UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended February 29, 2000
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from _________________to ________________
COMMISSION FILE NUMBER 0-22793
PRICESMART, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0628530
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4649 Morena Boulevard
San Diego, California 92117
(Address of principal executive offices)
(858) 581-4530
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ X] Yes [ ] No
The registrant had 5,147,896 shares of its common stock, par value $.0001
per share, outstanding at February 29, 2000.
<TABLE>
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PRICESMART, INC.
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
<S> <C>
Condensed Consolidated Balance Sheets as of February 29, 2000
(Unaudited) and August 31, 1999 3
Condensed Consolidated Statements of Operations (Unaudited)
for the three and six months ended February 29, 2000 and February 28,
1999 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the six months ended February 29, 2000 and February 28, 1999 5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
for the six months ended February 29, 2000 6
PriceSmart, Inc. Notes to Condensed Consolidated Financial Statements
(Unaudited) 7-12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 13-17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 19
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 19
ITEM 5. OTHER INFORMATION 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 20
</TABLE>
Page 2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRICESMART, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
February 29, August 31,
2000 1999
------------ --------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 17,659 $ 14,957
Marketable securities 5,471 17,627
Receivables, net of allowance for doubtful accounts 2,247 4,149
Merchandise inventories 34,946 25,919
Prepaid expenses and other current assets 2,279 2,681
City notes receivable, current portion 2,423 2,500
Property held for sale, net 1,652 2,126
------------ --------------
Total current assets 66,677 69,959
------------ --------------
OTHER ASSETS:
Property and equipment, net 88,108 48,507
Restricted cash 3,750 10,195
Deposits on land purchases -- 2,112
City notes receivable, less current portion 16,580 17,006
Notes receivable and other 4,437 4,295
------------ --------------
TOTAL ASSETS $ 179,552 $ 152,074
------------ --------------
------------ --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 22,425 $ 24,679
Accrued salaries, benefits and related 4,473 1,760
Deferred membership income 3,116 1,998
Long-term debt, current portion 7,129 707
Other accrued expenses 3,693 3,369
------------ --------------
Total current liabilities 40,836 32,513
------------ --------------
Long-term debt, less current portion 24,074 7,787
------------ --------------
Total liabilities 64,910 40,300
------------ --------------
Minority interest 21,600 17,913
Commitments and contingencies -- --
STOCKHOLDERS' EQUITY:
Preferred stock, $.0001 par value, 2,000,000 shares
authorized, none issued -- --
Common stock, $.0001 par value, 15,000,000 shares authorized,
and 6,044,073 and 5,991,256 shares issued at
February 29, 2000 and August 31, 1999, respectively 1 1
Additional paid-in capital 112,498 111,483
Notes receivable from stockholders (850) (950)
Deferred compensation (980) (1,282)
Accumulated other comprehensive loss (309) (453)
Accumulated deficit (3,426) (864)
Less: Treasury stock at cost, 896,177 and 907,898 shares at
February 29, 2000 and August 31, 1999, respectively (13,892) (14,074)
------------ --------------
Total stockholders' equity 93,042 93,861
------------ --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 179,552 $ 152,074
------------ --------------
------------ --------------
</TABLE>
See accompanying notes.
Page 3
<TABLE>
<CAPTION>
PRICESMART, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED - AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
----------------------------------------------------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES
SALES:
Net warehouse $ 75,458 $ 17,544 $125,940 $ 33,662
Export 146 2,019 421 4,328
Membership fees and royalties 1,834 501 3,171 858
Travel and other programs 2,674 1,717 4,569 2,997
Auto -- 1,988 -- 3,945
--------------- --------------- --------------- ---------------
TOTAL REVENUES 80,112 23,769 134,101 45,790
--------------- --------------- --------------- ---------------
EXPENSES:
COST OF GOODS SOLD:
Net warehouse 66,131 15,302 110,170 29,340
Export 139 1,950 405 4,194
Selling, general and administrative 12,782 8,188 24,128 15,417
Preopening expenses 1,046 464 3,289 649
--------------- --------------- --------------- ---------------
TOTAL EXPENSES 80,098 25,904 137,992 49,600
--------------- --------------- --------------- ---------------
OPERATING INCOME (LOSS) 14 (2,135) (3,891) (3,810)
--------------- --------------- --------------- ---------------
OTHER:
Interest income, net 476 1,191 1,123 2,513
Other income (expense) 31 627 (156) 1,531
Minority interest (227) (71) 449 (93)
--------------- --------------- --------------- ---------------
TOTAL OTHER 280 1,747 1,416 3,951
--------------- --------------- --------------- ---------------
Income (loss) before provision for 294 (388) (2,475) 141
income taxes --------------- --------------- --------------- ---------------
Provision for income taxes 87 81 87 92
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) $ 207 $ (469) $(2,562) $ 49
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
EARNINGS (LOSS) PER SHARE:
Basic $ 0.04 $ (0.09) $ (0.50) $ 0.01
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Diluted $ 0.04 $ (0.09) $ (0.50) $ 0.01
--------------- --------------- ------------- ---------------
--------------- --------------- --------------- ---------------
SHARES USED IN PER SHARE COMPUTATION:
Basic 5,114 5,036 5,100 5,175
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Diluted 5,734 5,036 5,100 5,349
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
See accompanying notes.
Page 4
<TABLE>
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PRICESMART, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - AMOUNTS IN THOUSANDS)
Six Months Ended
-------------------------------------
February 29, February 28,
2000 1999
------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (2,562) $ 49
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 1,948 711
Allowance for doubtful accounts (106) 73
Income tax charge 87 92
Minority interest (470) 93
Compensation expense recognized for stock options 302 727
Change in operating assets and liabilities
Restricted cash 6,445 (3,074)
Accounts receivable and other assets (6,583) 2,764
Accounts payable and other liabilities 1,814 3,645
------------------ ------------------
Net cash flows provided by operating activities 875 5,080
INVESTING ACTIVITIES
Purchases of marketable securities -- (39,672)
Sale of marketable securities 12,156 58,114
Additions to property and equipment (39,437) (8,930)
Payments of notes receivable 361 1,203
Other 103 --
------------------ ------------------
Net cash flows provided by (used in) investing activities (26,817) 10,715
FINANCING ACTIVITIES
Proceeds from property held for sale 440 1,221
Proceeds (repayment) from bank borrowings, net 22,709 (3,782)
Contributions by minority interest shareholders 4,157 813
Proceeds from exercise of stock options 1,197 170
Received payment on officers' notes receivable 100 --
Issuance of common stock -- 84
Purchases of treasury stock -- (6,605)
------------------ ------------------
Net cash flows provided by (used in) financing activities 28,603 (8,099)
Effect of exchange rate changes on cash
and cash equivalents 41 (31)
------------------ ------------------
Net increase in cash and cash equivalents 2,702 7,665
Cash and equivalents at beginning of period 14,957 5,639
------------------ ------------------
Cash and equivalents at end of period $ 17,659 $ 13,304
------------------ ------------------
------------------ ------------------
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 690 $ 58
Income Taxes $ 423 $ 129
</TABLE>
See accompanying notes.
Page 5
<TABLE>
<CAPTION>
PRICESMART, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000
(UNAUDITED - AMOUNTS IN THOUSANDS)
Other
Additional Notes Receivable Comprehensive
Common stock Paid-in from Deferred Income
Shares Amount Capital Stockholders Compensation (Loss)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at August 31, 1999 5,991 $1 $111,483 $(950) $(1,282) $(453)
Exercise of stock options 53 1,015
Amortization of deferred
compensation
302
Payment on Officers' Notes 100
Net loss
Unrealized gain on marketable
securities 103
Translation adjustment 41
Comprehensive loss
-----------------------------------------------------------------------------------------
Balance at February 29, 2000 6,044 $1 $112,498 $(850) $ (980) $(309)
=========================================================================================
<CAPTION>
Less:
Retained Treasury stock Total
Earnings at Cost Stockholders'
(Deficit) Shares Amount Equity
----------------------------------------------------
<S> <C> <C> <C> <C>
Balance at August 31, 1999 $(864) 908 $(14,074) $93,861
Exercise of stock options (12) 182 1,197
Amortization of deferred
compensation
302
Payment on Officers' Notes 100
Net loss (2,562) (2,562)
Unrealized gain on marketable
securities 103
Translation adjustment 41
-----------------
Comprehensive loss (2,418)
----------------------------------------------------
Balance at February 29, 2000 $(3,426) 896 $(13,892) $93,042
====================================================
</TABLE>
See accompanying notes.
Page 6
PRICESMART, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - COMPANY OVERVIEW AND BASIS OF PRESENTATION
COMPANY OVERVIEW: PriceSmart, Inc.'s ("PriceSmart" or the "Company") business is
international merchandising consisting of membership shopping stores similar to,
but smaller in size than, warehouse clubs in the United States. As of February
29, 2000, there were nine warehouse stores in operation (three in Panama, two in
the Dominican Republic, and one each in Guatemala, Costa Rica, El Salvador and
Honduras) of which the Company owns a majority interest. Also, there were five
warehouse stores in operation (four in China and one in Saipan) licensed to and
operated by local business people. Additionally, until March 1, 2000, the
Company operated a domestic travel business marketed primarily to Costco
Companies, Inc. ("Costco") members (see Note 8 - Subsequent Events).
BASIS OF PRESENTATION: The condensed consolidated financial statements include
the assets, liabilities and results of operations of the Company and its
majority owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. Certain amounts in the prior
period condensed consolidated financial statements have been reclassified to
conform to current period presentation.
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Ownership Basis of Presentation
------------- ---------------------
<S> <C> <C>
Ventures Services, Inc. 100% Consolidated
PriceSmart Guatemala 66% Consolidated
PriceSmart Panama 51% Consolidated
PriceSmart Trinidad 65% Consolidated
PSMT Caribe:
Costa Rica 60% Consolidated
Dominican Republic 60% Consolidated
El Salvador 60% Consolidated
Honduras 60% Consolidated
--------------------------------------------------------------------------------
</TABLE>
The condensed consolidated interim financial statements of the Company
included herein have been prepared by the Company without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission ("SEC") and
reflect all adjustments that are, in the opinion of management, necessary to
fairly present the financial position, results of operations, and cash flows for
the interim period presented. Certain information and footnote disclosures
normally included in consolidated financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such SEC rules and regulations. Management believes that the
disclosures made are adequate to make the information presented not misleading.
The results for interim periods are not necessarily indicative of the results
for the full year. The interim financial statements should be read in
conjunction with the financial statements and notes thereto contained in the
Company's audited consolidated financial statements for the year ended August
31, 1999 filed on Form 10-K.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR: The Company's fiscal year ends August 31. The Company's fiscal
quarter ends are November 30, February 28 or in leap year February 29 and May
31.
Page 7
PriceSmart, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
PROPERTY AND EQUIPMENT: Property and equipment are stated at cost. Depreciation
is computed on a straight-line basis over the estimated useful lives of the
assets, as follows:
Building and improvements 10-25 years
Fixtures and equipment 3-7 years
MERCHANDISE INVENTORIES: Merchandise inventories, which include merchandise for
resale, are valued at the lower of cost (average cost) or market.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
SEGMENT REPORTING: The Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information" which the
Company adopted in fiscal 1999. SFAS No. 131 amends the requirements to report
financial and descriptive information about its reportable operating segments.
The financial information is required to be reported on the basis that is used
internally for evaluating the segment performance and deciding how to allocate
resources to segments. The Company principally operates under one segment in two
geographic regions.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
February 29, August 31,
2000 1999
--------------- ---------------
<S> <C> <C>
PROPERTY AND EQUIPMENT
Land $ 21,398 $ 8,709
Building and improvements 31,464 20,413
Fixtures and equipment 25,817 16,724
Construction in progress 15,840 7,124
--------------- --------------
94,519 52,970
Less accumulated depreciation (6,411) (4,463)
--------------- --------------
Property and equipment, net $ 88,108 $ 48,507
--------------- --------------
--------------- --------------
</TABLE>
Page 8
PriceSmart, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
NOTE 4 - EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is computed based on the weighted average
shares outstanding in the period. Diluted earnings (loss) per share includes the
effect of dilutive securities (options) except where their inclusion is
antidilutive.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Computation of Net Income (Loss) Per Common Share (Basic
and Diluted) (Unaudited - amounts in thousands,
except per share data)
Three Months Ended Six Months Ended
----------------------------------- ----------------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
----------------- ---------------- ---------------------------------
<S> <C> <C> <C> <C>
Net income (loss) used for basic
and diluted computation $ 207 $ (469) $ (2,562) $ 49
----------------- ---------------- ---------------------------------
----------------- ---------------- ---------------------------------
Weighted average number of
Common shares outstanding 5,114 5,036 5,100 5,175
Add:
Assumed exercise of those options
that are common stock equivalents 620 -- -- 174
----------------- ---------------- ---------------------------------
Adjusted shares outstanding used
for diluted computation 5,734 5,036 5,100 5,349
----------------- ---------------- ---------------------------------
----------------- ---------------- ---------------------------------
Earnings (loss) per share:
Basic $ 0.04 $ (0.09) $ (0.50) $ 0.01
----------------- ---------------- ---------------------------------
----------------- ---------------- ---------------------------------
Diluted $ 0.04 $ (0.09) $ (0.50) $ 0.01
----------------- ---------------- ---------------------------------
----------------- ---------------- ---------------------------------
</TABLE>
All of the assumed exercises of company stock options into common shares are
excluded from diluted loss per share since their effect is antidilutive.
--------------------------------------------------------------------------------
Page 9
PriceSmart, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
NOTE 5 - COMPREHENSIVE INCOME (LOSS)
During the first quarter of fiscal 1999, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income" which requires the disclosure of all components
of comprehensive income, including net income and other comprehensive income.
Comprehensive income is defined as the change in equity during a period from
transactions and other events and circumstances generated from non-owner sources
which includes the Company's unrealized gains or losses on marketable securities
and foreign currency translation adjustments. Consolidated comprehensive income
(loss) was as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------------- -------------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
----------------- ---------------- ---------------------------------
<S> <C> <C> <C> <C>
Net income (loss) $ 207 $ (469) $ (2,562) $ 49
Unrealized gain (loss)
on marketable securities (16) 460 103 498
Foreign currency translation adjustments 9 (31) 41 (31)
----------------- ---------------- ---------------------------------
Comprehensive income (loss) $ 200 $ (40) $ (2,418) $ 516
----------------- ---------------- ---------------------------------
----------------- ---------------- ---------------------------------
</TABLE>
NOTE 6 - LOAN AGREEMENTS
In May 1999, the Company, through its joint venture arrangement in Costa
Rica, entered into a loan agreement with Banco Bilbao Vizcaya, S.A. for $3.8
million. The term of the loan is for three years and requires quarterly interest
payments at 14%. The loan matures on May 31, 2002, at which time the principal
amount is due. The loan is secured by a collateral deposit of $3.8 million
contributed by the Company and its joint venture arrangement in Costa Rica,
which earns interest of 13.75% per annum.
In October 1999, the Company, through its joint venture arrangement in
Costa Rica, entered into a loan agreement with CitiBank, N.A. for $5.9 million.
The term of the loan is for five years and interest is calculated on the basis
of six-month LIBOR (6.1575% at February 29, 2000) rate plus 4.0%. Minimum
principal payments of approximately $215,000 are due quarterly, with the
remaining balance of approximately $1.6 million due at the end of the loan. The
loan is collateralized by certain land, building, fixtures and equipment of the
Costa Rica joint venture and guaranteed up to 60% by the Company and up to 40%
from the Company's joint venture partner. The loan is also subject to certain
financial and operating covenants.
In December 1999, the Company, through its joint venture arrangement in El
Salvador, entered into a loan agreement with CitiBank, N.A. for $5.0 million.
The term of the loan is for five years and interest is calculated on the basis
of three-month LIBOR (6.10875% at February 29, 2000) rate per annum plus 4.0%.
Interest payments are required to be made on a monthly basis. Minimum principal
payments of $218,750 are due quarterly, with approximately $1.5 million due at
the end of the loan term. The loan is collateralized by certain land, building,
fixtures and equipment of the El Salvador joint venture and guaranteed up to 60%
by the Company and up to 40% from the Company's joint venture partner. The loan
is also subject to certain financial and operating covenants.
In December 1999, the Company, through its joint venture arrangement in
Panama, entered into a debt agreement with The Chase Manhattan Bank for $11.3
million. Advances will be through a secured revolving credit facility through
November 20, 2000. Outstanding borrowings under the facility at November 20,
2000 will be converted to a secured five year term loan. Interest on the debt
agreement is calculated on the basis of
Page 10
three-month LIBOR rate plus 1.75%. Payments are made on a monthly basis,
interest only while a revolving credit facility and interest plus principal
payments of $188,333 after the loan is converted to a term loan. The loan is
collateralized by certain land and building of the underlying warehouses and
guaranteed by the Company to the extent of its ownership interest. As of
February 29, 2000, the Company had borrowings of $7.6 million under the
revolving credit facility. The loan is also subject to certain financial and
operating covenants.
In January 2000, the Company established an $8.0 million revolving line of
credit with Bank of America, N.A. providing for cash advances and for up to $1
million of letters of credit. The term of the revolving line of credit expires
in December 2000 and interest is calculated on the basis of Bank of America,
N.A.'s prime rate, LIBOR plus one percentage point, or LIBOR plus one percentage
point. The revolving line of credit is secured by marketable securities of the
Company. As of February 29, 2000, the Company has full availability under the
revolving line of credit and no draws on the line have been made to date.
In January 2000, the Company, through its joint venture arrangement in the
Dominican Republic, entered into two separate line of credit facilities of $2.0
million each, both of which are due in six months. Interest on both credit
facilities is calculated on the basis of six-month LIBOR plus 4.25% and is
payable monthly. As of February 29, 2000, the full amount was drawn on the
facilities for general working capital.
In February 2000, the Company, through its joint venture arrangement in
Costa Rica, entered into a loan agreement with the Commercial International Bank
& Trust Co. Ltd. for $3.9 million. As of February 29, 2000, the Company has
borrowed $900,000 under the loan agreement. The remaining $3 million will be
borrowed for future warehouse developments. The term of the loan is for five
years and interest is calculated on the basis of the prime rate (8.75% at
February 29, 2000) per annum plus 2.0%. Interest payments are required to be
made on a monthly basis. Minimum principal payments of $139,286 are due
quarterly, with approximately $1.1 million due at the end of the loan term. The
loan is collateralized by certain land, building, fixtures and equipment of the
Costa Rica joint venture and guaranteed up to 60% by the Company and up to 40%
from the Company's joint venture partner. The loan is also subject to certain
financial and operating covenants.
In February 2000, the Company, through its joint venture arrangement in the
Dominican Republic, entered into a loan agreement with Banco Nacional de
Credito, S.A. for $4.2 million. The term of the loan is for five years and
interest is calculated on the basis of six-month LIBOR rate per annum plus
5.645%. Interest payments are required to be made on a monthly basis. Minimum
principal payments of $207,650 are due quarterly. The loan is collateralized by
certain land, building, fixtures and equipment of the Dominican Republic joint
venture and guaranteed up to 60% by the Company and up to 40% from the Company's
joint venture partner. The loan is also subject to certain financial and
operating covenants.
In late February 2000, the Company, through its joint venture arrangement
in Honduras, entered into a loan agreement with CitiBank, N.A. for $3.5 million
(proceeds from the loan were received subsequent to February 29, 2000). The term
of the loan is for five years and interest is calculated on the basis of
three-month LIBOR rate per annum plus 5.125%. Interest payments are required to
be made on a monthly basis. Minimum principal payments of $140,000 are due
quarterly, with approximately $800,000 due at the end of the loan term. The loan
is collateralized by certain land, building, fixtures and equipment of the Costa
Rica joint venture and guaranteed up to 60% by the Company and up to 40% from
the Company's joint venture partner. The loan is also subject to certain
financial and operating covenants.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
From time to time, the Company is subject to legal proceedings and claims
in the ordinary course of business. The Company currently is not aware of any
such legal proceedings or claims that it believes will have, individually or in
the aggregate, a material adverse effect on its business, financial condition or
operating results.
Page 11
PriceSmart, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
NOTE 8 - SUBSEQUENT EVENTS
ADDITIONAL LOANS: In March 2000, the Company, through its joint venture
arrangements in the Dominican Republic, entered into a 180-day bridge loan,
which converts to a five-year term loan, with Banco Dominicano del Progreso,
S.A. for $7.0 million. Interest on the bridge loan is 11.5% and three month
LIBOR plus 4.5% on the term loan. Interest payments are required to be made on a
monthly basis. Minimum principal payments of $350,000 are due quarterly. The
loan is collateralized by certain land, building, fixtures and equipment of the
Dominican Republic joint venture and guaranteed up to 60% by the Company and up
to 40% from the Company's joint venture partner. The loan is also subject to
certain financial and operating covenants.
SALE OF TRAVEL BUSINESS: On March 1, 2000, the Company sold its travel
business for $1.5 million to Club-4U under an asset purchase agreement
("purchase agreement"). Club-4U, a California corporation, was formed to
purchase the travel business and is owned by Sol Price who is a principal
stockholder of the Company. Under the purchase agreement , Club-4U acquired
the assets primarily used in connection with the travel business, subject to
liabilities under the travel business existing contracts, resulting in a gain
of approximately $1.1 million to be recognized in the third quarter of fiscal
2000.
ACQUISITION OF PANAMA MINORITY INTEREST: In March 2000, the Company entered into
an agreement to acquire sole ownership of the PriceSmart Panama business, which
previously has been 51% owned by the Company and 49% owned by BB&M International
Trading Group ("BB&M"), whose principals are several Panamanian businessmen,
including Rafael Barcenas, a Director of PriceSmart.
In return for BB&M's 49% interest, PriceSmart agreed to convey to BB&M's
principals 306,748 shares of PriceSmart common stock (which will be restricted
from being sold for one year). The Panama operations currently consist of three
stores in Panama City with a fourth currently under construction. The
acquisition of all the stock held by BB&M will be accounted for by the purchase
method of accounting.
CITY NOTE SALE: On April 5, 2000, the Company entered into an agreement to sell
up to ten notes receivable from various municipalities and agencies, known as
the "City Notes" (see "Note 5 - City Notes Receivable" in the notes to the
Company's audited consolidated financial statements for the year ended August
31, 1999 filed on Form 10-K), to the Price Family Charitable Trust, a California
Trust. Sol Price (a principal stockholder of PriceSmart, Inc.) and Robert Price
(a principal stockholder and Chairman of the Board of PriceSmart, Inc.) are
trustee and successor trustee, respectively, of the Trust.
The aggregate purchase price to be paid by the Trust for the City Notes is
$22.5 million. Initially, the Company will sell six of the City Notes to the
Trust for $11.5 million. The remaining City Notes will be sold to the Trust upon
receipt of consents to assignment of those notes from the
municipalities/agencies that issued the notes. The Company expects to receive
such consents within 45 days. The Company will recognize a gain of approximately
$3.9 million arising from this transaction that will be recognized in the third
quarter of fiscal 2000.
Page 12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This Quarterly Report contains forward-looking statements concerning the
Company's anticipated future revenues and earnings, adequacy of future cash flow
and related matters. (These forward-looking statements include, but are not
limited to, statements containing the words "expect", "believe", "will", "may",
"should", "project", "estimate", and like expressions, and the negative
thereof). These statements are subject to risks and uncertainties that could
cause actual results to differ materially from the statements, including foreign
exchange risks, political or economic instability of host countries, and
competition, as well as those risks described in the Company's SEC reports,
including the Company's Form 10-K filed pursuant to the Securities and Exchange
Act of 1934 on November 29, 1999.
The following discussion and analysis compares the results of operations
for each of the fiscal quarters ended February 29, 2000 and February 28, 1999,
and should be read in conjunction with the condensed consolidated financial
statements and the accompanying notes included within this report.
In the first quarter of fiscal 2000, the Company opened two new US-style
membership shopping warehouses under joint venture arrangements in Latin
America; one in Honduras (September 1999) and one in Panama (November 1999). In
the second quarter of fiscal 2000, the Company opened two additional new
US-style membership shopping warehouses under joint venture arrangements in the
Dominican Republic (both in December 1999), bringing the total number of
warehouses in operation under joint venture arrangements to nine as of February
29, 2000, compared to two warehouses at the end of the same period last year.
Also, there were five warehouse stores in operation (four in China and one in
Saipan) licensed to and operated by local business people at the end of the
second quarter of fiscal 2000, versus four licensed warehouse stores (three in
China and one in Saipan, Micronesia) at the end of the second quarter of fiscal
1999.
COMPARISON OF THE THREE MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999
Net warehouse sales (from the Company's joint venture locations) increased
331% to $75.5 million for the three months ended February 29, 2000 from $17.5
million for the three months ended February 28, 1999. The increase was a result
of four new warehouses opened during the first and second quarters of fiscal
2000 and three new warehouses opened during fiscal 1999.
The Company's warehouse gross margins (operating under joint venture
arrangements) for the three months ended February 29, 2000 decreased slightly to
12.4% from 12.8% for the three months ended February 28, 1999, primarily a
result of lower prices at new warehouse openings.
Export sales to the Company's licensee warehouses in Asia decreased to
$146,000 for the three months ended February 29, 2000 from $2.0 million for the
three months ended February 28, 1999, due to the Company's focus on company
owned warehouses.
Membership fees and royalties increased to $1.8 million for the three
months ended February 29, 2000 from $501,000 for the three months ended February
28, 1999. Membership fees (including other warehouse income) increased to $1.6
million for the three months ended February 29, 2000 from $144,000 for the three
months ended February 28, 1999. The increase quarter over quarter was primarily
a result of the new warehouse openings and an increase in the average
memberships per warehouse.
Travel and other program revenues increased to $2.7 million for the three
months ended February 29, 2000 from $1.7 million for the three months ended
February 28, 1999. For the three months ended February 29, 2000, travel revenue
was $2.4 million compared to $1.6 million for the same period last year. The
travel program generated most of its revenues through an agreement with Costco
Companies, Inc. ("Costco") and referral commissions. The auto referral business
was sold in April 1999.
page 13
Selling, general and administrative expenses include the operating
expenses related to the Company's warehouse operations; corporate
administrative expenses and operating expenses related to the auto, travel
and other programs. Selling, general and administrative expenses increased to
$12.8 million for the three months ended February 29, 2000 from $8.2 million
for the three months ended February 28, 1999. Warehouse operating expenses
increased for the three months ended February 29, 2000, primarily due to the
new warehouses opened. Corporate administrative expenses have increased to
support the Company's planned expansion of ten additional warehouses
throughout fiscal 2000, four of which have opened year-to-date. The Company
has also incurred incremental one-time development costs of approximately
$575,000 as a part of its planned expansion efforts, which are included in
corporate administrative expenses.
Preopening expenses, which represent expenses incurred before a warehouse
store is opened, increased to $1.0 million for the three months ended February
29, 2000 from $464,000 for the three months ended February 28, 1999. The
increase in preopening expenses is a result of the Company's planned expansion
of warehouses throughout Latin America.
Interest income, net, reflects earnings on marketable securities, cash and
cash equivalent balances, city notes receivable and certain secured notes
receivable from buyers of formerly owned properties and is reduced by interest
expense on bank borrowings at the Company's joint ventures. Interest income,
net, decreased to $476,000 for the three months ended February 29, 2000 from
$1.2 million for the three months ended February 28, 1999 primarily due to
decreased balances in cash and cash equivalents and marketable securities as a
result of the use of cash to finance the Company's expansion and increased
interest expense on bank borrowings during the second quarter of fiscal 2000.
Other income (expense) consists primarily of gain or losses on the sale of
marketable securities and the results from the Company's real estate operations.
For the three months ended February 29, 2000, other income was $31,000 and
consists of a net gain on the sale of marketable securities of $19,000, a loss
from the real estate operations of $62,000, and a gain on the sale of assets of
$74,000. For the three months ended February 28, 1999, other income was
$627,000, and consists of a net loss on the sale of marketable securities of
$293,000 and income from the real estate operations of $920,000, which includes
gains on sales of property. The Company expects to wind down its remaining real
estate operations in fiscal 2000 as it sells its remaining properties held for
sale.
Minority interest relates to an allocation of the joint venture income
(losses) to the minority interest shareholders respective interest.
The provision for income taxes relates to taxes on foreign operations. No
deferred tax benefit has been recognized on net operating losses and start up
costs. Because the realization of such deferred tax assets is not certain, a
full valuation allowance was established.
Page 14
COMPARISON OF THE SIX MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999
Net warehouse sales (from the Company's joint venture locations) increased
274% to $125.9 million for the six months ended February 29, 2000 from $33.7
million for the six months ended February 28, 1999. The increase was primarily a
result of four new warehouses opened during the first half of fiscal 2000 and
three new warehouses opened during fiscal 1999.
The Company's warehouse gross margins (operating under joint venture
arrangements) for the six months ended February 29, 2000 decreased slightly to
12.5% from 12.8% for the six months ending February 28, 1999, primarily a result
of lower prices at new warehouse openings.
Export sales to the Company's licensee warehouses in Asia decreased to
$421,000 for the six months ended February 29, 2000 from $4.3 million for the
six months ended February 28, 1999, due to the Company's focus on company owned
warehouse.
Membership fees and royalties increased to $3.2 million for the six months
ended February 29, 2000 from $858,000 for the six months ended February 28,
1999. Membership fees (including other warehouse income) increased to $2.8
million for the six months ended February 29, 2000 from $192,000 for the six
months ended February 28, 1999. The increase was primarily a result of the new
warehouse openings and an increase in the average memberships per warehouse.
Travel and other program revenues increased to $4.6 million for the six
months ended February 29, 2000 from $3.0 million for the six months ended
February 28, 1999. For the six months ended February 29, 2000, travel revenue
was $4.0 million compared to $2.8 million for the same period last year. The
travel program generated most of its revenues through an agreement with Costco
Companies, Inc. ("Costco") and referral commissions. The auto referral business
was sold in April 1999.
Selling, general and administrative expenses include the operating
expenses related to the Company's warehouse operations; corporate
administrative expenses and operating expenses related to the auto, travel
and other programs. Selling, general and administrative expenses increased to
$24.1 million for the six months ended February 29, 2000 from $15.4 million
for the six months ended February 28, 1999. Warehouse operating expenses
increased for the six months ended February 29, 2000 primarily due to the new
warehouses opened. Corporate administrative expenses have increased to
support the Company's planned expansion of ten additional warehouses
throughout fiscal 2000, four of which have opened year-to-date. The Company
has also incurred incremental one-time development costs of approximately
$817,000 as a part of its planned expansion efforts, which are included in
corporate administrative expenses.
Preopening expenses, which represent expenses incurred before a warehouse
store is opened, increased to $3.3 million for the six months ended February 29,
2000 from $649,000 for the six months ended February 28, 1999. The increase in
preopening expenses is a result of the Company's planned expansion of warehouses
throughout Latin America.
Interest income, net, reflects earnings on marketable securities, cash and
cash equivalent balances, city notes receivable and certain secured notes
receivable from buyers of formerly owned properties and is reduced by interest
expense on bank borrowings at the Company's joint ventures. Interest income,
net, decreased to $1.1 million for the six months ended February 29, 2000 from
$2.5 million for the six months ended February 28, 1999 primarily due to
decreased balances in cash and cash equivalents and marketable securities as a
result of the use of cash to finance the Company's expansion and increased
interest expense on bank borrowings during the first half of fiscal 2000.
