3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of event reported): April 16, 1998.
PURUS, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-22408
DELAWARE 77-0234694
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
605 Tennant Avenue, Suite B
Morgan Hill, CA 95037
(Address of principal executive (Zip Code)
offices)
Registrant's Telephone Number: (408) 778-3465
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On April 16, 1998, Purus, Inc. (the "Company"), entered into
a Commitment Letter with Casa Solaz, Inc. ("CSI"), a private
Nevada corporation which recently commenced the business of
manufacturing, marketing, and installing prefabricated housing
units in South America. Under the terms of the Commitment
Letter, the Company will acquire all of the capital stock of CSI
in exchange for that number of shares of Purus common stock equal
to 75% of the outstanding shares after giving effect to the
transaction (subject to adjustment on the basis of the net asset
value of the Company). The closing of the acquisition is subject
to a number of conditions, including but not limited to: (i) the
completion of all due diligence with respect to the parties; (ii)
completion of all definitive documentation; (iii) obtaining all
consents and approvals of the board of directors and shareholders
and other applicable third parties necessary or desirable in
connection with the acquisition; and (iv) resolution or other
disposition to the satisfaction of CSI of all pending legal
proceedings against the Company described in its 1997 annual
report on Form 10-KSB. Due to the uncertainty associated with
the pending litigation involving the Company, there is
significant uncertainty with respect to the transaction and
whether it will be consummated.
In connection with the acquisition commitment between the
Company and CSI, the Company made an additional loan to CSI of
$2,200,000, thereby increasing total loans to CSI to $4,000,000.
The loans bear interest at the rate of 6% per annum, and all
principal and interest is due December 31, 1999. The loans are
secured by all assets of CSI, including all of the capital stock
of its Venezuelan subsidiaries conducting operations in South
America.
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the Securities Exchange Act of
1934 regarding events, conditions, and other matters that may
affect the Company's future plans of operations, business
strategy, operating results, and financial position. Investors
are cautioned that any forward-looking statements are not
guaranties of future events or performance and are subject to
risks and uncertainties, and that actual events may differ
materially from those included within the forward-looking
statements as a result of various factors, including, but not
limited to, the conditions to completion of the proposed
acquisition of CSI by the Company described above.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. None.
(b) Pro Forma Financial Information. None.
(c) Exhibits. Included in this report are the following
exhibits.
Exhibit SEC Ref. Title of Document Page
No. No.
1 (10) Commitment Letter dated April 16, 1998 E-1
2 (10) 6 % Convertible Promissory Note dated E-9
April 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the Registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
Purus, Inc.
DATED: April 29, 1998 By /s/Peter Friedli
Chief Executive Officer
Exhibit No. 1
Form 8-K Dated April 16, 1998
Purus, Inc.
File No. 0-22408
PURUS, INC.
605 Tennant Ave., Suite B
Morgan Hill, CA 95037
April 16, 1998
VIA FACSIMILE
Mr. Donald Winstead, President
Casa Solaz, Inc.
17246 Quail Court
Morgan Hill, CA 95037
Dear Mr. Winstead:
Purus, Inc. ("Purus") is pleased to confirm its commitment
to make funds available to provide additional debt financing to
Casa Solaz, Inc., a Nevada corporation (the "Company"), in the
amount of $2,200,000 on the same terms as the existing loan
between the parties. Purus is prepared to make this commitment
in reliance on the agreement of the Company's holders of capital
stock to exchange their shares for Purus common stock (the
"Acquisition") subject to the terms and conditions contained
herein and in the attached Summary of Proposed Terms and
Conditions (the "Term Sheet"). (This letter and the Term Sheet
are sometimes collectively referred to herein as the "Letter").
Any capitalized term used and not otherwise defined herein shall
have the meaning ascribed to such term in the Term Sheet.
The commitment of Purus hereunder is based upon the
financial and other information regarding the Company and its
subsidiaries provided to Purus and is subject to the various
conditions precedent described in the Term Sheet and to the usual
reservations, among others, that there shall not have occurred
after the date of such information, in the sole opinion of Purus,
either any material adverse change in the business, assets,
liabilities (actual or contingent), operations, conditions
(financial or otherwise) or prospects of the Company and its
subsidiaries taken as a whole, or any changes in governmental
regulations, monetary policy or market conditions. If the
continuing review by Purus of the Company discloses information
relating to conditions or events not previously disclosed to
Purus or relating to new information or additional developments
concerning conditions or events previously disclosed to Purus
that Purus in its sole discretion believes may have a material
adverse effect on the condition (financial or otherwise), assets,
properties, business operations or prospects of the Company and
its subsidiaries taken as a whole, Purus, may, in its sole
discretion, decline to provide the Financing or complete the
Acquisition.
