(a)
              
The Holder shall be entitled to pledge, mortgage, transfer, endorse or otherwise convey this Warrant (a “Transfer”),
in whole or in part, without the prior written consent of the Company. The Holder and its direct and indirect transferees may Transfer
all or any portion of this Warrant by surrendering this Warrant to the Company together with a completed assignment in the form
attached hereto as Annex B. Upon such surrender, the Company shall deliver a new Warrant or Warrants to the person or persons entitled
thereto and, if applicable, shall deliver to Holder a new Warrant evidencing the right of Holder to purchase the balance of the
Warrant Shares subject to purchase hereunder. The term “Holder” as used herein shall include any transferee to whom
this Warrant has been transferred in accordance with this Section 6.

(b)
              
Except as set forth in the Purchase Agreement, the Holder of this Warrant shall not be entitled to vote or to receive
dividends or to be deemed the Holder of Common Stock that may at any time be issuable upon exercise of this Warrant for any purpose
whatsoever, nor shall anything contained herein be construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance or reclassification of stock,
change of par value or change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive notice
of meetings, or to receive dividends or subscription rights, until the Holder shall have exercised this Warrant and been issued
shares of Common Stock in accordance with the provisions hereof.

(c)
              
Neither this Warrant nor any shares of Common Stock or other securities purchased pursuant to this Warrant have been
registered under the Act or applicable state securities laws. Therefore, the transfer or exchange of this Warrant or such shares
may be made only in a transaction permitted under the Act and applicable state securities laws or pursuant to an exemption therefrom.
Prior to registration, the certificates evidencing the Warrant Shares or other securities issued on the exercise of this Warrant
shall bear a legend to the effect that the shares evidenced by such certificates have not been registered under the 1933 Act and
applicable state securities laws. This Warrant, and the shares of Common Stock issuable upon exercise hereof, shall be “Registrable
Securities” pursuant to that certain Investors' Rights Agreement, dated the date hereof (the “Investors’
Rights Agreement”), by and among the Company and the parties thereto, as the same may be amended from time to time.

(d)
              
The initial Holder of this Warrant (and certain assignees thereof) is entitled to the benefit of such registration
rights in respect of the Warrant Shares as are set forth in the Investors’ Rights Agreement.

11

(e)
              
Until this Warrant is transferred on the books of the Company, the Company may treat the record Holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

                                         
8.                       
Investment Representations. The Holder represents and warrants to the Company that the representations and warranties
in Sections 3.2 through 3.8 of the Purchase Agreement made by the Holder as a Purchaser (as defined in the Purchase Agreement)
under the Purchase Agreement are true and correct as of the date hereof.

                                         
9.                       
Successors. All the covenants and provisions hereof by or for the benefit of the Holder shall bind and inure to the
benefit of its respective successors and permitted assigns and transferees hereunder and shall be binding upon any corporation
or other entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s
assets (to the extent provided in Section 3(b)), and all of the obligations of the Company relating to the Warrant Shares shall
survive the exercise, conversion and termination of this Warrant, and all of the covenants and agreements of the Company shall
inure to the benefit of the successors and assigns of the Holder. The Company will, at the time of the exercise of this Warrant,
in whole or in part, upon request of the Holder but at the Company’s expense, acknowledge in writing its continuing obligation
to the Holder in respect of any rights (including, without limitation, any right to registration of the Warrant Shares) to which
the Holder shall continue to be entitled after such exercise in accordance with this Warrant; provided that the failure of the
Holder to make any such request shall not affect the continuing obligation of the Company to the Holder hereof in respect of such
rights.

                                     
10.                       
Notices, etc. All notices and other communications from the Company to the Holder of this Warrant shall be in writing
and sent by facsimile or overnight courier or shall be mailed by first class registered or certified mail, postage prepaid, at
such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company
an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company. All
such notices and communications shall, when mailed, be effective when deposited in the mails and, when sent by facsimile or overnight
courier, delivered, be effective when received.

                                     
11.                       
Amendments. This Warrant and any term hereof may be changed, waived, discharged or terminated only with the consent
of holders of Warrants representing a majority of the aggregate Common Stock issuable upon the exercise of all then outstanding
Warrants issued under the Purchase Agreement.