Other income (expense) consists primarily of gain or losses on the sale of
marketable securities and the results from the Company's real estate operations.
For the six months ended February 29, 2000, other expense was $156,000 and
consists of a net loss on the sale of marketable securities of $104,000, a loss
from the real estate operations of $126,000 and gain on the sale of assets of
$74,000. For the six months ended February 28, 1999, other income was $1.5
million, and consists of a net gain on the sale of marketable securities of
$318,000
Page 15
and income from the real estate operations of $1.2 million, which includes gains
on sales of property. The Company expects to wind down its remaining real estate
operations in fiscal 2000 as it sells its remaining properties held for sale.
Minority interest relates to an allocation of the joint venture income
(losses) to the minority interest shareholders respective interest.
The provision for income taxes relates to taxes on foreign operations. No
deferred tax benefit has been recognized on net operating losses and start up
costs. Because the realization of such deferred tax assets is not certain, a
full valuation allowance was established.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirement is the financing of land
acquisition, construction and equipment costs for new warehouses plus the cost
of pre-opening and working capital requirements, through investments in foreign
joint ventures.
During fiscal 2000, management's current intention is to spend an aggregate
of approximately $91.0 million (primarily through its foreign joint ventures)
for expansion in Latin America and the Caribbean to open up to ten new
warehouses. However, actual capital expenditures for new warehouse locations and
operations may vary from estimated amounts depending on the number of new
warehouses opened, business conditions and other risks and uncertainties to
which the Company and its businesses are subject. The Company, primarily through
its foreign joint ventures, intends to borrow up to $64.0 million during fiscal
2000 to finance these expenditures which will be secured by the land, building,
equipment and inventories at the new warehouses.
As of February 29, 2000, the Company has entered into financing
arrangements totaling approximately $49.5 million ($26.2 million in term loans
and $23.3 million in lines of credit). As of February 29, 2000, the Company had
remaining availability under its financing agreements of approximately $18.3
million.
In March 2000, the Company, through its joint venture arrangements in the
Dominican Republic, entered into a 180-day bridge loan, which converts to a
five-year term loan, with Banco Dominicano del Progreso, S.A. for $7.0 million.
Interest on the bridge loan is 11.5% and three month LIBOR plus 4.5% on the term
loan. Interest payments are required to be made on a monthly basis. Minimum
principal payments of $350,000 are due quarterly. The loan is collateralized by
the land, building, fixtures and equipment of the Dominican Republic joint
venture and guaranteed up to 60% by the Company and up to 40% from the Company's
joint venture partner. The loan is also subject to certain financial and
operating covenants.
On March 1, 2000, the Company sold its travel business for $1.5 million
to Club-4U under an asset purchase agreement ("purchase agreement"). Club-4U,
a California corporation, was formed to purchase the travel business and is
owned by Sol Price who is a principal stockholder of the Company. Under the
purchase agreement, Club-4U acquired the assets primarily used in connection
with the travel business, subject to liabilities under the travel business
existing contracts, resulting in a gain of approximately $1.1 million to be
recognized in the third quarter of fiscal 2000. The net proceeds will be used
to fund the continued growth of the Company's international membership
merchandising warehouse business.
On April 5, 2000, the Company entered into an agreement to sell up to ten
notes receivable from various municipalities and agencies, known as the "City
Notes" (see "Note 5 - City Notes Receivable" in the notes to the Company's
audited consolidated financial statements for the year ended August 31, 1999
filed on Form 10-K), to the Price Family Charitable Trust, a California Trust.
Sol Price (a principal stockholder of PriceSmart, Inc.) and Robert Price (a
principal stockholder and Chairman of the Board of PriceSmart, Inc.) are trustee
and successor trustee, respectively, of the Trust.
The aggregate purchase price to be paid by the Trust for the City Notes is
$22.5 million. Initially, the Company will sell six of the City Notes to the
Trust for $11.5 million. The remaining City Notes will be sold to the Trust upon
receipt of consents to assignment of those notes from the municipalities/
agencies that issued the Notes. The Company expects to receive such consents
within 45 days. The Company will recognize a gain of approximately $3.9 million
arising from this transaction that will be recognized in the third quarter of
fiscal
Page 16
2000. The proceeds of the sale of the City Notes will be used by the Company to
fund the continued growth of the Company's international membership
merchandising warehouse business.
In addition to the above borrowings, the Company is currently evaluating
several financing proposals and believes that the financing facilities for the
new warehouse locations will be completed. The balance of these expenditures
will be financed through a combination of cash, cash equivalents, marketable
securities, cash from operations of the Company's businesses, proceeds from the
sale of the City Notes and other note receivables.
The Company believes that borrowings under its current credit facilities,
together with its other sources of liquidity described above, will be sufficient
to meet its working capital and capital expenditure requirements for the
foreseeable future. However, if such sources of liquidity are insufficient to
satisfy the Company's liquidity requirements, the Company may need to sell
equity or debt securities or obtain additional credit facilities or reduce the
number of anticipated warehouse openings. There can be no assurance that such
financing alternatives will be available under favorable terms, if at all.
SEASONALITY
Historically, the Company's merchandising businesses have experienced
moderate holiday retail seasonality in their markets. In addition to seasonal
fluctuations, the Company's operating results fluctuate quarter-to-quarter as a
result of economic and political events in markets served by the Company, the
timing of holidays, weather, timing of shipments, product mix, and currency
effects on the cost of U.S.-sourced products which may make these products more
expensive in local currencies and less affordable. Because of such fluctuations,
the results of operations of any quarter are not indicative of the results that
may be achieved for a full fiscal year or any future quarter. In addition, there
can be no assurance that the Company's future results will be consistent with
past results or the projections of securities analysts.
IMPACT OF YEAR 2000
The year 2000 issue results from computer programs and hardware being
written with two digits rather than four digits to define the applicable year.
As a result, there is a risk that date sensitive software may recognize a date
using "00" as the year 1900, rather than the year 2000. This potentially could
result in system failure or miscalculations causing disruptions of operations,
including a temporary inability to process transactions or engage in normal
business activities.
The Company has experienced no year 2000 adverse effects on its internal
systems or any involved in its supply chain, including purchasing, distribution,
sales, and accounting. Also, no errors were found related to date processing
before or after January 1, 2000, including treatment of year 2000 as a leap
year. The Company will continue to monitor its hardware, software, and imbedded
systems as they are added or modified.
A significant part of the Company's business is derived from its activities
in Latin America and Asia. The Company's business could be adversely impacted in
the event business activities in Latin America and Asia are disrupted due to
year 2000 issues, with the extent of such impact dependent upon the extent of
such disruption, which may vary from country to country. The Company's business
could also be adversely impacted by supply chain disruption due to vendor and
supplier business interruption. To date there has been no year 2000 adverse
effects in the Company's foreign operations.
Page 17
Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company, through its joint ventures, conducts international operations
primarily in Latin America, and as such is subject to both economic and
political instabilities that cause volatility in foreign currency exchange.
During fiscal 1999, the Company opened warehouses in three foreign countries
through joint venture arrangements. Thus far in fiscal 2000, the Company has
opened warehouses in two additional foreign countries through joint venture
arrangements. For the six months ended February 29, 2000, approximately 71% of
the Company's net warehouse sales were in foreign currencies. The Company's
future expansion plans anticipate entry into additional foreign countries, which
may involve similar economic and political risks as well as challenges that are
different from those currently encountered by the Company. The Company believes
that because its present operations and expansion plans involve numerous
countries and currencies, its exposure from any one currency devaluation would
not significantly affect operating results. Nonetheless, there can be no
assurance that the Company will not experience a materially adverse effect on
the Company's financial condition as a result of the economic and political
risks of conducting an international merchandising business.
Translation adjustments from the Company's non-U.S. denominated joint
venture arrangements in Latin America totaled $204,000 for the six months ended
February 29, 2000 compared to $31,000 for the six months ended February 28,
1999. Translation adjustments from the Company's non-U.S. denominated joint
venture arrangements in Latin America totaled $245,000 for fiscal 1999.
Foreign currencies in most of the Latin American and Caribbean
countries have historically devalued against the U.S. dollar and most are
expected to continue to devalue. Managing foreign exchange is critical for
operating successfully in these markets and the Company manages its risks
through a combination of hedging currencies through Non Deliverable Forward
Exchange Contracts (NDF) and internal hedging procedures. As of February 29,
2000, the Company had $2.5 million in NDF's expiring at different dates through
April 10, 2000. The cost associated with these contracts through February 29,
2000 was not material. The Company will continue to purchase NDF's where
necessary to mitigate foreign exchange losses, but due to the volatility and
lack of derivative financial instruments in the countries the Company operates,
significant risk from unexpected devaluation of local currencies exist. Foreign
exchange transaction losses realized for the six months ended February 29, 2000
(including the cost of the NDF's) was approximately $537,000.
Page 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of stockholders was held on
January 19, 2000 at the Hilton San Diego Mission Valley in San
Diego, California. Stockholders of record at the close of
business on November 23, 1999 were entitled to notice of and to
vote in person or by proxy at the annual meeting. As of the
record date there were 5,094,758 shares outstanding. The matter
presented for vote received the required votes for approval and
had the following total, for and withheld votes as noted below.
1. To elect directors for the ensuing year, to serve until the next
Annual meeting of Stockholders and until their successors are
elected and have qualified:
<TABLE>
<CAPTION>
Votes For Votes Withheld
<S> <C> <C>
Rafael E. Barcenas 4,802,096 85,210
James F. Cahill 4,887,517 2
Katherine L. Hensley 4,886,474 1,045
Leon C. Janks 4,887,519 0
Lawrence B. Krause 4,886,474 1,045
Gilbert A. Partida 4,886,474 1,045
Robert E. Price 4,887,351 168
</TABLE>
Item 5. Other Information
None
Page 19
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Loan agreement by and between CitiBank and PRICSMARLANDCO, S.A.,
Prismar de Costa Rica. S.A., PSMT Caribe, Inc.. Pricesmart, Inc.,
P.S.C., S.A., and Venture Services, Inc. dated October 1999 for $5.9
million.
10.2 Line of credit between Bank of America and PriceSmart, Inc. dated
January 10, 2000 for $8.0 million.
10.3 Loan agreement by and between CitiBank, N.A. and Imobiliaria
PriceSmart, S.A. de C.V., PriceSmart El Salvador, S.A. de C.V., PSMT
Caribe, Inc., PriceSmart, Inc., P.S.C., S.A., and Venture Services,
Inc. dated December 21, 1999 for $5.0 million.
10.4 (a) Loan agreement by and between The Chase Manhattan Bank and
PriceSmart, Inc. and PB Real Estate, S.A. dated December 20, 1999 for
$11.3 million (in Spanish).
10.4 (b) Loan agreement by and between The Chase Manhattan Bank and
PriceSmart, Inc. and PB Real Estate, S.A. dated December 20, 1999 for
$11.3 million (in English).
10.5 (a) Line of Credit for 180 days between Banco Nacional de Credito,
S.A. and PriceSmart Dominicana, S.A. January 11, 2000 for $1.0 million
(in Spanish).
10.5 (b) Line of Credit for 180 days between Banco Nacional de Credito,
S.A. and PriceSmart Dominicana, S.A. dated January 11, 2000 for $1.0
million (in English).
10.5 (c) Line of Credit for 180 days between Banco Nacional de Credito,
S.A. and PriceSmart Dominicana, S.A. dated January 11, 2000 for $1.0
million (in Spanish).
10.5 (d) Line of Credit for 180 days between Banco Nacional de Credito,
S.A. and PriceSmart Dominicana, S.A. dated January 11, 2000 for $1.0
million (in English).
10.6 (a) Line of Credit for 180 days between Banco Del Progresso, S.A.
and PriceSmart Dominicana, S.A. dated December 23, 1999 for $2.0
million (in Spanish).
10.6 (b) Line of Credit for 180 days between Banco Del Progresso and
PriceSmart Dominicana, S.A. dated December 23, 1999 for $2.0 million
(in English).
10.7(a) Loan agreement by and between Commercial International Bank &
Trust Co. Ltd. And PRICMARLANDCO, S.A. (Costa Rica) dated February 4,
2000 for $3.9 million (in Spanish).
10.7(b) Loan agreement by and between Commercial International Bank &
Trust Co. Ltd. And PRICMARLANDCO, S.A. (Costa Rica) dated February 4,
2000 for $3.9 million (in English).
10.8(a) Loan agreement by and between Banco Nacional de Credito, S.A.
and PriceSmart Dominicana, S.A. dated February 22, 2000 for $4.2
million (in Spanish).
10.8(b) Loan agreement by and between Banco Nacional de Credito, S.A.
and PriceSmart Dominicana, S.A. dated February 22, 2000 for $4.2
million (in English).
10.9 Loan agreement by and between CitiBank, N.A. and Inmobiliaria
PriceSmart Honduras dated February 25, 2000 for $3.5 million.
10.10 Loan agreement by and between Banco Dominicano del Progreso,
S.A., Inmobiliaria PriceSmart, S.A. and PriceSmart Dominicana, S.A.
dated March 10, 2000 for $7.0 million.
10.11 Travel Business Purchase Agreement dated March 1, 2000 between
the Company and Club-4U.
10.12 Agreement to acquire sole ownership of the Panama PriceSmart
business dated March 22, 2000 between the Company and BB&M
International Trading Group.
10.13 Loan agreement by and between Banco Bilbao Vizcaya, S.A. and
PRICSMARLANDCO, S.A. dated May 27, 1999 for $3.75 million.
10.14 Second Amendment of Employment Agreement between PriceSmart, Inc.
and Gilbert A. Partida, dated January 10, 2000.
10.15 Third Amendment of Employment Agreement between PriceSmart, Inc.
and Thomas Martin dated January 11, 2000.
10.16 Third Amendment of Employment Agreement between PriceSmart, Inc.
and K. C. Breen dated January 11, 2000.
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed for the six months ended February 29,
2000.
Page 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PriceSmart, Inc.
REGISTRANT
Date: April 11, 2000 /s/ Gilbert A. Partida
----------------------
Gilbert A. Partida
President and Chief Executive
Officer
Date: April 11, 2000 /s/ Allan C. Youngberg
---------------------
Allan C. Youngberg
Executive Vice President,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Page 21
LOAN AGREEMENT BY AND BETWEEN
CITIBANK
and
PRICSMARLANDCO, S.A., PRISMAR DE COSTA RICA, S.A., PSMT CARIBE, INC.,
PRICESMART, INC., P.S.C., S.A., AND VENTURES SERVICES, INC.
THIS LOAN AGREEMENT IS ENTERED INTO, ON THE DATE INDICATED ON THE SIGNATURE
PAGE HERETO, BY AND BETWEEN, on the first part, CITIBANK, N.A. -
INTERNATIONAL BANKING FACILITY, a banking entity established, organized and
existing under the laws of the United States of America ("CREDITOR") and, on
the second part, PRICSMARLANDCO, SOCIEDAD ANONIMA, a corporation organized
and existing under the laws of the country of Costa Rica ("DEBTOR"), and as
guarantors PRISMAR DE COSTA RICA, SOCIEDAD ANONIMA, a corporation organized
and existing under the laws of the country of Costa Rica, PRICESMART, INC., a
corporation organized and existing under the laws of Delaware, P.S.C.,
SOCIEDAD ANONIMA, a corporation organized and existing under the laws of
Delaware, P.S.C., SOCIEDAD ANONIMA, a corporation organized and existing
under the laws of Panama, and PSMT CARIBE, INC., a corporation organized and
existing under the laws of the British Virgin Islands ("GUARANTORS"), and
VENTURES SERVICES, INC., a corporation organized and existing under the laws
of Delaware, as technology licensor ("LICENSOR").
RECITALS:
WHEREAS, DEBTOR, PRICSMARLANDCO, SOCIEDAD ANONIMA, Costa Rican corporate
identification number three hyphen one hundred and one hyphen two hundred
twenty nine thousand nine hundred forty-eight (3-101-229,948), domiciled in
San Jose, Costa Rica, entity registered in the Mercantile Section of the
Public Registry, book one thousand two hundred two (1,202) page seventy-eight
(78), entry seventy-five (75), has applied to CREDITOR CITIBANK N.A. -
INTERNATIONAL BANKING FACILITY, a bank entity established, organized and
existing under the laws of the United States of America, for a medium term
non-revolving mercantile loan in the amount of five million nine hundred
thousand dollars ($5,900,000.00), legal tender of the United States of
America (the "LOAN");
WHEREAS, THE DEBTOR proposes to use the LOAN for costs of construction,
including furniture, fixture and equipment, of PRICESMART membership shopping
1
warehouse with an area of approximately five thousand (5,000) square meters,
on a parcel of land owned by THE DEBTOR in San Jose, Costa Rica, Central
America, more accurately described below ("THE PROPERTY");
WHEREAS, THE DEBTOR has offered a security interest in THE PROPERTY,
including any improvements thereto, in favor of THE CREDITOR;
WHEREAS, THE DEBTOR has agreed to continue being responsible for the
operation, management and administration of the PRICESMART mercantile
establishment;
WHEREAS, THE DEBTOR has complied with the following conditions precedent to
the grant of the loan: a) THE DEBTOR has offered loan guarantees acceptable
to THE CREDITOR, b) the parties have reached an agreement concerning the
terms and conditions of the loan and the form and content of documentation
necessary for the completion of this transaction, including but not limited
to credit agreements and insurance policies, c) THE DEBTOR has provided an
appraisal of THE PROPERTY and furniture, fixtures and equipment offered as
security for this loan which was conducted by an expert appraiser selected by
THE CREDITOR, and; d) the appraisal reflected an appraised value in an amount
sufficient to qualify THE PROPERTY TOGETHER WITH FURNITURE, FIXTURES AND
EQUIPMENT as security for the loan in the amount contemplated;
WHEREAS, THE DEBTOR has agreed that THE CREDITOR reserves the right not to
make any disbursement in cash if there is: a) any adverse material change in
the financial condition of THE DEBTOR and/or any of THE GUARANTORS between
the date of the execution of this LOAN AGREEMENT and the date on which the
disbursement becomes due, and; b) if at the time of the disbursement,
political conditions in the Republic of Costa Rica materially and adversely
affect the risks to THE CREDITOR in making the loan disbursement;
WHEREAS, it has been deemed beneficial by THE CREDITOR, THE DEBTOR and each
of THE GUARANTORS, to grant, receive and guarantee, respectively, the loan
set forth in this document, in accordance with the terms and conditions
herein set forth;
THEREFORE, in accordance with the foregoing clauses, and being deemed
beneficial for all the parties hereto, the undersigned enter into this LOAN
AGREEMENT, subject to the following terms and conditions:
AGREEMENT:
2
1. DEFINITIONS:
For purposes of this LOAN AGREEMENT, the following terms shall mean:
THE PROPERTY: That property registered in the Public Registry Office,
Province of San Jose, real estate registration numbers: 1) four hundred
and eighty-six thousand one hundred and ninety-eight hyphen zero zero zero
(486,198-000), described as parking lot and warehouse, located in San
Jose, eighteenth canton, first district, with an area twenty one thousand
three hundred fifty three meters with twenty seven square decimeters
(21,353,27 m2), and the following boundary lines: North: Pricsmarlando,
S.A. and public road South: National Insurance Institute; East: Republic
Tobacco Company; and West: Negocios Nacional Nortenos, S.A. and partially
Pricsmarlando, S.A. 2) four hundred and ninety four thousand eight
hundred fifty six hyphen zero zero zero (494,856-000), described as land
for construction, located in San Jose, eighteenth canton, first district,
with an area two thousand two hundred forty nine meters two square
decimeters (2,249,02 m2), and the following boundary lines: North: public
road South: Pricsmarlando, S.A.; East: Republic Tobacco Company; and West:
Pricsmarlando, S.A. and which constitutes the encumbered property that
secures payment under this LOAN AGREEMENT.
LOAN AGREEMENT or AGREEMENT: The agreement stipulated, agreed upon and
subscribed by means of this written instrument.
DISBURSEMENT: The delivery of the DOLLARS lent to THE DEBTOR by THE CREDITOR,
in cash or by means of check, transfer or deposit.
BUSINESS DAY: Any day that the offices of THE CREDITOR are open to the
general public in the cities of New York and San Jose, Costa Rica. With
regard to the six (6) month LIBOR RATE, a day on which THE CREDITOR's
banks in the cities of New York and San Jose, Costa Rica are all open.
DOLLARS OR DOLLAR: The legal tender of the United States of America.
MATERIAL ADVERSE CHANGE: The negative impact on THE DEBTOR resulting from any
unfavorable action of any kind or nature, including, but not limited to
any disadvantageous determination in any suit, arbitration proceeding,
judicial, extrajudicial or administrative proceedings, or any investigation
of any government or other authority, which may impose a negative and
adverse burden, which may make materially difficult and alter adversely
the financial condition, the business operations, the assets or the
securities of THE DEBTOR. For purposes of this definition, "material
adverse change" shall mean: Any variation related to the business,
financial conditions, or of other nature, operations, results, properties
or perspectives of the DEBTOR and/or Prismar de Costa Rica, S.A. and/or
political, economical or financial conditions of the Republic of Costa
Rica, or in the Costa Rican market of debtors of loans or loan securities,
which, in good faith opinion of the CREDITOR, could reasonably be expected
to significantly diminish the BORROWER'S ability to perform its
obligations under THE LOAN.
SELF-GUARANTEED LOAN: That certain loan dated as of May 27, 1999 by and
between Prismar de Costa Rica, S.A. and Banco Bilbao Viscaya as amended,
evidenced by
3
a Promissory Note. BORROWER, PRISMAR DE COSTA RICA, S.A. and each of the
GUARANTORS agree that the SELF-GUARANTEED LOAN will not be materially
modified without Creditor's prior written consent.
FINANCIAL STATEMENT: the balance sheet, profit and loss statement, and the
cash flow statement, including any accompanying note; and in the case of
audited Financial Statements, including the auditors' report and the
report of the President or the managers of THE DEBTOR and each of THE
GUARANTORS.
LEGALLY IN ARREARS: Failure to make a timely payment to interest or to pay
one of the installments to principal as agreed upon, thereby authorizing
THE CREDITOR to consider the loan one hundred percent due and payable.
FISCAL YEAR: The period of time that starts on the first day of September of
every year and ends on the thirty-first day of August of the following
year. If there is any change in the fiscal year of THE DEBTOR or any of
THE GUARANTORS, it shall be communicated, and the appropriate addendum
to this AGREEMENT shall be subscribed.
SIX (6) MONTH LIBOR RATE: Six (6) Month LIBOR Rate on a given date shall mean
the rate offered by Citibank N.A. London Branch to prime banks in the
London interbank market at 11 a.m. (London Time) two London Banking Days
prior to that due date with reference to advances of six months' tenor
of amounts approximately equal to the principal amount of the Advance
then outstanding; further, a "London Banking Day" shall mean a day on
which banks are not required or authorized to close in London.
THE LOAN:
Subject to the terms and conditions stipulated in this LOAN AGREEMENT,
THE CREDITOR agrees to lend to THE DEBTOR, and THE DEBTOR agrees to
borrow from THE CREDITOR, the amount of five million nine hundred
thousand DOLLARS ($5,900,000.00), legal tender of the United States of
America, non-revolving mercantile loan, which THE DEBTOR shall use to
cover the costs of construction including furniture, fixture and
equipment a PRICESMART membership shopping warehouse on THE PROPERTY.
DISBURSEMENT:
THE DEBTOR shall receive from THE CREDITOR the amount of five million nine
hundred thousand DOLLARS ($5,900,000.00), amount that shall be disbursed
subject to: 1) THE DEBTOR offering loan guarantees acceptable to THE
CREDITOR, 2) the parties reaching an agreement concerning the terms and
conditions of the loan and the form and content of documentation
necessary for the completion of this transaction, including but not
limited to credit agreements and insurance policies, 3) THE DEBTOR
providing an appraisal of THE PROPERTY offered as security for this loan
conducted by an expert appraiser selected by THE CREDITOR, and; 4) the
appraisal reflecting an appraised value in an amount sufficient to
qualify THE PROPERTY as security for the loan in the amount
4
contemplated.
By its execution of this AGREEMENT, THE CREDITOR expressly acknowledges that
all conditions above have been met.
THE DEBTOR authorizes THE CREDITOR to deduct from this sum the amount
required to cover the structuring fee referenced in Section 4.c. below.
4. INTEREST, FEES AND INCREASE IN COSTS:
REGULAR INTEREST: This loan will accrue interests on the remnant of the
debted amount, equivalent to the Six (6) Month LIBOR Rate plus four
percentage points. The Six (6) Month LIBOR Rate will be reviewed,
adjusted and modified on a monthly basis. The interests will be due and
payable on a monthly basis and will be calculated on the basis of three
hundred sixty days of a calendar year and according to the number of
days that have passed. The interest will start to be counted from today
and will be payable every fifteen day of every month starting on the
fifteen day of November, 1999.
OVERDUE INTEREST: If THE DEBTOR fails to make a principal payment on the
agreed upon date, the DEBTOR will acknowledge interests in the ordinary
rate that in each opportunity will be in force, plus a surcharge of
three percentage points, applicable on the principle due. Said overdue
interest shall also be paid by THE DEBTOR in DOLLARS.
STRUCTURING FEE: THE DEBTOR shall pay, one time only, the amount of
eighty-eight thousand five hundred DOLLARS ($88,500.00) to THE CREDITOR,
as a credit structuring fee, which amount THE DEBTOR authorizes and
requests be deducted from the amount of the disbursement.
TAXES: (a) Any and all payments made hereunder shall be made free and clear of
and without deduction for any present of future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
hereto, excluding taxes imposed on net income and all income and
franchise taxes and any political subdivisions thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If any taxes
are required by law to be deducted from or in respect of any sum payable
hereunder (i) the sum payable shall be increased as may be necessary so
that after making all required deductions the Bank receives an amount
equal to the sum it would have received had no such deductions been
made, (ii) the DEBTOR shall make such deductions and (iii) the DEBTOR
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law. (b) In addition, the
DEBTOR agrees to pay any present or future documentary stamp or
intangible taxes or any other excise or property taxes, charges or
similar levies which arise from any payments made hereunder or from the
execution, delivery or registration of, or otherwise with respect to,
this agreement (hereinafter referred to as "Other taxes"). (c) The
DEBTOR will indemnify the Bank for the full amount of Taxes or Other
taxes (including, without limitation, any Taxes or Other taxes imposed
by any jurisdiction on amount payable under this Section) paid
5
by the Bank and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Bank
makes written demand therefor. (d) Within 30 days after the date of
repayment of Taxes, the DEBTOR will furnish to the Bank the original or
a certified copy of a receipt evidencing payment thereof. If no Taxes
are payable in respect of any payment, the DEBTOR will furnish to the
Bank a certificate from each appropriate taxing authority, or an opinion
of counsel acceptable to the Bank, in either case stating that such
payment is exempt from or not subject to Taxes. (c) Without prejudice to
the survival of another agreement of the DEBTOR hereunder, the
agreements and obligations of the DEBTOR contained in subsections (a)
through (d) above shall survive the payment in full of principal and
interest hereunder.
5. TERM:
The term is five (5) years, commencing the 12th day of October 1999 and
expiring on the 15th day of October 2004.
6. PROCEDURE AND PLACE OF PAYMENT OF THE AMOUNTS OWED:
INSTALLMENTS: THE DEBTOR shall pay to THE CREDITOR the amount of principal
owed, by means of the timely payment of twenty fixed and consecutive
quarterly installments to capital, in arrears, in the amount of two hundred
fifteen thousand one hundred four dollars and sixteen cents ($215,104.16)
each, payable on the fifteen of the initial month of each quarter, starting on
the fifteen day of January 2000, and a twenty-first and final installment in
the amount of one million five hundred and ninety-seven thousand nine hundred
sixteen dollars and sixty-seven cents ($1,597,916.67) on the fifteenth day of
October, 2004, plus any outstanding balance. The quarterly installments
payable to THE CREDITOR shall be debited on each date of payment scheduled
from the current account that THE DEBTOR will have with THE CREDITOR OR ANY
SUBSIDIARY OR AFFILIATE OF THE CREDITOR denominated in Dollars, or paid by
means of check, transfer or any other means to the full satisfaction of THE
CREDITOR. Interest shall be payable on a monthly basis, in accordance with
Section 4 above.
7. CONDITIONS PRECEDENT TO THE DISBURSEMENT OF THE CREDIT:
Prior to the disbursement of the credit, the following Conditions Precedent
must be meet:
A. THE DEBTOR shall have delivered the following to THE CREDITOR:
Three years of financial statements, including balance sheet, profit and
loss statement and cash flow statement, of PRICESMART, INC.
Business plan and cash flow projections for the term of the credit of THE
DEBTOR and PRISMAR DE COSTA RICA, S.A. on a consolidated basis.
6
Business plan and cash flow projections of PRICESMART, INC. AND PSMT
CARIBE, INC. for 1999-2000 period.
Final plans of the construction and its specifications.
e. Environmental impact assessment, if required by THE CREDITOR.
f. Soil study, if required by THE CREDITOR.
Occupancy permits and other permits and authorizations required for
operation of the mercantile establishment.
Leases, shareholder's agreement and license grants, including: license
agreement, technology transfer, training and sourcing
agreements subscribed by and among PRICESMART, INC., VENTURES
SERVICES, INC. and PRISMAR DE COSTA RICA, S.A., and the lease
agreement subscribed by and between PRICSMARLANDCO, S.A. and
PRISMAR DE COSTA RICA, S.A. Appraisal of the assets given as a
security, with form and contents acceptable to THE CREDITOR, which
shall be for an amount of no less than eight million six
hundred thousand Dollars ($8,600,000.00) for the real estate and
the personal property located inside the real property, as it is
as of the date hereof. PriceSmart, Inc., Ventures Services, Inc.,
and Prismar de Costa Rica, S.A. hereby expressly amend the
Licensing, Technology Transfer, Training and Sourcing Agreement
dated September 14, 1998 in the terms and to grant, in favor of
CREDITOR, the rights indicated in clause 12 point p of this
document.
i. Any other document that may be reasonably required by THE CREDITOR.
B. CITIBANK, N.A. - IBF shall have finalized and signed a Participation
Agreement with BANCA PROMERICA for its participation in the credit, for an
amount of nine hundred thousand Dollars ($900,000.00). Said participation
shall include the collateral on a PARI PASSU basis; however, in an event of
default, CITIBANK, N.A. - International Banking Facility shall have priority
over Banca Promerica, its participation being subordinated to the recovery of
the part of the credit lent by CITIBANK, N.A. - International Banking
Facility. In any case, the insurance of the Overseas Private Investment
Corporation (OPIC) shall not cover Banca Promerica.
SPECIAL CONDITIONS OF THE LOAN:
INSURANCE: THE DEBTOR agrees to deliver to THE CREDITOR proof of insurance
coverage over all the facilities and assets given as security, including
the property and the buildings, improvements and equipment, against every
risk, including but not limited to fire, hurricane, civil riot,
earthquake, floods, liability for accidents and business interruption,
and any other damage, in an amount deemed satisfactory to THE CREDITOR.
