EXHIBIT 4.20
AMENDMENT NO. 2 TO CONVERTIBLE NOTE
THIS AMENDMENT NO. 2 TO CONVERTIBLE NOTE (the "Amendment No. 2") is entered
into by and between Java Centrale, Inc., a California corporation (the
"Borrower") and Legong Investments, N.V., a Netherlands Antilles corporation
("Legong"), to be effective as of December 31, 1997 (the "Effective Date").
RECITALS
A. On or about December 15, 1995 the Borrower borrowed Two Million Dollars
($2,000,000) from Legong pursuant to a Convertible Note and a Note Purchase
Agreement entered into as of December 15, 1995 and certain agreements related
thereto, including that certain Amendment No. 1 to the Note and a Security
Agreement dated as of June 10, 1997. (As used herein the term "Note" shall mean
the Convertible Note as amended by Amendment No. 1, and the term "Related
Agreements" shall refer to the Note Purchase Agreement and the Security
Agreement.)
B. The Note included provisions which allowed Legong to convert portions of
the principal balance thereof into shares of the Borrower's common stock,
pursuant to which Legong has from time to time so converted a total of One
Million Dollars ($1,000,000) in principal balance of the Note, leaving a
remaining principal balance, as of the date of this Amendment No. 2, of One
Million Dollars ($1,000,000.00).
C. The Note was amended on July 10, 1997 (Amendment No. 1). As so amended,
the Note was secured by the grant to Legong of a security interest in all of the
outstanding shares of Borrower's wholly-owned subsidiary Paradise Bakery, Inc.,
a Delaware corporation ("PBI").
D. The parties now wish to amend the Note again, in order to extend the due
date of the Note and for other purposes as shall appear herein.
E. The parties note that, effective as of December 19, 1997, Borrower
effected a one for ten reverse stock split of its outstanding shares of Common
Stock. Accordingly, all share and per share figures included herein have been
adjusted to reflect the said reverse stock split and are given on a "post split"
basis.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
and other conditions contained herein, and for other good and valuable
consideration the receipt and sufficiency of which is by all parties hereto
acknowledged and accepted, the parties do agree as follows:
1. CURRENT PRINCIPAL BALANCE OF THE NOTE; INCREASE IN PRINCIPAL BALANCE.
(a) As of the Effective Date of this Amendment No. 2, the current
principal
balance owing on the Note is agreed to be by all parties as One Million
Three Hundred Ninety Six Thousand Eight Hundred Twenty Nine Dollars
($1,396,829). This amount includes (a) the adjusted principal balance of
One Million Two Hundred Ninety Four Thousand Seven Hundred Dollars
($1,294,700) under the Note as amended by Amendment No. 1, (b) the Fifty
Two Thousand Seven Hundred Dollars ($52,000) adjustment fee which was
granted by the Company in connection with Amendment No. 1, (c) Fifty
Thousand One Hundred Twenty Nine Dollars ($50,129) in unpaid interest on
the Note through the Effective date hereof.
(b) In order to induce Legong to enter into this Amendment No. 2, and
as a material condition hereof, the Company hereby agrees to grant Legong
an increase of Fifty Two Thousand Dollars ($52,000) in the principal
balance of the Note described above, so that, immediately following the
Effective Date of this Amendment No. 2 the said principal balance shall
for all purposes be deemed to be One Million Four Hundred Forty Eight
Thousand Eight Hundred Twenty Nine Dollars ($1,448,829).
2. CHANGE OF MATURITY DATE. From and after the Effective Date of this
Amendment No. 2, the principal balance of the Note shall be due and payable on
April 1, 1998 (the "Adjusted Maturity Date").
3. WARRANTS.
(a) The Twenty Five Thousand (25,000) Warrants which were granted by
Borrower pursuant to Amendment No. 1 to the Note (the "Old Legong Warrants")
shall be repriced, so that the exercise price thereof shall be One Dollar
Eighty Cents ($1.80) per Old Legong Warrant Share.
(b) Simultaneously with the execution of this Amendment No. 2, Borrower
shall grant to Legong nontransferable stock purchase warrants representing
the right to purchase up to Twenty Thousand (20,000) shares of Borrower's
common stock (the "New Warrant Shares") at a warrant exercise price equal to
One Dollar and Eighty Cents ($1.80) per share, and otherwise on the same
terms as the Old Legong Warrants (the "New Legong Warrants"). The New Legong
Warrants shall expire on December 31, 2000.
(c) The New Legong Warrants shall be redeemable by Borrower at a
redemption price of Fifty Cents ($0.50) per New Warrant Share if the closing
sale price for Borrower's common stock shall have exceeded Twenty Dollars
($20.00) per share for not less than twenty (20) trading days immediately
prior to the date on which Borrower shall give Legong written notice of its
intent to so redeem the New Legong Warrants. In the event that Borrower
shall give Legong notice of its intent to redeem the New Legong Warrants as
described in this paragraph (b), Legong shall have the right to exercise its
rights under the New Legong Warrants at any time within the ten (10)
business days following the date on which such notice is first given to
Legong.
4. REGISTRATION. Borrower shall include both the Old Warrant Shares and
the New Warrant Shares in the Registration Statement on Form SB-2 that is
currently pending before the
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Securities and Exchange Commission. Borrower shall deliver warrant
certificates reflecting both the Old Legong Warrants and the New Legong
Warrants, which certificates shall be in form satisfactory to Legong, on or
before January 16, 1998.
5. WAIVER OF DEFAULTS. Borrower and Legong mutually acknowledge and agree
that as of the date of this Amendment No. 2 there has been no default under,
breach of, or non-compliance with any portion of the Note or the Related
Agreements, including Amendment No. 1, by any party to them, and do hereby waive
any such default, breach, or non-compliance which may have occurred prior to the
Effective Date of this Amendment No. 2.
6. CONTINUED VALIDITY OF THE TERMS OF THE NOTE AND RELATED AGREEMENTS NOT
AMENDED HEREBY. Except as, and only to the extent, expressly provided herein,
nothing contained in this Amendment No. 2 shall be construed as altering,
waiving, or supplementing any of the terms or covenants of the Note (including
without limitation Article IV thereof) or any of the Related Agreements,
including without limitation the Security Agreement.
7. COUNTERPARTS. This Amendment No. 2 may be executed in one or more
counterparts, all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, Borrower and Legong have each caused this Amendment to
be signed by their duly authorized officers, to be effective as of the day and
year first above written.
BORROWER: JAVA CENTRALE, INC.
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx, MS, CPA
VP and Chief Financial Officer
LEGONG:
LEGONG INVESTMENTS, N.V.
By:
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Name:
Title:
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