                                     
12.                       
Governing Law. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State
of New York without regard to the laws that might be applied under any conflict of laws principles.

                                     
13.                       
Headings. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect
any of the terms hereof.

                                     
14.                       
Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability
of any other provision.

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to be executed by a duly authorized officer as of the date first written above.

12

COUPON EXPRESS, INC.

 

 

By:__________________________________

Name: Eric L. Kash

Title:  Chief Executive Officer

13

Annex A

 

Form of Exercise Notice

(To be executed if Holder desires to exercise
this Warrants evidenced by this Warrant Certificate).

TO COUPON EXPRESS, INC.

	ð	The
undersigned hereby (1) irrevocably elects to exercise this Warrant for ___________ Warrant Shares represented by this Warrant, (2) makes payment in full of the
aggregate Exercise Price for such Warrant Shares by enclosure of a certified or bank cashier's check therefor, upon condition that a new Warrant be issued for
the balance of the Warrant Shares remaining, if any, and (3) requests that a certificate for the shares of Common Stock purchased hereunder be issued in the
name of and delivered to:
	ð	
        The undersigned hereby elects to purchase _______ Warrant Shares,
        by net exercise of this Warrant pursuant to the provisions of Section 2 of this Warrant.

         

 

 

(Please print name and address)

The undersigned hereby reaffirms, as of
the date hereof, the investment representations in Section 8 of this Warrant.

If such number of Warrant Shares not be
all of the Warrant Shares evidenced by this Warrant Certificate, a new Warrant for the balance remaining of such Warrant Shares
shall be registered in the name of and delivered to:

 

 

 

 

(Please print name and address)

 

 

Dated:_________________________             Signature________________________________________________

 

14

Annex B

 

Form of Assignment

(To be executed by the registered Holder
if such Holder desires to transfer the attached Warrant.)

FOR VALUE
RECEIVED,        hereby
sells, assigns, and transfers unto a Warrant to purchase shares of common stock, par value $0.001 per share, of Coupon Express,
Inc., a Nevada corporation (the “Company”), together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint attorney to transfer such Warrant on the books of the Company, with full power of substitution.

The undersigned represents,
unless the sale of this Warrant has been registered under the Securities Act of 1933, as amended (the “Securities Act”),
that the undersigned is acquiring such Warrant for its own account for investment and not with a view to or for sale in connection
with any distribution thereof (except for any resale pursuant to a Registration Statement under the Securities Act).

 

Dated:_________________________             Signature________________________________________________

         

 

15exh_101.htm

Exhibit 10.1

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

This FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this “Fifth Amendment”) is made as of this 31 day of  May, 2012 by and between MGP INGREDIENTS, INC., a Kansas corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”).  This Fifth Amendment amends that certain Credit and Security Agreement between Borrower and Lender dated July 21, 2009, as amended by a Consent dated December 31, 2009, as amended by Consent dated February 2, 2010, as amended by a First Amendment to Credit and Security Agreement dated as of June 30, 2010, as amended by a Second Amendment to Credit and Security Agreement dated as of January 20, 2011, as amended by a Third Amendment to Credit and Security Agreement dated as of October 20, 2011, and as amended by an Assignment and Assumption of Note and Credit Agreement and Fourth Amendment to the Credit Agreement dated as of January 3, 2012 (as further modified, amended and restated, the “Credit Agreement”).

 

WHEREAS, Lender is willing to make certain modifications to the Credit Agreement, but only on the terms and subject to the conditions set forth herein.

 

NOW THEREFORE, in consideration of the Recitals, the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows:

 

1. Definitions and Rules of Interpretation.  Capitalized terms used but not otherwise defined herein, including the Preamble and the Recitals, shall have the meanings assigned to them in the Credit Agreement.  The rules of interpretation set forth in Section 1.2 of the Credit Agreement shall apply to this Fifth Amendment as if fully set forth herein.