The rights derived from the existing insurance policies shall be
assigned in favor of THE CREDITOR effect for the term of this LOAN
AGREEMENT. The application of the amounts paid on any insurance policy
claim to the reduction or satisfaction of any outstanding amount of the
loan, or to the restoration of all or part of the facilities given in
guarantee to THE CREDITOR, shall be without prejudice of any other right
or remedy that THE
7
CREDITOR may have as established in this LOAN AGREEMENT. Without notice
being required on the anniversary of each insurance policy, or at the
request of THE CREDITOR, THE DEBTOR shall deliver to THE CREDITOR
duplicates of all the original insurance contracts or policies
subscribed in accordance with the previous provisions, as well as copies
of the receipts of the premiums paid, and a confirmation issued by the
insurer certifying that the policies are in force and fully in effect,
and that THE DEBTOR appears registered as mortgage creditor and
beneficiary of the policies.
b. TITLE INSURANCE: The DEBTOR has provided title insurance policy issued
by Stewart Title which the CREDITOR acknowledges receipt and deems
acceptable. Such title policy shall be in place in the same terms and
conditions during the term of the Loan Agreement, except otherwise agree
between DEBTOR and CREDITOR.
c. PREPAYMENT: THE DEBTOR reserves the right to repay the loan earlier but,
in such a circumstance, it shall not have any right to any discount or
to the return of interest already paid. Every prepayment shall be
applied to the principal in a reverse order to that of the loan
maturity. All interest due on the prepayment is payable at the same
time. Said prepayment can be total or partial. If THE DEBTOR makes a
partial prepayment, the payment must be in an amount of no less than
two hundred fifteen thousand one hundred four dollars and sixteen cents
($215,104.16.00), and shall not be required to pay any prepayment
penalty. It is understood that an prepayment shall necessarily coincide
with the dates of payment of interest. In any event of prepayment, THE
DEBTOR shall give notice of its intent to THE CREDITOR two business days
prior to the actual payment. THE DEBTOR shall indemnify THE CREDITOR
against any loss, cost or expense incurred by THE CREDITOR as a result
of not honoring a prepayment requested and confirmed by THE DEBTOR.
9. OBLIGATIONS OF THE DEBTOR AND PRISMAR DE COSTA RICA, S.A.:
THE DEBTOR and PRISMAR DE COSTA RICA, S.A. do expressly agree and undertake
for the whole term of the loan and until all the monetary obligations derived
from it have been paid in full and during the term of effectiveness of all
the securities granted under this AGREEMENT, to the following:
EXISTENCE AND OPERATING LICENSES: THE DEBTOR and PRISMAR DE COSTA RICA, S.A.
shall obtain, preserve and keep in full legal force their corporate
existence and full capacity to operate in Costa Rica, as well as all
types of licenses and permits to operate their activities, including
but not limited to: all local zoning, land use permits and tax approvals
needed to convert the garden/soccer field into a shopping warehouse.
Likewise, THE DEBTOR and PRISMAR DE COSTA RICA, S.A. shall comply with
all material aspects of the governing laws, regulations, decrees,
resolutions, judgments, opinions and orders or restrictions imposed by
any government, judicial or administrative authority or entity, which
are applicable to the management of their businesses and activities, and
the
8
ownership of their property and assets and related subsidiaries,
including environmental laws, and they shall pay when due all the
material obligations they may have now or in the future during the term
of effectiveness of this loan.
BUSINESS MANAGEMENT: They shall continue conducting and operating their
businesses substantially as described to THE CREDITOR in connection with
this LOAN AGREEMENT. THE DEBTOR and PRISMAR DE COSTA RICA, S.A. shall
conduct its business in compliance with all applicable laws and
directives of Governmental Bodies having the force of law, including
without limitation Corrupt Practices Laws, and shall implement internal
management and accounting practices and controls adequate to ensure
compliance with applicable Corrupt Practices Laws. For purposes of the
previous sentence, the term "Governmental Body" means any national,
state or local governmental entity, inside or outside Costa Rica, with
de facto or de jure authority over any of the Debtor, GUARANTORS, or
Citibank, and the term "Corrupt Practices Law" means any law prohibiting
(or imposing sanctions for) bribery, kickbacks, or similar business
practices. The DEBTOR shall not use the proceeds of the loan for any
purpose other than meeting the expenses of the project, and shall not
engage in any business in connection with the project other than the
DEBTOR's present business activities and those related to the project
(as each are described in the information provided to OPIC by Citibank)
and other activities similar thereto, without the prior consent of OPIC.
ASSETS AND PROPERTIES: They shall keep all assets and properties they have
used in the management of their businesses, in particular those that
secure payment of the LOAN AGREEMENT, undertaking to maintain the
securities granted under this LOAN AGREEMENT in the same condition they
are; and in particular THE DEBTOR and PRISMAR DE COSTA RICA, S.A. cannot
alienate, transfer or otherwise dispose of any of the securities to
which this AGREEMENT refers.
BANK BUSINESS: to the extent that the prices and services of THE CREDITOR are
competitive in the local market, THE DEBTOR, PRISMAR DE COSTA RICA, S.A.
and their subsidiary and related companies shall strive to obtain their
needed bank services from THE CREDITOR.
AUDITS AND INSPECTIONS: THE DEBTOR and PRISMAR DE COSTA RICA, S.A. agree to
collaborate in the inspections regarding the loans and their securities
which may be conducted by CREDITOR. Futhermore, THE DEBTOR and PRISMAR
DE COSTA RICA, S.A. agree to accompany the legal representatives of THE
CREDITOR to inspect THE PROPERTY given as a security, whenever THE
CREDITOR may deem it reasonably necessary.
FINANCIAL STATEMENTS: THE DEBTOR and each of THE GUARANTORS shall submit to
THE CREDITOR, within ninety (90) days following the end of their fiscal
year, their Annual Financial Statements duly audited by a firm of
external auditors accepted by THE CREDITOR. In the case of THE DEBTOR
and PRISMAR DE COSTA RICA, S.A., said Financial Statements shall be
consolidated and consolidating. If at any time THE CREDITOR does not
approve
9
of the firm of external auditors utilized by THE DEBTOR it shall give
notice to THE DEBTOR and/or any of THE GUARANTORS indicating the
reasons for the disapproval. In said case, THE DEBTOR and/or THE
GUARANTORS shall have thirty days counted from the date of
communication to designate a new company that shall also be subject to
the same examination and approval of THE CREDITOR, which shall not be
unreasonably withheld. If approval is not granted by THE CREDITOR in
this period, THE CREDITOR shall have the right to consider all monetary
obligations in its favor as due and payable jointly and in advance.
INTERNAL FINANCIAL STATEMENTS: THE DEBTOR and each of THE GUARANTORS shall
submit to THE CREDITOR on a quarterly basis within forty-five days
following the end of each quarter, their interim and internal financial
statements. In the case of THE DEBTOR and PRISMAR DE COSTA RICA, S.A., they
shall be consolidated and consolidating. All statements shall include an
affidavit by the legal representative, stating compliance with the
undertakings hereunder made, including but not limited to: the respective
financial ratios.
Y2K PREPAREDNESS: THE DEBTOR and PRISMAR DE COSTA RICA, S.A. shall submit to
THE CREDITOR a statement of Y2K preparedness including a duly approved
contingency plan.
PAYMENT OF TAXES: THE DEBTOR and PRISMAR DE COSTA RICA, S.A. shall submit on
time and in the appropriate form all income tax returns and reports,
and pay when due all municipal and property taxes and other government
charges, or those that for any reason have been levied on their
activities and real and personal property, in particular those that are
securities under this instrument. THE DEBTOR and PRISMAR DE COSTA RICA,
S.A. shall not be required to pay said taxes while they are contesting,
in good faith, their validity or amount following the appropriate legal
procedures; but they shall reflect in their financial statements the
reserve fund or allowance for payment thereof, if said payment has to
be made.
MAINTENANCE OF CERTAIN FINANCIAL RATIOS: Financial ratios will be reviewed on a
quarterly basis, calculated and measured using a 12 month rolling basis,
commencing with the conclusion of the first full year of operation from the
date of the loan. During the term of the credit, THE DEBTOR y PRISMAR DE
COSTA RICA, S.A., shall maintain on a consolidated basis the following
financial ratios: Debt service ratio (defined as: net income + interest +
depreciation + amortization/principal + payment of interest), excluding the
SELF-GUARANTEED LOAN, shall not fall below the level of one point one zero
(1.10) for the year 2000; one point fifteen (1.15) for the year 2001, one
point twenty-five (1.25) for the year 2002 and one point five (1.50)
thereafter. Interest coverage ratio (defined as: Net income + interest +
depreciation + depreciation + amortization/interest payment) excluding the
Self-Guaranteed Loan, shall not fall below the level of one point seven
five (1.75) for the year 2000, two point zero (2.0) for the year 2001, two
point five (2.5) for the year 2002 and three point zero (3.0) thereafter.
Leverage Ratio (defined as:
10
total debt - Self-Guaranteed Loan/net worth + Self-Guaranteed Loan)
shall not be greater than the level of three point zero (3.0) for the
year 2000, two point five (2.5) for the year 2001 and two point zero
(2.0) thereafter; The total debt, excluding the Self-Guaranteed Loan
/EBITDA ratio cannot exceed five point zero (5.0) for the year 2000;
four point zero (4.0) for the year 2001; two point seventy-five (2.75)
for the year 2002 and two point five (2.50) thereafter. EBITDA shall be
calculated using the past twelve (12) months at the time of the
calculation, and shall be defined as: the amount (without duplication)
of: net income + depreciation and amortization + interest expense + all
accounting expenses that do not represent a cash expenditure during the
period, including but not limited to: unrealized losses derived from
the exchange differential or monetary corrections and, only when said
expense has been deducted in connection with the determination of the
nets profits + expenses of taxes on profits, only when the expense has
been deducted in connection with the determination of the net income -
accounting income that does not represent cash income during the year,
including but not limited: profits from the exchange difference and
monetary corrections - capital income from their interest in
subsidiaries or affiliates + dividends in cash received from
subsidiaries and affiliates.
NOTICE OF LITIGATION, ADMINISTRATIVE PROCEEDINGS AND TAX RE-QUALIFICATIONS: THE
DEBTOR and each of the GUARANTORS, shall give written notice to THE
CREDITOR, immediately after THE DEBTOR learns of any litigation or
administrative or arbitration proceeding, or tax re-qualifications,
which may affect THE DEBTOR, that is developing adversely or that
threatens to be initiated against it, and which may have an adverse
material effect on the business, assets or financial condition of THE
DEBTOR, or which may affect or which can materially affect the capacity
of THE DEBTOR to comply with its obligations acquired under this
instrument and this LOAN AGREEMENT.
ANNUAL REVIEWS OF THE LOAN: THE DEBTOR and PRISMAR DE COSTA RICA, S.A., agree
and undertake to respect to respect the annual reviews of the loan to
be conducted by THE CREDITOR, and respect all those additional
requirements that may be necessary to impose on THE DEBTOR and PRISMAR
DE COSTA RICA, S.A. as a result of such reviews.
a. THE DEBTOR agrees that each year during the term of the loan, it will
complete and submit OPIC's form of "Self-Monitoring Questionnaire for
Insurance & Financial Projects" (as that form may be amended from time to
time) with respect to the operation of the project. Also, THE DEBTOR agrees
that it will, upon OPIC's request, permit OPIC representatives to inspect
the Debtor's facilities and properties during normal business hours.
KEEPING OF BOOKS AND RECORDS: THE DEBTOR and PRISMAR DE COSTA RICA, S.A.
undertake to adequately and accurately keep all the books and records
necessary and common in similar companies.
BUSINESS WITH AFFILIATES: Both THE DEBTOR and PRISMAR DE COSTA RICA, S.A. can
undertake business or transactions with affiliates, provided said business
11
or transactions are undertaken as arm's length transactions.
COMPLIANCE OF ALL THE TERMS AND CONDITIONS ESTABLISHED BY OPIC (OVERSEAS PRIVATE
INVESTMENT CORPORATION), RELATED TO THE ENVIRONMENTAL STANDARDS, LABOR
RIGHTS AND HEALTH AND SECURITY OF THE WORKERS: THE DEBTOR and Prismar
de Costa Rica, S.A. must comply with the following requirements: (1)
Labor Rights. THE DEBTOR and Prismar de Costa Rica, S.A. agree not to
take any action, and to ensure that no action will be taken by any
contractor (or any subcontractor) performing engineering, procurement
and construction services, contracted for after the date of this
document, or providing operating and management services contracted for
after this date, for the project (each a "contractor" and collectively
the "contractors"), to prevent employees of the DEBTOR and/or Prismar
de Costa Rica, S.A. or of any such contractors performing such services
for the project, legally exercise according to the Costa Rican Law,
their right of associations and their right to bargain collectively.
The DEBTOR and Prismar de Costa Rica, S.A. agree to observe, and to
cause each contractor to observe, with respect to their respective
employees, applicable laws relating to acceptable conditions of work,
with respect to minimum wages, work schedule and occupational health
and safety. Furthermore, in connection with the project, accept and
agree to cause each contractor (i) not to use forced labor, (ii) not to
employ any person under age fifteen years and not to employ any person
under age eighteen for hazardous activity, and (iii) that all the
employees will have the right to remove themselves from hazardous
situations without jeopardizing their continued employment. In the
event of non-compliance or possible non-compliance with the above
requirements with respect to the employees of the DEBTOR and Prismar de
Costa Rica or any contractor comes to the attention of the DEBTOR
and/or Prismar de Costa Rica, S.A. it shall give prompt notice thereof
to the Bank and OPIC and, if applicable, to such contractor. It (i)
shall (a) cure such non-compliance or (b) cause such contractor to cure
such non-compliance, in either case to the satisfaction of OPIC, and
(ii) shall terminate the contract with such contractor (the "contract")
unless such non-compliance is cured to the satisfaction of OPIC within
90 days of such notice, or notice thereof from the Bank or OPIC to it,
whichever first occurs. The failure of the DEBTOR and/or Prismar de
Costa Rica, S.A. to (a) promptly to notify OPIC and, if applicable, the
contractor of such non-compliance; or (b) (i) to cure such
non-compliance or cause such contractor to cure such non-compliance, in
either case to the satisfaction of OPIC, or (ii) to terminate the
contract, shall constitute a default of the present agreement
permitting the Bank to accelerate the maturity of the Facility Loan.
Notwithstanding the above, the DEBTOR and Prismar de Costa Rica, S.A.
and the contractors are not responsible under this Section for the
actions of the Government of Costa Rica. The DEBTOR and Prismar de
Costa Rica, S.A. shall comply with (i) International Finance
Corporation's Environmental, Health and Safety Guidelines for Office
Buildings, dated July 1, 1998, and (ii) the provisions of all
applicable environmental, health and safety laws, codes and ordinances,
and all rules and regulations promulgated thereunder, with respect to
the project.
12
Access to the Premises: THE DEBTOR and Prismar de Costa Rica, S.A. grant the
CREDITOR with the right of access to the premises when reasonable to
protect the right of THE CREDITOR under the Loan and the Security.
RIGHT TO SETOFF: after the occurrence and during the continuance of any event
of default, the Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the
Bank to or for the credit of the account of the DEBTOR and Prismar de
Costa Rica, S.A. against any and all of the obligations of the DEBTOR
now or hereafter existing under this agreement, irrespective or whether
or not the Bank shall have made any demand under this agreement and
although such obligations may be unmatured. The Bank agrees promptly to
notify the DEBTOR after any such setoff and application, provided that
the failure to give such notice shall not affect the validity of such
setoff and application. The rights of the Bank under this Section are in
addition to other rights and remedies (including, without limitation,
other rights of setoff) which the Bank may have.
10. RESTRICTIONS ON THE DEBTOR AND PRISMAR DE COSTA RICA, S.A.:
THE DEBTOR and PRISMAR DE COSTA RICA, S.A. do expressly agree and undertake
for the whole term of the loan and until all the monetary obligations derived
from it have been paid in full and during the term of effectiveness of all
the guarantees granted under this AGREEMENT, to the following:
STOCK OWNERSHIP: No change in the stock structure shall be made or permitted
if it implies a change in the stock control in THE DEBTOR and/or in
PRISMAR DE COSTA RICA, S.A., as long as this AGREEMENT is in effect or
there is any monetary obligation derived from this AGREEMENT or its
securities, not paid on a full or partial basis. Any change which
results in PriceSmart, Inc. have a greater direct or indirect ownership
in THE CREDITOR or PRISMAR DE COSTA RICA, S.A., is expressly exempted
from this restriction.
STATUS OF THE DEBTOR AND PRISMAR DE COSTA RICA, S.A.: THE DEBTOR and PRISMAR
DE COSTA RICA, S.A. shall not adopt any resolution of merger, liquidation
or dissolution or consolidation with any other company or entity; and
they shall not make any investments in subsidiaries, affiliates or third
entities, or guarantee obligations of third parties without the prior
written consent of THE CREDITOR, which shall not be unreasonably
withheld. Neither THE DEBTOR nor PRISMAR DE COSTA RICA, S.A. shall
invest in the capital stock or the shares of any subsidiary or
affiliate, except in the regular course of business.
LIMITATION ON TRANSACTIONS: THE DEBTOR and PRISMAR DE COSTA RICA, S.A.,
excluding capital expenditures, cannot make any of the following
transactions if they exceed two hundred and fifty thousand DOLLARS
($250,000.00) per year, unless they have the express authorization of
THE CREDITOR, which shall not
13
be unreasonably withheld: acquisitions, sales or transfers of assets,
leases or sales, leasing, repurchase or redeeming of shares issued and
outstanding (including stock options and coupons), swaps, revocations or
resolutions, reforms, repurchases of debt and obligations under capital
and operational leases. Notwithstanding the above, Borrower and/or
Prismar de Costa Rica, S.A. might enter into a negotiations involving
the sale of adjacent land, property number 494856-000, measuring
2,249.02 m2 for an amount not less than the "release price"; however
Borrower and Prismar de Costa Rica, S.A. acknowledge that they will need
Creditor's approval in order to execute any final transaction with such
property. Such approval will be at the sole discretion of Creditor and
in any event, the Creditor will require that all proceeds from the sale
of such property be applied to the outstanding balance of the Loan. For
this purposes, RELEASE PRICE is set at the higher of the appraised value
of said land (US$281,127.50), or 90% of sale price, provided that the
sale price is based on an "arms-length" transaction.
LIMITATION ON CAPITAL EXPENDITURES: THE DEBTOR and PRISMAR DE COSTA RICA,
S.A. undertake not to exceed the amount of four hundred thousand DOLLARS
($400,000.00) in their annual capital expenditures. This amount refers
to capital expenditures in addition and incremental to the financing
provided by CITIBANK N.A. --International Banking Facility.
LIMITATION ON ENCUMBRANCES: THE DEBTOR and PRISMAR DE COSTA RICA, S.A. agree
not to mortgage, pledge or otherwise encumber any of the assets that
they currently own, without the prior express consent of THE CREDITOR,
which shall not be unreasonably withheld.
CONDITIONS ON CONTRACTORS AND SUBCONTRACTORS: THE DEBTOR and PRISMAR DE COSTA
RICA, S.A. undertake, during the term of effectiveness of this LOAN
AGREEMENT, not to take any action, and assure that no contractor or
subcontractor of the project may take any action that may prevent or
hinder the employees of THE DEBTOR or any of the contractors or
subcontractors working in the project of THE DEBTOR from or in the
exercise of their rights of association and their rights of joint
claims and defense. They also undertake, during the term of
effectiveness of this LOAN AGREEMENT, to respect and have the
contractors and subcontractors related to the project of THE DEBTOR
respect all the laws that govern work conditions, including but not
limited to those related to minimum wages, work schedules, occupational
health and safety. They further undertake that they and the contractors
or the subcontractors related to the project, (i) shall not force
anybody to hard labor, (ii) shall not employ persons under fifteen
years old, or persons under eighteen years old for dangerous works; and
(iii) all their employees shall have the right to withdraw from
dangerous situations, without thereby affecting their continuity as
such. If THE DEBTOR is aware of any failure to comply with the
provisions indicated in subsections (i), (ii) and (iii) above, whether
in connection with the employees of THE DEBTOR or with any contractor
or subcontractor, THE DEBTOR shall report it immediately to THE
CREDITOR and OPIC and, when appropriate, to the contractor or
subcontractor.
14
Furthermore, THE DEBTOR shall: (a) cure the default or (b) force the
contractor or subcontractor to cure the default, in both cases to the
satisfaction of OPIC, and (ii) Terminate the contract with the
contractor; in both cases unless the default is cured to the
satisfaction of OPIC within ninety calendar days following notice of the
default by THE CREDITOR or OPIC, whichever is first. Notwithstanding the
above, THE DEBTOR and the contractors shall not be responsible, with
respect to the provisions of this subsection, for the actions of the
Government of Costa Rica.
11. REPRESENTATIONS AND WARRANTIES:
For the purpose of inducing THE CREDITOR to execute this LOAN AGREEMENT, the
following representations are made:
THE DEBTOR is a company duly organized under the laws of Costa Rica, with
legal existence as of the date hereof and full legal capacity to execute
this LOAN AGREEMENT and the documents that supplement it.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
they have the power and/or authorizations, as required by law, to act in
their individual capacity and to execute this loan agreement and the
documents that supplement it.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
they have filed without omission all tax returns required by law and
have paid without omission all taxes resulting from such returns or any
tax assessment, requalification or requirement; and neither THE DEBTOR
nor any of the GUARANTORS are aware of any obligation, assessment,
tax, requirement or requalification with regard to the periods covered
by the returns or communications filed or given before the date hereof,
beyond what appear in such returns and communications, and neither
DEBTOR nor any of the GUARANTORS have been notified by the appropriate
authorities of any deficiency, error or requalification of their
individual tax and/or other obligations of any nature, and neither THE
DEBTOR nor any of the GUARANTORS foresee any likelihood for such an
event.
THE DEBTOR and Prismar de Costa Rica, S.A. individually consent to cooperate
with any inspections conducted by the Office of the Superintendent
General of Financial Entities and/or THE CREDITOR directed to verify
compliance with the investment plan that has been submitted and is
included in the credit records concerning this LOAN AGREEMENT and
undertakes and bind themselves to provide to THE CREDITOR any report
with regard to the investment of the loan, as well as updated report of
their financial statements.
THE DEBTOR and PRISMAR DE COSTA RICA, S.A. represent and warrant that they
have obtained all the authorizations, licenses and permits necessary to
perform all the activities related to their businesses and commercial
operations, and that they will remain in force during the entire term
of this agreement.
THE DEBTOR and each of the GUARANTORS represent and warrant that all the
15
obligations and covenants hereunder expressed and assumed by them
respectively, are legal and valid obligations, binding on and enforceable
on each with accordance with their respective terms, and they do not
require any additional authorization.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
they, as of the date of execution of this instrument, are not in default
under any law, regulation, undertaking, contract, mortgage, trust,
resolution, license or any other instrument, obligation or duty, that binds
or affects them individually or any of their properties, and which may be a
default that significantly and adversely affects their capacity to comply
with or perform any of their obligations under this LOAN AGREEMENT.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
there are no current or threatened litigation, arbitration or claim that
may by itself or together with any other procedure or claim, significantly
and adversely affect their capacity to comply with or perform their
obligations under this LOAN AGREEMENT.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
they have fully disclosed to THE CREDITOR all facts concerning what they
know or should reasonably know, would be a material fact to THE CREDITOR
regarding the creditor's decision to execute this agreement.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
they have not taken any action or step towards, liquidation, dissolution,
bankruptcy or reorganization, or for the appointment of a receiver, a
trustee, an administrator or a similar officer with respect to any or all
of their assets or income.
THE DEBTOR and each of the GUARANTORS individually represent and warrant that
they do not have any significant or contingent obligation that has not
been duly disclosed to THE CREDITOR.
THE DEBTOR acknowledges and agrees that THE CREDITOR has received the approval
of the Overseas Private Investment Corporation (OPIC) against risks as
inconvertibility of the currency, impossibility or repatriation of the
funds facilitated to the DEBTOR, expropriation and political violence, and
that the terms of this credit are granted under the assumption that said
insurance granted by the OPIC will continue in force in the same terms
during the entire term of the credit. THE DEBTOR agrees that OPIC shall
bear no liability if CREDITOR shall fail to make any disbursement of the
loan (or any part of such disbursement) to THE DEBTOR as would otherwise
be required under this instrument. THE DEBTOR agrees to pay all the
expenses and professional fees related to the processing and issuance of
this insurance, and THE CREDITOR recognizes that all the expenses and
professional fees foreseeable with regard to said insurance are already
included in the charges detailed in this document. THE DEBTOR acknowledges
and agrees that if OPIC makes any payment to CREDITOR in connection with
OPIC's guarantee of the loan, OPIC shall be entitled to require that
CREDITOR transfer
16
to OPIC CREDITOR'S entire interest in the loan and in any collateral
provided for the loan, and THE DEBTOR hereby provides its consent to such
transfer. The representations, statements and warranties set forth in this
clause shall survive the performance of this LOAN AGREEMENT and they shall
be considered repeated on any subsequent day until the loan and any other
amounts due under it have been duly repaid to THE CREDITOR, and all the
obligations herein set forth have been complied.
12. DEFAULT
Any of the following will be considered individually as a default of this
LOAN AGREEMENT:
delay in a payment to principal by THE DEBTOR, as agreed upon;
delay in making one or more monthly payments of interest, as agreed upon;
failure to pay the structuring fee, as agreed upon;
failure to pay any of the obligations of THE DEBTOR and/or PRISMAR DE COSTA
RICA, S.A. to any individual or legal entity, when such a failure to
comply persists for more than thirty (30) days after the due date, with the
exception of debts with PriceSmart Inc., in which case the term of default
can be extended to ninety (90) days; and those obligations that are
self-guaranteed loans, and in all other cases, provided the obligations
collected are not being reasonably questioned;
the failure to comply with any monetary or non-monetary obligations set forth in
this AGREEMENT;
THE DEBTOR and/or each of the GUARANTORS file for or initiate proceedings for
dissolution, liquidation or receivership, or are declared in bankruptcy, or
request any meeting of creditors or consent to the appointment of a
receiver, or cease to make payments, with the exception of those debts
that are self-guaranteed;
b. failure to comply with any representation or guarantee made by THE DEBTOR,
PRISMAR DE COSTA RICA, S.A. or any of the other GUARANTORS, or the
determination that any warranty or representation is materially incorrect,
or if any of the agreements are not complied with by them;
c. the securities created to secure this loan cannot be registered in the
Public Registry due to causes imputable to THE DEBTOR;
d. this LOAN AGREEMENT or any of the securities provided by THE DEBTOR ceases
to be a valid and perfect security right, or have in the future, due to any
circumstance, a Material Adverse Change on their nature as securities for
THE CREDITOR;
e. any legal or administrative proceeding materially prevents THE DEBTOR
and/or Prismar de Costa Rica, S.A. from continuing the regular course of
its business and operations, or they have in the future a Material Adverse
Change on the business, operations and financial statements of THE DEBTOR
AND PRISMAR DE COSTA RICA;
f. the validity or effectiveness of this LOAN AGREEMENT or any security issued
17
in connection with it is successfully challenged by any Government
authority, or any third party, whether an individual or a legal entity;
g. the Board of Directors or the senior management of THE DEBTOR and/or PRISMAR
DE COSTA RICA, S.A. made decisions that, together with others or on a
separate basis, affect or may affect adversely the net worth of THE DEBTOR,
or the quality, preservation and/or state of the security, in the terms of
the Article 777 of the Civil Code of the Republic of Costa Rica, for which
THE DEBTOR expressly states that the encumbrances hereunder created in favor
of THE CREDITOR, are those appropriate in accordance with the financial
situation of THE DEBTOR as of the date hereof. Accordingly, any
deterioration shall imply that it may have to grant an excess security and
it is in default with regard to the security. For all purposes, THE DEBTOR
recognizes as sufficient to certify such deterioration or imminent
possibility of deterioration the opinion of its external auditors, together
with the opinion of the credit department and the General Management of THE
CREDITOR,
h. a change in the ownership, management or control of THE DEBTOR, or PRISMAR
DE COSTA RICA, S.A., without the prior written consent of THE CREDITOR,
excepting increases in direct or indirect ownership by PriceSmart, Inc.;
ANY OF THE GUARANTORS fail to comply with any obligations assumed under this
LOAN AGREEMENT; or
i. if there is any materially adverse or other change in the financial
condition, or in the business or in the business perspectives of THE
DEBTOR and/or PRISMAR DE COSTA RICA, S.A. then: THE CREDITOR shall have
the right to have all monetary obligations in its favor as due and
payable earlier, being also empowered at its sole discretion to: (i)
pursue the assets of THE DEBTOR and THE GUARANTORS, on a simultaneous
or a subsidiary basis, at the exclusive judgment of THE CREDITOR, but
in proportion to the guarantees, by means of the enforcement of bills
of exchange and/or notes, or filing action to initiate proceedings in
accordance with its rights; and/or (ii) also in the exclusive judgment
of THE CREDITOR, as expressly accepted by THE DEBTOR, to enforce the
securities received by THE CREDITOR with no need of Court proceedings
to demonstrate the termination of the AGREEMENT or the failure to
comply with the obligations derived from this AGREEMENT. The failure or
delay by THE CREDITOR to enforce or exercise any right under this
AGREEMENT shall not be interpreted as a waiver of that right or any
other right or power it may have under this AGREEMENT or the Law. All
the rights contained in this AGREEMENT and any securities herein
established are cumulative and can be exercised jointly or separately.
Termination, by PriceSmart, Inc., or any other party to the Licensing,
Technology Transfer, Training & Sourcing Agreement, pursuant to Section 12
of said Licensing Agreement. In the event PriceSmart, Inc. elects to
terminate said Licensing Agreement during the term of the Loan, it shall
provide Creditor with
18
written notice of its intent thereof, six months prior to said election and
shall grant creditor the right to substitute Prismar de Costa Rica, S.A. in said
agreement or to elect another substitute that shall be acceptable to PriceSmart,
Inc.
13. EARLY TERMINATION
The AGREEMENT may be subject to early termination if;
a. There is any material change in laws or regulations which may materially
affect THE DEBTOR'S ability to comply with the obligations herein agreed
upon; or
b. If the security granted is not considered to be in first position with
regard to other debts of THE DEBTOR and/or PRISMAR DE COSTA RICA, S.A. or
c. if there is any materially adverse or other change in the financial
condition, or in the business or in the business perspectives of THE DEBTOR
and/or PRISMAR DE COSTA RICA, S.A., or
d. if there is a failure to comply with the obligations set forth in Section
10 above, then: THE CREDITOR shall have the right to have all monetary
obligations in its favor together as due and payable earlier, being
empowered at its sole discretion to; i) pursue the assets of THE DEBTOR
and THE GUARANTORS, on a simultaneous or a subsidiary basis, at the sole
discretion of THE CREDITOR, but in proportion to the guarantees, by means
of the enforcement of bills of exchange and/or notes, or filing action to
initiate proceedings in accordance with its rights; and/or (ii) also in the
sole discretion of THE CREDITOR, as expressly accepted by THE DEBTOR, to
enforce the securities received by THE CREDITOR with no need of Court
proceedings to demonstrate the termination of the AGREEMENT or the failure
to comply with the obligations derived from this AGREEMENT. The failure or
delay by THE CREDITOR to enforce or exercise any right under this AGREEMENT
shall not be interpreted as a waiver of that right or any other right or
power it may have under this AGREEMENT or the Law. All the rights contained
in this AGREEMENT and any securities herein established are cumulative and
can be exercised jointly or separately.
In any of these events, CREDITOR will have the right to immediately collect the
Loan with all consequences thereof.
