PROMISSORY NOTE
Minneapolis, Minnesota
$____________ September ___, 1999
FOR VALUE RECEIVED, _____________________ (the "Maker") promises to pay
to Eagle Pacific Industries, Inc., its or successors or assigns ("Eagle"), at
such place as may be designated from time to time by Eagle, in lawful money of
the United States of America, the principal sum of ___________________ Dollars
($__________) together with interest on the unpaid principal balance hereof,
from the date hereof until this Promissory Note (the "Note") is fully paid, at
an annual rate equal to the Applicable Interest Rate (defined below), calculated
on the basis of actual number of days elapsed in a 360-day year.
Payment of Interest.
The principal balance of this Note will accrue interest from the date
hereof until this Note is paid in full at that interest rate applicable to
Eagle's revolving credit facility in place during the term of this Note (the
"Applicable Interest Rate"). Interest only shall be paid (at the Applicable
Interest Rate) on the last day of each calendar year commencing on December 30,
1999, and continuing on the last day of each and every calendar year thereafter
until that date on which the Maker shall have paid the principal balance of this
Note in full, but in no event later than November 30, 2004 (the "Maturity
Date").
Payments of Principal.
On the Maturity Date, the entire principal balance of this Note plus
accrued interest and all other charges and sums due under this Note shall be due
and payable in full.
Prepayment.
This Note may be prepaid in whole at any time, or in part from time to
time, at the option of the Maker, without penalty or premium.
Application of Payments.
All payments shall be applied first to any costs of collection, then to
the payment of accrued interest, and then to the principal balance of this Note.
If any payment of principal, interest, late charge of other sum be made
hereunder becomes due and payable on a day other than a business day, the due
date of such payment shall be extended to the next succeeding business day and
interest thereon shall be extended to the next succeeding business day and
interest thereon shall be payable at the Applicable Interest Rated during such
extension.
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Use of Proceeds.
Eagle acknowledges that this Note was issued to Eagle in partial
payment of ______ shares of Common Stock of Eagle Pacific Industries, Inc.
purchased by the Maker from Eagle as of the date hereof (the "Purchased Stock").
Security.
As security for the payment and performance of this Note, the Maker
hereby pledges to Eagle all of the Maker's right, title and interest in and to
the Purchased Stock, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Purchased Shares. Upon request by Eagle, the
Maker shall deliver to Eagle the Purchased Shares for possession during the term
of this Note, and Eagle shall refrain from exercising the voting and other
consensual rights pertaining to the Purchased Shares.
Events of Default.
The occurrence of any one or more of the following events shall
constitute an Event of Default:
(a) The Maker shall fail to make when due any payment of
principal of, or interest on, this Note and such failure shall continue
for a period of thirty days after the Maker receives written notice
from Eagle of such failure; or
(b) The Maker's employment with Eagle is terminated for any
reason including, without limitation, death or total disability.
Remedies.
If any Event of Default shall occur and be continuing, then Eagle may
declare that the outstanding unpaid principal balance of the Note, the accrued
and unpaid interest thereon and all other obligations of the Maker to Eagle to
be forthwith due and payable, whereupon the Note, all accrued and unpaid
interest thereon and all such obligations shall immediately become due and
payable, in each case without further demand or notice of any kind.
No Waiver.
No delay or failure on the part of Eagle in exercising any right or
remedy hereunder, or at law or at equity, shall operate as a waiver of or
preclude the exercise of any such right or remedy, and no single or partial
exercise by Eagle of any such right or remedy shall preclude or estop another or
further exercise thereof or exercise of any other right or remedy. No waiver by
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Eagle hereof shall be effective unless in writing signed by Eagle. A waiver on
any one occasion shall not be construed as a waiver of any such right or remedy
on any prior or subsequent occasion.
Costs of Collection.
The Maker agrees to pay all costs of collection, including attorneys'
fees, in the event that any amount under this Note is not paid when due.
Miscellaneous.
This Note is being delivered in, and shall be governed by the laws of,
the State of Minnesota. Presentment or other demand for payment, notice of
dishonor and protest are expressly waived.
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