ADDENDUM TO CONVERTIBLE DEBENTURE AND
WARRANT TO PURCHASE COMMON STOCK
This Addendum to Convertible Debenture and Warrant to Purchase Common Stock
("Addendum") is entered into as of the 27th day of April 2005 by and between
Peabodys Coffee, Inc., a Nevada corporation ("Peabodys"), and La Jolla Cove
Investors, Inc., a California corporation ("LJCI").
WHEREAS, Peabodys and LJCI are parties to that certain 7 3/4 % Convertible
Debenture dated as of December 5, 2003 ("Debenture"); and
WHEREAS, Peabodys and LJCI are parties to that certain Warrant to Purchase
Common Stock dated as of December 5, 2003 ("Warrant"); and
WHEREAS, the parties desire to amend the Debenture and Warrant in certain
respects.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Peabodys and LJCI agree as
follows:
1. All terms used herein and not otherwise defined herein shall have the
definitions set forth in the Debenture.
2. Under section 2.5 of the Debenture, Peabodys has the right to redeem
the Debenture under certain circumstances. In addition, LJCI may be
advancing additional funds to Peabodys that may be treated as Warrant
prepayments. It is hereby agreed that Peabodys shall only be able to
redeem the Principal Amount of the Debenture that does not have a
Warrant prepayment associated with it.
3. When the Debenture Principal Amount declines below $50,000, LJCI shall
be permitted, for a period of 60 days, to add up to $250,000 of
additional principal to the Debenture, on the same terms and conditions
as the Debenture.
4. For all Common Shares obtained under registration statements filed
after December 9, 2004, the percentage Conversion Price set forth in
section 3.1(a) of the Debenture shall be 65% and the 20 Trading Day
period set forth in section 3.1(a) shall be increased to 30 Trading
Days. At LJCI's option, any monetary penalties due LJCI under the
Debenture may be added to the principal balance of the Debenture.
5. On or about February 8, 2005, LJCI advanced $30,000 to, or on behalf
of, Peabodys for various payables. Such funds shall represent a
prepayment towards the future exercise of Warrant Shares under the
Warrant. The timing of the application of the prepaid funds shall be at
LJCI's sole discretion.
6. On the effective date of the next SB-2 registration statement
containing Common Shares for LJCI, LJCI will advance $25,000 to
Xxxxxxxxx & Xxxxx on behalf of Peabodys. Such funds shall represent a
prepayment towards the future exercise of Warrant Shares under the
Warrant. The timing of the application of the prepaid funds shall be at
LJCI's sole discretion.
7. Except as specifically amended herein, all other terms and conditions
of the Debenture and Warrant shall remain in full force and effect.
IN WITNESS WHEREOF, Peabodys and LJCI have caused this Addendum to be signed by
its duly authorized officers on the date first set forth above.
Peabodys Coffee, Inc. La Jolla Cove Investors, Inc.
By: __________________________ By: __________________________
Name: _______________________ Name: ________________________
Title: ________________________ Title: _________________________
The undersigned personally guarantees repayment of all amounts advanced by LJCI
to or on behalf of Peabodys after November 15, 2004.
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Xxxx X. Xxxxxxx