 

2. Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

 

(a) The following definitions found in Section 1.1 of the Credit Agreement are  amended and restated as follows:

 

“Adjusted Net Income” means Net Income, adjusted by excluding from such calculation all cash and non-cash gains, losses, income and expenses related to the following:

 

(a)           Joint Ventures (provided, however, for purposes of this subsection (a), cash gains, losses, income and expenses shall not be excluded),

 

(b)           Swap Contracts and hedging activities,

 

(c)           Corporate reorganization and restructuring activities, or subsidiary start-up operations,

 

(d)           The sale, disposition, purchase or acquisition of assets, other than in the ordinary course of business,

 

All as approved by Lender, in its reasonable discretion.”

 

 “Borrowing Base” means at any time the lesser of:

 

(a)           The Maximum Line Amount; or

 

  

  

  

(b)           Subject to change from time to time in the Lender’s sole but reasonable discretion, the sum of:

 

	
  

	
(i)

	
The product of the Accounts Advance Rate times Eligible Accounts; plus

 

	
  

	
(ii)

	
The sum of (without duplication) (1) the product of the Eligible Starch Inventory Advance Rate times Eligible Starch Inventory, plus (2) the product of the Eligible Protein Inventory Advance Rate times Eligible Protein Inventory, plus (3) the product of the Eligible Flour Inventory Advance Rate times Eligible Flour Inventory, plus (4) the product of the Eligible Corn Inventory Advance Rate times Eligible Corn Inventory, plus (5) the product of the Eligible Food Grade Alcohol Inventory Advance Rate times Eligible Food Grade Alcohol Inventory plus (6) the product of the Eligible Fuel Grade Alcohol Inventory Advance Rate times Eligible Fuel Grade Alcohol Inventory plus (7) product of the Eligible Finished Goods Inventory Advance Rate times Eligible Finished Goods Inventory plus (8) the product of the applicable Eligible Barreled Alcohol Inventory Advance Rate times Eligible Barreled Alcohol Inventory that is less than two (2) years old, plus (9) the product of the applicable Eligible Barreled Alcohol Inventory Advance Rate times Eligible Barreled Alcohol Inventory that is two (2) years old or greater, plus (10) the product of Account Value at Market Advance Rate times Account Value at Market; provided Eligible Inventory which is Rail Inventory shall not exceed $3,000,000 at any time, and provided further that the sum of the products obtained in items (8) and (9) above shall not exceed $7,500,000 at any time.”

 

“Eligible Barreled Alcohol Inventory Advance Rate” means, as applied to Eligible Barreled Alcohol Inventory less than two (2) years old, fifty percent (50%), and as applied to Eligible Barreled Alcohol Inventory two (2) years old or greater, seventy percent (70%), or, in each case, such lesser rate as the Lender in its sole but reasonable discretion may deem appropriate from time to time.

 

“Fixed Charge Coverage Ratio” means the aggregate of Adjusted Net Income plus an amount which, in the determination of Net Income has been deducted for Interest Expense, income tax, depreciation, and amortization expenses, minus dividends, taxes (paid in cash), cash contributions to Joint Ventures (other than initial capital contributions and start-up expenses paid prior to or within two months after the inception of a Joint Venture entity), and Unfinanced Capital Expenditures, all divided by the aggregate of the Current Maturities of Long Term Debt, capitalized lease payments, and Interest Expense, all as determined by reference to the most recently prepared financial statements provided by Borrower in accordance with Sections 6.1(a) and (b). ”

 

(b) The following definitions is hereby deleted in its entirety from Section 1.1 of the Credit Agreement:

 

“Distilled Spirits Tax Reserve”

 

“Rail Reserve”

 

(c) Section 6.2 of the Credit Agreement is amended by amending and restating Section 6.2 as follows:

 

  

  

  

“Section 6.2                              Financial Covenants.

 

(a)           Balance Sheet Leverage Ratio.  The Borrower’s Balance Sheet Leverage Ratio shall not be greater than 1.75 to 1.0 as of each December 31, March 31, June 30, and September 30 through the term of this Agreement.