The Company hereby represents, warrants and covenants to
Purus that (i) all information, which has been, or is hereafter,
made available to Purus by the Company or any of its
representatives in connection with the transactions contemplated
hereby ("Information"), is, and will be, complete and correct in
all material respects and does not, and will not, contain any
untrue statement of a material fact or omit to state a fact
necessary to make the statements contained therein not misleading
and (ii) all financial projections concerning the Company that
have been, or are hereafter, made available to Purus by the
Company or any of its representatives (the "Projections") have
been, or will be, prepared in good faith based upon reasonable
assumptions. The Company also agrees to furnish Purus with such
information and Projections as it may reasonably request and to
supplement the Information and the Projections from time to time,
through and including the closing date of the Acquisition (the
"Closing Date"), so that the representation and warranty set
forth in the preceding sentence is correct on the Closing Date.
Each of the parties hereto agree that the other party shall
(i) have no liability (whether direct or indirect, in contract or
tort or otherwise) to security holders or creditors arising out
of, related to, or resulting from, the transactions contemplated
herein, except to the extent that such liability is found by a
judgment of a court of competent jurisdiction to have resulted
from gross negligence or willful misconduct or (ii) be
responsible or liable for any consequential damages that may be
alleged as a result of this Letter.
The provisions of the immediately preceding paragraph shall
remain in full force and effect regardless of whether definitive
documentation for the Financing and Acquisition shall be
completed, executed and delivered, and notwithstanding the
termination of this Letter or the commitment of Purus hereunder.
Please note that, except with respect to the provisions of
the preceding two paragraphs, the commitment proposed herein does
not constitute a binding obligation of either the Company or
Purus, nor does it define all of the terms and conditions of the
Financing and Acquisition, but is a framework upon which the
documentation for the proposed transactions would be structured,
and is a basis for further discussion and negotiation of the
terms as may be appropriate. Among other things, the Acquisition
would be subject to all of the Conditions Precedent to Closing
set forth in the Term Sheet, and those matters which are not
covered by or made clear in this Letter are subject to the mutual
agreement of the parties.
This Letter (i) shall be governed by, and construed in
accordance with, the laws of the State of California, without
regard to any choice-of-law principles thereof, (ii) may be
executed in counterparts, which, taken together, shall constitute
an original, (iii) shall be amended or modified only in a writing
executed by the parties hereto, (iv) shall not be assigned or
transferred by the Company (whether by operation of law or
otherwise) without the prior written consent of Purus, and (v)
supersedes and replaces any and all proposals or commitment
letters previously delivered by Purus to the Company. In
addition, no party has been authorized by Purus to make any oral
or written statements inconsistent with this Letter.
The commitment proposed herein will be available for
acceptance until 5:00 p.m. (Pacific Daylight Savings time) on
April 17, 1998, unless further extended in writing by Purus.
We are delighted to have this opportunity to work with you.
If the terms of the Letter meet with your approval, please
indicate your acceptance by signing and dating the enclosed copy
of this Letter, and then returning the same to the undersigned.
Very truly your,
PURUS, INC.
By: /s/ Peter Friedli
Name: Peter Friedli
Title: Chief Executive Officer
Dated: April 16, 1998, 1998
ACCEPTED:
CASA SOLAZ, INC.
By: Donald Winstead
Name: Donald Winstead
Title: President
Dated: April 16, 1998
<PAGE>
SUMMARY OF PROPOSED TERMS AND CONDITIONS
PURUS/CASA SOLAZ
I. SENIOR SECURED NOTE
OFFERING
Issuer: Purus, Inc. (the "Company").
Issue: Amendment and increase of existing $1,800,000
note to $4,000,000 (the "Note").
Closing: Closing of the increase in the Note is
expected to occur on or before April 21,
1998.
Security: The Note will be secured by the same assets
as the existing $1,800,000 Note.
Use of Proceeds: To finance new facilities and provide for
working capital and general corporate
purposes.