14. TERM TO CURE DEFAULTS AND REASONS FOR EARLY TERMINATION:
Without prejudice of the provisions of Sections 12. and 13. above, and without
affecting the consequences of the early termination or the default, including
but not limited to: the right to charge overdue interest, THE CREDITOR shall be
required provide, prior to filing any action at Court to which it may be
entitled under the guarantees issued, a cure period in which THE DEBTOR may
correct any defaults, in accordance with the following:
In cases in which there is failure to make timely payment of any amount owing
under
19
the LOAN AGREEMENT, THE CREDITOR shall grant a non-extendable term of ten
(10) calendar days from the date of non-payment to complete the payment in
full and cure default, provided that in such case that this provision cannot
be exercised more than twice per year; otherwise an immediate "Event of
Default" shall occur.
In any other case of default or event of early termination, that is, those
termination conditions that do not involve the failure to pay an amount owing
under this LOAN AGREEMENT, THE CREDITOR shall give notice to THE DEBTOR of
the existence of said default or reason for early termination, granting to
THE DEBTOR a non-extendable term of thirty (30) calendar days to immediately
and definitively cure the cause of the default or the reason for the early
termination.
15. SECURITY:
For purposes of securing payment of the amount of principal owed, the fee,
regular interest, overdue interest if any, the personal and procedural costs of
any eventual proceedings for collection, and all other monetary or other
responsibilities of THE DEBTOR set forth in this LOAN AGREEMENT, and/or the
damages caused by the failure of THE DEBTOR to comply, THE DEBTOR will grant
sufficient security to the satisfaction of THE CREDITOR.
In addition to the above, the following companies do hereby become GUARANTORS of
the monetary obligations of THE DEBTOR as set forth in this LOAN AGREEMENT, in
the proportions hereunder indicated:
PRISMAR DE COSTA RICA, S.A. and PSMT CARIBE, INC. on a jointly and absolute
basis for the total amount of the debt.
PRICESMART, INC., for an amount not to exceed sixty percent (60%) of the
principal, that is, the amount of three million five hundred forty thousand
DOLLARS ($3,540,000), plus the appropriate interest, and,
PSC, S.A., for an amount not to exceed forty percent (40%) of the principal,
that is, the amount of two million three hundred sixty thousand DOLLARS
($2,360,000.00), plus the appropriate interest. These companies make the
same waivers and covenants that the THE DEBTOR has made and do hereby give
their authorization to grant extensions or other facilities, without further
consultation or notice, waiving the application of the laws of their domicile
as well as payment demands.
16. REDUCTION OF GUARANTORS' LIABILITIES:
THE CREDITOR shall reduce the liability of each of the GUARANTORS, in
accordance with the following:
Dollar per dollar upon repayment of the credit in accordance with the table of
amortizations, provided that the maximum reduction shall be as follows:
Fifty percent (50%) of the LOAN, or two million nine hundred fifty thousand
dollars ($2,950,000), at such time as the loan to value is equal to or less than
50% and, for
20
the prior 12 month period, the net operating income from the project covered
combined debt service (interest and principal amortization) on the loan at
the minimum 1.50:1 ratio and:
Thirty percent (30%) of the LOAN, or one million seven hundred seventy dollars
($1,770,000), at such time as the loan to value is equal to or less than 30%
and, for the 12 month period, the net operating income from the project
covered combined debt service on the loan at a minimum 1.75:1 ratio.
THE CREDITOR at the express request of each of THE GUARANTORS shall grant these
reductions; otherwise, the guarantees shall remain in force as originally
agreed upon. In any case, this reduction does not apply to the guarantee
issued by PRISMAR DE COSTA RICA, S.A., which shall remain in force in the
same terms during the entire term of effectiveness of the debt.
17. WAIVER:
THE DEBTOR and each of THE GUARANTORS waive application of the laws of their
domicile, payment demands and summary proceedings for collection. The
encumbrances include, but are not limited to: any current or future improvement
to THE PROPERTY and/or improvements thereon, including those made by third
parties, as well as any excess area that may exist between the area registered
in the Public Registry and the actual area of the property, all of which is
accepted by THE DEBTOR. In case of a foreclosure auction, the base shall be the
balance of the principle and interest owed at the time the collection
proceedings are initiated, in accordance with the liquidation of THE CREDITOR.
THE DEBTOR expressly and irrevocably waives in favor of THE CREDITOR any benefit
of order in any eventual judicial proceedings. Consequently, THE CREDITOR can,
in the event of a failure to comply with these monetary and non-monetary
obligations, enforce the any security related to this Loan, and collect upon
other assets of THE DEBTOR and/or any of THE GUARANTORS, all of this on a
simultaneous or subsidiary basis, at the exclusive judgement of THE CREDITOR.
The application of payments shall be made at the exclusive discretion of THE
CREDITOR, even after the eventual auction. THE DEBTOR agrees to pay all taxes
levied on the Property and deliver to THE CREDITOR during the entire term of
effectiveness of The Loan Agreement, all communications about taxes that it may
receive as well as the receipts of their effective payment, including any
applicable interest or fine. THE DEBTOR agrees and binds itself not to transfer,
consent to or grant any other encumbrance on the properties, without the prior
written consent of THE CREDITOR, as well as to discharge any other encumbrance
that may be in force over THE PROPERTY while any balance due under this
AGREEMENT is still pending.
18. ADDITIONAL UNDERTAKINGS OF EACH OF THE GUARANTORS:
PriceSmart, Inc. undertakes to maintain a minimum net worth of fifty-five
million DOLLARS ($55,000,000.00) during the entire term of effectiveness of the
debt. Likewise, PRICESMART INC. undertakes to not diminish the interest that it
currently has
21
in PSMT CARIBE, INC., a company established and organized under the laws of the
British Virgin Islands. In turn, PSC, S.A. undertakes to maintain a minimum
net worth of ten million DOLLARS ($10,000,000.00) during the entire term of
effectiveness of the debt. Likewise, PSC, S.A. undertakes to not diminish the
interest that it currently has in PSMT CARIBE, INC., a company established
and organized under the laws of the British Virgin Islands, with the
exception that it may sell any part of its interest therein to PRICESMART,
INC. PSMT Caribe, Inc. undertakes to maintain a minimum net worth of twenty
five million dollars ($25,000,000.00) during the entire term of effectiveness
of the debt. In the event that any of the GUARANTORS anticipate a variance
from any of the above covenants, except wherein PRICESMART, INC. obtains
greater percentage interest in PSMT CARIBE, INC., BORROWER and/or PRISMAR DE
COSTA RICA, S.A., such GUARANTORS must obtains CREDITOR'S consent thereto
with an advance sixty (60) days notice, which consent may be withheld at
CREDITOR'S (sole) discretion.
19. HEDGING:
CREDITOR agrees that, prior to LOAN closing, it will not require DEBTOR to
enter into a non-delivery forward contract in order to hedge local currency
devaluation risk, based upon CREDITOR'S current policies and practices
regarding devaluation risk. However, CREDITOR and DEBTOR agree that this
policy will be reviewed on quarterly basis, and, in the event that market
conditions so dictate, CREDITOR reserves the right to require that the DEBTOR
enter into such hedge. DEBTOR acknowledges CREDITOR'S rights in this regard
and agrees to act in good faith in order to mitigate any devaluation risk.
20. ASSIGNMENT AND PARTICIPATION IN THE CREDIT:
THE CREDITOR reserves the right to assign its rights under this LOAN
AGREEMENT on a full or a partial basis, with no further obligation but to
notify such a circumstance to THE DEBTOR. THE CREDITOR reserves the right and
the option to offer participation in this credit at the time of or after
subscription of this AGREEMENT, to a financial institution duly recognized as
a First Rate institution by an international standards or by the Central Bank
of Costa Rica, for the purpose of making the disbursements in excess of any
actually then disbursed by THE CREDITOR. For all legal and judicial purposes,
THE DEBTOR recognizes CITIBANK N.A. - International Banking Facility as sole
creditor of this loan. No notice shall be required if THE CREDITOR offers
participation in this credit to a financial institution.
21. EXPENSES AND PROFESSIONAL FEES:
All the expenses and professional fees, including but not limited to
appraisal and attorney's fees, taxes, rates, legal tax stamps and charges in
connection with the negotiation, preparation, execution, administration and
performance of this LOAN AGREEMENT, its securities and other related acts and
documents, shall be defrayed
22
by THE DEBTOR and be immediately paid by it upon request of THE CREDITOR.
THE DEBTOR agrees and consents to assume and pay the personal and procedural
costs of all and any eventual actions that may be filed by THE CREDITOR
against THE DEBTOR to enforce THE DEBTOR's performance under this AGREEMENT.
22. PARTIAL NULLITY AND FAILURE TO COMPLY WITH OBLIGATIONS:
The nullity or illegality of any of the provisions of this LOAN AGREEMENT
shall not affect the validity, legality and enforceability of the remaining
clauses. All the rights and remedies established in this instrument or in any
security document are cumulative and can be exercised contemporaneously or
successively, in addition and not in exclusion of any other right or remedy
established by law. Failure by THE CREDITOR to demand the exact compliance
with all or any of the obligations of THE DEBTOR under this AGREEMENT does
not imply and cannot be considered as an exemption, modification, acceptance
or waiver of the terms, conditions and rights set forth in the LOAN
AGREEMENT, because in order that such an exemption, modification, acceptance
or waiver be valid, it has to be duly set forth in a writing accepted by both
parties.
23. ABSENCE OF JOINT VENTURE:
Nothing herein stipulated or contained constitutes or may be interpreted as
the creation of a joint venture or partnership for the achievement of a
common purpose by and between THE DEBTOR and THE CREDITOR. THE CREDITOR shall
not assume any liability for any obligation or risk derived from the business
and activities of THE DEBTOR directly or indirectly.
24. STATEMENT OF MUTUAL BENEFIT:
THE CREDITOR and THE DEBTOR, expressly certify that the matters agreed upon by
them in this LOAN AGREEMENT are the result of negotiations and mutual
concessions that favor and benefit them.
25. GOVERNING LAW AND JURISDICTION:
THE CREDITOR and THE DEBTOR shall abide by the laws of the State of New York,
United States of America, for interpretation of this LOAN AGREEMENT. Any
complaint, action or procedure in connection with this LOAN AGREEMENT or its
enforcement shall be subject to the jurisdiction of the U.S.Federal Court in
the State of New York, for which purpose all parties waive application of the
laws of their domicile and residence.
26. COMMUNICATIONS AND NOTICE REQUIREMENTS:
Any communication or notice required by this LOAN AGREEMENT shall be made in
writing by means of certified letter, with receipt acknowledged, at the
domicile
23
indicated in this AGREEMENT, and the following addresses:
TO THE CREDITOR:
Citibank, N.A.
General Manager
Oficentro Ejecutivo Sabana Sur,
Numero 3, Primer Piso
San Jose, Costa Rica
Fax (506) 296--24-58
With a Copy to:
Lic. David Arturo Campos B. and/or Lic. Rolando Lacle Zuniga
Lacle & Gutierrez,
Avenida 6, entre calles 21 y 25
C.P. 794-1,000
San Jose, Costa Rica
Fax: (506) 221-61-62
TO THE DEBTOR AND each of THE GUARANTORS:
Ernesto Grijalva
Vice President Latin America Legal Affairs
PriceSmart, Inc.,
4649 Morena Boulevard
San Diego, CA 92107
FAX: 858-581-4707
With a copy to:
Lic. Edgar Zurcher Gurdian
Zurcher Montoya & Zurcher
Calle 1a, entre avenidas 9 y 11
CP 4066-1000,
San Jose, Costa Rica
FAX: 221-9127
26. SERVICE OF NOTICE
Finally, THE DEBTOR and each of THE GUARANTORS, through their officers
24
duly authorized and indicated in this instrument, state that, without
prejudice of waiving application of the laws of their domicile, they can be
served in case of failure to comply with any obligation hereunder, at the
address indicated in this document, and declare that they can be served
personally or by means of notice at this address, and that they understand
that if their address is inaccurate or non-existent, they can be served by
means of notice published in a newspaper of the State of New York with a
copy published in a newspaper in Costa Rica.
After reading the above, the parties agree on it, and sign on the dates and
places indicated below.
CITIBANK, N.A.-IBF PRICSMARLANDCO, S.A.
Place: San Jose, Costa Rica Place: San Jose, Costa Rica
Date: Oct. 7, 1999 Date: Oct. 19, 1999
/s/ Victor Balcazar Banegas /s/ Joseph William Martin
-------------------------------- ---------------------------------------
Victor Balcazar Banegas Joseph William Martin
Treasurer
PRISMAR COSTA RICA, S.A., PRICESMART, INC.,
Place: San Jose, Costa Rica Place: San Diego, CA
Date: Oct. 19, 1999 Date: Oct. 10, 1999
/s/ Joseph William Martin /s/ Karen J. Ratcliff
-------------------------------- ---------------------------------------
Joseph William Martin Karen J. Ratcliff
President Executive VP Finance
P.S.C., S.A. VENTURES SERVICES, INC.
(With respect to Sections 7 (h) and 12
(p) of this Agreement.)
Place: San Jose, Costa Rica Place: San Diego, CA
Date: Oct. 19, 1999 Date: Oct. 10, 1999
/s/ Joseph William Martin /s/ Karen J. Ratcliff
-------------------------------- ---------------------------------------
Joseph William Martin Karen J. Ratcliff
Chief Finance Officer
25
PSMT Caribe, Inc.
Place: San Diego, CA
Date: Oct. 10, 1999
/s/ Karen J. Ratcliff
--------------------------------
Karen J. Ratcliff
Treasurer Chief Financial Officer
26
[LOGO] BANK OF AMERICA
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BUSINESS LOAN AGREEMENT
This Agreement dated as of January 10, 2000, is between Bank of America, N.A.
(the "Bank") and PriceSmart, Inc. (the "Borrower").
1. LINE OF CREDIT AMOUNT AND TERMS
1.1 LINE OF CREDIT AMOUNT.
(a) During the availability period described below, the Bank will provide a
line of credit to the Borrower. The amount of the line of credit (the
"Commitment") is Eight Million and 00/100 Dollars ($8,000,000.00).
(b) This is a revolving line of credit providing for cash advances and
letters of credit. During the availability period, the Borrower may
repay principal amounts and reborrow them.
(c) The Borrower agrees not to permit the outstanding principal balance of
advances under the line of credit plus the outstanding amounts of any
letters of credit, including amounts drawn on letters of credit and not
yet reimbursed, to exceed the Commitment and the limitations specified in
paragraph 1.3 below.
1.2 AVAILABILITY PERIOD. The line of credit is available between the date of
this Agreement and December 31, 2000, or such earlier date as the availability
may terminate as provided in this Agreement (the "Expiration Date").
1.3 BORROWING BASE.
(a) MARKETABLE COLLATERAL. The Borrower's obligations to the Bank under this
facility will be secured by marketable collateral of the following types
and otherwise acceptable to the Bank:
<TABLE>
<CAPTION>
Advance Margin Call
Collateral Type Percentage Percentage
--------------- ---------- ----------
<S> <C> <C>
Corporate Bonds (Moody's Rating 80% 85%
Baa or Standard & Poor's BBB or
higher)
MUTUAL FUNDS:
Money Market 95% 95%
</TABLE>
- Does not apply to convertible bonds. Convertible bonds are
limited to the applicable percentages for the stock to which they
may convert.
(b) ADVANCE RATE. No extension of credit will be made under this facility
if, as a result, the principal balance outstanding under this facility
would exceed the Borrowing Base. The "Borrowing Base" is the sum of the
amounts determined by multiplying the Collateral Value by the Advance
Percentage for each type of collateral securing this facility.
(c) MARGIN CALL. The principal balance outstanding under this facility must
not exceed at any one time the sum of the amounts determined by
multiplying the Collateral Value by the Margin Call Percentage for each
type of collateral securing this facility. If this limit is exceeded,
the Borrower shall have two banking days from the date the Borrower is
notified by the Bank of such noncompliance, to either pledge additional
collateral acceptable to the Bank, in its sole discretion, or reduce the
principal balance outstanding under this facility so that, in either
case, the principal balance outstanding is less than the Borrowing Base.
This two day notice period and opportunity to cure shall not apply if the
collateral threatens to decline speedily in value, and in such case the
Borrower agrees that the Bank may immediately at the Bank's sole option
(i) declare amounts due under this Agreement to be immediately due and
payable, and/or (ii) sell all or any part of the collateral.
(d) The "Collateral Value" of collateral shall be determined at any given
time as follows:
(i) If a mutual fund, the Collateral Value shall be determined by
multiplying (A) the most recent per share net asset value of such
mutual fund obtained from the Wall Street Journal, times (B) the
number of shares of such mutual fund held by the Bank as
collateral. In the event that such net asset value is not
available in the Wall Street Journal, the Collateral Value shall
be the value quoted to the Bank by a reputable brokerage firm
selected by the Bank.
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-1-
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(ii) If corporate bonds, the Collateral Value shall be determined from
the most recent closing price for such bonds obtained from the
Wall Street Journal. If such closing price is not available in
the Wall Street Journal, the Collateral Value shall be the value
quoted to the Bank by a reputable brokerage firm selected by the
Bank.
(e) The Borrower may not sell, trade, or withdraw any part of the collateral
without the prior approval of the Bank, which approval will not be
unreasonably withheld.
(f) If any of the collateral is margin stock, the Borrower will provide the
Bank a Form U-1 Purpose Statement, and the Bank and the Borrower will
comply with the restrictions imposed by Regulation U of the Federal
Reserve, which may require a reduction in the Advance Percentage of the
margin stock collateral.
(g) If any of the collateral is or may be considered restricted or control
securities for purposes of Rule 144 of the Securities and Exchange
Commission, the Borrower shall provide, in form and substance acceptable
to the Bank, such information concerning the securities as may be
required by the Bank, together with an agreement regarding Rule 144
executed by the owner of the securities. The Advance Percentage and
Margin Call Percentage for securities covered by Rule 144 may be set by
the Bank at a lower rate than specified above.
(h) For regulatory reasons, the Bank will not accept as collateral Ineligible
Securities while they are being underwritten by Banc of America
Securities LLC, or for thirty days thereafter, Banc of America Securities
LLC is a wholly-owned subsidiary of Bank of America Corporation, and is a
registered broker-dealer which is permitted to underwrite and deal in
certain Ineligible Securities. "Ineligible Securities" means securities
which may not be underwritten or dealt in by member banks of the Federal
Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C.
Section 24, Seventh), as amended.
1.4 INTEREST RATE.
(a) Unless the Borrower elects an optional interest rate as described below,
the interest rate is the Bank's Prime Rate.
(b) The Prime Rate is the rate of interest publicly announced from time to
time by the Bank as its Prime Rate. The Prime Rate is set by the Bank
based on various factors, including the Bank's costs and desired return,
general economic conditions and other factors, and is used as a reference
point for pricing some loans. The Bank may price loans to its customers
at, above, or below the Prime Rate. Any change in the Prime Rate shall
take effect at the opening of business on the day specified in the public
announcement of a change in the Bank's Prime Rate.
1.5 REPAYMENT TERMS.
(a) The Borrower will pay interest on January 31, 2000, and then monthly
thereafter until payment in full of any principal outstanding under this
line of credit.
(b) The Borrower will repay in full all principal and any unpaid interest or
other charges outstanding under this line of credit no later than the
Expiration Date. Any interest period for an optional interest rate (as
described below) shall expire no later than the Expiration Date.
1.6 OPTIONAL INTEREST RATES. Instead of the interest rate based on the
Bank's Prime Rate, the Borrower may elect the optional interest rates listed
below during interest periods agreed to by the Bank and the Borrower. The
optional interest rates shall be subject to the terms and conditions described
later in this Agreement. Any principal amount bearing interest at an optional
rate under this Agreement is referred to as a "Portion." The following optional
interest rates are available:
(a) the IBOR Rate plus 1 percentage points.
(b) the LIBOR Rate plus 1 percentage points.
1.7 LETTERS OF CREDIT.
(a) This line of credit may be used for financing:
(i) commercial letters of credit with a maximum maturity not to extend
beyond the Expiration Date. Each commercial letter of credit will
require drafts payable at sight.
(ii) standby letters of credit with a maximum maturity not to extend
beyond the Expiration Date.
(iii) The amount of letters of credit outstanding at any one time
(including amounts drawn on letters of credit and not yet
reimbursed) may not exceed One Million and 00/100 Dollars
($1,000,000.00) for commercial letters of credit and One Million
and 00/100 Dollars ($1,000,000.00) for standby letters of credit.
--------------------------------------------------------------------------------
-2-
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(b) The Borrower agrees:
(i) any sum drawn under a letter of credit may, at the option of the
Bank, be added to the principal amount outstanding under this
Agreement. The amount will bear interest and be due as described
elsewhere in this Agreement.
(ii) if there is a default under this Agreement, to immediately prepay
and make the Bank whole for any outstanding letters of credit.
(iii) the issuance of any letter of credit and any amendment to a letter
of credit is subject to the Bank's written approval and must be in
form and content satisfactory to the Bank and in favor of a
beneficiary acceptable to the Bank.
(iv) to sign the Bank's form Application and Agreement for Commercial
Letter of Credit or Application and Agreement for Standby Letter
of Credit.
(v) to pay any issuance and/or other fees that the Bank notifies the
Borrower will be charged for issuing and processing letters of
credit for the Borrower.
(vi) to allow the Bank to automatically charge its checking account for
applicable fees, discounts, and other charges.
2. OPTIONAL INTEREST RATES
2.1 OPTIONAL RATES. Each optional interest rate is a rate per year.
Interest will be paid on the last day of each interest period, and on the last
day of each month during the interest period. At the end of any interest
period, the interest rate will revert to the rate based on the Prime Rate,
unless the Borrower has designated another optional interest rate for the
Portion. No Portion will be converted to a different interest rate during the
applicable interest period. Upon the occurrence of an event of default under
this Agreement, the Bank may terminate the availability of optional interest
rates for interest periods commencing after the default occurs.
2.2 IBOR RATE. The election of IBOR Rates shall be subject to the following
terms and requirements:
(a) The interest period during which the IBOR Rate will be in effect will be
no shorter than 30 days and no longer than one year. The last day of the
interest period will be determined by the Bank using the practices of the
offshore dollar inter-bank market.
(b) Each IBOR Rate Portion will be for an amount not less than the following:
(i) for interest periods of 91 days or longer, Five Hundred Thousand
Dollars ($500,000).
(ii) for interest periods of between 30 days and 90 days, One Million
Dollars ($1,000,000).
(c) The Borrower may not elect an IBOR Rate with respect to any principal
amount which is scheduled to be repaid before the last day of the
applicable interest period.
(d) The "IBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All
amounts in the calculation will be determined by the Bank as of the first
day of the interest period.)
IBOR Rate = IBOR Base Rate
--------------------------
(1.00 - Reserve Percentage)
Where,
(i) "IBOR Base Rate" means the interest rate at which the Bank's Grand
Cayman Branch, Grand Cayman, British West Indies, would offer U.S.
dollar deposits for the applicable interest period to other major
banks in the offshore dollar inter-bank market.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The
percentage will be expressed as a decimal, and will include, but
not be limited to, marginal, emergency, supplemental, special, and
other reserve percentages.
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-3-
(e) Each prepayment of an IBOR Rate Portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid, and a prepayment fee as described
below. A "prepayment" is a payment of an amount on a date earlier than
the scheduled payment date for such amount as required by this Agreement.
(f) The prepayment fee shall be in an amount sufficient to compensate the
Bank for any loss, cost or expense incurred by it as a result of the
prepayment, including any loss of anticipated profits and any loss or
expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Portion or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by the Bank in connection with
the foregoing. For purposes of this paragraph, the Bank shall be deemed
to have funded each Portion by a matching deposit or other borrowing in
the applicable interbank market, whether or not such Portion was in fact
so funded.
(g) The Bank will have no obligation to accept an election for an IBOR
Rate Portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal
to the interest period, of an IBOR Rate Portion are not available
in the offshore dollar inter-bank market; or
(ii) the IBOR Rate does not accurately reflect the cost of an IBOR
Rate Portion.
2.3 LIBOR Rate. The election of LIBOR Rates shall be subject to the
following terms and requirements:
(a) The interest period during which the LIBOR Rate will be in effect will
be one, two, three, four, five, six, seven, eight, nine, ten, eleven, or
twelve months. The first day of the interest period must be a day other
than a Saturday or a Sunday on which the Bank is open for business in
New York and London and dealing in offshore dollars (a "LIBOR Banking
Day"). The last day of the interest period and the actual number of days
during the interest period will be determined by the Bank using the
practices of the London inter-bank market.
(b) Each LIBOR Rate Portion will be for an amount not less than the
following:
(i) for interest periods of four months or longer, Five Hundred
Thousand Dollars ($500,000).
(ii) for interest periods of one, two or three months, One Million
Dollars ($1,000,000).
(c) The "LIBOR Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100 of one percent. (All amounts
in the calculation will be determined by the Bank as of the first day of
the interest period.)
LIBOR Rate = London Inter-Bank Offered Rate
------------------------------
(1.00 - Reserve Percentage)
Where,
(i) "London Inter-Bank Offered Rate" means the average per annum
interest rate at which U.S. dollar deposits would be offered for
the applicable interest period by major banks in the London
inter-bank market, as shown on the Telerate Page 3750 (or such
other page as may replace it) at approximately 11:00 a.m. London
time two (2) London Banking Days before the commencement of the
interest period. If such rate does not appear on the Telerate
Page 3750 (or such other page that may replace it), the rate for
that interest period will be determined by such alternate method
as reasonably selected by Bank. A "London Banking Day" is a day
on which the Bank's London Branch is open for business and
dealing in offshore dollars.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The percentage
will be expressed as a decimal, and will include, but not be
limited to, marginal, emergency, supplemental, special, and other
reserve percentages.
(d) The Borrower shall irrevocably request a LIBOR Rate Portion no later
than 12:00 noon time on the LIBOR Banking Day preceding the day on which
the London Inter-Bank Offered Rate will be set, as specified above. For
example, if there are no intervening holidays or weekend days in any of
the relevant locations, the request must be made at least three days
before the LIBOR Rate takes effect.
(e) The Borrower may not elect a LIBOR Rate with respect to any principal
amount which is scheduled to be repaid before the last day of the
applicable interest period.
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-4-
(f) Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason
of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid and a prepayment fee as described
below. A "prepayment" is a payment of an amount on a date earlier than
the scheduled payment date for such amount as required by this Agreement.
(g) The prepayment fee shall be in an amount sufficient to compensate the
Bank for any loss, cost or expense incurred by it as a result of the
prepayment, including any loss of anticipated profits and any loss or
expense arising from the liquidation or reemployment of funds obtained by
it to maintain such Portion or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by the Bank in connection with
the foregoing. For purposes of this paragraph, the Bank shall be deemed
to have funded each Portion by a matching deposit or other borrowing in
the applicable interbank market, whether or not such Portion was in fact
so funded.
(h) The Bank will have no obligation to accept an election for a LIBOR
Rate Portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal
to the interest period, of a LIBOR Rate Portion are not available
in the London inter-bank market; or
(ii) the LIBOR Rate does not accurately reflect the cost of a LIBOR
Rate Portion.
3. FEES AND EXPENSES
3.1 FEES.
(a) LOAN FEE. The Borrower agrees to pay a loan fee in the amount of Ten
Thousand and 00/100 Dollars ($10,000.00). This fee is due on or before
the date of this Agreement.
(b) WAIVER FEE. If the Bank, at its discretion, agrees to waive or amend
any terms of this Agreement, the Borrower will, at the Bank's option, pay
the Bank a fee for each waiver or amendment in an amount advised by the
Bank at the time the Borrower requests the waiver or amendment. Nothing
in this paragraph shall imply that the Bank is obligated to agree to any
waiver or amendment registered by the Borrower. The Bank may impose
additional requirements as a condition to any waiver or amendment.
3.2 EXPENSES. The Borrower agrees to immediately repay the Bank for
expenses that include, but are not limited to, filing, recording and search
fees, appraisal fees, title report fees and documentation fees.
3.3 REIMBURSEMENT COSTS.
(a) The Borrower agrees to reimburse the Bank for the cost of periodic
audits of the collateral securing this Agreement, at such intervals as
the Bank may reasonably require. The audits may be performed by employees
of the Bank or by independent auditors.
4. COLLATERAL
4.1 PERSONAL PROPERTY. The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or will
own in the future as listed below. The collateral is further defined in
security agreement(s) executed by the Borrower. In addition, all personal
property collateral securing this Agreement shall also secure all other
present and future obligations of the Borrower to the Bank (excluding any
consumer credit covered by the federal Truth in Lending law, unless the
Borrower has otherwise agreed in writing). All personal property collateral
securing any other present or future obligations of the Borrower to the Bank
shall also secure this Agreement.
(a) Stock and other securities as follows: account number
#66-15-002-7328520 with Bank and all successor and replacement accounts,
regardless of the numbers of such accounts or the offices at which such
accounts are maintained (the "Account") and all rights of Borrower in
connection with the Account.
Regulation U of the Board of Governors of the Federal Reserve System
places certain restrictions on loans secured by margin stock (as defined
in the Regulation). The Bank and the Borrower shall comply with
Regulation U. If any of the collateral is margin stock, the Borrower
shall provide to the Bank a Form U-1 Purpose Statement.
For regulatory reasons, the Bank will not accept as collateral
Ineligible Securities while they are being underwritten by Banc of
America Securities LLC, or for thirty days thereafter. Banc of America
Securities LLC is a wholly-owned subsidiary of Bank of America
Corporation, and is a registered broker-dealer which is permitted to
underwrite and
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-5-
deal in certain Ineligible Securities. "Ineligible Securities" means
securities which may not be underwritten or dealt in by member banks of
the Federal Reserve System under Section 16 of the Banking Act of 1933
(12 U.S.C. Section 24, Seventh), as amended.
5. DISBURSEMENTS, PAYMENTS AND COSTS
5.1 REQUESTS FOR CREDIT. Each request for an extension of credit will be
made in writing in a manner acceptable to the Bank, or by another means
acceptable to the Bank.
5.2 DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each
payment by the Borrower will be:
(a) made at the Bank's branch (or other location) selected by the Bank
from time to time;
(b) made for the account of the Bank's branch selected by the Bank from
time to time;
(c) made in immediately available funds, or such other type of funds
selected by the Bank;
(d) evidenced by records kept by the Bank. In addition, the Bank may, at
its discretion, require the Borrower to sign one or more promissory
notes.
5.3 TELEPHONE AND TELEFAX AUTHORIZATION.
(a) The Bank may honor telephone or telefax instructions for advances or
repayments or for the designation of optional interest rates and telefax
requests for the issuance of letters of credit given, or purported to be
given, by any one of the individuals authorized to sign loan agreements
on behalf of the Borrower, or any other individual designated by any one
of such authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn from
the Borrower's account number 14506-07752, or such other of the
Borrower's accounts with the Bank as designated in writing by the
Borrower.
(c) The Borrower will indemnify and hold the Bank harmless from all
liability, loss, and costs in connection with any act resulting from
telephone or telefax instructions the Bank reasonably believes are made
by any individual authorized by the Borrower to give such instructions.
This paragraph will survive this Agreement's termination, and will
benefit the Bank and its officers, employees, and agents.
5.4 DIRECT DEBIT (PRE-BILLING).
(a) The Borrower agrees that the Bank will debit the Borrower's deposit
account number 14506-07752, or such other of the Borrower's accounts with
the Bank as designated in writing by the Borrower (the "Designated
Account") on the date each payment of interest and any fees from the
Borrower becomes due (the "Due Date"). If the Due Date is not a banking
day, the Designated Account will be debited on the next banking day.
