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
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.