USIS ACQUISITION, LLC
July 24, 1998
American Eco Corporation
00000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxXxxxxx, Chairman
Gentlemen:
This letter sets forth the terms and conditions of the
agreement relating to the purchase by the undersigned (the
"Buyer") from you, American Eco Corporation, an Ontario
corporation (the "Seller"), of certain promissory notes (the
"Notes") of U S Industrial Services, Inc., a Delaware corporation
(the "Company"), issued to the Seller consisting of an aggregate
principal and interest in the amount of $17,900,000 as of July
24, 1998. The Notes consist of the total of a Promissory Note,
dated March 1, 1996, from EIF Holdings, Inc., a Hawaii
corporation ("EIF"), as Maker, to the Seller, as Payee, as
amended by a Renewal, Extension and Modification of the Revolving
Line of Credit Note, dated July 31, 1997, a Second Amendment to
the Revolving Line of Credit Note, dated September 30, 1997, and
a Third Amendment to the Revolving Line of Credit Note, dated
February 18, 1998. Effective June 22, 1998, EIF completed a
recapitalization and reincorporation (collectively, the
"Reincorporation"), whereby the surviving company (or successor
registrant) is the Company. Upon the Reincorporation the Company
succeeded to all the business, properties, assets and liabilities
of EIF.
1. Subject to the terms and conditions herein, the
Buyer is purchasing from the Seller, and the Seller is selling
and assigning to the Buyer, the Notes for $17,900,000 (the
"Purchase Price"). Upon execution and delivery of this Letter
Agreement by the Seller to the Buyer, the Buyer shall pay the
Purchase Price by delivering to the Seller (i) $5,000,000 by wire
transfer to an account designated by the Seller and (ii) a
promissory note, in the form attached hereto as Exhibit A (the
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"Promissory Note"), in the principal amount of $12,900,000
payable to the order of the Seller. The Promissory Note shall
bear interest at a rate of 10% per annum and all interest shall
accrue and be payable upon maturity which shall be on January 29,
1999 and shall be secured by shares of the Company pursuant to a
Stock Pledge Agreement in the form attached hereto as Exhibit B.
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2. The Buyer represents, warrants and covenants to
the Seller that:
2.1 The Buyer has the full corporate power and
authority to enter into this Letter Agreement, to purchase the
Indebtedness, and to issue the Promissory Note and to execute and
deliver the Pledge Agreement, and that the Buyer's execution,
delivery and performance under this Letter Agreement, the
Promissory Note and the Pledge Agreement (collectively, the
"Purchase Documents") has been duly authorized by all necessary
action.
2.2 The Buyer has duly executed and delivered the
Purchase Documents and each constitutes a legal, valid and
binding obligation of the Buyer, enforceable against it in
accordance with their respective terms.
2.3 The Buyer is not, on the date hereof, nor
will be as a result of the transactions contemplated by this
Letter Agreement, insolvent, as such term is defined under Title
11 of the United States Code or any similar state statute.
2.4 The Buyer has provided the unaudited balance
sheet as at July 16, 1998 (the "Balance Sheet"). The Balance
Sheet has been prepared according to generally accepted
accounting principles and accurately sets forth the assets and
liabilities (contingent or otherwise) as of the date thereof. No
event has occurred since the date of the Balance Sheet which
would adversely affect the financial condition of the Buyer.
2.5 The Buyer is fully familiar with and aware of
the current business and affairs of the Company and it has had
the opportunity to discuss the Company's operations and financial
condition and prospects with management of the Company. The
Buyer acknowledges that the Seller has not made any
representations (written or oral) to it regarding the Company.
2.6 The Buyer acknowledges that the sale and
assignment of the Notes to it is without recourse to the Seller,
and that it fully understands the risks entailed in such an
investment and inherent in the transactions contemplated by this
Letter Agreement.
3. The Seller represents and warrants to the Buyer
that:
3.1 The Seller is the sole beneficial and record
owner of the Notes, free and clear of any lien, encumbrance
and/or security interest of any kind or nature whatsoever, except
any restrictions by reason of the Securities Act of 1933, as
amended.
3.2 The Seller has the full corporate power and
authority to enter into this Letter Agreement and to sell the
Notes, and that the Seller's execution, delivery and performance
under this Letter Agreement has been duly authorized by all
necessary action.
4. This Letter Agreement sets forth the entire
agreement between the parties hereto as to the subject matter
herein, and cannot be amended, modified or terminated except by
an agreement in writing executed by the parties hereto. In the
event any provision of this Letter Agreement is invalid, illegal
or unenforceable, the remainder of hereof shall be construed
without taking into effect such invalid, illegal or unenforceable
provision. This letter shall be governed by the laws of the
State of Texas.
Please signify your agreement to the foregoing by
executing and returning the duplicative original of this letter.
You may retain the original for your files.
Very truly yours,
USIS ACQUISITION, LLC
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx, III
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Xxxxxx X. Xxxxxx, III
Manager
Agreed to this 24th
day of July, 1998
AMERICAN ECO CORPORATION
By: /s/ Xxxxxxx X. XxXxxxxx
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Xxxxxxx X. XxXxxxxx
Chairman
Consented to this 24th
day of July, 1998
U S INDUSTRIAL SERVICES, INC.
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
President/Chief Operating Officer