TERMS OF THE NOTES
Ranking: The Note shall be the senior secured
obligations of the Company, ranking senior in
right of payment to all existing and future
subordinated indebtedness of the Company.
Interest: The Note will bear interest at a fixed rate
of 6% per annum.
Maturity: December 31, 1999.
II. ACQUISITION
OFFERING
Issuer: Purus, Inc. ("Purus").
Issue: Common Stock (the "Common Stock").
Aggregate Amount: After giving effect to the transaction, that
number of shares of Purus common stock equal
to 75% of the outstanding shares (subject to
adjustment as provided below) will be issued
in exchange for all of the capital stock of
the Company held by Company stockholders as
of the date of this Letter and their
successors or or assigns ("Acquisition").
Closing: Closing of the Acquisition is expected to
occur on or before December 31, 1999 (the
"Closing Date").
Adjustment: If, as of the end of the most recent fiscal
quarter of Purus prior to the Closing Date
and provided there is no material change from
the end of such quarter to the Closing Date,
the net asset value of Purus in greater than
$4,000,000, the number of Purus shares issued
for the capital stock of the Company shall be
adjusted by mututal agreement of the parties.
ADDITIONAL CLOSING
CONDITIONS
Stock Exchange
Agreement: The Acquisition shall be made pursuant to a
definitive exchange agreement (the "Stock
Exchange Agreement"), which shall contain
representations and warranties, covenants and
indemnification provisions in form and
substance satisfactory to the parties.
No Change of Control If there shall occur a Change of Control
of Purus, the Company shall have no further
obligation to consummate the Acquisition.
As used herein, a "Change of Control" means a
change of control of Purus of a nature that
would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")
(as in effect on the Closing Date), whether
or not Purus is then subject to such
reporting requirement; provided, that,
without limitation, such a Change of Control
shall be deemed to have occurred if:
(i) any "person" (ad defined in
Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities
of Purus representing thirty percent (30%) or
more of the combined voting power of Purus's
then outstanding securities; provided,
however, that no Change of Control shall be
deemed to have occurred if prior to the
acquisition of such thirty percent (30%) of
the combined voting power of Purus's then
outstanding securities, a majority of the
Continuing Directors (as defined below)
approves such acquisition; or
(ii) if there shall cease to be a
majority of the Board of Directors of Purus
(the "Board") comprised of Continuing
Directors; or
(iii) the stockholders of Purus
approve a merger of consolidation of Purus
with any other corporation, other than a
merger or consolidation which would result in
the voting securities of Purus outstanding
immediately prior thereto continuing to
represent (either by remaining outstanding or
by being converted into voting securities of
the surviving entity) at least eighty percent
(80%) of the combined voting power of the
voting securities of Purus or such surviving
entity outstanding immediately after such
merger or consolidation; or
(iv) if any recapitalization event
occurs as a result of which the holders of
voting securities of Purus outstanding
immediately prior thereto do not continue to
hold at least eighty percent (80%) of the
combined voting power of the voting
securities of Purus immediately after such
recapitalization event; or
(v) the stockholders of Purus approve a
plan of complete liquidation of Purus or an
agreement for the sale or disposition by
Purus of all or substantially all of Purus's
assets; or
(vi) a majority of the "named executive
officers" set forth in Purus's most recent
Proxy Statement or Annual Report on Form 10-K
or Form 10-KSB, as the case may be, cease to
occupy such positions within a period of 365
consecutive days.
As used herein, "Continuing Directors" means
individuals who constitute the Board as of
the date of the Letter and any new
director(s) whose election by the Board or
nomination for election by Purus's
stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then
still in office who either were directors as
of the date hereof or whose election or
nomination for election was previously so
approved.
