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EXHIBIT 4.7
AMENDMENT TO THE SUPPLEMENTAL
SECURITIES PURCHASE AGREEMENT
This agreement is made as of December 14, 1999 by and among Krauses's
Furniture, Inc., a Delaware corporation (the "Company"), General Electric
Capital Corporation, a New York corporation ("GECC"), and Japan Omnibus Ltd., an
international business incorporated in the British Virgin Islands ("JOL").
Whereas, the Company, GECC and JOL are parties to the Supplemental
Securities Purchase Agreement, dated as of August 14, 1997, as amended (the
"Supplemental Purchase Agreement"), which provided for the purchase and sale of
the New Securities and amended and restated certain provisions of the Original
Agreement (all capitalized terms not defined herein shall have the meanings set
forth in the Supplemental Purchase Agreement).
Whereas, the parties hereto have agreed to amend certain financial
covenants contained in Section 6.2 of the Supplemental Purchase Agreement.
INTENDING TO BE LEGALLY BOUND and in consideration of the mutual covenants
and obligations contained herein and in the Supplemental Purchase Agreement, the
parties agree as follows:
Effective as of November 1, 1999, Section 6.2 Financial Covenants shall be
amended in its entirety to read as follows:
6.2. Financial Covenants. For purposes of this Section 6.2, "fiscal year"
and "fiscal quarter" are both measured on the basis of the fiscal year of the
Company ending on the Sunday closest to the last day of January of the
succeeding calendar year as determined by the 52/53 week retail fiscal year.(1)
(a) The Company will not permit its Consolidated Net Worth at the end
of any fiscal quarter to be less than the amount set forth below for such fiscal
quarter, provided that, upon any public or private offering of capital stock of
the Company for the Company's account, the amounts set forth below for fiscal
quarters subsequent to such offering shall be adjusted upward by an amount equal
to the net proceeds of any such offering multiplied by 0.9:
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(1) E.g. Fiscal year 1999 is the twelve-month period ending 1/30/2000 and the
fiscal quarters of fiscal year 1999 are the quarterly periods ending
5/02/99, 8/01/99, 10/31/99 and 1/30/00.
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Year Q1 Q2 Q3 Q4
---- ------- ------- ------- -------
1998 N/A N/A N/A 11.5 MM
1999 11.5 MM 9.0 MM 8.8 MM 7.0 MM
2000 6.6 MM 7.0 MM 8.0 MM 9.0 MM
2001 23.5 MM 26.0 MM 28.5 MM 31.0 MM
2002 34.0 MM 37.0 MM 40.0 MM N/A
(b) The Company will not incur, create, assume or permit to exist any
Indebtedness at the end of any fiscal quarter if such Indebtedness would result
in a ratio of Consolidated Total Indebtedness to Consolidated Net Worth of more
than the amount for such fiscal quarter indicated set forth below:
Year Q1 Q2 Q3 Q4
---- ----- ---- ---- ----
1998 N/A N/A N/A 2.25
1999 2.75 2.75 3.75 4.85
2000 4.85 4.5 4.0 3.5
2001 1.10 1.00 1.00 1.00
2002 1.00 1.00 1.00 N/A
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(c) The Company will not permit its Fixed Charge Ratio at the end of
any fiscal quarter to be less than the amount set forth below for such fiscal
quarter:
Year Q1 Q2 Q3 Q4
---- ----- ---- ---- ----
1998 N/A N/A N/A 0.85
1999 0.95 0.70 0.75 0.83
2000 1.0 1.05 1.10 1.20
2001 1.45 1.45 1.45 1.45
2002 1.45 1.45 1.45 N/A
(d) The Company and its Subsidiaries will not make capital
expenditures (net of any sale leasebacks incurred within such fiscal year) in
excess of the amounts set forth below for the fiscal years indicated:
1998 $7,600,000
1999 $10,000,000
2000 $9,000,000
2001 $8,000,000
2002(2) $4,000,000(2)
Any amount not spent in any one fiscal year may be spent in a succeeding fiscal
year, subject to the Company's annual business plan.
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(2) Applicable to the first two fiscal quarters of 2002.
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IN WITNESS WHEREOF, the Company, GECC and JOL have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized.
XXXXXX'X FURNITURE, INC.
By:
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
and Chief Financial Officer
GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Name: Xxxxxx X. Xxxxxxxxxx, Xx.
Title: Department Operations Manager
JAPAN OMNIBUS LTD.
By:
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Name:
Title:
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