 

(b)           Adjusted Net Income.  The Borrower’s Adjusted Net Income shall not be less than the amounts set forth below for the period corresponding thereto:

	
Period

	
Adjusted Net Income

	
Fiscal Quarter ending June 30, 2012

	
$(1,000,000.00)

	
Fiscal Quarter ending September 30, 2012

	
$(500,000.00)

	
Fiscal Quarter ending December 31, 2012

	
$1.00

	
Twelve Month period ending March 31, 2013

	
$1.00

	
Twelve month period ending on each June 30 September 30, December 31, and March 31 thereafter

	
$1.00

	  	  

 

 (c)           Fixed Charge Coverage Ratio.  Beginning with the 12-month period ending on March 31, 2013, and as of  each subsequent June 30, September 30, December 31, and March 31 through the term of this Agreement, the Borrower’s Fixed Charge Coverage Ratio shall not be less than 2.00 to 1.00, for the 12-month period then ending.”

(d) The form of the Compliance Certificate attached as Exhibit B to the Credit Agreement is replaced with the form of Compliance Certificated attached as Exhibit A to this Fifth Amendment.

 

3. Conditions Precedent to Effectiveness of Fifth Amendment.  This Fifth Amendment shall not be effective unless and until each of the following conditions precedent shall have been satisfied or waived in the sole and absolute discretion of Lender:

 

(a) Lender Agent shall have received on or prior to the date hereof each of the following, each dated the date hereof unless otherwise agreed by Lender, in form and substance satisfactory to Lender:

 

(i) this Fifth Amendment duly executed by Borrower and Lender;

 

(ii) a copy of certificates attesting to the good standing of Borrower in each jurisdiction where any Constituent Document of Borrower is on file with any governmental authority and in any jurisdiction where Borrower is qualified to do business as a foreign entity or where such qualification is necessary (and, if appropriate in any such jurisdiction, related tax certificates);

 

  

  

  

(iii) a certificate of the secretary or other officer of Borrower in charge of maintaining books and records of Borrower certifying (A) that each officer of Borrower certified to Lender on the date hereof as authorized to execute and deliver any Loan Document continues to be so authorized, (B) that there have been no changes to the Constituent Documents of Borrower delivered on the date hereof and certified to Lender on the date hereof as complete and correct, and (C) as to the resolutions of Borrower’s board of directors or other appropriate governing body approving and authorizing the execution and delivery of this Fifth Amendment;

 

(iv) a certificate of a responsible officer of Borrower to the effect that, as of the date hereof, (A) each representation set forth in Article V of the Credit Agreement is true and accurate, and (B) the representations set forth in this Fifth Amendment are true and correct;

 

(v) such other documents and information as any Lender may reasonably request.

 

(b) The Borrower shall have paid to Lender all expenses and costs of Lender (including, without limitation, the commitment fee, and the attorney fees of counsel for Lender and expenses of counsel for Lender) in connection with the preparation, negotiation, execution and approval of this Fifth Amendment and any and all other Loan Documents, instruments and things contemplated hereby, whether or not such transactions are consummated, together with all other expenses and costs incurred by Lender chargeable to Borrower pursuant to the terms of the Credit Agreement which are unpaid at such time.

 

(c) The Borrower shall have received all consents and authorizations required pursuant to any material contractual obligation with any other Person and shall have obtained all permits of, and effected all notices to and filings with, any governmental authority, in each case, as may be necessary in connection with this Fifth Amendment.

 

4. Ratification; Estoppel; Reaffirmation.

 

(a)  Borrower does hereby reaffirm the Credit Agreement and other Loan Documents, and ratify the Credit Agreement and other Loan Documents, as amended, modified and supplemented, including, without limitation, the covenant set forth in Section 6.1(b) of the Credit Agreement which requires the Borrower to deliver monthly unaudited/internal balance sheet and statements of income and retained earnings of the Borrower as at the end of and for each month and for the year to date period.

 

(b) Borrower does hereby reaffirm to Lender each of the representations, warranties, covenants and agreements set forth in the Credit Agreement and the other Loan Documents with the same force and effect as if each were separately stated herein and made as of the date hereof to Lender.

 

  

  

  

(c) The Borrower further represents and warrants that, as of the date hereof, there are no counterclaims, defenses or offsets of any nature whatsoever to the Loans or any of the Loan Documents and that, as of the date hereof no default has occurred or exists under any of the Loan Documents.