(b) Approximately 10 days prior to each Due Date, the Bank will mail to
the Borrower a statement of the amounts that will be due on that Due Date
(the "Billed Amount"). The calculation will be made on the assumption
that no new extensions of credit or payments will be made between the
date of the billing statement and the Due Date, and that there will be no
changes in the applicable interest rate.
(c) The Bank will debit the Designated Account for the Billed Amount,
regardless of the actual amount due on that date (the "Accrued Amount").
If the Billed Amount debited to the Designated Account differs from the
Accrued Amount, the Discrepancy will be treated as follows:
(i) If the Billed Amount is less than the Accrued Amount, the
Billed Amount for the following Due Date will be increased by the
amount of the discrepancy. The Borrower will not be in default by
reason of any such discrepancy.
(ii) If the Billed Amount is more than the Accrued Amount, the
Billed Amount for the following Due Date will be decreased by the
amount of the discrepancy.
Regardless of any such discrepancy, interest will continue to
accrue based on the actual amount of principal outstanding without
compounding. The Bank will not pay the Borrower interest on any
overpayment.
(d) The Borrower will maintain sufficient funds in the Designated Account
to cover each debit. If there are insufficient funds in the Designated
Account on the date the Bank enters any debit authorized by this
Agreement, the debit will be reversed.
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5.5 BANKING DAYS. Unless otherwise provided in this Agreement, a banking
day is a day other than a Saturday or a Sunday on which the Bank is open for
business in California. All payments and disbursements which would be due on a
day which is not a banking day will be due on the next banking day. All
payments received on a day which is not a banking day will be applied to the
credit on the next banking day.
5.6 TAXES. If any payments to the Bank under this Agreement are made from
outside the United States, the Borrower will not deduct any foreign taxes
from any payments it makes to the Bank. If any such taxes are imposed on any
payments made by the Borrower (including payments under this paragraph), the
Borrower will pay the taxes and will also pay to the Bank, at the time
interest is paid, any additional amount which the Bank specifies as
necessary to preserve the after-tax yield the Bank would have received if
such taxes had not been imposed. The Borrower will confirm that it has paid
the taxes by giving the Bank official tax receipts (or notarized copies)
within 30 days after the due date.
5.7 ADDITIONAL COSTS. The Borrower will pay the Bank, on demand, for the
Bank's costs or losses arising from any statute or regulation, or any request
or requirement of a regulatory agency which is applicable to all national
banks or a class of all national banks. The costs and losses will be
allocated to the loan in a manner determined by the Bank, using any
reasonable method. The costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets and commitments
for credit.
5.8 INTEREST CALCULATION. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year
and the actual number of days elapsed. This results in more interest or a
higher fee than if a 365-day year is used. Installments of principal which
are not paid when due under this Agreement shall continue to bear interest
until paid.
5.9 DEFAULT RATE. Upon the occurrence of any default under this Agreement,
principal amounts outstanding under this Agreement will at the option of the
Bank bear interest at a rate which is 2 percentage point(s) higher than the
rate of interest otherwise provided under this Agreement. This will not
constitute a waiver of any default.
5.10 INTEREST COMPOUNDING. At the Bank's sole option in each instance, any
interest, fees or costs which are not paid when due under this Agreement
shall bear interest from the due date at the Bank's Prime Rate plus 2
percentage points. This may result in compounding of interest.
6. CONDITIONS
The Bank must receive the following items, in form and content acceptable to
the Bank, before it is required to extend any credit to the Borrower under
this Agreement:
6.1 AUTHORIZATIONS. Evidence that the execution, delivery and performance
by the Borrower of this Agreement and any instrument or agreement required
under this Agreement have been duly authorized.
6.2 GOVERNING DOCUMENTS. A copy of the Borrower's articles of incorporation.
6.3 SECURITY AGREEMENTS. Signed original security agreements, assignments,
financing statements and fixture filings (together with collateral in which
the Bank requires a possessory security interest), which the Bank requires.
6.4 EVIDENCE OF PRIORITY. Evidence that security interests and liens in
favor of the Bank are valid, enforceable, and prior to all others' rights and
interests, except those the Bank consents to in writing.
6.5 INSURANCE. Evidence of insurance coverage, as required in the
"Covenants" section of this Agreement.
6.6 OTHER ITEMS. Any other items that the Bank reasonably requires.
7. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties. Each request
for an extension of credit constitutes a renewed representation:
7.1 ORGANIZATION OF BORROWER. The Borrower is a corporation duly formed and
existing under the laws of the state where organized.
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7.2 AUTHORIZATION. This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers.
7.3 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance
with its terms, and any instrument or agreement required hereunder, when
executed and delivered, will be similarly legal, valid, binding and enforceable.
7.4 GOOD STANDING. In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.
7.5 NO CONFLICTS. This Agreement does not conflict with any law, agreement,
or obligation by which the Borrower is bound.
7.6 FINANCIAL INFORMATION. All financial and other information that has
been or will be supplied to the Bank is:
(a) sufficiently complete to give the Bank accurate knowledge of the
Borrower's (and any guarantor's) financial condition, including all
material contingent liabilities.
(b) in compliance with all government regulations that apply.
7.7 LAWSUITS. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been
disclosed in writing to the Bank.
7.8 COLLATERAL. All collateral required in this Agreement is owned by the
grantor of the security interest free of any title defects or any liens or
interests of others.
7.9 PERMITS, FRANCHISES. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade
name rights, patent rights and fictitious name rights necessary to enable it
to conduct the business in which it is now engaged.
7.10 OTHER OBLIGATIONS. The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
7.11 INCOME TAX MATTERS. The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year.
7.12 NO TAX AVOIDANCE PLAN. The Borrower's obtaining of credit from the Bank
under this Agreement does not have as a principal purpose the avoidance of
U.S. withholding taxes.
7.13 NO EVENT OF DEFAULT. There is no event which is, or with notice or
lapse of time or both would be, a default under this Agreement.
7.14 INSURANCE. The Borrower has obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.
7.15 LOCATION OF BORROWER. The Borrower's place of business (or, if the
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrower's signature on this
Agreement.
7.16 YEAR 2000 COMPLIANCE. The Borrower has conducted a comprehensive review
and assessment of the Borrower's systems and equipment applications with
respect to the "year 2000 problem" (that is, the inability of computers, as
well as embedded microchips in non-computing devices, to properly perform
date-sensitive functions with respect to certain dates prior to and
after December 31, 1999). Based on that review, the Borrower does not believe
the year 2000 problem, including costs of remediation, will result in a
material adverse change in the Borrower's business condition (financial or
otherwise), operations, properties or prospects, or ability to repay the
credit. The Borrower has developed adequate contingency plans to ensure to
the best of its ability uninterrupted and unimpaired business operation in
the event of a failure of its own or a third party's systems or equipment due
to the year 2000 problem, including those of vendors, customers, and
suppliers, as well as a general failure of or interruption in its
communications and delivery infrastructure, or to mitigate any losses that
may arise from such failure.
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-8-
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8. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:
8.1 USE OF PROCEEDS. To use the proceeds of the credit only for working
capital.
8.2 FINANCIAL INFORMATION. To provide the following financial information
and statements in form and content acceptable to the Bank, and such
additional information as requested by the Bank from time to time:
(a) Within 120 days of the Borrower's fiscal year end, the Borrower's
annual financial statements and copies of Form 10-K Annual Report filing
with the Securities and Exchange Commission. These financial statements
must be audited (with an unqualified option) by a Certified Public
Accountant acceptable to the Bank. The statements shall be prepared on a
consolidated basis.
(b) Copies of the Borrower's Form 10-Q Quarterly Report within 60 days
after the date of filing with the Securities and Exchange Commission.
(c) Copies of the Borrower's monthly brokerage statements within 20 days of
each period end.
8.3 NOTICES TO BANK. To promptly notify the Bank in writing of:
(a) any lawsuit over One Million Dollars ($1,000,000) against the Borrower
(or any guarantor).
(b) any substantial dispute between the Borrower (or any guarantor) and any
government authority.
(c) any event of default under this Agreement, or any event which, with
notice or lapse of time or both, would constitute an event of default.
(d) any material adverse change in the Borrower's (or any guarantor's)
business condition (financial or otherwise), operations, properties or
prospects, or ability to repay the credit.
(e) any change in the Borrower's name, legal structure, place of business,
or chief executive office if the Borrower has more than one place of
business.
(f) any actual contingent liabilities of the Borrower (or any guarantor),
and any such contingent liabilities which are reasonably foreseeable.
8.4 BOOKS AND RECORDS. To maintain adequate books and records.
8.5 AUDITS. To allow the Bank and its agents to examine, audit, and make
copies of any physical certificates and books and records concerning the
collateral securing this Agreement at any reasonable time. If any of the
collateral, books or records are in the possession of a third party, the
Borrower authorizes that third party to permit the Bank or its agents to have
access to perform examinations or audits.
8.6 COMPLIANCE WITH LAWS. To comply with the laws (including any fictitious
name statute), regulations, and orders of any government body with authority
over the Borrower's business.
8.7 PRESERVATION OF RIGHTS. To maintain and preserve all rights,
privileges, and franchises the Borrower now has.
8.8 MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or
replacements to keep the Borrower's properties in good working condition.
8.9 PERFECTION OF LIENS. To help the Bank perfect and protect its security
interests and liens, and reimburse it for related costs it incurs to protect
its security interests and liens.
8.10 COOPERATION. To take any action reasonably requested by the Bank to
carry out the intent of this Agreement.
8.11 GENERAL BUSINESS INSURANCE. To maintain insurance as is usual for the
business it is in.
8.12 ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's written
consent:
(a) engage in any business activities substantially different from the
Borrower's present business.
(b) liquidate or dissolve the Borrower's business.
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-9-
(c) sell, assign, lease, transfer or otherwise dispose of any assets for
less than fair market value, or enter into any agreement to do so.
(d) sell, assign, lease, transfer or otherwise dispose of part of the
Borrower's business or the Borrower's assets except in the ordinary
course of the Borrower's business and the sale of the Borrower's travel
business as disclosed to the Bank.
(e) acquire or purchase a business or its assets.
(f) voluntarily suspend its business for more than 7 days in any 30 day
period.
8.13 BANK AS PRINCIPAL DEPOSITORY. To maintain the Bank as its principal
depository bank, including for the maintenance of business, cash management,
operating and administrative deposit accounts.
9. DEFAULT
If any of the following events occurs, the Bank may do one or more of the
following: declare the Borrower in default, stop making any additional credit
available to the Borrower, and require the Borrower to repay its entire debt
immediately and without prior notice. If an event of default occurs under the
paragraph entitled "Bankruptcy," below, with respect to the Borrower, then
the entire debt outstanding under this Agreement will automatically by due
immediately.
9.1 FAILURE TO PAY. The Borrower fails to make a payment under this
Agreement when due.
9.2 LIEN PRIORITY. The Bank fails to have an enforceable first lien (except
for any prior liens to which the Bank has consented in writing) on or
security interest in any property given as security for this Agreement (or
any guaranty).
9.3 FALSE INFORMATION. The Borrower (or any guarantor) has given the Bank
false or misleading information or representations.
9.4 BANKRUPTCY. The Borrower (or any guarantor) files a bankruptcy petition,
a bankruptcy petition is filed against the Borrower (or any guarantor) or the
Borrower (or any guarantor) makes a general assignment for the benefit of
creditors.
9.5 RECEIVERS. A receiver or similar official is appointed for the
Borrower's (or any guarantor's) business, or the business is terminated.
9.6 JUDGMENTS. Any judgments or arbitration awards are entered against the
Borrower (or any guarantor), or the Borrower (or any guarantor) enters into
any settlement agreements with respect to any litigation or arbitration, in
an aggregate amount of One Million Dollars ($1,000,000) or more in excess of
any insurance coverage.
9.7 GOVERNMENT ACTION. Any government authority takes action that the Bank
believes materially adversely affects the Borrower's (or any guarantor's)
financial condition or ability to repay.
9.8 MATERIAL ADVERSE CHANGE. A material adverse change occurs, or is
reasonably likely to occur, in the Borrower's (or any guarantor's) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.
9.9 CROSS-DEFAULT. Any default occurs under any agreement in connection with
any credit the Borrower (or any guarantor) has obtained from anyone else or
which the Borrower (or any guarantor) has guaranteed in the amount of Five
Hundred Thousand Dollars ($500,000) or more in the aggregate.
9.10 DEFAULT UNDER RELATED DOCUMENTS. Any guaranty, subordination agreement,
security agreement, deed of trust, or other document required by this
Agreement is violated or no longer in effect.
9.11 OTHER BANK AGREEMENTS. The Borrower (or any guarantor) fails to meet the
conditions of, or fails to perform any obligation under any other agreement
the Borrower (or any guarantor) has with the Bank or any affiliate of the
Bank.
9.12 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the conditions
of, or fails to perform any material obligation under, any term of this
Agreement not specifically referred to in this Article. This includes any
failure or anticipated failure by the Borrower to comply with any financial
covenants set forth in this Agreement, whether such failure is evidenced by
financial statements delivered to the Bank or is otherwise known to the
Borrower or the Bank.
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-10-
10. ENFORCING THIS AGREEMENT; MISCELLANEOUS
10.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made
under generally accepted accounting principles, consistently applied.
10.2 CALIFORNIA LAW. This Agreement is governed by California law.
10.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the
right of set-off against the Borrower.
10.4 ARBITRATION.
(a) This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Bank, whether arising in contract, tort or
by statute, including but not limited to controversies or claims that
arise out of or relate to: (i) this Agreement (including any renewals,
extensions or modifications); or (ii) any document related to this
Agreement (collectively a "Claim").
(b) At the request of the Borrower or the Bank, any Claim shall be
resolved by arbitration in accordance with the Federal Arbitration Act
(Title 9, U.S. Code)(the "Act"). The Act will apply even though this
Agreement provides that it is governed by the law of a specified state.
(c) Arbitration proceedings will be determined in accordance with the Act,
the rules and procedures for the arbitration of financial services
disputes of J.A.M.S./Endispute or any successor thereof ("J.A.M.S."),
and the terms of this paragraph. In the event of any inconsistency, the
terms of this paragraph shall control.
(d) The arbitration shall be administered by J.A.M.S. and conducted in any
U.S. state where real or tangible personal property collateral for this
credit is located or if there is no such collateral, in California. All
Claims shall be determined by one arbitrator; however, if Claims exceed
Five Million Dollars ($5,000,000), upon the request of any party, the
Claims shall be decided by three arbitrators. All arbitration hearings
shall commence within ninety (90) days of the demand for arbitration
and close within (90) days of commencement and the award of the
arbitrator(s) shall be issued within thirty (30) days of the close of
the hearing. However, the arbitrator(s), upon a showing of good cause,
may extend the commencement of the hearing for up to an additional
sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be
submitted to any court having jurisdiction to be confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any Claim
is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. For purposes of the application of the
statute of limitations, the service on J.A.M.S. under applicable
J.A.M.S. rules of a notice of Claim is the equivalent of the filing of
a lawsuit. Any dispute concerning this arbitration provision or whether
a Claim is arbitrable shall be determined by the arbitrator(s). The
arbitrator(s) shall have the power to award legal fees pursuant to the
terms of this Agreement.
(f) This paragraph does not limit the right of the Borrower or the Bank
to: (i) exercise self-help remedies, such as but not limited to,
setoff; (ii) initiate judicial or nonjudicial foreclosure against real
or personal property collateral; (iii) exercise any judicial or power
of sale rights, or (iv) act in a court of law to obtain an interim
remedy, such as but not limited to, injunctive relief, writ of
possession or appointment of a receiver, or additional or supplementary
remedies.
(g) The filing of a court action is not intended to constitute a waiver of
the right of the Borrower or the Bank, including the suing party,
thereafter to require submittal of the Claim to arbitration.
10.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced. The Bank retains all
rights, even if it makes a loan after default. If the Bank waives a default,
it may enforce a later default. Any consent or waiver under this Agreement
must be in writing.
10.6 ADMINISTRATION COSTS. The Borrower shall pay the Bank for all
reasonable costs incurred by the Bank in connection with administering this
Agreement.
10.7 ATTORNEYS' FEES. The Borrower shall reimburse the Bank for any
reasonable costs and attorneys' fees incurred by the Bank in connection with
the enforcement or preservation of any rights or remedies under this
Agreement and any other documents executed in connection with this Agreement,
and in connection with any amendment, waiver, "workout" or restructuring
under this Agreement. In the event of a lawsuit or arbitration proceeding,
the prevailing party is entitled to recover costs and reasonable attorneys'
fees incurred in connection with the lawsuit or arbitration proceeding, as
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determined by the court or arbitrator. In the event that any case is
commenced by or against the Borrower under the Bankruptcy Code (Title 11,
United States Code) or any similar or successor statute, the Bank is entitled
to recover costs and reasonable attorneys' fees incurred by the Bank related
to the preservation, protection, or enforcement of any rights of the Bank in
such a case. As used in this paragraph, "attorneys' fees" includes the
allocated costs of the Bank's in-house counsel.
10.8 ONE AGREEMENT. This Agreement and any related security or other
agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between the
Bank and the Borrower concerning this credit.
(b) replace any prior oral or written agreements between the Bank and the
Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete and
exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
10.9 INDEMNIFICATION. The Borrower will indemnify and hold the Bank
harmless from any loss, liability, damages, judgments, and costs of any kind
relating to or arising directly or indirectly out of (a) this Agreement or
any document required hereunder, (b) any credit extended or committed by the
Bank to the Borrower hereunder, and (c) any litigation or proceeding related
to or arising out of this Agreement, any such document, or any such credit.
This indemnity includes but is not limited to attorneys' fees (including the
allocated cost of in-house counsel). This indemnity extends to the Bank, its
parent, subsidiaries and all of their directors, officers, employees, agents,
successors, attorneys, and assigns. This indemnity will survive repayment of
the Borrower's obligations to the Bank. All sums due to the Bank hereunder
shall be obligations of the Borrower, due and payable immediately without
demand.
10.10 NOTICES. All notices required under this Agreement shall be
personally delivered or sent by first class mail, postage prepaid, or by
overnight courier, to the addresses on the signature page of this Agreement,
or sent by facsimile to the fax numbers listed on the signature page, or to
such other addresses as the Bank and the Borrower may specify from time to
time in writing. Notices sent by first class mail shall be deemed delivered
on the earlier of actual receipt or on the fourth business day after deposit
in the U.S. mail.
10.11 HEADINGS. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.
10.12 COUNTERPARTS. This Agreement may be executed in as many counterparts
as necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.
This Agreement is executed as of the date stated at the top of the first page.
BANK OF AMERICA, N.A.
PriceSmart, Inc.
X /s/ Karin S. Barnes
------------------------------------
By: Karin S. Barnes, Vice President X /s/ Robert M. Gans
---------------------------------------
By: Robert M. Gans,
Executive Vice President/Secretary
Address where notices to the
Bank are to be sent:
X /s/ Allan Youngberg
San Diego Regional Commerical ---------------------------------------
Banking Office #01450 By: Allan Youngberg,
450 B Street, Mezzanine Executive Vice President/
San Diego, CA 92101 Chief Financial Officer
Address for Notices:
4649 Morena Blvd.
San Diego, CA 92117
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-12-
CREDIT AGREEMENT
This CREDIT AGREEMENT (the "AGREEMENT"), dated as of December 21, 1999
is executed among Inmobiliaria PriceSmart El Salvador, Sociedad Anonima de
Capital Variable, or simply Inmobiliaria Pricesmart, S.A. de C.V., a company
organized and existing under the laws of El Salvador (the "BORROWER"),
PriceSmart El Salvador, Sociedad Anonima de Capital Variable, or simply
PriceSmart El Salvador, S.A. De C.V., a company organized under the laws of
El Salvador, (the "GUARANTOR"), PSMT Caribe Inc., a corporation organized
according to the laws of the British Virgin Islands, (the "GUARANTOR"),
PriceSmart, Inc., a corporation organized according to the laws of the State
of Delaware, United States of America, (the "GUARANTOR AND ASSIGNOR"), PSC,
S.A, a company organized under the laws of the Republic of Panama (the
"GUARANTOR"), Ventures Services Inc., a corporation organized according to
the laws of the State of Delaware, United States of America (the "ASSIGNOR"),
and Citibank, N.A., an international banking facility organized in accordance
with the laws of the State of New York, United States of America (the
"LENDER").
PRELIMINARY STATEMENTS
1.- INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply INMOBILIARIA PRICESMART, S.A. DE C.V. (the "BORROWER") has
applied to the LENDER, for a medium term non-revolving loan of an amount of FIVE
MILLION UNITED STATES DOLLARS (US$5,000,000.00).
2.- In order to provide funds to finance a completed PriceSmart warehouse
containing approximately five thousand square meters (5,000 M2) in Santa Elena,
El Salvador, the BORROWER has requested that the LENDER enter into this
Agreement.
3.- PSMT Caribe, Inc. (i) has complied with a capital injection of at
least THREE MILLION SEVEN HUNDRED THOUSAND Dollars (US$3,750,000.00) into the
Borrower, (ii) has made capital contributions to the BORROWER in the amount
of THREE MILLION UNITED STATES DOLLARS (US$3,000,000.00) for the down payment
on the purchase of land located in Metrocentro, City of San Salvador,
Republic of El Salvador, where the second PriceSmart store is currently being
built, and ONE MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS
(US$1,500,000.00) for construction of said store and (iii) has agreed and
will contribute an additional TWO MILLION FIVE HUNDRED THOUSAND UNITED STATES
DOLLARS (US$2,500,000.00) to the BORROWER for the purchase of completing land
acquisition and construction of the second store located in Metrocentro, City
of San Salvador, Republic of El Salvador, in the next six months from the
Closing Date.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 CERTAIN DEFINED TERMS. Certain capitalized terms are
used in this Agreement with the specific meanings defined below in this
Section 1.01. Except as otherwise explicitly specified to the contrary or
unless the context clearly requires otherwise, (a) the capitalized term
"Section" refers to sections of this Agreement; (b) the capitalized term
"Exhibit" refers to exhibits to this Agreement; (c) references to a
particular Section include all subsections thereof; (d) the word "including"
shall be construed as "including without limitation"; (e) references to a
particular Person include such Person's successors and assigns to the extent
permitted by this Agreement and the other Loan Documents; and (f) the use of
the plural includes the singular and of the masculine includes the feminine,
and vice-versa. References to "the date hereof" mean the date first set forth
above.
"BORROWER" has the meaning set forth in the preliminary statements
to this Agreement.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day
on which banks in New York, New York or San Salvador, El Salvador are
authorized or required by law or other governmental action to close.
"CAPITAL EXPENDITURES" means any payments which are made by a
Person for, or in connection with, the rental, lease, purchase,
construction or use of any real or personal property the value or cost
of which, under Salvadoran GAAP, should be capitalized and appear on such
Person's balance sheet in the category of property, plant or equipment,
without regard to the manner in which such payments or the instrument
pursuant to which they are made are characterized by such Person or any
other Person.
"CITIBANK" has the meaning set forth in the preamble to this
Agreement.
"COLLATERAL" means all "Collateral" (as defined in any Collateral
Documents), First Security Interest on land, building, fixtures and
equipment owned or leased by the Borrower, Assignment of all rents,
leases and license agreements and other assets and property that in
accordance with the terms of the Collateral Documents is or will be
subject to any Lien in favor of the Lender.
"COLLATERAL DOCUMENTS" means the Pledges of furniture, fixtures and
equipment and the Mortgage on Real Property owned by or leased by the
Borrower, the Assignment of all rents, of all leases and of the Licensing,
Technology Transfer, Training and Sourcing Agreement.
"COLONES" means the lawful currency of the Republic of El Salvador.
"CONSOLIDATED" means the consolidation of accounts in accordance with
Salvadoran GAAP.
"CROSS-BORDER INSURANCE" means the insurance policy between the Lender and
OPIC.
"DEBT" of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person for the
purchase price of property or services (other than trade or other account
payables, trade acceptances, trade letters of credit or similar trade extensions
of credit incurred in the ordinary course of business so long as such
obligations have an original or stated maturity of not more that 180 days), (c)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all obligations of such Person as lessee under
leases that have been or should be, in accordance with Salvadoran GAAP, recorded
as capital leases, (f) all obligations, contingent or otherwise, of such Person
in respect of acceptances, letters of credit or similar extensions of credit
(except for trade obligations excluded under clause (b) above), (g) all
obligations of such Person to make payments under the Collateral Documents, (h)
all obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any capital stock of or other ownership or profit
interest in such Person or any other Person or any warrants, rights or options
to acquire such capital stock, (i) all Debt of others referred to in clauses (a)
through (h) above or clause (j) below guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (1) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (2) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (3) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (4) otherwise to assure a creditor against loss, and (j) all Debt
referred to in clauses (a) through (i) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Debt.
"DEBT SERVICE" means, for any period, the sum of all principal payments
scheduled to be made by the Borrower in respect of Debt during such period
plus Interest Expense for such period plus any other payment that the
Borrower is obliged to make during that period.
"DEFAULT" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time
elapse or both.
"DISBURSEMENT" means the amount of FIVE MILLION DOLLARS
(US$5,000,000.00) which the Lender will deliver to the Borrower pursuant to
this Agreement on the Closing Date.
"DOLLARS" and the sign "US$" each mean the lawful currency of the United
States of America.
"EBITDA" means, during any period the sum (without duplication) of (i)
the net income of the Borrower, plus (ii) depreciation and amortization, plus
(iii) Interest Expense, plus (iv) all other non cash expenses including, but
not limited to, unrealized losses from foreign exchange and monetary
correction, and only to the extent that any such expense was deducted, plus
(v) income tax expense, to the extent that any such tax was deducted in
connection with the determination of net income, minus (vi) non cash gains,
including, but not limited to, foreign exchange gains and monetary
corrections, minus (vii) equity income form participation in subsidiaries and
affiliates plus (viii) cash dividends received from subsidiaries and
affiliates.
"EL SALVADOR" means the Republic of El Salvador.
"ENVIRONMENTAL ACTION" means any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or Environmental Permit,
including, without limitation, (a) any claim by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any Environmental Law and (b) any
claim by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
"ENVIRONMENTAL LAW" means any Salvadoran national, departmental, local
or municipal law, rule, regulation, code, order, writ, judgement, injunction,
decree
or judicial or agency written interpretation, written policy or written
guidance relating to the protection of the environment, health, safety or
Hazardous Materials or regulating the use, disposal or exposure to substances
by reason of their effect on the health or safety of humans or of the
environment.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"FACILITY" means, at any time, the aggregate amount of the Lender
Commitments at such time.
"FISCAL YEAR" means a fiscal year of the Borrower ending on August 31st
in any calendar year.
"GUARANTEES" in connection with the full repayment of all principal and
interest outstanding means (i) joint and several from the Borrower, PriceSmart
El Salvador, S.A. de C.V. and PSMT Caribe, Inc, (ii) from PriceSmart, Inc.,
in an amount up to but not exceeding 60% of all principal and interest
outstanding from time to time and (iii) from PSC, S.A., in an amount up to
but not exceeding 40% of all principal and interest outstanding from time to
time.
"GUARANTEE REDUCTION PROVISION" means the Lender agrees to reduce the
guarantees dollar for dollar with the repayment of the Loan pursuant to the
amortization schedule, provided that the maximum reduction shall be as follows
(i) 50% of the loan TWO MILLION FIVE HUNDRED THOUSAND Dollars (US$2,500,000.00)
at such time as the loan to value is equal to or less than 50% and; for the
prior 12-month period, the net operating income for the Project covered
combined debt service (interest and principal amortization) on the loan at a
minimum 1.50:1 ratio, and (ii) 30% of the loan ONE MILLION FIVE HUNDRED
THOUSAND Dollars (US$1,500,000.00) at such time as the loan to value is equal
to or less than 30% and, for the prior 12-month period, the net operating
income from the project covered combined debt service on the loan at a minimum
1.75:1 ratio.
"INTEREST EXPENSE" means, for any period of the Borrower, the aggregate
amount of interest paid or required to be paid in cash by the Borrower in
respect of all Debt.
"INTEREST PERIOD" means, the period commencing on the date of such
Disbursement and ending on the next succeeding Payment Date and, thereafter,
each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the next succeeding Payment Date;
PROVIDED, HOWEVER, that:
(a) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
PROVIDED, HOWEVER, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business
day; and
(b) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month in such Interest Period, such Interest Period shall end on
the last Business Day of such succeeding calendar month.
"INTEREST RATE" will be calculated on the basis of 3-months LIBOR Rate +
4.0% p.a. All interest will be calculated on a 365/360 days convention.
Interest payments shall be due and payable on a monthly basis.
"LIEN" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including,
without limiation, the lien or retained security title of a conditional
vendor and any easement, right of way or other encumbrance on title to real
property.
"LOAN CLOSING" means the date on which all parties hereto have executed
this Agreement.
"LOAN DOCUMENTS" means this Agreement, the Recognition of Debt, the
Collateral Documents, in each case as amended or otherwise modified from time
to time.
"LOAN PARTY" means each of the Borrower, PriceSmart El Salvador, S.A. de
C.V., PSMT Caribe, Inc., PriceSmart, Inc., PSC, S.A. and Ventures Services,
Inc., any other pledgor, assignor or guarantor under any Collateral Document
and their successors and permitted assigns.
"LOAN TERM" means five years from Loan Closing.
"MATERIAL ADVERSE CHANGE" means any substantive alteration in (a) the
business condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, PriceSmart El Salvador, S.A. de
C.V., PSMT Caribe, Inc., PriceSmart, Inc., PSC, S.A. which significantly
diminishes any of the parties ability to perform the obligations stated herein
"MATERIAL ADVERSE EFFECT" means any variation in the financial
condition, business, properties or prospects or results of the operations of
the Borrower and/or PriceSmart El Salvador, S.A. de C.V. which, in the good
faith opinion of the Lender, could reasonably be expected to significantly
diminish the Borrower's ability to perform its obligations stated herein.
"MATERIAL CONTRACT" means, with respect to any Person, any written
contract that is material to the business condition (financial or otherwise),
operations, performance, properties or prospects of such Person, including,
without limitation, with respect to the Borrower, the Leasing Agreements, the
Licence Agreements or other similar contract.
"MATURITY DATE" means December 21, 2004.
"MORTGAGE ON REAL PROPERTY" means the mortgage entered into on the date
hereof by the Borrower and the Lender for its benefit, substantially in the
form of Exhibit 2 attached hereto.
"NEW YORK LOAN DOCUMENTS" means this Agreement, the Assignment
Agreement, dated as of December 21, 1999, in each case, as amended or
otherwise modified from time to time.
"OBLIGATION" means, with respect to any Person, any payment, performance
or other obligation of such Person of any kind, including, without limitation,
any liability of such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured, unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 4.01 (g). Without limiting the generality of the foregoing, the
Obligations of the Borrower under the Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses, fees, premiums with
respect to Cross-Border Insurance, attorneys' fees and disbursements,
indemnities and other amounts payable by the Borrower under any Loan
Document and (b) the obligation of the Borrower to reimburse any amount in
respect of any of the foregoing that the Lender shall pay or advance on
behalf of the Borrower as contemplated in this Agreement.
"OPIC" Means Overseas Private Investment Corporation is an agency of the
United States Government, with the mandate of facilitating economically
productive an environmentally sound United States private investments in
developing countries and emerging economies.
"OTHER TAXES" has the meaning specified in Section 2.08.
