Exhibit
10.31


 


AMENDMENT


 


This AMENDMENT (this “Amendment”), dated as of December 9, 2005, is entered into by
and between IWT TESORO CORPORATION, a Nevada corporation (the “Company”), INTERNATIONAL WHOLESALE TILE
INC., a Florida corporation (“Tile”
and, together with the Company, the “Credit
Parties” and, each a “Credit Party”) and LAURUS MASTER FUND, LTD., a Cayman
Islands company (“Laurus”), for
the purpose of amending the terms of (i) the Security Agreement, dated as
of August 25, 2005, by and between the Credit Parties and Laurus (as amended,
modified or supplemented from time to time, the “Security Agreement”) and (ii) the Registration Rights
Agreement by and between the Company and Laurus, dated as of August 25, 2005
(as amended, modified or supplemented from time to time, the ”Registration Rights Agreement” and, together with the
Security Agreement and the other Ancillary Documents referred to in the
Security Agreement, the ”Loan Documents”).
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Security Agreement.


 


WHEREAS, the Company has agreed that it shall file a “Request
for Withdrawal” (“RW”) with the Securities and Exchange Commission (the “Commission”)
with respect to the Registration Statement (as defined in the Registration
Rights Agreement) filed by the Company with the Commission on September 21,
2005; and


 


WHEREAS, as a result of the filing of the RW, the
Registration Statement will not be declared effective by the Commission by the
Effectiveness Date (as defined in the Registration Rights Agreement); and


 


WHEREAS, Laurus has agreed to amend certain
of the terms and conditions of the Registration Rights Agreement in order to
extend the deadline by which the Registration Statement is required to be
declared effective by the Commission.


 


NOW, THEREFORE, in
consideration of the above, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:


 


1.     The definition of “Effectiveness Date” as
set forth in Section 1 of the Registration Rights Agreement is amended in its
entirety as follows:


 


“Effectiveness Date” means, (i) with respect to the initial Registration
Statement required to be filed hereunder, a date (the “New Filing Date”) no
later than one-hundred twenty (120) days following the earlier to occur of (x)
the date upon which certain of the Loan Documents shall have been revised (the “Modification”)
in good faith by the Company, International Wholesale Tile Inc. (to the extent
party thereto) and the Purchaser for the purpose of addressing certain concerns
raised by the Commission in respect of the registration of the Registrable
Securities and (y) February 28, 2006, but only to the extent that the Purchaser
is willing by February 28, 2006 to consent to the Modification and has
negotiated the terms of such Modification in good faith; provided that the
Company shall use its best efforts to cause such Registration Statement to be
declared effective within ninety (90) days following the New Filing Date, provided,
however, if such Registration Statement is not declared effective by
such date (A) primarily, in Laurus’ good faith judgment, as a result of the
Commission having provided comments to such Registration Statement, such date
shall be extended until the Commission has no further comments as long as the
Company has diligently responded to all such comments within fifteen (15) days
of receipt of such comments or (B) because the Effectiveness Date falls within
the period commencing (x) fifteen (15) days prior to and forty-five (45) days
following the end of any fiscal quarter of the Company or (y) fifteen (15) days
prior to and ninety (90) days following the end of any fiscal year of the
Company, the Effectiveness Date shall be extended until such financial
statements required to be filed with the Commission in respect of such fiscal
quarter or year have been filed with the Commission, and (ii) with respect to
each additional Registration Statement required to be filed hereunder, a date
no later than thirty (30) days following the applicable Filing Date; provided,
however, if such Registration Statement is not declared effective by
such date solely as a result of the Commission having provided comments to such
Registration Statement, such date shall be extended until the Commission has no
further comments as long as the Company has diligently responded to all such
comments within fifteen (15) days of receipt of such comments.


 

















 


2.             The Company understands that the
Company has an affirmative obligation to make prompt public disclosure of
material agreements and material amendments to such agreements. The Company
hereby agrees that Laurus shall not be in violation of any duty to the Company
or its shareholders, nor shall Laurus be deemed to be misappropriating any
information of the Company, if Laurus sells shares of common stock of the
Company, or otherwise engages in transactions with respect to securities of the
Company, while in possession of the information contained in this Amendment.


 


3.     Each amendment set forth herein shall be
effective as of the first date (the “Amendment
Effective Date”) when (i) each Credit Party and Laurus shall have
executed and each Credit Party shall have delivered to Laurus its respective
counterpart to this Amendment and (ii) the RW shall have been filed by the
Company with the Commission.


 


4.     Except as specifically set forth in this
Amendment, there are no other amendments, modifications or waivers to the Loan
Documents, and all of the other forms, terms and provisions of the Loan
Documents remain in full force and effect.


 


5.     Each Credit Party hereby represents and
warrants to Laurus that (i) no Event of Default exists on the date hereof, (ii)
on the date hereof, all representations, warranties and covenants made by the
Company in connection with the Loan Documents are true, correct and complete
and (iii) on the date hereof, all of the Company’s and its Subsidiaries’
covenant requirements have been met.


 


6.     From and after the Amendment Effective
Date, all references in the Loan Documents and in the other Related Agreements
to the Registration Rights Agreement shall be deemed to be references to the
Registration Rights Agreement, as the case may be, as modified hereby.


 


7.     This Amendment shall be binding upon the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of and be enforceable by each of the parties hereto and
their respective successors and permitted assigns. THIS
AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This
Amendment may be executed in any number of counterparts, each of which shall be
an original, but all of which shall constitute one instrument.


 


2

















 


IN WITNESS WHEREOF, each Credit Party and Laurus have caused this Amendment to the Loan
Documents to be signed in its name effective as of this 9th day of
December 2005.


 


 


	
   

  	
  IWT
  TESORO CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL
  WHOLESALE TILE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  LAURUS
  MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						



 


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