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