 

(d) Borrower does hereby ratify, affirm, reaffirm, acknowledge, confirm and agree that the Credit Agreement and other Loan Documents, as amended, modified and supplemented hereby by this Fifth Amendment, represent the valid, enforceable and collectible obligations of Borrower.

 

5. Release.  Borrower does hereby release, remise, acquit and forever discharge Lender and Lender’s employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, successors and assigns, subsidiary corporations, parent corporation, and related corporate divisions (all of the foregoing hereinafter called the “Released Parties”), from any and all action and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter arising, for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to this Fifth Amendment, the Loan Agreement and the Other Agreements (all of the foregoing hereinafter called the “Released Matters”).  Borrower acknowledges that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters.  Borrower represents and warrants to Lender that it has not purported to transfer, assign or otherwise convey any right, title or interest of Borrower in any Released Matter to any other Person and that the foregoing constitutes a full and complete release of all Released Matters.

 

6. Governing Law.  The terms and conditions of this Fifth Amendment, the Credit Agreement and all of the other Loan Documents shall be governed by the applicable laws of the State of Kansas.

 

7. Counterparts.  This Fifth Amendment may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.  Counterpart signature pages to this Fifth Amendment transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

 

8. No Cancellation.  This Fifth Amendment evidences the same indebtedness as evidenced by the Credit Agreement and other Loan Documents (as modified hereby).  This Fifth Amendment is secured by the Collateral as provided in the Credit Agreement including all amendments and modifications thereto.  All future advances made to the Borrower or the Guarantors in the good faith judgment of the lender for the purpose of protecting Lender’s interests in the collateral will also be secured by this Fifth Amendment.  This Fifth Amendment is an extension, modification and amendment of the prior documents and the execution hereof does not evidence a cancellation of the indebtedness evidenced by the prior documents.

 

  

  

  

9. Entire Agreement.    The following notice is included in compliance with K.S.A. 16-117 and K.S.A. 16-118:

 

	
  

	
“THIS WRITTEN AGREEMENT IS THE FINAL EXPRESSION OF THE CREDIT AGREEMENT BETWEEN THE PARTIES HERETO AS THE SAME EXISTS TODAY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES HERETO.  THE FOLLOWING SPACE (WHICH THE PARTIES HERETO AGREE IS SUFFICIENT SPACE) IS PROVIDED FOR THE PLACEMENT OF NONSTANDARD TERMS, IF ANY (IF THERE ARE NO NONSTANDARD TERMS TO BE ADDED, STATE “NONE”):

NONE

BY SIGNING BELOW, THE PARTIES HERETO HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL CREDIT AGREEMENT BETWEEN THEMSELVES WITH RESPECT TO THE SUBJECT MATTER OF THIS WRITTEN CREDIT AGREEMENT.

10. ARBITRATION.  ANY DISPUTE ARISING OUT OF THIS FIFTH AMENDMENT SHALL BE SUBJECT TO AND GOVERNED BY THE ARBITRATION PROVISIONS LOCATED IN SECTION 8.16 OF THE CREDIT AGREEMENT, AS AMENDED BY THIS FIFTH AMENDMENT.

[Signatures follow on next page]

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Fifth Amendment as of the date first above written.

 

	
100 Commercial Street

Atchison, KS 66002

Telecopier:  (913) 360-5661

 

Attention:  Dick Larson

e-mail:  dick.larson@mgpingredients.com

	
MGP INGREDIENTS, INC.

a Kansas corporation

 

 

By:  /s/  Timothy W. Newkirk

Name: Timothy W. Newkirk

Its:  President

 

 

By: /s/  Don Tracy

Name:  Don Tracy

Its:  Chief Financial Officer

 

 

	
Wells Fargo Bank, National Association

7500 College Boulevard, Suite 200

Overland Park, KS 66210

Telecopier:  (913)234-2901

Attention:  Jeffrey Farrell

e-mail: Jeffrey.D.Farrell@wellsfargo.com

	
WELLS FARGO BANK,

   NATIONAL ASSOCIATION

 

 

By:  /s/  Kathleen Ground

Kathleen Gound, Vice President

  

  

  