"PAYMENT DATE" means each March 21, 2000; June 21, 2000; September 21,
2000; December 21, 2000; March 21, 2001; June 21, 2001; September 21, 2001;
December 21, 2001; March 21, 2002; June 21, 2002; September 21, 2002; December
21, 2002; March 21, 2003; June 21, 2003; September 21, 2003; December
21, 2003; March 21, 2004; June 21, 2004; September 21, 2004; December 21, 2004.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Sections 5.02 (b) and 5.03
[(a)B] hereof; (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations that are not overdue
for a period of more than 30 days; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations, and (d) easements, rights of way and
other encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLEDGES OF FURNITURE, FIXTURES AND EQUIPMENT" means the pledge
agreements entered into on the date hereof in respect of furniture, fixtures
and equipment and certain other moveable assets owned by the Borrower on the
date hereof between the Borrower and the Lender for its benefit,
substantially in the form of Exhibit 2 attached hereto.
"PROCESS AGENT" has the meaning specified in Section 7.04.
"RECOGNITION OF DEBT" means a Loan Recognition, under Salvadoran law.
"RESPONSIBLE OFFICER" means any authorized officer of the Borrower.
"ROLLING PERIOD" means for any fiscal quarter, such quarter and the
immediately preceding fiscal quarter.
"SALVADORAN GAAP" has the meaning specified in Section 1.03.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) the fair market value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay such debts and liabilities as they mature and (d) such Person
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably by expected to become an actual or matured liability.
"TAXES" has the meaning specified in Section 2.08.
"WORKING CAPITAL" means, as of any date, the current assets of the
Borrower, other than cash and other marketable securities, minus the current
liabilities of the Borrower, other than the current portion of long term debt,
in each case in accordance with Salvadoran GAAP, as of such date.
SECTION 1.02 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding."
SECTION 1.03 ACCOUNTING TERMS. All accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Citibank, N.A. hereunder shall
be prepared in accordance with Salvadoran generally accepted accounting
principles applied on a basis consistent with those applied in the preparation
of the latest financial statements furnished to the Lender hereunder (which,
prior to the delivery of the first financial statements under Section 5.04,
shall be the unaudited financial statements referred to in Section 5.04
("SALVADORAN GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE LOAN
SECTION 2.01. (a) The Lender agrees to lend to the Borrower an
amount up to FIVE MILLION Dollars (US$5,000,000.00). The loan amount is not
to exceed 80% of the direct and indirect hard and soft construction costs,
including furniture, fixtures and equipment, organization and start-up costs,
excluding land cost.
The Borrower acknowledges that this in an IBF facility and as such,
according to the Board of Governors of the Federal Reserve System of the United
States, that extensions of credit by international banking facilities, this loan
may be used only to finance operations outside the United States of the Borrower
or of the Borrower's affiliated outside the United States. The Borrower
indicates its understanding of this provision by initialing the blank which
follows this paragraph.
Initial: /s/ M.M.
------------------------------
(b) To effect the Disbursement, the Lender shall transfer the amount of
the Disbursement in United States Dollars to the account of PriceSmart El
Salvador, S.A. de C.V. number 0-110902-026.
In addition to those conditions precedent to the obligation of the
Lender to make the Disbursement set forth in Sections 3.01 and 4.01 below, on
or before the Date of the Disbursement, the Borrower shall deliver to the
Lender twenty (20) promissory notes substantially in the form of Annex A
hereto (the "Notes") executed by an authorized signatory of the Borrower. The
Lender shall have no obligation hereunder to effect the Disbursement if it
shall not have previously received such Notes, as executed by the Borrower,
at the principal offices of Citibank, N.A., San Salvador branch.
(c) Repayment of the Disbursement. The Borrower agrees that the
principal mechanism for the repayment of the Disbursement to the Lender shall be
the delivery to the Lender of the amount corresponding to the amortization
schedule determined in Section 2.03. Every payment shall be made in the same
currency that it was delivered (US dollars). If for governmental or any other
reason, the Borrower has to make payments in local currency, the amount will be
calculated based on the average dollar sales price dictated by Citibank N.A.,
San Salvador branch, for the day that the payment takes place. If the Borrower
were to make the payments in local currency without any valid reason, the loan
will terminate and the Lender will have the right to ask for repayment of the
full amount plus the corresponding interest.
The Borrower will make all principle and interest payments in Citibank,
N.A., San Salvador branch or where the Lender designates. Payments will first
cover interest due and then principle.
SECTION 2.02. FEES; PREMIUMS. (a) COMMITMENT FEE. The Borrower shall
pay to the Lender a structuring fee set forth below:
STRUCTURING FEE. The Borrower shall pay to the Lender at loan closing
1.25% flat (SIXTY TWO THOUSAND FIVE HUNDRED DOLLARS US$62,500.00). This fee will
be deducted from the loan amount.
SECTION 2.03. REPAYMENT OF LOAN. The Borrower shall repay to the
Lender a minimum amortization of EIGHT HUNDRED SEVENTY FIVE THOUSAND Dollars
(US$875,000.00) per annum. Amortization payments will be due and payable on a
quarterly basis, commencing March 21, 2000. The residual amount outstanding
totaling approximately ONE MILLION FIVE HUNDRED TWENTY FIVE THOUSAND DOLLARS
(US$1,525,000.00) shall be due and payable at the end of the Loan Term.
SECTION 2.04. PREPAYMENTS. With the exception of scheduled principal
amortization payments, full repayment of the Loan is not permitted for a minimum
of 24 months following Loan closing. Thereafter, the Borrower agrees to notify
Lender in writing, at least 90 days prior to the date of any full repayment of
the Loan. Also partial prepayments may only take place on the date when interest
rates are adjusted, according to 3 months LIBOR Rate.
SECTION 2.05. INTEREST (a) SCHEDULED INTEREST. The Borrower shall
pay interest on the unpaid principal amount owing to the Lender from the date
of disbursement until such principal amount shall be paid in full, at a rate
per annum equal at all times during each Interest Period for such
Disbursement of the sum of 3-month LIBOR Rate for such Interest Period PLUS
4.0% p. a., in effect from time to time, due and payable on a monthly basis.
All interest will be calculated on a 365/360 days convention.
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of
a Default, the Borrower shall pay interest on the unpaid principal amount the
amount owing to the Lender, payable in arrears on the dates referred to in
clause (a) above and on demand, at a rate per annum equal at all times to 5% per
annum above the prevailing rate per annum that would be required to be paid on
the Loan pursuant to clause (a) above.
(c) INTEREST RATE REDUCTION. The Lender agrees to reduce the interest
rate up to the amounts determined below, provided that the following conditions
are met (i) Reduce up to 1/8 of a percent from the initial interest rate
(3-months LIBOR plus 4.0%) when the Debt Service Coverage (as defined in the
Financial Covenants) is above 1.50 and Leverage (as defined in the Financial
Covenants) is below 2.0 (ii) Reduce up to 1/4 of a percent from the initial
interest rate (3-months LIBOR plus 4.0%) when the Debt Service Coverage (as
defined in the Financial Covenants is above 2.0 and Leverage (as defined in
the Financial Covenants) is below 1.50. These conditions will be
measured against year-end audited financial figures. The Lender reserves the
right to waive this reduction if country and market conditions are not favorable
or do not permit such reduction.
SECTION 2.06. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation after the date of this Agreement or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Lender, related specifically to this loan, (excluding for purposes
of this Section 2.06 any such increased costs resulting from (i) Taxes or Other
Taxes (as to which Section 2.08 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which the Lender is
organized or any political subdivision thereof), then the Borrower shall from
time to time, upon demand by the Lender, pay to the Lender for the account of
the Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrower by the Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If the Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) not currently in effect,
increases the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender based upon the existence of the
Lender's commitment to lend hereunder and other commitments of this type and
that such increase in capital represents an additional cost to the Lender
relating to this transaction, then, upon demand by the Lender, the Borrower
shall pay to the Lender, from time to time specified by the Lender, additional
amounts sufficient to compensate the Lender or such corporation, on a
proportional basis, for such increased cost in the light of such circumstances,
to the extent that the Lender reasonably determines such increase in capital to
be allocable to the existence of the Lender's commitment to lend to the Borrower
and to result in an additional cost for the Lender. A certificate as to the
amount of such increased cost, explaining in detail how such change in capital
required entails additional cost for the Lender, submitted to the Borrower by
the Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(c) Any additional amounts payable under this Section 2.06 by the
Borrower to a Lender assignee shall not exceed the additional amounts the
Borrower would have been required to pay to the Lender assignor who assigned
its rights and obligations under this Agreement to such assignee if no such
assignment had occurred.
(d) Before making any demand for additional amounts under this
Section 2.06, the Lender agrees to use its reasonable efforts (consistent with
its internal policy and any applicable legal and regulatory restrictions) to
minimize any such amounts.
SECTION 2.07. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment hereunder not later than 11:00 A.M. (New York City time) on the day
when due in Dollars to the Lender at the Lender's Account in same-day funds. In
the
event that the amount of funds received by the Lender are insufficient to
satisfy the payments due and payable hereunder, the Lender shall apply such
funds in the following order of priority: (i) first: ratably to all interest
due and payable hereunder, (ii) second: ratably to all amounts due and
payable under Section 2.02: ratably to all principal due and payable with
respect to the Loan and (iv) fourth: ratably to all other amounts due and
payable hereunder.
(b) The Borrower hereby authorizes the Lender, if and to the
extent payment owed to the Lender is not made when due hereunder, to charge
from time to time against any or all of the Borrower's accounts with the
Lender any amount so due. The Lender agrees to provide prompt written notice
to the Borrower as to the occurrence of any such charges against the
Borrower's accounts by the Lender in respect of amounts due hereunder, the
amount of such charges and the specific Borrower's account so charged.
(c) All computations of fees and interest based on the 3-months
LIBOR Rate shall be made by the Lender on the basis of a year of 360/365
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable. Each determination by the Lender of interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.08 TAXES. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.03, free and clear of
and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, EXCLUDING, in the case of the Lender, taxes imposed on its
income and franchise taxes imposed on it in lieu of income taxes by the
jurisdiction under the laws of which the Lender is organized or its
principal office is located or any political subdivision thereof and, in the
case of the Lender, taxes imposed on its income or revenues and franchise and
any other taxes imposed on it in lieu of income taxes by the jurisdiction of
the Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or the
Recognition of Debt being hereinafter referred to as "TAXES"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or the Recognition of Debt to the Lender, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 2.08) the Lender receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay (or shall cause to be paid)
any present or future stamp, documentary taxes, value added or any other
excise or property taxes, charges or similar levies imposed by El Salvador,
that arise from any payment
made hereunder or the Recognition of Debt or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any of the
other Loan Documents or any other taxes as may be agreed upon by the Borrower
and the Lender (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify the Lender for the full amount of
Taxes and Other Taxes, and for the full amount of taxes of any kind imposed
on amounts payable under this Section 2.08, paid by the Lender and any
liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 30 days from the date the Lender makes written demand therefor
accompanied by written evidence of payment of such Taxes or other Taxes.
(d) If the Lender actually and irrevocably realizes, by reason of
a refund, deduction or credit of any Taxes paid or reimbursed by the Borrower
pursuant to subsection (a) or (c) above in respect of payments under this
Agreement or the Recognition of Debt, a monetary benefit that it would
otherwise not have obtained, and that would result in the total payments
under this Section 2.08 exceeding the amount needed to make the Lender whole,
the Lender shall pay to the Borrower, with reasonable promptness following
the date on which it actually and irrevocably realizes such benefit, an
amount equal to the lesser of the amount of such benefit or the amount of
such excess; (in each case net of all out-of-pocket expenses in securing such
refund, deduction or credit).
SECTION 2.09 USE OF PROCEEDS. The proceeds of the Loan shall be
available to the Borrower for the following: to refinance a completed
PriceSmart warehouse containing approximately 5,000 M2 located in Santa
Elena, El Salvador.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01 CONDITIONS PRECEDENT TO INITIAL BORROWING. The
obligation of the Lender to make a Disbursement on occasion of the Borrowing
hereunder is subject to the satisfaction of the following conditions
precedent:
(a) The Lender shall be satisfied with the terms and conditions of
this Agreement and the other Loan Documents and the aggregate amount of
the Loan shall be FIVE MILLION DOLLARS (US$5,000,000.00).
(b) The Lender shall have a valid and perfected first-priority
security interest in the Collateral (other than the real property of
the Borrower, listed in Exhibit 2 that shall be registered and
perfected in accordance with Section 5.02
n); all filings, recordations and searches necessary or desirable in
connection with such security interests shall have been duly made or
obtained; and all filing and recording taxes and fees shall have been
paid.
(c) The Lender shall be satisfied with the corporate and legal
structure and capitalization of the Borrower and each of its
Guarantors, including, without limitation, the terms and conditions of
the corporate organizational documents and shareholders' agreement (if
any) of the Borrower and each such Guarantor and of each agreement or
instrument relating thereto.
(d) All Material Contracts shall be in full force and effect and
delivered to the Lender prior to the date hereof with certification
from the Borrower as to their completeness and effectiveness and (ii)
have not been amended, modified or rescinded since delivery, shall be
satisfactory to the Lender.
(e) There shall have occurred no event or circumstance that could
reasonably be expected to (i) result in a Material Adverse Change, (ii)
have a material adverse effect on the ability of the Borrower to meet
its obligations under any Loan Document or Material Contract to which
it is a party.
(f) The Lender shall have received each of the following in form
and substance satisfactory to the Lender: (i) three years historical
financial statements (including Balance Sheets, profit and Loss, and
Cash Flow Statements) of PriceSmart, Inc.; (ii) Business Plan and Cash
Flow Projections for the Borrower and PriceSmart El Salvador for the
duration of the Loan Term; (iii) Business Plan and Cash Flow
Projections for PriceSmart Inc. and PSMT Caribe Inc. for 1999-2000,
(iv) As-Built Plans and Specifications; Environmental Impact Report, if
required, soil reports, occupancy permits and required governmental
approvals; (v) Leasing, Shareholder and Licensing Agreements including:
a) Licensing, Technology Transfer, Training and Sourcing Agreement
among PriceSmart, Inc., Venture Services, Inc. and PriceSmart El
Salvador, dated June 1, 1999; b) Lease Agreement between the Borrower
and PriceSmart, which will be signed before closing of the loan and c)
Shareholder Agreement between PriceSmart, Inc. and PSC, S.A., dated
September 14, 1998; (vi) MAI Appraisal, in a form and from an appraisal
firm acceptable to the Lender. Such appraisal is to result in a minimum
valuation of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
(US$8,500,000.00) for the property on an "As-is" basis and (vii) such
other documents as reasonably required by the Lender.
(g) There shall exist no action, suit, investigation, litigation
or proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) purports to affect
in a manner adverse to the
Lender the legality, validity or enforceability of any Loan Document or the
consummation of the transactions contemplated thereby.
(h) All governmental and third party consents, approvals,
authorizations and licenses necessary in connection with any Loan
Document or the transactions contemplated thereby, if any, shall have been
obtained, shall be in full force and effect and, except for the governmental
and third party consents, approvals, authorizations and licenses that (i)
were delivered to the Lender prior to the date hereof with certification from
the Borrower as to their completeness and effectiveness and (ii) have not
been amended, modified or rescinded since such delivery, shall be
satisfactory to the Lender, all applicable waiting periods shall have expired
without any action being taken by any competent authority, and no law or
regulation shall be applicable in the judgment of the Lender that restrains,
prevents or imposes materially adverse conditions on the Borrower, any Loan
Document or the transactions contemplated thereby.
(i) The Cross-Border Insurance shall be in full force and effect and
shall be satisfactory in all respects to the Lender.
(j) The Lender shall have received on or before the date of the
initial Borrowing the following each dated such day (unless otherwise
specified), in form and substance satisfactory to the Lender (unless
otherwise specified) and in sufficient copies for the Lender
(i) Notarized declaration of the Corporate Secretary of the
board of directors of each Loan Party establishing that all said parties
have met all necessary corporate requirements to the satisfaction of the
Lender, and the transactions contemplated thereby and of all documents
evidencing other necessary corporate requirements and governmental and
other third party approvals and consents, if any, with respect to such
Loan Document.
(ii) Copies of the organizational documents of each Loan Party
and all amendments thereto certified by the General Manager, a Vice
President or Secretary of such Loan Party as being a true, correct and
complete copy thereof.
(iii) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Loan Document to which
it is or is to be a party and the other documents to be delivered
hereunder and thereunder.
(iv) Certified copies of all Material Contracts of the Borrower
listed in Exhibit 4 (Leasing Agreement, License Agreement, etc.) duly
executed by the parties thereto, all of which shall be in full force and
effect.
(v) Each of the Mortgage on Real Property, the Pledge of
Equipment, the Pledge of the Furniture, Pledge of the Fixtures,
Assignment of the Leasing Agreement and of the Licensing, Technology
Transfer, Training and Sourcing Agreement, in each case duly executed
by the parties thereto on the date hereof and substantially in the
form of the relevant Exhibit hereto, together with:
(A) evidence of the completion of all recordings,
filings, registrations and notices of or with respect to each such
Collateral Document (other than the registration of the Mortgages
on Real Property with the appropriate Salvadoran registries that
shall be completed in accordance with Section 5.02 n) that the
Lender may deem necessary or desirable in order to perfect and
protect the Liens created thereby; and
(B) evidence that all other action that the Lender may
deem necessary or desirable in order to perfect and protect the
first priority liens and security interests created under each
such Collateral Document.
(vi) The Cross-Border Insurance, duly executed by OPIC and the
Lender, which agreement shall be in full force and effect.
(vii) Recognition of Debt in respect of the Borrowing, duly
executed by the Borrower, substantially in the form of Exhibit 2 hereto.
(viii) A certificate of the Chief Financial Officer of the
Borrower, in form and substance satisfactory to the Lender, certifying as
to the a) DEBT SERVICE RATIO. Shall not fall below the level of 1.25 for
year 2001, 1.50 for year 2002, and 1.60 thereafter. The debt service ratio
is defined as net income plus interest plus depreciation plus
amortization divided by principal plus interest payment. Cash Coverage
Ratio, defined below, shall not fall below 1.10 for year 2000. Cash
Coverage Ratio is defined as EBITDA + Cash at hand - US$500,000.00)/
(Interest Exp. + Current Maturity) EBITDA will be calculated utilizing the
past twelve months. (b) INTEREST COVERAGE. Shall not fall below the level
of 2.0 for year 2000, 2.5 for year 2001, 3.0 for year 2002, 3.5 for year
2003, and 4.0 for year 2004 (c) LEVERAGE RATIO. Shall not be greater
than 3.0 for year 2000, 2.50 for year 2001, 2.0 for year 2002, 1.75 for
year 2003, and 1.0 for year 2004. Leverage is defined as: the total debt
divided by net worth. (d) TOTAL DEBT/EBITDA. Shall not be greater than
3.25 for year
2001, 2.5 for year 2002, 2.0 thereafter. EBITDA will be calculated
utilizing the past twelve months.
(ix) Such other approvals, opinions or documents as the Lender
may reasonably request, PROVIDED that for the avoidance of doubt such
corporate resolutions, certificates and documents of PriceSmart El
Salvador, S.A. de C.V., PriceSmart, Inc., PMST Caribe, Inc., PSC, S.A.
and Ventures Services, Inc. shall relate to the transactions contemplated
by the Loan Documents or the corporate existence of such Loan Parties.
(k) The Borrower shall have paid (i) all accrued fees of the Lender
and (ii) as provided in Section 2.05, all accrued expenses of the Lender
(including the reasonably accrued fees and expenses of the local counsel to
the Lender).
SECTION 3.02. CONDITIONS PRECEDENT TO THE BORROWING. The obligation of
the Lender to make the disbursement on the occasion of the Borrowing shall be
subject to the further conditions precedent that on the date of the Borrowing
(i) the Lender shall have received the Recognition of Debt in respect of the
Borrowing, duly executed by the Borrower, substantially in the form of
Exhibit 2 hereto, and (ii) the following statements shall be true (and each
of the giving of the applicable Notice of Borrowing, and the acceptance by
the Borrower of the proceeds of the Borrowing shall constitute a
representation and warranty by the Borrower that both on the date of such
notice and on the date of the Borrowing such statements are true)
(a) the representations and warranties contained in the Loan Document
are correct on and as of such date, before and after giving effect to the
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date, and,
(b) no event has occurred and its continuing, or would result from the
Borrowing or from the application of the proceeds therefrom, that
constitutes a Default.
SECTION 3.03. DETERMINATIONS UNDER SECTIONS 3.01 AND 3.02. For purposes
of determining compliance with the conditions specified in Sections 3.01 and
3.02, the Lender shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to the Lender
by its execution of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or
in which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed could not reasonably be
expected to have a Material Adverse Effect and (iii) has all requisite
corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding capital stock of the
Borrower has been validly issued, is fully paid and non-assessable. The
outstanding capital stock of the Borrower is free and clear of all Liens.
(b) The Borrower has no Subsidiaries.
(c) The execution, delivery and performance by the Borrower of the
Loan Document to which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, and do not (i)
contravene the Borrower's organizational documents, (ii) violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award, (iii) conflict with or result in the breach of, or constitute a
default under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting the Borrower or any
of their properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of the Borrower.
(d) No authorization or approval or other action by, and no notice to
or filing with, any Salvadoran governmental authority or regulatory body or
any other third party is required for (i) the due execution, delivery,
recordation, filing or performance by the Borrower of any Loan Document to
which it is or is to be a party, or for the consummation of the transactions
contemplated hereby, (ii) the grant by the Borrower of the Liens granted by
it pursuant to the Collateral Documents, (iii) the perfection or maintenance
of the Liens created by the Collateral Documents (including the first
priority nature thereof) or (iv) the exercise by the Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, have been duly obtained, taken, given
or made and are in full force and effect.
(e) This Agreement has been duly executed and delivered by the
Borrower. This Agreement is, the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.
(f) The pro forma and forecasted balance sheets, income statements
and statements of cash flows of the Borrower delivered to the Lender pursuant
to Section 3.01 were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in the light of conditions
existing at the time of delivery of such forecasts, and represented, at the
time of delivery, the Borrower's best estimate of its future financial
performance.
(g) No information, exhibit or report furnished by the Borrower to
the Lender (including the Information Memorandum when delivered) in
connection with the negotiation of the Loan Documents or pursuant to the
terms of the Loan Documents contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements made
therein not misleading.
(h) The Lender has received and reviewed the Insurance Policies and
has found them acceptable.
(i) There is no action, suit, investigation, litigation or
proceeding, including any Environmental Action, pending or threatened before
any court, governmental agency or arbitrator that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) purports to materially
affect the legality, validity or enforceability of this Agreement or the
consummation of the transactions contemplated hereby.
(j) The operations and properties of the Borrower comply in all
material respects with all applicable Environmental Laws and Environmental
Permits, all past material non-compliance with such Environmental Laws and
Environmental Permits has been resolved without ongoing obligations or costs,
and no circumstances exist that could (i) form the basis of an Environmental
Action against such Person or any of its properties that could reasonably be
expected to have a Material Adverse Effect or (ii) cause any such property to
be subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(k) The Borrower is not a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction that, in each case, could reasonably be
expected to have a Material Adverse Effect.
(l) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral, securing the payment of the
Obligations owing to the Secured Party under the Loan Documents and all
filings and other actions
necessary or desirable to perfect and protect such security interest set
forth therein shall have been duly taken. The Borrower is the legal and
beneficial owner of the Collateral pledged by it and that the Collateral is
free and clear of an Lien, except for the liens and security interests
created or permitted under the Loan Documents.
(m) Neither the business nor the properties of the Borrower are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or other
casualty (whether or not covered by insurance) that could be reasonably
likely to have a Material Adverse Effect.
(n) Set forth on Schedule 3.01(m)(vi) hereto is a complete and
accurate list of all Material Contracts of the Borrower, showing as of the
date hereof the parties, subject matter and term thereof. Each Material
Contract has been duly authorized, executed and delivered by all parties
thereto, has not been amended or otherwise modified, is in full force and
effect and is binding upon and enforceable against all parties thereto in
accordance with its terms, and there exists no default under any Material
Contract by any party thereto.
(o) The Borrower and the Guarantors have obtained insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general areas in
which the Borrower operates and as otherwise contemplated in the Collateral
Documents.
(p) The Borrower nor any of the Guarantors and their respective
property has any immunity from jurisdiction of any court or from set-off or
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) under the
laws of El Salvador.
(q) This Agreement, the Notes and the other Loan Documents are in
proper legal form under the law of El Salvador for the enforcement thereof
against the Borrower and the other Loan Parties under the law of El Salvador,
and to ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement and the other Loan Document in El Salvador, it is
not necessary that this Agreement, the Notes or any other Loan Documents or
any other document be filed or recorded at this time with any court or other
authority in El Salvador or that any stamp or similar tax be paid on or in
respect of this Agreement, the Notes or any Loan Document; PROVIDED that the
signature of the Borrower has been notarized by a notary public and an
apostille has been duly received for such notarization and each of the Loan
Documents is translated into Spanish by an official an official translator.
There is no tax, levy, impost, deduction, charge or withholding imposed by El
Salvador on any political subdivision, thereof either
(i) on or by virtue of the execution or delivery of the Agreement, the
Notes, any other Loan Document or (ii) on any payment to be made by the
Borrower pursuant to the Agreement or the other Loan Documents, except for
a 20% withholding tax imposed on payments of interest to non-Salvadoran
institutions that have not qualified with the Central Reserve Bank of
El Salvador.
(r) Each of the Borrower and the Guarantors is, individually and
together, Solvent.
(s) The Borrower has (i) initiated a review and assessment of all
areas within its business and operations (including those affected by
suppliers, vendors and customers) that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications
used by the Borrower (or suppliers and vendors) may be unable to
recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a
plan and timeline for addressing the Year 2000 Problem on a timely basis,
and (iii) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, the Borrower believes that all
computer applications (including those of its suppliers and vendors) that
are material to its business and operations are reasonably expected on a
timely basis to be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000 (that is, be "Year 2000
compliant"), except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER AND
PRICESMART EL SALVADOR, S.A. DE C.V.
SECTION 5.01. FINANCIAL COVENANTS ON A CONSOLIDATED BASIS. So long as
any amount of the Loan shall remain unpaid, the Borrower and PriceSmart El
Salvador, Sociedad Anonima de Capital Variable, or simply PriceSmart El
Salvador, S.A. de C.V. on a consolidated basis, shall:
(a) REVIEW OF COVENANTS. Permit covenants to be reviewed at the end
of each quarter (calculated and measured using a 12 month rolling basis)
commencing with the conclusion of the first full year of operation.
(b) DEBT SERVICE RATIO. Shall not fall below the level of 1.25 for
year 2001, 1.50 for year 2002, and 1.60 thereafter. The debt service ratio is
defined as: net income plus interest plus depreciation plus amortization
divided by principal plus interest payment. Cash Coverage Ratio, defined
below, shall not fall below 1.10 for year 2000. Cash Coverage Ratio is
defined as: EBITDA + Cash at hand - US$500,000.00)/(Interest Exp. + Current
Maturity).
(c) INTEREST COVERAGE. Shall not fall below the level of 2.0 for year
2000, 2.5 for year 2001, 3.0 for year 2002, 3.5 for year 2003, and 4.0 for
year 2004.
(d) LEVERAGE RATIO. Shall not be greater than 3.0 for year 2000, 2.50
for year 2001, 2.0 for year 2002, 1.75 for year 2003, and 1.0 for year 2004.
Leverage is defined as: the total debt divided by net worth.
(e) TOTAL DEBT/EBITDA. Shall not be greater than 3.25 for year 2001,
2.5 for year 2002, 2.0 thereafter. EBITDA will be calculated utilizing the
past twelve months.
SECTION 5.02. AFFIRMATIVE COVENANTS. So long as any amount of the Loan
shall remain unpaid, or the Lender shall have any Commitment hereunder, the
Borrower and PriceSmart El Salvador, Sociedad Anonima de Capital Variable, or
simply PriceSmart El Salvador, S.A. de C.V. shall:
(a) COMPLIANCE WITH LAWS, ETC. (i) Comply with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, all pension laws and Environmental Laws, except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect and (ii) obtain and maintain all necessary permits, licenses,
authorizations and approvals with any governmental authority or regulatory
body or any other third party required in connection with the performance by
the Borrower under any Loan Document or any Material Contract, requiring
that all the transactions with its affiliates shall be conducted at "arms
length".
(b) PAYMENT OF TAXES, ETC. Pay and discharge before the same shall
become delinquent and maintain appropriate reserves for (A) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (B) all lawful claims that, if unpaid, might by law become a
Lien upon its property, PROVIDED, HOWEVER, that the Borrower and PriceSmart
El Salvador, S.A. de C.V. shall not be required to pay or discharge, any
such tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to its
property and becomes enforceable against its other creditors.
(c) PAYMENT OF MATERIAL OBLIGATIONS. The Borrower and PriceSmart El
Salvador, S.A. de C.V. shall comply with all their material obligations.
(d) MAINTENANCE OF INSURANCE. Maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses
and
owning similar properties in the same general areas in which the Borrower or
PriceSmart El Salvador, S.A. de C.V., as the case may be, operate and as
otherwise contemplated in the Collateral Documents.
(e) MAINTENANCE OF TITLE INSURANCE. Maintain title insurance in favor
of the Lender from a title insurance company acceptable by the Lender.
(f) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of its
properties and all necessary governmental approvals, licenses and permits,
that are used or useful in the conduct of its business in good working order
and condition, ordinary wear and tear excepted. No changes in ownership are
permitted without the Lender's consent.
(g) YEARLY CAPITAL EXPENDITURES. The yearly Capital Expenditures
should not exceed an amount of FOUR HUNDRED THOUSAND Dollars
(US$400,000.00). The amount stated herein refers to additional CAPEX,
incremental from the financing provided by the Lender.
(h) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain
its existence, legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises, to the extent that
failure to preserve and maintain the same could produce a Material Adverse
Effect and conduct its business in accordance with prudent business
practices. The Borrower and PriceSmart El Salvador, S.A. de C.V. will not be
allowed to contract any of the following without the Lender's prior consent:
mergers, consolidations and divestitures and changes in conduct of the
business of either's corporate structure.
(i) VISITATION RIGHTS. During normal business hours and from time to
time, with reasonable notice, permits the Lender, or any of the insurer
parties to the Political Risk Insurance or any agents or representatives
thereof, to examine the records and books of account of, and visit the
properties of, the Borrower PriceSmart El Salvador, S.A. de C.V., and to
discuss the affairs, finances and accounts of the Borrower and of PriceSmart
El Salvador, S.A. de C.V. with any of its officers or directors and with its
independent certified public accountants.
(j) KEEPING OF BOOKS. Keep appropriate and accurate books of record
and accounts, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and of
PriceSmart El Salvador, S.A. de C.V. in accordance with Salvadoran GAAP.
(k) COMPLIANCE WITH TERMS OF REAL PROPERTY LEASEHOLDS. Make all
payments and otherwise perform all obligations in respect of all leases of
real property to which the Borrower or PriceSmart El Salvador, S.A. de C.V.,
as applicable, is a party, keep such leases in full force and effect and
not allow such
leases to lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, notify the Lender of any default by any party with
respect to such leases and cooperate with the Lender in all respects to cure
any such default, except where the failure to do so, either individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(l) PROPERTY AND CASUALTY INSURANCE. The Borrower shall maintain
property and casualty insurance customary in the industry, properly
endorsed in favor of the Lender from an insurance company accepted by the
Lender.