Conditions Precedent
to Closing: The closing of the Acquisition (the
"Closing") is subject to the completion,
execution and delivery of acceptable
documentation with respect to the Acquisition
and other conditions precedent deemed
appropriate by the parties for transactions
similar to the Acquisition in general and for
the transaction in particular, including, but
not limited to, each of the following:
(i) The completion of all due diligence
with respect to the Company and its
subsidiaries in scope and determination
satisfactory to Purus in its sole discretion;
(ii) All definitive documentation
(including, but not limited to, the Stock
Exchange Agreement and associated
documentation with respect thereto) shall
have been completed, executed and delivered
in form and substance satisfactory to the
parties;
(iii) All consents and approvals of
the board of directors and shareholders,
governmental and regulatory bodies, and other
applicable third parties necessary or
desirable in connection with the Acquisition
shall have been obtained and remain in
effect;
(iv) no material adverse change shall
have occurred, or shall be reasonably
expected to occur, in the business, assets,
liabilities (actual or contingent),
operations, condition (financial or
otherwise) or prospects of the Company and
its subsidiaries taken as a whole;
(v) The absence of any claim, action,
suit, order, injunction, investigation or
proceeding (including, without limitation,
any of the foregoing that relate to
bankruptcy or insolvency) pending or
threatened in any court or before any
arbitrator or governmental authority that
purports to affect the Company or its
subsidiaries or any transaction contemplated
hereby, or that could have a material adverse
effect on the Company or its subsidiaries or
any transaction contemplated hereby or on the
ability of the Company and its subsidiaries
to perform its and their respective
obligations under any documents to be
executed in connection with the Acquisition;
(vi) Receipt and review, with results
satisfactory to Purus and its counsel of
information regarding litigation, tax,
accounting, labor, insurance, pension
liabilities (actual or contingent), real
estate leases, material contracts, debt
agreements, property ownership and contingent
liabilities of the Company and it
subsidiaries;
(vii) Purus and its counsel shall be
satisfied with the legal structure of the
Company and its subsidiaries (including,
without limitation, its or their respective
Certificates of Incorporation (including any
Certificate of Rights and Designations of any
currently outstanding series or class of
preferred stock), Bylaws, and any regulatory
matters affecting the proposed Acquisition
and the terms and conditions of the
transaction proposed herein; and
(viii) Resolution or other
disposition to the satisfaction of the
Company of all pending legal proceedings
against Purus described in the 1997 annual
report of Purus on Form 10-KSB.
Exhibit No. 2
Form 8-K Dated April 16, 1998
Purus, Inc.
File No. 0-22408
US$2,200,000.00 April 17, 1998
CASA SOLAZ, INC.
6% Promissory Note
CASA SOLAZ, INC., a corporation duly organized and existing
under the laws of the state of Nevada (hereinafter referred to as
the "Company"), for value received, hereby promises to pay to
PURUS, INC., a Delaware corporation, or its order, the principal
sum of TWO MILLION TWO HUNDRED THOUSAND US DOLLARS
($2,200,000.00), on December 31, 1999 (the "Maturity Date"), upon
presentation and surrender of this promissory note ("Note") at
the offices of the Company at 17246 Quail Court, Morgan Hill, CA
95037, in such lawful money of the United States of America as at
the time of payment shall be legal tender for the payment of
public and private debt, and to pay at that time in like lawful
tender interest on the unpaid principal at a rate per annum
(calculated on the basis of the actual number of days elapsed in
a 365-day year) equal to 6%, from and after the date of issuance
or from the most recent date on which interest has been paid or
duly provided for, as the case may be.
This Note is subject to the following further terms and
material provisions:
1. Prepayment. The Note is subject to prepayment at any
time after the issue date, upon not less than 30 nor more than 50
days' notice by mail, in whole or in part, at the election of the
Company. For a period of 15 days following the date of written
notice of prepayment, the holder may apply any amount then owing
on this Note to exercise of the Series A Preferred Stock Warrant
issued by the Company to Purus, Inc., dated February 17, 1998
("Warrant"), as provided in paragraph 7, below. On the date
fixed for repayment, the Note shall cease to bear interest. Upon
surrender of the Note for repayment in accordance with said
notice of prepayment by the Company, the amount of principal and
interest due shall be paid in cash or certified funds. If the
Note is prepaid only in part, the holder shall present the Note
to the Company for notation thereon of such partial repayment.
The obligation of the Company to prepay the Note shall be
evidenced by a resolution of the board of directors of the
Company.
2. Satisfaction and Discharge of Note. This Note shall
cease to be of further effect (except as to any surviving rights
of conversion, transfer or exchange herein expressly provided
for) when,
(a) The Company has paid or caused to be paid all sums
payable hereunder by the Company, including all
principal amounts and interest accrued under the Note;
and
(b) All the conditions precedent herein provided for
relating to the satisfaction and discharge of this Note
have been complied with.
