EXHIBIT 10.19
CO-SALE AGREEMENT
DATE: May 10, 1996
PARTIES: Xxxxx X. Xxxxx ("H. Spell")
Xxxxxxx X. Xxxxx ("W. Spell")
Spell Family Foundation ("Foundation")
Xxxxx X. Xxxxxxx ("Xxxxxxx")
Xxxxxxx X. Xxxxxxx ("Xxxxxxx")
Xxxxxxx Xxxxx Mezzanine Capital Fund, L.P. ("Xxxxx")
RECITALS:
A. As of the date hereof the parties hereto are the owners of the
shares of capital stock of Eagle Pacific Industries, Inc.
("EPII") and the options, warrants and other rights to acquire
shares of common stock of EPII as set forth on Exhibit A
attached hereto.
B. The parties hereto desire to provide for certain co-sale
rights in the event of certain significant sales by other
parties hereto.
AGREEMENT:
1. For the purposes of this Agreement the following terms shall
have the meanings indicated below:
(a) "Management Group" shall refer to H. Spell, W. Spell, Foundation,
Xxxxxxx and Xxxxxxx or any two or more of them acting together.
(b) "Shares" shall mean the shares of capital stock of EPII listed on
Exhibit A hereto and any shares of common stock of EPII acquired by a
party hereto pursuant to the exercise of any option, warrant or other
right to acquire shares of common stock of EPII listed on Exhibit A
hereto.
(c) "Selling Transaction" shall mean the sale, assignment, transfer or
other disposition of more than 500,000 Shares in a single transaction
or series of related transactions that is not otherwise exempted from
the provisions of this Agreement by Section 4 below.
2. During the term hereof, the Management Group shall not enter
into a Selling Transaction without permitting Xxxxx to
participate as a seller in such transaction(s) on a pro rata
basis according to the common share holdings of EPII listed on
Exhibit A assuming all options, warrants and other rights to
acquire shares of common stock of EPII have been exercised.
3. The Management Group shall give prompt written notice to Xxxxx
in the event that it has the present intention to enter into a
Selling Transaction. Such notice shall disclose the terms and
conditions of such Selling Transaction. Xxxxx shall advise the
Management Group in writing within thirty days of receipt of
such notice whether or not it desires to be a seller in such
Selling Transaction on the terms and conditions set forth in
the notice from the Management Group and pursuant to Section 2
above. If Xxxxx does not provide such written response to the
notice from the Management Group within such time period,
Xxxxx shall be deemed to have waived its rights hereunder with
respect to such Selling Transaction and the Management Group
may proceed with such Selling Transaction on substantially the
terms set forth in the notice to Xxxxx.
4. The following sales, assignments, transfers or other
dispositions by the Management Group shall not be considered
Selling Transactions and shall be exempt from the provisions
of this Agreement:
(a) sales of Shares by the Management Group in a bona fide underwritten
public offering pursuant to a registration statement filed by EPII
pursuant to the Securities Act of 1933, as now or hereafter amended
(the "Act");
(b) sales of Shares by the Management Group in a market transaction in
a bona fide public market, pursuant to a registration statement,
pursuant to Rule 144 promulgated under the Act or pursuant to some
other exemption from registration under the Act; and
(c) any transfer of Shares by gift or testamentary disposition to any
person.
5. This Agreement shall terminate on May 31, 1999 or upon such
earlier date as Xxxxx shall dispose of any Shares such that
after all such dispositions Xxxxx owns less than 25% of the
Shares shown on Exhibit A as being owned by Xxxxx.
6. All notices and other communications required or permitted
hereunder shall be in writing and shall be delivered in
person, by facsimile transmission, by a recognized courier
service or by the United States Postal Service to party at
its/his address or facsimile number listed on Exhibit A
hereto, or at such other address or facsimile number as such
party may specify by written notice to the other parties
hereto. All such notices shall be deemed to be effective when
received at such address or facsimile number.
7. This Agreement and the rights of the parties hereunder shall
be construed and governed by the laws of the State of
Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
__________________________________________
Xxxxx X. Xxxxx
__________________________________________
Xxxxxxx X. Xxxxx
SPELL FAMILY FOUNDATION
By:_______________________________________
Its:_________________________________
__________________________________________
Xxxxx X. Xxxxxxx
__________________________________________
Xxxxxxx X. Xxxxxxx
XXXXXXX XXXXX MEZZANINE CAPITAL FUND, L.P.
By:_______________________________________
Its:_________________________________
EXHIBIT A
EAGLE PACIFIC INDUSTRIES, INC.
CO-SALE AGREEMENT
Xxxxx X. Xxxxx 26,384 shares of Common Stock
2430 Metropolitan Centre 50,000 shares of Preferred Stock
Xxxxxxxxxxx, XX 00000 Options for 220,000 shares of Common Stock
(000) 000-0000
Xxxxxxx X. Xxxxx 33,864 shares of Common Stock
2430 Metropolitan Centre 25,000 shares of Preferred Stock
Xxxxxxxxxxx, XX 00000 Options for 285,000 shares of Common Stock
(000) 000-0000
Spell Family Foundation 22,500 shares of Common Stock
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
(000) 000-0000
Xxxxx X. Xxxxxxx 25,000 shares of Preferred Stock
0000 Xxxxxxxxxx Xxxxxx Options for 70,000 shares of Common Stock
Xxxxxxxxx, XX 00000
(000) 000-0000
Xxxxxxx X. Xxxxxxx 72,727 shares of Common Stock
000 Xxxx Xxxx Xxxxxx 22,500 shares of Preferred Xxxxx
Xxxxxxx, XX 00000 Options for 70,000 shares of Common Stock
(000) 000-0000
Xxxxxxx Xxxxx Mezzanine 435,000 shares of Common Stock
Capital Fund, L.P. Options for 315,000 shares of Common Stock
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
(000) 000-0000