(m) TITLE INSURANCE. The Borrower shall maintain Lender Title
Insurance in favor of the Lender from a title insurance company accepted by
the Lender.
(n) PERFECTION OF SECURITY INTERESTS. Maintain the recording, priority
and perfection of the Liens on the Collateral created by the Collateral
Documents and keep all Collateral free and clear of Liens except for the
Liens created under Collateral Documents.
(o) FURTHER ASSURANCES. From time to time, do and perform any and all
acts and execute any and all documents as may be necessary or as reasonably
requested by the Lender or the insurers in order to effect the purposes of
this Agreement or to protect the rights or interests of the Lenders or the
insurer parties to the Political Risk Insurance, in each case, or under the
Loan Documents or as may be otherwise contemplated in the Political Risk
Insurance.
(p) YEAR 2000 COMPLIANT. Promptly notify the Lender in the event the
Borrower discovers or determines that any computer application (including
those of its suppliers and vendors) that is material to the Borrower's
business and operations will not be Year 2000 compliant, except to the
extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
(q) WORKER RIGHTS. To observe, cause each contractor to observe,
with respect to its respective employees, applicable laws relating to
acceptable conditions of work with respect to minimum wages, hours of work,
and occupational health and safety. Furthermore, in connection with the
project it agrees, and agrees to cause each contractor, (i) not to use forced
labor, (ii) not to employ any person under age 15, and not to employ any
person under age 18 for any hazardous activity, and (iii) that all employees
will have the right to remove themselves from hazardous situations without
jeopardizing their continued employment.
(r) ENVIRONMENTAL COMPLIANCE. Comply with (i) the International
Finance Corporation's Environmental, Health and Safety Guidelines for Office
Buildings, dated July 1, 1998, and (ii) the provisions of all applicable
environmental, health and safety laws, codes and ordinances, and all rules
and regulations promulgated thereunder, with respect to the project. The
Borrower shall require its project contractors to comply with the foregoing
worker rights requirements with respect to employees of such contractors or
their subcontractors.
(s) GOVERNMENTAL COMPLIANCE. Conduct its business in compliance with
all applicable laws and directives of governmental bodies having force of
law, including without limitation, corrupt practices laws and shall
implement internal management and accounting practices and controls
adequate to ensure compliance with applicable corrupt practices laws. The
Borrower shall use the proceeds of its Loan solely for the project and shall
not engage in any business in connection with the project other than its
present business activities and those related to its project, as each are
described in the information provided to OPIC and other activities similar,
thereto, without the prior written consent of OPIC.
(t) ADDITIONAL TERMS. Comply with such additional terms and conditions
as may be required in connection with each OPIC Approval.
(u) NO LIABILITY FOR OPIC. Agree that OPIC shall bear no liability if
a Facility Loan is not funded in whole or in part.
(v) GROSS-UP OF PAYMENTS. Agree to the gross-up of payments by it for
taxes and increased costs on terms to be agreed upon between the Lender and
OPIC.
(w) OPIC'S OPTION TO PURCHASE. Consent to the exercise of OPIC's
option to purchase the Loan, if applicable.
(x) SELF-MONITORING QUESTIONNAIRE. The Borrower shall complete and
annually submit the OPIC Self-Monitoring Questionnaire, which will be
provided by the Lender, with respect to the operation of the related
project. Unless waived in writing by OPIC, the Borrower shall, upon request
of OPIC, give access to OPIC representatives during normal business hours to
permit them to inspect their facilities and properties.
The Borrower acknowledges that the Lender is required to (i) notify OPIC
upon becoming aware of any violation of the covenants in this Section letters
(r), (s), (t), (u), (v), (w), (x) and (y) by the Borrower, (ii) consult with
OPIC concerning appropriate actions to be taken with respect to such
violations, and (iii) if OPIC so directs, accelerate, or cause the applicable
Branch to accelerate the related Loan, provided it or the applicable Branch
has the power to do so under applicable law.
SECTION 5.03. NEGATIVE COVENANTS. So long as any amount of the Loan
shall remain unpaid, or the Lender shall have any Commitment hereunder, the
Borrower shall not, and, except as set forth below, at any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, any Lien on
or with respect to any of its properties of any character now owned, or
assign any right to receive income EXCLUDING:
(A) Liens created under the Loan Document; and
(B) Permitted Liens.
(b) MERGERS, ETC. Contract any of the following without the Lender's
prior written consent: mergers, consolidations and divestitures, and
changes in conduct of the business or corporate structure.
(c) SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise dispose
of any Collateral or any part of its assets other than Collateral, or grant
any option or other right to purchase, lease or otherwise acquire any
Collateral or any part of its assets other than Collateral, other than
(i) in the case of the Borrower inventory to be sold in the ordinary course
of its business, (ii) assets no longer used or useful in its operations.
(d) INVESTMENTS IN OTHER PERSONS. Contract any of the following
without the Lender's prior written consent: investments in subsidiaries,
affiliates and/or third parties; and guarantees to third parties. Invest in
the capital stock or securities of any subsidiary or affiliated corporations
except in the ordinary course of business.
(e) CHANGE IN NATURE OF BUSINESS. Make any material change in the
nature of its business as carried on at the date hereof.
(f) ACCOUNTING CHANGES. Make or permit any change in accounting
policies or reporting practices, except as required to comply with
Salvadoran GAAP.
(g) PREPAYMENTS, ETC. OF DEBT. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner,
or make any payment in violation of this Agreement, other than, prepayment
of (A) the Loan in accordance with the terms of this Agreement and (B) trade
account payables incurred in the ordinary course of business.
(h) AMENDMENT, ETC. OF CERTAIN CONTRACTS. Amend, modify or change in
any manner any material term or condition of, or cancel or terminate, or
consent to or accept any cancellation or termination of, or give any consent,
waiver or approval under, or waive any default under or breach of any
material term or condition of, the Lease and License Agreement, without the
prior written consent of the Lender.
(i) PARTNERSHIPS. Become a general partner in any general or limited
partnership.
(j) ACQUISITIONS. Contract any of the following without the Lender's
prior consent if they should exceed the amount of US$250,000.00 per year
(excluding capital expenditures); acquisitions, sales or transfers of
assets; leases or sale/leasebacks of assets, repurchases or redemptions of
outstanding stock (including options or warrants); exchanges defeasances,
amendments or repurchases of long term indebtedness; and capital lease and
operating lease obligations.
(k) CHARTER AMENDMENTS. Make any amendment or modification of its
corporate organizational documents in a manner that could reasonably be
expected to be materially adverse to the rights, remedies or interests of
the Lender or the ability of the Borrower or any other Loan Party to perform
under any Loan Document, or impair the value of the Collateral.
(l) NEGATIVE PLEDGE. Enter into or suffer to exist any agreement on
all assets which are the subject of this loan.
(m) WORKER RIGHTS. Take any action, and to ensure that no action will
be taken by any contractor (or subcontractor) of the Borrower performing
engineering, procurement and construction services, or providing operating
and management services, for the project (each a "contractor" and
collectively the "contractors") to prevent employees of the Borrower or of
any such contractor performing such services for the project in El Salvador
from lawfully under the laws of El Salvador exercising their right of
association and their right to bargain collectively.
SECTION 5.04. ADDITIONAL GUARANTOR CONVENANTS. So long as any amount of
the Loan shall remain unpaid, or the Lender shall have any Commitment
hereunder, the Guarantors shall:
(a) MINIMUM NET WORTH. PriceSmart, Inc. shall maintain a minimum net
worth of US$55,000,000.00, at all times.
(b) EXISTING OWNERSHIP. PriceSmart, Inc., shall not diminish existing
ownership in PSMT Caribe, Inc.
(c) MINIMUM NET WORTH. PSC, S.A. shall maintain a minimum net worth
of US$10,000,000.00.
(d) EXISTING OWNERSHIP. PSC, S.A. shall maintain existing ownership
in PSMT Caribe, Inc.
(e) MINIMUM NET WORTH. PSMT Caribe, Inc. shall maintain a minimum net
work of US$25,000,000.00.
(f) VARIANCE FROM COVENANTS. In the event that the Guarantors
anticipate a variance from any of the above covenants, except wherein
PriceSmart, Inc. obtains greater percentage interest in PSMT Caribe, Inc.,
the Borrower, and/or PriceSmart El Salvador, S.A. de C.V., the Guarantors
must obtain the Lender's consent thereto with an advance 60 days notice,
which consent may be withheld at the Lender's sole discretion.
SECTION 5.05 - REPORTING REQUIREMENTS. So long as the Loan or any part
of the Loan shall remain unpaid, the Borrower will furnish to the Lender:
(a) DEFAULT NOTICE. As soon as possible and in any event no later than
five Business Days, (i) after the General Manager or the Chief Financial
Officer of the Borrower obtains knowledge of the occurrence of each Default,
a statement of a senior officer of the Borrower setting forth details of such
Default, other "default" or Material Adverse Change and the action that the
Borrower has taken and proposes to take with respect thereto; (ii) In the
event that non-compliance or potential non-compliance with covenants in
Sections 5.02(q) and 5.03 (m), with respect to the employees of the Borrower
or any contractor comes to the attention of the Borrower, it shall give
prompt notice thereof to the Lender and OPIC and, if applicable, to such
contractor. It (i) shall (a) cure such non-compliance or (b) cause such
contractor to cure such non-compliance, in either case to the satisfaction
of OPIC, and (ii) shall terminate that contract with such contractor (the
"contract") unless such non-compliance is cured to the satisfaction of OPIC
within 90 days of such notice thereof from the Lender of OPIC to it,
whichever occurs first.
(b) QUARTERLY FINANCIALS. As soon as available and in any event
within 45 days after the end of each of the quarters of each Fiscal Year, a
Consolidated and consolidating balance sheet of the Borrower, PriceSmart El
Salvador, S.A. de C.V., and the Guarantors as of the end of such quarter. All
financial statements shall include a certificate from the management
detailing compliance of the Financial Covenants and certifying that no
Default or Event of Default has occurred.
(c) ANNUAL AUDITED FINANCIALS. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a consolidated and
consolidating audited balance sheet of the Borrower, PriceSmart,
S.A. de C.V. And the Guarantors. All financial statements shall include a
certificate from the
management detailing compliance of the Financial Covenants and certifying
that no Default or Event of Default has occurred.
(d) LITIGATION. (i) Promptly after the commencement thereof, notice
of all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (A) which could have a Material
Adverse Effect on the Borrower or any other Loan Party, (B) or which could
reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and (ii) as soon as possible and in any event no
later than five Business Days after the General Manager or the Chief
Financial Officer of the Borrower obtains knowledge of the commencement
thereof, notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could
reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations, performance, properties or
prospect of the Borrower.
(e) OTHER INFORMATION. Within fifteen days of a written request by
the Lender, such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower as the Lender may from time to time reasonably request.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events ("EVENTS
OF DEFAULT") shall occur and be continuing:
(a) the Borrower shall fail to ratify, before a Salvadoran Notary
Public, this Agreement and the Collateral Documents within a 30-day period
from closing date.
(b) (i) the Borrower and PriceSmart El Salvador, S.A. de C.V. shall
fail to pay any principal or interest of the Loan when the same shall become
due and payable or (ii) the Borrower and PriceSmart El Salvador, S.A. de C.V.
shall fail to pay any other amounts to any party due and payable, where such
failure shall continue unremedied for 30 days after due date. Payments due to
PriceSmart, Inc. are exempt from this provision.
(c) any Guarantor shall fail to honor the obligations under the Loan
Documents.
30
(d) any representation or warranty made by the Borrower, PriceSmart
El Salvador, S.A. de C.V. and any of the Guarantors (or any of its
officers) in the Loan Document or any certificate or other document delivered
in connection with the Loan Documents shall prove to have been incorrect in
any material respect when made or confirmed;
(e) the Borrower, PriceSmart El Salvador, S.A. de C.V. or any
of the Guarantors shall fail to perform or observe any term, covenant or
agreement contained in Sections 5.01, 5.02, 5.03, 5.04, and 5.05;
(f) Material Breach: any representation or warranty by Borrower,
PriceSmart El Salvador and Guarantors proves to be incorrect in any material
aspect, or any other covenants are not complied with;
(g) Bankruptcy, insolvency, re-scheduling, moratoria on payments or
similar proceeding by or against Borrower, PriceSmart El Salvador and
Guarantors.
(h) Changes in laws that materially affect the ability of the
Borrower to perform obligations, make Borrower's obligations under the Loan
Documentation illegal or unenforceable, failure of the obligations under the
Loan Facility to rank senior to all indebtedness of the Borrower and
PriceSmart El Salvador, S.A. de C.V.;
(i) A change in ownership, management or control of Borrower and/or
PriceSmart El Salvador, S.A. de C.V. excepting any increase in direct or
indirect ownership by PriceSmart, Inc.;
(j) Occurrence of Material Adverse Change in the condition (financial
or otherwise) of Borrower or PriceSmart El Salvador, S.A. de C.V.;
(k) Termination, by PriceSmart, Inc., of the Licensing, Technology
Transfer, Training & Sourcing Agreement, pursuant to Section 12 of said
Licensing Agreement. In the event PriceSmart, Inc. elects to terminate said
Licensing Agreement during the term of the Loan, it shall provide Lender with
written notice of its intent thereof, six months prior to said election;
(l) Cure Provisions: Borrower shall have a 10-days curing period
for any payment default. This provision does not require notification and
must not be exercised more than twice per year. In such case that this
provision is exercised more than twice per year, Borrower shall be in
immediate default. Borrower shall have a 30-day curing period for any
non-payment default;
(m) Failure of the Borrower (x) promptly to notify the Lender and, if
applicable, the contractor of such non-compliance; or (y) to cure such non-
compliance or cause such contractor to cure such non-compliance, in either
case to the satisfaction of OPIC, or (ii) to terminate the contract. The
Borrower and the contractors are not responsible under this Section for the
actions of the government of El Salvador.
Then, the Lender may declare, by written demand for payment, any portion
or all of the Loan to be due and payable, whereupon such portion of the Loan,
together with interest accrued thereon and all other amounts due under this
Agreement, shall immediately mature and become due and payable.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. DEVALUATION HEDGE. The Lender agrees that, prior to Loan
closing, it will not require the Borrower to enter into a non-delivery
forward contact in order to hedge local currency devaluation risk, based upon
the Borrower's current policies and practices regarding devaluation risk.
However, the Borrower and the Lender agree that this policy will be reviewed
on a quarterly basis, and, in the event that market conditions so dictate,
the Lender reserves the right to require that the Borrower enter into such
hedge. The Borrower acknowledges the Lender's rights in this regard and
agrees to act in good faith in order to mitigate any devaluation risk.
SECTION 7.02. LOAN PARTICIPATION. The Lender may, in its sole
discretion, participate or assign all or a portion of the Loan to one or more
lending institutions (Co-lenders or Participants). In the event the Lender
assigns all or a portion of the Loan to a Co-Lender, the Lender's
responsibility for the funding of that portion of the Loan will terminate
upon the assumption by the Co-Lender of such responsibility. Lender may, but
will not be obliged to serve as agent for the Co-Lenders with respect to the
Loan.
SECTION 7.03. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed (or, in the case of the Collateral Documents,
consented to) by the Borrower and the Lender.
SECTION 7.04. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered, if to the Borrower, at its address at 4649 Morena Blvd, San Diego,
California, 92117, Attention: Ernesto Grijalva, Vice President Latin America,
Legal Affairs, if to the Lender, at its address set forth on the signature
pages hereof, or, as to the Borrower, or the Lender, at
such other address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other address as
shall be designated by such party in a written notice to the Borrower and the
Lender. All such notices and communications shall, when mailed, telegraphed,
telecopied or telexed, be effective when deposited in the mails, delivered to
the telegraph company, transmitted by telecopier or confirmed by telex
answerback, respectively. Delivery by telecopier of an executed counterpart
of any amendment or waiver of any provision of this Agreement is executed and
delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 7.05. NO WAIVER, REMEDIES. No failure on the part of the
Borrower or the Lender, to exercise, and no delay in exercising, any right
hereunder or under this Agreement or Recognition of Debt shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 7.06. COSTS, EXPENSES. The Borrower agrees to pay all incidental
expenses of the Lender relating to the Loan, including but not limited to
appraisal fees, attorneys fees, notary and recording fees, and environmental
studies, if any, shall be paid by Borrower whether or not the Loan closes.
SECTION 7.07. JURISDICTION, ETC. (a) Each of the parties hereto hereby
irrevocably, and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Agreement or the other Loan Documents, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final, non-appealable judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan
Documents in the courts of any jurisdiction, including the enforcement of the
Collateral Documents governed under Salvadoran law in the courts of El
Salvador. The Borrower irrevocably and unconditionally waives any right to
claim a lack of jurisdiction should any Loan Document be enforced in El
Salvador. The Borrower hereby irrevocably appoints Ernesto Grijalva, Vice
President Latin America Legal Affairs (the "PROCESS AGENT") with an office on
the date hereof 4649 Morena Blvd, san Diego, California, 92117 as its agent
to receive on behalf of such Borrower and its property service of copies of
the summons and complaint and any other process which may be served in any
such action or proceeding. Such service may be made by mailing or delivering
a copy of such process to the Borrower in care of the Process Agent at the
Process Agent's above address, and such Borrower hereby irrevocably
authorizes and directs the Process Agent to accept such service on its
behalf. As an alternative method of service, the Borrower also irrevocably
consents to the service of any and all process in any such action or
proceeding by sending copies of such process by mail (by method requiring
evidence of receipt) with a second copy to be sent to the Borrower by courier
at its address specified in Section 7.04.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement and
the other Loan Documents in any New York State or federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
the Borrower hereby irrevocably waives such immunity in respect of its
obligations under this Agreement and the other Loan Documents and, without
limiting the generality of the foregoing, agrees that the waivers set forth
in this subsection (c) shall have the fullest scope permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are
intended to be irrevocable for purposes of such Act.
SECTION 7.08. ENGLISH LANGUAGE. This Agreement has been negotiated and
executed in the English language. The English language version of this
Agreement and each other Loan Document shall control and be conclusive as to
the meaning of any terms and provisions hereof or thereof, except in the case
of the Recognition of Debt, the Mortgage on Real Property, the Pledges of the
Equipment and the Pledge of the Lease Agreement, where the Spanish language
version shall control and be conclusive as to the meaning of any terms and
provision thereof. Each other document to be delivered in respect of this
Agreement shall be in the English language or shall be accompanied by an
English translation certified by the Borrower as being complete and correct.
SECTION 7.09. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 7.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, PRICESMART EL
SALVADOR, S.A. DE C.V., THE GUARANTORS, THE ASSIGNOR AND THE LENDER
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE ACTIONS OF THE LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER: /s/ Mauricio Muyshondt
IMMOBILIARIA PRICESMART EL
SALVADOR, SOCIEDAD ANONIMA DE CAPITAL VARIABLE or simply
INMOBILIARIA PRICESMART, S.A. DE C.V.
By: /s/ Mauricio Muyshondt
Name: Mauricio Muyshondt
Title: Attorney In Fact
GUARANTORS:
PRICESMART EL SALVADOR
SOCIEDAD ANONIMA DE CAPITAL VARIABLE, or simply PRICESMART EL
SALVADOR, S.A. DE C.V.
By: /s/ Ernesto Grijalva
Name: Ernesto Grijalva
Title: Director Secretary
PRICESMART, INC.
By: /s/ Ernesto Grijalva
Name: Ernesto Grijalva
Title: Vice President Latin America
Legal Affairs
PSMT CARIBE, INC.
By: /s/ Ernesto Grijalva
Name: Ernesto Grijalva
Title: Attorney In Fact
PSC, S.A.
By: /s/ Edgar Zurcher
Name: Edgar Zurcher
Title: President
VENTURES SERVICES, INC.
By: /s/ Ernesto Grijalva
Name: Ernesto Grijalva
Title: Attorney In Fact
LENDER
CITIBANK, N.A.
By: /s/ Gijs Bert Veltman
Name: Gijs Bert Veltman
Title: Vice President Corporate Bank
Head
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: March 21, 2000.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: June 21, 2000.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: September 21, 2000.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: December 21, 2000.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: March 21, 2001.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: June 21, 2001.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: September 21, 2001.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: December 21, 2001.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: March 21, 2002.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: June 21, 2002.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: September 21, 2002.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: December 21, 2002.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: March 21, 2003.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: June 21, 2003.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: September 21, 2003.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: December 21, 2003.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: March 21, 2004.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: June 21, 2004.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
PROMISSORY NOTE
WITHOUT PROTEST
For US$218,750.00 Maturity Date: September 21, 2004.
By this PROMISSORY NOTE INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.,
referred to hereinafter as THE BORROWER, hereby unconditionally promises to
pay to the order of CITIBANK, N. A., at the offices of Citibank, N.A. New York,
the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FIFTY United
States Dollars plus a 3-months LIBOR interest rate plus 4.0%, on the maturity
date stated herein.
The payment to be made by THE BORROWER, under this Note shall be made in
United States Dollars in immediately available and freely transferable funds
no later than 12:00 Noon Central Standard Time in the due date, without
set-off, counterclaim, deduction of whatever nature.
For the legal effects of this Note, THE BORROWER, determines as special
domicile the City of New York, State of New York, United States of America or
the City of San Salvador, Republic of El Salvador, and in case of judicial
action, waives the right to appeal of the garnishment decree, sentence, and
any other appealable decision of the El Salvador Mercantile Court in any
Mercantile Judicial Collection Procedure or related procedure. To the maximum
extent permitted by law, THE BORROWER agrees to pay on demand all costs and
expenses of CITIBANK, N. A. hereunder that are incurred in connection with
the enforcement of this Note, whether judicial or not. CITIBANK, N. A. has been
empowered by THE BORROWER to designate the (bailee) depository of the
garnished assets, which designee is released from providing a guaranty.
San Salvador, December 21, 1999.
/s/ Mauricio Muyshondt
----------------------------------
Signature
Name of the Subscriber: INMOBILIARIA PRICESMART EL SALVADOR, SOCIEDAD ANONIMA
DE CAPITAL VARIABLE, or simply, INMOBILIARIA PRICESMART, S. A. DE C. V.
Address of the Subscriber: Urbanizacion MadreSelva, Boulevard Sur, Calle
Cortez Blanco y Ave. El Pepeto# 86. Antiguo Cuscatlan, El Salvador.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART EL SALVADOR, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply PRICESMART EL SALVAVOR, S. A. DE C. V.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PRICESMART, INC.
/s/ Ernesto Grijalva
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSMT CARIBE, INC.
/s/ Edgar Zurcher
----------------------------------
Signature of the Guarantor
Name of the guarantor: PSC, S. A.
Exhibit 10.4(a)
[SEAL]
REPUBLICA DE PANAMA
PROVINCIA DE PANAMA
NOTARIA DUODECIMA DEL CIRCUITO
LIEDO. PLINIO F. VALDES F.
NOTARIO DUODECIMO
TELEFONOS: 223-9617 CELULAR: 612-1426 CALLE 52, ATRAS DEL
223-9626 EDIFICIO AVESA. LOCAL #1
FAX: 223-9614 CAMPO ALEGRE
APARTADO POSTAL 55-0101
ESTAFELA PAMILLA
PANAMA, REP. DE PANAMA
COPIA
ESCRITURA NO 12146 DE 20 DE diciembre DE 1999.
Por la cual:
Por la cual la sociedad PRICESMART, INC. declara cancelados unos
gravamenes hipotecarios y anticreticos constituidos a su favor por la sociedad
PB REAL ESTATE, S.A.; la entidad bancaria denominada THE CHASE MANHATTAN BANK
celebra con la referida sociedad PB REAL ESTATE, S.A. contrato de linea de
credito convertible en prestamo garantizado con Primera Hipoteca y Anticresis
sobre las Fincas Nos.: 1) 41,054; 2) 41,055; 3) 41,056; 4) 41,057; 5) 41,058; 6)
41,059; 7) 41,060; 8) 41,061; 9) 41,062; 10) 41,063; 11) 41,064; 12) 41,065; 13)
41,066; 14) 41,067; 15) 41,068; 16) 41,069; 17) 41,070; 18) 41,071; 19) 41,072;
20) 41,073; 21) 41,074; 22) 41,075; 23) 41,076, 24) 41,077; 25) 41,078; 26)
41,079; 27) 41,080; 28) 41,081; 29) 41,082; 30) 41,083; 31) 41,084; 32) 41,085;
33) 41,086; 34) 41,087; 35) 41,088; 36) 41,089; 37) 41,090; 38) 41,091; 39)
41,092; 40) 41,093; 41) 41,094 y 42) 41,095.
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
ESCRITURA PUBLICA NUMERO DOCE MIL CIENTO CUARENTA Y SEIS------------------------
-------------------------------------(12146)------------------------------------
Por la cual la sociedad PRICESMART, INC. declara cancelados unos gravamenes
hipotecarios y anticreticos constituidos a su favor por la sociedad PB REAL
ESTATE, S.A.; la entidad bancaria denominada THE CHASE MANHATTAN BANK celebra
con la referida sociedad PB REAL ESTATE, S.A. contrato de linea de credito
convertible en prestamo garantizado con Primera Hipoteca y Anticresis sobre las
Fincas Nos.: 1) 41,054; 2) 41,055; 3) 41,056; 4) 41,057; 5) 41,058; 6) 41,059;
7) 41,060; 8) 41,061; 9) 41,062; 10) 41,063; 11) 41,064; 12) 41,065; 13) 41,066;
14) 41,067; 15) 41,068; 16) 41,069; 17) 41,070; 18) 41,071; 19) 41,072; 20)
41,073; 21) 41,074; 22) 41,075; 23) 41,076; 24) 41,077; 25) 41,078; 26) 41,079;
27) 41,080; 28) 41,081; 29) 41,082; 30) 41,083; 31) 41,084; 32) 41,085; 33)
41,086; 34) 41,087; 35) 41,088; 36) 41,089; 37) 41,090; 38) 41,091; 39) 41,092;
40) 41,093; 41) 41,094 y 42) 41,095.--------------------------------------------
------------------------Panama, 20 de diciembre de 1999.------------------------
********************************************************************************
En la ciudad de Panama, Capital de la Republica y Cabecera del Circuito
Notarial del mismo nombre, a los veinte (20) dias del mes de diciembre de
mil novecientos noventa y nueve (1999), ante mi, PLINIO FRANCISCO VALDES,
Notario Publico Duodecimo del Circuito de Panama, con cedula de identidad
personal numero ocho-doscientos ochenta y nueve-trescientos ochenta
(8-289-380),---------------------comparecio personalmente el senor JESUS
ERNESTO GRIJALVA, varon, norteamericano, mayor de edad, casado, abogado, de
transito por esta ciudad, portador de pasaporte norteamericano numero cero
tres siete cero cero dos seis ocho nueve, (037002689), quien, manifiesta
conocer el idioma espanol, de manera que no requiere de la asistencia de un
traductor publico autorizado para este acto, y
2
quien declara estar actuando en representacion de la sociedad
PRICESMART, INC., constituida y existente de conformidad con las leyes del
Estado de Delaware, Estados Unidos de Norteamerica, segun consta en
certificacion expedida por el Secretario de Estado del Estado de Delaware,
Estados Unidos Norteamerica, la cual se me presenta debidamente traducida al
espanol por traductor publico autorizado y legalizada mediante Apostilla,
debidamente facultado para este acto segun consta poder que se me entrega
debidamente traducido al espanol y legalizado por el Consulado de Panama en
en San Diego California, Estados Unidos de America y por el Ministerio de
Relaciones Exteriores de Panama para su protocolizacion en esta escritura
publica, por una parte, en adelante indentificado como EL ACREEDOR
HIPOTECARIO, persona a quien conozco y quien me solicito hiciera constar lo
siguiente:------------------------------------------------------------------
---------------------CANCELACION DE GRAVAMENES PRIMERO:---------------------
Declara EL ACREEDOR HIPOTECARIO que mediante escritura publica numero siete
mil quinientos cuarenta y uno (7541), de fecha veinticuatro (24) de
septiembre de mil novecientos noventa y ocho (1998), otorgada en la notaria
Duodecima del Circuito de Panama, celebro un contrato de prestamo y Linea de
Credito, con la sociedad PRICE COSTCO DE PANAMA, S.A. hasta por la suma de
Cinco Millones Ochocientos Setenta y Cinco Mil Dolares (US$5,875,000.00)
moneda legal de los Estados Unidos de America, los cuales fueron garantizados
por la sociedad PB REAL ESTATE, S.A. con Primera Hipoteca y Anticresis sobre
las cuarenta y dos (42) Fincas que se describen a continuacion: 1) cuarenta y
un mil cincuenta y cuatro (41,054); 2) cuarenta y un mil cincuenta y cinco
(41,055); 3) cuarenta y un mil cincuenta y seis (41,056); 4) cuarenta y un
mil cincuenta y siete (41,057); 5) cuarenta y un mil cincuenta y ocho
(41,058); 6) cuarenta y un mil cincuenta y neuve (41,059); 7)
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
3
cuarenta y un mil sesenta (41,060); 8) cuarenta y un mil sesenta y uno
(41,061); 9) cuarenta y un mil sesenta y dos (41,062); 10) cuarenta y un mil
sesenta y tres (41,063); 11) cuarenta y un mil sesenta y cuatro (41,064); 12)
cuarenta y un mil sesenta y cinco (41, 065); 13) cuarenta y un mil sesenta y
seis (41,066); 14) cuarenta y un mil sesenta y siete (41,067); 15) cuarenta y
un mil sesenta y ocho (41,068); 16) cuarenta y un mil sesenta y nueve
(41,069); 17) cuarenta y un mil setenta (41,070); 18) cuarenta y un mil
setenta y uno (41,071); 19) cuarenta y un mil setenta y dos (41,072); 20)
cuarenta y un mil setenta y tres (41,073); 21) cuarenta y un mil setenta y
cuatro (41,074); 22) cuarenta y un mil setenta y cinco (41,075); 23) cuarenta
y un mil setenta y seis (41,076); 24) cuarenta y un mil sesenta y siete
(41,077); 25) cuarenta y un mil setenta y ocho (41,078); 26) cuarenta y un
mil setenta y nueve (41,079); 27) cuarenta y un mil ochenta (41,080); 28)
cuarenta y un mil ochenta y uno (41,081); 29) cuarenta y un mil ochenta y dos
(41,082); 30) cuarenta y un mil ochenta y tres (41,083); 31) cuarenta y un
mil ochenta y cuatro (41,084); 32) cuarenta y un mil ochenta y cinco
(41,085); 33) cuarenta y un mil ochenta y seis (41,086); 34) cuarenta y un
mil ochenta y siete (41,087); 35) cuarenta y un mil ochenta y ocho (41,088);
36) cuarenta y un mil ochenta y nueve (41,089); 37) cuarenta y un mil noventa
(41,090); 38) cuarenta y un mil noventa y uno (41,091); 39) cuarenta y un mil
noventa y dos (41,092); 40) cuarenta y un mil noventa y tres (41,093); 41)
cuarenta y un mil noventa y cuatro (41,094) y 42) cuarenta y un mil noventa y
cinco (41,095); todas inscritas al Rollo seis mil uno (6001), Documento uno
(1), Asiento uno (1) de la Seccion de la Propiedad Horizontal, Provincia de
Panama del Registro Publico, tal como consta inscrito en el Registro Publico
a Ficha doscientos mil setecientos cuarenta
4
(200,740), Rollo Complementario siete mil novecientos cuarenta y nueve
(7949), Documento uno (1), Seccion de Micropeliculas (Hipotecas y
Anticresis). SEGUNDO: Declara EL ACREEDOR HIPOTECARIO que por este medio
cancela la Primera Hipoteca y anticresis que pesa sobre las fincas descritas
en la clausula anterior, a fin de que las mismas puedan ser otorgadas en
Primera Hipoteca y Anticresis a favor de la entidad bancaria THE CHASE
MANHATTAN BANK, toda vez que, con el producto del prestamo que dicha entidad
bancaria ha otorgado a la sociedad PB REAL ESTATE, S.A. mediante esta
escritura publica se cancelara a favor de EL ACREEDOR HIPOTECARIO el prestamo
que este otorgo a la referida sociedad, segun ha sido indicado en la clausula
Primera de esta parte de la presente escritura publica.