3. Security. This Note and the obligations represented
hereby shall be secured by: (a) all of the assets of the Company
pursuant to the Security Agreement dated February 17, 1998, given
by the Company to Purus, Inc., and this Note and all obligations
arising hereunder shall be deemed a "Secured Obligation" as that
term is defined in the Security Agreement; (b) by all of the
capital stock of all subsidiary corporations of the Company
pursuant to the Pledge Agreement dated February 17, 1998, given
by the Company to Purus, Inc., and this Note and all obligations
arising hereunder shall be deemed an "Obligation" as that term is
defined in said Pledge Agreement; and (c) by all of the capital
stock of all subsidiary corporations of the Company pursuant to
the Pledge Agreement dated February 17, 1998, given by the
Company and Housekit Construcciones, S.A., to Purus, Inc., and
this Note and all obligations arising hereunder shall be deemed
an "Obligation" as that term is defined in said Pledge Agreement.
The Security Agreement and Pledge Agreements referenced herein
are collectively referred to as the "Security Documents".
4. Events of Default. "Event of Default" when used
herein, whatever the reason for such event of default and whether
it shall be voluntary or involuntary or be effected by operation
of law pursuant to any judgment, decree or other order of any
court or any order, rule or regulation of any administrative or
governmental body, or be caused by the provisions of any
paragraph herein means any one of the following events:
(a) Default in the payment of interest on the Note
when it becomes due and payable, whether at maturity,
upon prepayment by declaration, or otherwise;
(b) Default in the payment of the principal on the
Note when due, whether at maturity, upon prepayment by
declaration, or otherwise;
(c) Default in the performance or breach of any
covenant or warranty of the Company or any of its
subsidiaries under this Note or the Security Documents
(other than a covenant or warranty the default or
breach of which is elsewhere in this section
specifically dealt with), and continuation of such
default or breach for a period of 60 days after there
has been given to the Company by the holder a written
notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a
notice of default hereunder;
(d) The entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company or
any subsidiary of the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition
of or in respect of the Company or any subsidiary of
the Company under the Federal Bankruptcy Act or any
other applicable federal, state, or foreign law, or
appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of any of the
Company or its subsidiaries or of any substantial part
of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any
such decree or order not stayed and in effect for a
period of 60 consecutive days; or
(e) The institution by any of the Company or its
subsidiaries of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings
against it, or a filing by it of a petition or answer
or consent seeking reorganization or relief under the
Federal Bankruptcy Act or any other applicable federal,
state or foreign law; or the consent by it to the
filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee, sequestrator,
or other similar official of any of the Company or its
subsidiaries or of any substantial part of its
property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they
become due, or the taking of corporate action by any of
the Company or its subsidiaries in furtherance of any
such actions.
5. Acceleration of Maturity. If an event of default
occurs and is continuing then, in every such case, the holder may
declare the principal and all accrued interest of the Note to be
due and payable immediately, by a notice in writing to the
Company of such default, and upon any such declaration, such
principal and accrued interest shall become immediately due and
payable. At any time after such declaration of acceleration has
been made and before a judgment or decree for payment of money
due has been obtained by the holder, the holder, by written
notice to the Company, may rescind and annul such declaration and
its consequences if all events of default, other than the non-
payment of the principal or interest on the Note which have
become due solely by such acceleration, have been cured or waived
as provided below. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
6. Suits for Enforcement. If an event of default occurs
and is continuing, the holder may, in its discretion, proceed to
protect and enforce its rights by such appropriate judicial
proceedings as the holder shall deem most effectual to protect
and enforce any such rights, whether for the specific enforcement
of any covenant or agreement under this Note or in aid of the
exercise of any power granted herein, or to enforce any other
proper remedy.
(a) THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA.
(b) THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY CALIFORNIA STATE OR FEDERAL COURT
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS NOTE AND THE COMPANY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE OR
FEDERAL COURT. THE COMPANY HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING.
(c) The Company irrevocably consents to the service of
process out of any of the aforementioned courts in any
such action or proceeding by the mailing of the copies
thereof by certified mail, return receipt requested,
postage prepaid, to it at its address set forth herein,
such service to become effective upon the earlier of
(i) the date 10 calendar days after such mailing or
(ii) any earlier date permitted by applicable law.
Nothing in this paragraph shall affect the right of the
holder to bring proceedings against the Company in the
courts of any other jurisdiction or to serve process in
any other manner permitted by applicable law.
