AGREEMENT, ANY RELATED
AGREEMENT OR ANY OF THE AGREEMENTS CONTEMPLATED HEREBY OR THEREBY;
(D)
MATERIALLY ALTER OR CHANGE THE SCOPE OF THE BUSINESS OF THE
COMPANY AND ITS SUBSIDIARIES TAKEN AS A WHOLE; OR
(E)
(I) CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY INDEBTEDNESS
(EXCLUSIVE OF TRADE DEBT AND DEBT INCURRED TO FINANCE THE PURCHASE OF EQUIPMENT
(NOT IN EXCESS OF FIVE PERCENT (5%) OF THE FAIR MARKET VALUE OF THE COMPANY'S
AND ITS SUBSIDIARIES' ASSETS)) WHETHER SECURED OR UNSECURED OTHER THAN (X) THE
COMPANY'S OBLIGATIONS OWED TO THE PURCHASER, (Y) INDEBTEDNESS SET FORTH ON
SCHEDULE 6.12(E) ATTACHED HERETO AND MADE A PART HEREOF AND ANY REFINANCINGS OR
REPLACEMENTS THEREOF ON TERMS NO LESS FAVORABLE TO THE PURCHASER THAN THE
INDEBTEDNESS BEING REFINANCED OR REPLACED, AND (Z) ANY INDEBTEDNESS INCURRED IN
CONNECTION WITH THE PURCHASE OF ASSETS (OTHER THAN EQUIPMENT) IN THE ORDINARY
COURSE OF BUSINESS, OR ANY REFINANCINGS OR REPLACEMENTS THEREOF ON TERMS NO LESS
FAVORABLE TO THE PURCHASER THAN THE INDEBTEDNESS BEING REFINANCED OR REPLACED,
SO LONG AS ANY LIEN RELATING THERETO SHALL ONLY ENCUMBER THE FIXED ASSETS SO
PURCHASED AND NO OTHER ASSETS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES;
(II) CANCEL ANY INDEBTEDNESS OWING TO IT IN EXCESS OF $100,000 IN THE AGGREGATE
DURING ANY 12 MONTH PERIOD; (III) ASSUME, GUARANTEE, ENDORSE OR OTHERWISE BECOME
DIRECTLY OR CONTINGENTLY LIABLE IN CONNECTION WITH ANY OBLIGATIONS OF ANY OTHER
PERSON OR ENTITY, EXCEPT THE ENDORSEMENT OF NEGOTIABLE INSTRUMENTS BY THE
COMPANY OR ANY SUBSIDIARY THEREOF FOR DEPOSIT OR COLLECTION OR SIMILAR
TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS OR GUARANTEES OF INDEBTEDNESS
OTHERWISE PERMITTED TO BE OUTSTANDING PURSUANT TO THIS CLAUSE (E); AND
(II) THE COMPANY, WITHOUT THE PRIOR WRITTEN CONSENT OF THE PURCHASER, SHALL NOT,
AND SHALL NOT PERMIT ANY OF ITS SUBSIDIARIES TO, CREATE OR ACQUIRE ANY
SUBSIDIARY AFTER THE DATE HEREOF UNLESS (I) SUCH SUBSIDIARY IS A WHOLLY-OWNED
SUBSIDIARY OF THE COMPANY AND (II) SUCH SUBSIDIARY BECOMES A PARTY TO THE
SECURITY AGREEMENT, THE SUBSIDIARY SECURITY AGREEMENT AND THE CONTINUING
GUARANTY (EITHER BY EXECUTING A COUNTERPART THEREOF OR AN ASSUMPTION OR JOINDER
AGREEMENT IN RESPECT THEREOF) AND, TO THE EXTENT REQUIRED BY THE PURCHASER,
SATISFIES EACH CONDITION OF THIS AGREEMENT AND THE RELATED AGREEMENTS AS IF SUCH
SUBSIDIARY WERE A SUBSIDIARY ON THE CLOSING DATE.
(III)
Required Approvals. Subject to the provisions of that certain
Amended and Restated Loan and Security Agreement dated as of December 31, 2004
among Fleet Capital Corporation, the Company, International Wholesale Tile, Inc.
("IWT"), The Tile Club, Inc. ("Tile Club") and Import Flooring Group, Inc.
("Import") (as amended, modified or supplemented from time to time, the "Working
Capital Lender Loan Agreement") and all agreements, instruments, documents,
mortgages, pledges, powers of attorney, consents, assignments, contracts,
notice, security agreements, trust agreements and guarantees executed in
20
connection with the Working Capital Lender Loan Agreement (all such documents,
as each may be amended, supplemented or modified, the "Working Capital Lender
Loan Documents").
6.14
REISSUANCE OF SECURITIES. THE COMPANY AGREES TO