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EXHIBIT 10.5
August 14, 1997
General Electric Capital Corporation
Equity Capital Group
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Xxx XxXxxxx
Permal Capital Management
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Warrants for Xxxxxx'x Furniture, Inc.
Ladies and Gentlemen:
Reference is made to that certain Supplemental Securities Purchase
Agreement dated as of August 14, 1997 ("Supplemental Purchase Agreement") by
and among Xxxxxx'x Furniture, Inc. ("Xxxxxx'x"), General Electric Capital
Corporation ("GECC") and Japan Omnibus Ltd. ("JOL"). Capitalized terms used
herein without definition shall have the same meanings herein as when defined
in the Supplemental Purchase Agreement. "Old Warrants" as used herein means any
and all warrants to purchase common stock of Xxxxxx'x other than the Existing
Warrants and the New Warrants (including the 1997 Warrants, the Standby Warrants
and the Performance Warrants).
Xxxxxx'x requests that each of GECC and JOL, each with respect to all
Existing Warrants and New Warrants issued or issuable to them, waive any
anti-dilution protections or adjustments contained in any of the Existing
Warrants or the New Warrants, including any adjustment either in number of
shares of common stock of Xxxxxx'x that may be purchased on exercise of any of
the Existing Warrants or the New Warrants, or in the exercise price for which
shares may be purchased thereunder, to the extent such anti-dilution change or
adjustment would result from the execution and delivery of, or the consummation
of the transactions contemplated by, the Supplemental Purchase Agreement,
including (i) the issuance of the 1997 Warrants, the Standby Warrants and the
Performance Warrants and (ii) the later determination of the number of shares
for which the Performance Warrants are exercisable, which determination shall
be made in the manner provided in the Performance Warrant.
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As a material inducement to GECC and JOL in granting this waiver,
Xxxxxx'x hereby represents and warrants to GECC and JOL that, with respect to
the anti-dilution adjustments and protections contained in the Old Warrants,
the transactions contemplated by the Supplemental Purchase Agreement shall not
result in an increase by more than 8,602 shares in the number of shares of
Xxxxxx'x common stock issuable on exercise of the Old Warrants. If the
foregoing representation and warranty is incorrect and GECC, JOL and Xxxxxx'x,
acting in good faith, agree that any anti-dilution protections or adjustments
with respect to the Old Warrants (in excess of the 8,602 share adjustment
referenced above) have a material adverse effect on the interests of GECC and
JOL, GECC and JOL shall have the benefits accorded to them as set forth in the
Existing Warrants and the New Warrants and, if no such benefits are available,
GECC, JOL and Xxxxxx'x shall use their best efforts in good faith to negotiate
an equitable adjustment.
Please acknowledge your agreement to waive any such anti-dilution
protection or adjustment by executing this letter in the appropriate space
below. Such waiver will be effective as of the Closing under the Supplemental
Purchase Agreement.
Very truly yours,
XXXXXX'X FURNITURE, INC.
By:_______________________________
Xxxxxx Xxxxx Xxxxxx
General Counsel and Secretary
Acknowledged and agreed to as of August 14, 1997
GENERAL ELECTRIC
CAPITAL CORPORATION
By:_____________________________
Name:___________________________
Title:__________________________
JAPAN OMNIBUS LTD.
By:_____________________________
Name:___________________________
Title:__________________________
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