(d) THE COMPANY AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE COMPANY OR HOLDER. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE HOLDER ENTERING INTO THIS
NOTE AND MAKING THE LOAN TO THE COMPANY EVIDENCED
HEREBY.
(e) The Company agrees to pay and hold the holder harmless
from any stamp, documentary, intangibles, transfer or
similar taxes or charges, and all recording or filing
fees with respect to this Note or any payments to be
made thereunder, and to reimburse the holder upon
demand for all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and expenses)
incurred by the holder in enforcing the obligations of
the Company under this Note or in connection with any
restructuring or "work-out" of any such obligations.
7. Warrant Exercise. Subject to, and in compliance with,
the provisions contained herein, the holder of the Note is
entitled, at holder's option, at any time on or before the
Maturity Date (or in case this Note or some portion hereof shall
be called for repayment prior to such date or there shall be a
declaration of acceleration of maturity under paragraph 5, above,
then until and including, but not after, the close of business
within 15 days of the date of notice of repayment or the date of
declaration, as the case may be), to apply all amounts then owing
under this Note to exercise of the Warrant and purchase in
accordance with the terms of the Warrant of fully paid and non-
assessable shares of the Series A Convertible Preferred Stock of
the Company. Exercise of the Warrant shall be effected by
surrender of this Note, duly endorsed (if so required by the
Company), to the Company at its offices set forth herein
accompanied by written notice of exercise in the manner required
by the Warrant.
8. Notices; Waiver. All notices hereunder shall be in
writing or by telecopy and shall be sufficiently given to the
Company or holder if addressed or delivered to them at the
following addresses:
If to the Company: Casa Solaz, Inc.
Attn: Donald Winstead
17246 Quail Court
Morgan Hill, CA 95037
Telecopy (408) 782-2198
If to holder: Purus, Inc.
Attn: President
605 Tennant Avenue, Suite B
Morgan Hill, CA 95037-5529
Telecopy (408) 778-3466
or at such other address as any party may designate to any other
party by written notice. All such notices and communications
shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; when received, if deposited in
the mail, postage prepaid; when transmission is verified, if
telecopied; and on the next business day, if timely delivered to
an air courier guaranteeing overnight delivery. Where this Note
provides for notice, such notice may be waived in writing by the
person entitled to receive such notice, either before or after
the date on which the person entitled to receive such notice and
either before or after the event, and such waiver shall be the
equivalent of such notice.
9. Restrictions. The holder of this Note, by acceptance
hereof, agrees and acknowledges that:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER
COMPLIANCE UNDER THE ACT OR THE LAWS OF THE APPLICABLE
STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, AND ITS
COUNSEL, TO THE EFFECT THAT THE SALE OR TRANSFER IS
EXEMPT FROM REGISTRATION UNDER THE ACT AND SUCH STATE
STATUTES.
10. Miscellaneous
(a) The provisions of this Note and the Security Documents
may from time to time be amended, modified or waived,
if such amendment, modification or waiver is in writing
and, (i) in the case of an amendment or modification,
is consented to by the Company and holder and (ii) in
the case of a waiver of obligation of the Company or
compliance with any prohibition contained in this Note
or Security Documents, is consented to by the holder.
(b) No failure or delay on the part of the holder in
exercising any power or right under this Note or the
Security Documents shall operate as a wavier thereof,
nor shall any single or partial exercise of any such
power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
No notice to or demand on the Company in any case shall
entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the holder
shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions.
No waiver or approval hereunder shall require any
similar or dissimilar waiver or regulatory approval
thereafter to be granted hereunder.
(c) Any provision of this Note or the Security Documents
which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions of this Note or the Security Documents or
affecting the validity or enforceability of such
provision in any other jurisdiction.
(d) The various headings of this Note and the Security
Documents are inserted for convenience only and shall
not affect the meaning or interpretation of the Note or
the Security Documents or any provisions hereof or
thereof.
(e) This Note shall be binding upon and shall inure to the
benefit of the parties hereto and their respective
successors and assigns; provided, however, that the
Company may not assign or transfer its rights or
obligations hereunder without the prior written consent
of the holder.
(f) The Company hereby waives all requirements as to
diligence, presentment, demand of payment, protest and
notice of any kind with respect to this Note. All
amounts owing hereunder are payable by the Company
without relief from any valuation or appraisal laws.
DATED this 17th day of April, 1998.
CASA SOLAZ, INC.
By /s/ Donald Winstead,
President