EXHIBIT A

 

Compliance Certificate

 

(Attached)

 

 

 

 

 

 

  

  

  

COMPLIANCE CERTIFICATE

 

To:           Wells Fargo Bank, National Association

Date:           [___________________, 20____]

Subject:                      Financial Statements

 

In accordance with our Credit and Security Agreement dated July 21, 2009(as amended from time to time, the “Credit Agreement”), attached are the financial statements of MGP INGREDIENTS, INC., a Kansas corporation (the “Borrower”) dated [_________________, 20__ _](the “Reporting Date”) and the year-to-date period then ended (the “Current Financials”).  All terms used in this certificate have the meanings given in the Credit Agreement.

 

A. Preparation and Accuracy of Financial Statements.  I certify that the Current Financials have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly present the Borrower’s financial condition as of the Reporting Date.

 

B. Name of Borrower; Merger and Consolidation Related Issues.  I certify that:

 

(Check one)

 

	
o

	
The Borrower has not, since January 5, 2012, changed its name or jurisdiction of organization, nor has it consolidated or merged with another Person.

 

	

o

	
The Borrower has, since January 5, 2012, either changed its name or jurisdiction of organization, or both, or has consolidated or merged with another Person, which change, consolidation or merger:  was consented to in advance by Lender in writing, and/or  is more fully described in the statement of facts attached to this Certificate.

 

	
C.  

	
Events of Default.  I certify that:

 

(Check one)

 

	

o

	
I have no knowledge of the occurrence of a Default or an Event of Default under the Credit Agreement, except as previously reported to the Lender in writing.

 

	

o

	
I have knowledge of a Default or an Event of Default under the Credit Agreement not previously reported to the Lender in writing, as more fully described in the statement of facts attached to this Certificate, and further, I acknowledge that the Lender may under the terms of the Credit Agreement impose the Default Rate at any time during the resulting Default Period.

 

	
D.  

	
Litigation Matters.  I certify that:

 

(Check one)

 

	

o

	
I have no knowledge of any material adverse change to the litigation exposure of the Borrower or any of its Affiliates or of any Guarantor.

 

  

  

  

	

o

	
I have knowledge of material adverse changes to the litigation exposure of the Borrower or any of its Affiliates or of any Guarantor not previously disclosed in Schedule 5.7, as more fully described in the statement of facts attached to this Certificate.

 

	
E.  

	
Financial Covenants.  I further certify that:

 

(Check and complete each of the following)

 

1.           Maximum Balance Sheet Leverage Ratio.  Pursuant to Section 6.2(a) of the Credit Agreement, as of the Reporting Date, the Borrower’s Balance Sheet Leverage Ratio was [______ _]to 1.00, which o satisfies o does not satisfy the requirement that such ratio be not greater than 1.75 to 1.00.

2.           Minimum Adjusted Net Income.  Pursuant to Section 6.2(b) of the Credit Agreement, as of the Reporting Date, the Borrower’s Adjusted Net Income was [_____], which o satisfies o does not satisfy the requirement that the Adjusted Net Income be not less than $[____].

3.           Minimum Fixed Charge Coverage Ratio.  Pursuant to Section 6.2(c) of the Credit Agreement, as of the Reporting Date, the Borrower’s Fixed Charge Coverage Ratio was [______ _]to 1.00, which o satisfies o does not satisfy the requirement that such ratio be not less than 2.00 to 1.00.

4.           Rail Invoices.  The Borrower has paid all Rail Invoices as such Rail Invoices became due.

5.           Tax Due on Alcohol Inventory.  During the one month period ending on the Reporting Date, Borrower has produced [______________] proof gallons of food and fuel grade alcohol.  The Borrower has paid all taxes arising from the Borrower’s production or possession of Inventory which consists of food and fuel grade alcohol except for taxes in the amount of [$___________] which are set forth in detail on a schedule attached hereto.

Attached are statements of all relevant facts and computations in reasonable detail sufficient to evidence Borrower’s compliance with the financial covenants referred to above, which computations were made in accordance with GAAP.

 

MGP INGREDIENTS, INC.

a Kansas corporation

By: ____________________________

Its Chief Financial Officer

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