En este estado comparecen personalmente los senores HOMERO EDUARDO VELASQUEZ
DORAN, varon, panameno, mayor de edad, casado, banquero, vecino de esta
ciudad, portador de la cedula de identidad personal numero ocho-ciento
sesenta y seis-ochocientos cincuenta y uno (8-166-851), actuando en su
condicion de Apoderado General de THE CHASE MANHATTAN BANK, tal como consta
en el Registro Publico, Seccion de Micropeliculas (Mercantil) a la Ficha
SE-setecientos cincuenta y cuatro (SE754), Rollo cincuenta mil cuatrocientos
cuarenta y tres (50,443), Imagen cero cero treinta y cuatro (0034), quien en
lo sucesivo se denominara EL BANCO, por una parte y, por la otra, RAFAEL
ERNESTO BARCENAS PEREZ, varon, panameno, mayor de edad, casado, empresario,
vecino de esta ciudad, portador de cedula de identidad personal numero
ocho-ciento veintiocho-trescientos cincuenta y cuatro (8-128-354), quien
manifiesta estar actuando en nombre y representacion de la sociedad
denominada PB REAL ESTATE, S.A., inscrita en el Registro Publico a Ficha
trescientos treinta
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
5
y un mil trescientos cincuenta (331,350), Rollo cincuenta y cuatro mil
seiscientos dieciseis (54,616), Imagen cuarenta y uno (41), debidamente
facultado para este acto segun consta en acta de reunion de Junta Directiva
de la referida sociedad, la cual se me entrega para su incorporacion a esta
escritura publica, en adelante identificada como EL DEUDOR, personas a
quienes conozco y que me solicitaron hiciera constar lo siguiente:
II. CONTRATO DE LINEA DE CREDITO CONVERTIBLE EN PRESTAMO PRIMERA:
(CUANTIA): Declara EL BANCO que ha puesto a disposicion de EL DEUDOR una
facilidad creditcia consistente en una cuenta o linea de credito por la suma
de ONCE MILLONES TRESCIENTOS MIL DOLARES (US$11,300,000.00) moneda legal de
los Estados Unidos de America, de la cual declara y acepta EL DEUDOR haber
recibido de EL BANCO y, en consecuencia, adeudarle a este, la suma de TRES
MILLONES DE DOLARES (US$3,000,000.00) moneda legal de Estados Unidos de
America. SEGUNDA: (USO DE LOS FONDOS) EL DEUDOR se obliga a disponer de los
fondos objeto de la cuenta o linea de credito a que hace referencia la
clausula anterior para los siguientes propositos: a) La suma de Tres Millones
de Dolares (US$3,000,000.00) moneda legal de Estados Unidos de America, que EL
DEUDOR ha reconocido en la clausula anterior haber recibido de EL BANCO, para
financiar la construccion de unas mejoras en el almacen construido en el area
de El Dorado, en la Ciudad de Panama; b) La suma de TRES MILLONES
SETENCIENTOS VEINTICINCO MIL DOLARES (US$3,725,000.00) moneda legal de los
Estados Unidos de America, para la adquisicion de un terreno en la Ciudad de
David, Provincia de Chiriqui y la construccion de sus mejoras, consistentes
en un almacen sobre dicho terreno. No obstante lo anterior, las partes
convienen en que de la referida facilidad de credito, EL DEUDOR
6
solo podra disponer de dichos TRES MILLONES SETECIENTOS VEINTICINCO MIL
DOLARES (US$3,725,000.00) moneda legal de los Estados Unidos de America,
despues de que EL DEUDOR haya constituido Primera Hipoteca y Anticresis a
favor de EL BANCO sobre el terreno de la Ciudad de David, tan pronto como EL
DEUDOR adquiera la propiedad de este y c) La diferencia del monto del
prestamo, para cancelar el saldo que adeuda a la sociedad PRICESMART, INC. al
momento de la inscripcion de la presente escritura publica, producto del
prestamo a que hace referencia la Primera (I) parte de esta escritura
publica. ------------ TERCERA (PLAZO): Las partes convienen en que la
facilidad crediticia a que hace referencia la clausula anterior se manejara
bajo la figura de una cuenta o linea de credito hasta por un termino de diez
(10) meses, a partir de la fecha de firma de la presente escritura publica,
pero, en ningun caso, despues del treinta y uno (31) de octubre del ano dos
mil (2,000). Transcurrida dicha fecha, los dineros desembolsados por EL BANCO
a EL DEUDOR en virtud del uso de la cuenta o linea de credito seran
convertidos en prestamo a largo plazo, por un termino de cinco (5) anos, a
partir del treinta y uno (31) de octubre del ano dos mil (2000). El
diferencial del monto de la cuenta o linea de credito que no hubiera sido
utilizado por EL DEUDOR al vencimiento del plazo a que hace referencia esta
clausula, sera acreditada por EL BANCO y puesta a disposicion de EL DEUDOR
en una cuenta, registrandose dicho monto como un prestamo, tambien por el
termino de cinco (5) anos, junto con la suma de TRES MILLONES DE DOLARES
(US$3,000,000.00) moneda legal de los Estados Unidos de America, que EL
DEUDOR ya ha utilizado y que ha reconocido adeudar a EL BANCO en la clausula
Primera de esta Segunda (II) parte de la presente escritura publica y junto
con el monto de la linea de credito utilizada para cancelar el monto
7
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
adeudado por EL DEUDOR a PRICESMART, INC. -------CUARTA (ABONOS Y COMISION):
Declara EL DEUDOR que se obliga a cancelar a EL BANCO, la totalidad de las sumas
adeudadas por razon de su convertibilidad en prestamo, o sea, la suma de ONCE
MILLONES TRESCIENTOS MIL DOLARES (US$11,300,000.00) moneda legal de los Estados
Unidos de America, mediante el pago de cincuenta y nueve (59) abonos mensuales
consecutivos a capital, cada uno, por una suma no menor de CIENTO OCHENTA Y OCHO
MIL TRESCIENTOS TREINTA Y TRES MIL DOLARES ($US188,333.00), moneda de curso
legal de los Estados Unidos de America, mas un ultimo abono final por un monto
de CIENTO OCHENTA Y OCHO MIL TRESCIENTOS CINCUENTA Y TRES DOLARES
(US$188,353.00), moneda legal de los Estados Unidos de America, todos ellos en
concepto de capital, mas intereses y FECI, este ultimo equivalente al uno por
ciento (1%) correspondiente a la tasa estatal destinada al Fondo Especial de
Compensacion de Intereses (F.E.C.I.) bajo Ley cuatro (4) de mil novecientos
noventa y cuatro (1994). ----- Los pagos a que hacen referencia esta clausula
deberan efectuarse el dia veinticinco (25) de cada mes hasta la cancelacion
total de la deuda, autorizando a EL BANCO a debitar esta o cualquier otra
cantidad de la cuenta corriente que mantiene en EL BANCO. ------- EL DEUDOR
autoriza por este medio, a EL BANCO, para que al recibir cualquier abono en
relacion con las obligaciones que por este medio contrae a favor de EL BANCO,
pueda imputar libremente, a su entera discrecion, el respectivo abono a cuenta
del capital adeudado, con preferencia al pago de los intereses vencidos, que en
ese supuesto quedarian pendientes de pago por EL DEUDOR. --- En caso de
morosidad en el pago de los abonos a capital y/o intereses, se generara un
interes moratorio equivalente al cuatro por ciento (4%) sobre la tasa de interes
efectiva convenida en la clausula siguiente. La tasa de interes
8
resultante se aplicara al saldo total adeudado y estara vigente mientras
persista la morosidad. ----- QUINTA (INTERES): EL DEUDOR se obliga a pagar
mensualmente a EL BANCO, durante la vigencia de la cuenta o linea de credito,
es decir, hasta el dia treinta y uno (31) de octubre del ano dos mil (2,000),
y durante la vigencia del prestamo que resulta de la conversion de la
referida cuenta o linea de credito, un interes anual de LIBOR
[calculado a tres (3) meses], mas uno punto setenta y cinco por ciento
(1.75%) sobre el saldo adeudado, hasta la cancelacion del prestamo, ajustable
periodicamente a opcion de EL BANCO, pagaderos mensualmente los dias
veinticinco (25) de cada mes, mediante debito de su cuenta corriente que hara
EL BANCO y para lo cual esta debidamente autorizado por EL DEUDOR. ---- Los
intereses se calcularan a una tasa anual sobre los saldos diarios adeudados,
por el numero exacto de dias naturales transcurridos sobre la base de un ano
de trescientos sesenta (360) dias. ----- Para los efectos de esta clausula la
Tasa LIBOR (LONDON INTERBANK OFFERING RATE) se define como la tasa de interes
cotizada por The Chase Manhattan Bank para la oferta de Dolares en el mercado
interbancario. La tasa LIBOR se determinara dos (2) dias laborables antes del
primer dia del periodo de interes. Esta tasa sera efectiva el primer dia del
periodo de interes. ---------- SEXTA (COMPENSACION): EL DEUDOR, autoriza a
EL BANCO para debitar cualquier suma que a cualquier titulo mantenga o reciba
en EL BANCO, a fin de compensar las sumas necesarias para las amortizaciones
de capital, intereses, sobretasa F.E.C.I. o de cualquier otro concepto
contraidas mediante la presente escritura publica, sin dar aviso previo a EL
DEUDOR. ---------- SEPTIMA (CESION DE CREDITO): EL DEUDOR conviene en que EL
BANCO podra transferir en cualquier momento, a cualquier persona natural o
juridica, en todo o en parte, los creditos y demas derechos y
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obligaciones de EL BANCO consignados en la presente escritura publica, sin
necesidad de que EL BANCO tenga que dar ninguna clase de aviso previo a EL
DEUDOR y sin que EL BANCO necesite requerir ni recibir aprobacion alguna de
EL DEUDOR. EL DEUDOR autoriza a EL BANCO para suministrar a cualquier
tercero, toda informacion que EL BANCO estime necesaria para facilitar dicha
transferencia, exonerando expresamente EL DEUDOR a EL BANCO de cualquiera
consecuencia resultante del ejercicio que EL BANCO haga del derecho a que se
refiere esta clausula. ---------- OCTAVA (COMPROMISOS FINANCIEROS) EL DEUDOR
se obliga para con EL BANCO, durante la vigencia del prestamo y mientras EL
DEUDOR mantenga deudas con EL BANCO, a que sus estados financieros
consolidados con sus empresas relacionadas, incluyendo PRICE COSTCO DE
PANAMA, S.A. acreditaran y reflejaran las siguientes condiciones financieras:
Uno (1): Cobertura del Servicio de la Deuda o "Debt Service Coverage
Covenant" (EBITDA/Debt Service) de un minimo de uno punto cuarenta (1.40)
durante la vigencia del prestamo. EBITDA se define como el Ingreso Neto, mas
intereses, impuestos sobre la renta, depreciacion y amortizaciones. Servicio
de Deuda ("Debt Service"), es el pago de la suma total adeudada
correspondiente a capital, mas intereses. La relacion de la Cobertura del
Servicio de la Deuda ("Debt Service Coverage") sera calculado para el periodo
fiscal finalizado. ----- Dos (2): Compromiso de Apalancamiento o "Leverage
Covenant" (Pasivos Totales o "Total Liabilities"/Partrimonio Neto Tangible o
"Tangible Net Worth" de un maximo de dos punto cero cero (2.00) durante la
vigencia del prestamo. Patrimonio Neto Tangible, es el patrimonio neto, menos
activos intangibles (p.e. plusvalia, prestamos a empleados, prestamos a
accionistas). Patrimonio Neto o "Net Worth", son los Activos Totales menos
Pasivos Totales. La relacion del Compromiso de Apalancamiento o "Leverage
Covenant"
10
sera calculado para el ano fiscal finalizado. Tres (3): Los accionistas
haran una contribucion o aporte de capital por una suma no menor de Dos
Millones Doscientos Doce Mil Dolares (US$2,212,000.00) moneda legal de los
Estados Unidos de America, para financiar parcialmente el nuevo almacen
arrendado a Price Costco de Panama, S.A., en la Ciudad de David, Provincia de
Chiriqui, Republica de Panama. La contribucion o aporte de capital sera
usado, primero, en el proyecto, seguido por los debitos o retiros de la
facilidad crediticia. Cuatro (4): Para la construccion del nuevo almacen en
El Dorado, en la Ciudad de Panama, Republica de Panama, Price Costco de
Panama, S.A. contribuira o aportara la suma de Dos Millones de Dolares
(US$2,000,000.00), moneda legal de los Estados Unidos de America, proveniente
de su propio flujo de caja, a fin de pagar las mejoras del almacen, y/o para
pagar los costos de las partes tecnicas (mejoras permanentes a la estructura
del edificio). Cinco (5): Entregar estados financieros no auditados en forma
trimestral, dentro de los sesenta (60) dias subsiguientes a la fecha de
cierre de cada trimestre y estados financieros consolidados anuales,
auditados, los cuales debera entregar dentro de los noventa (90) dias
subsiguientes a la fecha de cierre del periodo fiscal. Seis (6): No podran
darse cambios materiales adversos (Material Adverse Effect) en la situacion
contable y financiera consolidada de EL DEUDOR y Price Costco de Panama, S.A.
Siete (7) No podran darse cambios en la mayoria accionaria existente al
momento del otorgamiento del presente prestamo, tanto de EL DEUDOR, como en
Price Costco de Panama, S.A. o en el control de dichas empresas, sin el
consentimiento previo y expreso de EL BANCO, si a criterio de este, tales
cambios puedan afectar los derechos de EL BANCO respecto del prestamo o la
garantia hipotecaria; ponga en riesgo el
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prestamo o produzca algun Cambio Material Adverso ("Material Adverse Effect")
respecto del prestamo o de las condiciones bajo las cuales el mismo fue
otorgado a EL DEUDOR. Ocho (8) EL DEUDOR, ni Price Costco de Panama, S.A.
podran incurrir en endeudamientos adicionales a los ya dados a conocer por EL
DEUDOR a EL BANCO, sin el consentimiento previo de este, si a criterio de EL
BANCO tales cambios afecten los derechos de EL BANCO respecto del prestamo o
la garantia hipotecaria; pongan en riesgo el prestamo o produzcan algun
Cambio Material Adverso ("Material Adverse Effect") respecto del prestamo o
de las condiciones bajo las cuales el mismo fue otorgado a EL DEUDOR. Nueve
(9) El valor de los bienes dados en garantia de este prestamo deben cubrir y
garantizar la totalidad del monto del prestamo, segun un avaluo reciente.
---En adicion a lo anterior, EL DEUDOR se obliga a entregarle a EL BANCO,
dentro de los treinta (30) dias subsiguientes a la fecha en que se haya
finalizado la contruccion del almacen de David, Provincia de Chiriqui, un
avaluo hecho por una firma de avaluadores independientes y aceptables por EL
BANCO. En adicion a lo anterior, EL DEUDOR se obliga a constituir Primera
Hipoteca y Anticresis a favor de EL BANCO sobre el terreno que EL DEUDOR esta
en proceso de adquirir en la Ciudad de David, Provincia de Chiriqui, tan
pronto adquiera la propiedad del mismo.-----------------III. CONSTITUCION DE
PRIMERA HIPOTECA Y ANTICRESIS---------------------- LIMITACION AL DERECHO DE
DOMINIO--------------------NOVENA: (CONSTITUCION DE LA GARANTIA) Declara EL
DEUDOR que para garantizar el pago de los ONCE MILLONES TRESCIENTOS MIL
DOLARES (US$11,300.000.00), moneda legal de los Estados Unidos de America que
EL BANCO puso a disposicion de EL DEUDOR, sus intereses, costas, gastos de
cobranza, ya sean judiciales o extrajudiciales y de cualquier otra indole a
que haya lugar; asi como par garantizar
12
el fiel cumplimiento de todas y cada una de las obligaciones que por este
medio adquiera EL DEUDOR y por todo el tiempo que cualquiera de ellas
subsista, CONSTITUYE en favor de EL BANCO y hasta por la suma de ONCE
MILLONES TRESCIENTOS MIL DOLARES (U$11,300,000.00), moneda legal de los
Estados Unidos de America, Primera Hipoteca y Anticresis sobre las cuarenta y
dos (42) Fincas que se describen a continuacion: 1) cuarenta y un mil
cincuenta y cuatro (41,054); 2) cuarenta y un mil cincuenta y cinco (41,055);
3) cuarenta y un mil cincuenta y seis (41,056); 4) cuarenta y un mil
cincuenta y siete (41,057); 5) cuarenta y un mil cincuenta y ocho (41,058);
6) cuarenta y un mil cincuenta y nueve (41,059); 7) cuarenta y un mil sesenta
(41,060); 8) cuarenta y un mil sesenta y uno (41,061); 9) cuarenta y un mil
sesenta y dos (41,062); 10) cuarenta y un mil sesenta y tres (41,063); 11)
cuarenta y un mil sesenta y cuatro (41,064); 12) cuarenta y un mil sesenta
y cinco (41,065); 13) cuarenta y un mil sesenta y seis (41,066); 14) cuarenta
y un mil sesenta y siete (41,067); 15) cuarenta y un mil sesenta y ocho
(41,068); 16) cuarenta y un mil sesenta y nueve (41,069); 17) cuarenta y un
mil setenta (41,070); 18) cuarenta y un mil setenta y uno (41,071); 19)
cuarenta y un mil setenta y dos (41,072); 20) cuarenta y un mil setenta y
tres (41,073); 21) cuarenta y un mil setenta y cuatro (41,074); 22) cuarenta
y un mil setenta y cinco (41,075); 23) cuarenta y un mil setenta y seis
(41,076); 24) cuarenta y un mil setenta y siete (41,077); 25) cuarenta y un
mil setenta y ocho (41,078); 26) cuarenta y un mil setenta y nueve (41,079);
27) cuarenta y un mil ochenta (41,080); 28) cuarenta y un mil ochenta y uno
(41,081); 29) cuarenta y un mil ochenta y dos (41,082); 30) cuarenta y un mil
ochenta y tres (41,083); 31) cuarenta y un mil ochenta y cuatro (41,084); 32)
cuarenta y un mil ochenta y cinco (41,085); 33) cuarenta y un mil
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ochenta y seis (41,086); 34) cuarenta y un mil ochenta y siete (41,087); 35)
cuarenta y un mil ochenta y ocho (41,088); 36) cuarenta y un mil ochenta y
nueve (41,089); 37) cuarenta y un mil noventa (41,090); 38) cuarenta y un mil
noventa y uno (41,091); 39) cuarenta y un mil noventa y dos (41,092); 40)
cuarenta y un mil noventa y tres (41,093); 41) cuarenta y un mil noventa y
cuatro (41,094) y 42) cuarenta y un mil noventa y cinco (41,095); todas
inscritas al Rollo seis mil uno (6001), Documento uno (1), Asiento uno (1) de
la Seccion de la Propiedad Horizontal, Provincia de Panama del Registro
Publico.--------DECIMA: (EJERCICIO DE LA ANTICRESIS): EL BANCO podra, cuando
lo estime conveniente ejercer su derecho como acreedor anticretico, tomando
posesion de las fincas hipotecadas para su administracion, dando aviso a EL
DEUDOR y sin necesidad de proceso ni tramite ante ninguna autoridad.--------En
caso de que sea instaurada la accion ejecutiva hipotecaria, EL BANCO continuara
con el derecho de ejercer la anticresis discrecionalmente y encargarse de la
administracion de las fincas dadas en anticresis tomando posesion de las
mismas, en tanto se verifica la venta judicial.------------Queda convenido que
EL BANCO o la persona que este designe para administrar las fincas gravadas
ejercera todos los derechos que se deriven a favor de EL DEUDOR como dueno de
las fincas hipotecadas, sin necesidad de rendir cuentas por dicha
administracion, pues EL DEUDOR lo releva, por este medio, expresamente de
dichas obligaciones.-----------Para estos efectos, EL BANCO y EL DEUDOR
convienen en que, de conformidad con lo dispuesto en el articulo mil
seiscientos veintitres (1623), del Codigo Civil, en caso de que EL BANCO
tuviere que ejercer sus derechos como acreedor anticretico, no estara obligado
a responder personalmente de los gastos que ocasione la administracion,
mantenimiento y conservacion de los bienes hipotecados, ni de las
14
primas de seguros contra ningun tipo de riesgos o de impuestos o tasas que
recaigan sobre dichos bienes.--- Queda igualmente convenido por EL BANCO y EL
DEUDOR que en este supuesto, los gastos referentes a las fincas y que se
ocasionen en el ejercicio del derecho de anticresis, seran cubiertos por las
rentas o frutos que produzcan las fincas dadas en primera hipoteca y anticresis,
en primer lugar y el excedente sera aplicado al pago de los intereses y a la
amortizacion del capital, en ese orden, de conformidad con las obligaciones
contraidas por EL DEUDOR en la presente escritura publica.-------Si los frutos
o rentas que produzcan las fincas hipotecadas no fueran suficientes para cubrir
sus gastos y las obligaciones contraidas por EL DEUDOR, EL BANCO podra proceder
por la via judicial para el cobro de su credito. Esta facultad se entiende sin
perjuicio de las que posee EL BANCO por virtud de los supuestos contemplados en
la clausula correspondiente al vencimiento anticipado de las obligaciones.------
DECIMAPRIMERA: (SEGUROS): EL DEUDOR se obliga a mantener durante la vigencia de
este contrato, las fincas gravadas, asi como las mejoras en ellas construidas,
aseguradas contra incendio, con endoso de extension de cubierta y danos directos
causados por terremotos, y transferiran o cederan a EL BANCO el derecho a
recibir la indemnizacion, que, en caso de siniestro deba pagar la compania
aseguradora y al efecto endosaran y entregaran inmediatamente a EL BANCO la
poliza de seguro o polizas respectivas, asi como las renovaciones
correspondientes.-- Este seguro sera en todo momento por una suma no menor al
OCHENTA POR CIENTO (80%) del valor de las mejoras construidas sobre las fincas
hipotecadas.--------EL BANCO se reserva el derecho de renovar la poliza de
seguro a su vencimiento, cancelando el importe de la prima si EL DEUDOR no
cubriera la misma; y si esto sucediere, EL
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DEUDOR debera pagar a EL BANCO a requerimiento, el valor de la prima o primas y
los intereses correspondientes a la suma desembolsada por EL BANCO, a la tasa
para entonces aplicable a esta deuda, pudiendo EL BANCO, si asi lo decidiera,
capitalizar el valor de las primas, quedando en todo caso tambien garantizadas
con los gravamenes que aqui se constituyen a favor de EL BANCO, las sumas que
desembolse EL BANCO en virtud de lo dispuesto en esta clausula.---Si EL DEUDOR
no cumpliere con las obligaciones aqui contraidas, EL BANCO podra, en cualquier
tiempo, mediante aviso escrito a EL DEUDOR, declarar inmediatamente exigible y
pagadera la totalidad de las sumas adeudadas y todos los intereses acumulados y
no pagados sobre las mismas.------- DECIMASEGUNDA (INSPECCIONES): EL BANCO se
reserva el derecho de efectuar inspecciones razonables a las fincas hipotecadas,
en cualquier momento, previa notificacion a EL DEUDOR, durante el horario de
atencion al publico por parte de Price Costco de Panama, S.A., para establecer
si con dichas fincas se mantienen suficientemente garantizadas las obligaciones
contraidas por EL DEUDOR en esta escritura publica, y EL DEUDOR se compromete a
asumir los gastos de inspeccion, si esta se llevare a cabo.---------------------
DECIMATERCERA: (LIMITACION AL DERECHO DE DOMINIO): EL DEUDOR se compromete a no
gravar, ni vender, ni en ninguna otra forma enajenar, en todo o en parte las
fincas hipotecadas sin el previo consentimiento de EL BANCO, otorgado en la
misma escritura en que se efectua la operacion correspondiente.----- Estas
prohibiciones constituyen, por acuerdo expreso de las partes, una limitacion del
dominio de las fincas gravadas en esta escritura publica y las partes solicitan
al Registro Publico, la especial anotacion de la marginal correspondiente, pues
solo con el consentimiento expreso de EL BANCO, podra EL DEUDOR gravar, vender o
en cualquier otra
16
forma enajenar las Fincas numeros 1) cuarenta y un mil cincuenta y cuatro
(41,054); 2) cuarenta y un mil cincuenta y cinco (41,055); 3) cuarenta y un mil
cincuenta y seis (41,056); 4) cuarenta y un mil cincuenta y siete (41,057); 5)
cuarenta y un mil cincuenta y ocho (41,058); 6) cuarenta y un mil cincuenta y
nueve (41,059); 7) cuarenta y un mil sesenta (41,060); 8) cuarenta y un mil
sesenta y uno (41,061); 9) cuarenta y un mil sesenta y dos (41,062); 10)
cuarenta y un mil sesenta y tres (41,063); 11) cuarenta y un mil sesenta y
cuatro (41,064); 12) cuarenta y un mil sesenta y cinco (41,065); 13) cuarenta y
un mil sesenta y seis (41,066); 14) cuarenta y un mil sesenta y siete (41,067);
15) cuarenta y un mil sesenta y ocho (41,068); 16) cuarenta y un mil sesenta y
nueve (41,069); 17) cuarenta y un mil setenta (41,070); 18) cuarenta y un mil
setenta y uno (41,071); 19) cuarenta y un mil setenta y dos (41,072); 20)
cuarenta y un mil setenta y tres (41,073); 21) cuarenta y un mil setenta y
cuatro (41,074); 22) cuarenta y un mil setenta y cinco (41,075); 23) cuarenta y
un mil setenta y seis (41,076); 24) cuarenta y un mil setenta y siete (41,077);
25) cuarenta y un mil setenta y ocho (41,078); 26) cuarenta y un mil setenta y
nueve (41,079); 27) cuarenta y un mil ochenta (41,080); 28) cuarenta y un mil
ochenta y uno (41,081); 29) cuarenta y un mil ochenta y dos (41,082); 30)
cuarenta y un mil ochenta y tres (41,083);----------31) cuarenta y un mil
ochenta y cuatro (41,084); 32) cuarenta y un mil ochenta y cinco (41,085); 33)
cuarenta y un mil ochenta y seis (41,086); 34) cuarenta y un mil ochenta y siete
(41,087); 35) cuarenta y un mil ochenta y ocho (41,088); 36) cuarenta y un mil
ochenta y nueve (41,089); 37) cuarenta y un mil noventa (41,090); 38) cuarenta y
un mil noventa y uno (41,091); 39) cuarenta y un mil noventa y dos (41,092); 40)
cuarenta y un mil noventa y tres (41,093); 41) cuarenta y un mil noventa y
cuatro
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(41,094) y 42) cuarenta y un mil noventa y cinco (41,095); descritas en esta
escritura publica.----------DECIMACUARTA (INFORMES FINANCIEROS) EL DEUDOR se
compromete a presentar a EL BANCO, un informe anual sobre su situacion
financiera y sobre el estado de cada uno de los negocios de que sea titular o
coparticipe siempre y cuando adeude alguna suma a EL BANCO por razon del
presente prestamo.----Estos informes deberan ser presentados dentro de los
noventa (90) dias calendarios siguientes al cierre del ejercicio fiscal de EL
DEUDOR.----------DECIMAQUINTA: (VENCIMIENTO ANTICIPADO): EL DEUDOR conviene
ademas, en que EL BANCO podra considerar la deuda total como de plazo vencido y
proceder por la via judicial, en los siguientes casos:------UNO (1): Si las
fincas que EL DEUDOR da a EL BANCO en primera hipoteca y anticresis fueren
secuestradas, embargadas, o se anotare suspension, marginal o demanda en el
Registro Publico sobre ellas o resultaren en cualquier otra forma
perseguidas.----------DOS (2): En caso de que EL DEUDOR fuera disuelto como
sociedad o hicieran cesion de sus bienes o fueren declarados en quiebra o
concurso de acreedores, a peticion de cualquiera de ellos o de
terceros;----------TRES (3): Si EL DEUDOR no presenta a EL BANCO en cualquier
momento en que este lo exija, la constancia de que las fincas estan a paz y
salvo con el impuesto de inmueble, o cualquier otro impuesto, tasa o
contribucion nacional o municipal, relativos a las fincas hipotecadas, o que EL
DEUDOR se encuentra en paz y salvo con cualesquiera otros impuestos, tasa o
contribucion, que en el futuro recaigan sobre dichas fincas, sobre otros bienes
de EL DEUDOR, o sobre este en forma directa y personal.----------CUATRO (4): Si
EL DEUDOR estuviere en mora de sus obligaciones con la Caja de Seguro Social y
para estos efectos EL BANCO podra tambien exigir en cualquier tiempo, el
certificado de paz y salvo con dicha institucion oficial.----------
18
CINCO (5): Si las fincas que EL DEUDOR da en primera hipoteca y anticresis
sufrieren depreciacion, desmejoras o deterioro a tal grado que, a juicio de
EL BANCO no cubran satisfactoriamente las presentes obligaciones, salvo que
EL DEUDOR ofreciera otra garantia que satisfaga a EL BANCO.------SEIS (6): Si
EL DEUDOR resultare secuestrado o embargado en sus negocios o en cualquiera
de sus bienes (muebles o inmuebles).------SIETE (7): Si EL DEUDOR no cumpliere
con los pagos establecidos en este contrato en concepto de capital e
intereses.----- OCHO (8): Si el resultado de la inspeccion de que trata la
clausula Decimasegunda de esta escritura publica, determina que las fincas
hipotecadas no estan en buenas condiciones para garantizar las obligaciones
contraidas por EL DEUDOR.-----NUEVE (9): Si EL DEUDOR no cumpliere con
cualquiera de las obligaciones que contrae en cualquiera de las clausulas de la
presente escritura publica.-----DIEZ (10): Si EL DEUDOR realiza cualquier
acto de venta, gravamen o enajenacion de las fincas que sirven de garantia
sin el expreso consentimiento de EL BANCO-----ONCE(11): Si EL DEUDOR no
constituye a favor de EL BANCO primera hipoteca y anticresis sobre el
terreno de la Ciudad de David, Provincia de Chiriqui, tan pronto como
adquiera la propiedad sobre el mismo,-----DECIMASEXTA: (RENUNCIA A DOMICILIO
Y A TRAMITES): EL DEUDOR renuncia al domicilio y a los tramites del proceso
ejecutivo en el caso de que EL BANCO tuviere necesidad de recurrir a los
tribunales de justicia y si llega el caso de remate, este se efectuara a
base de la suma por la cual sea hecha la respectiva solicitud de venta
judicial a los tribunales.---------------DECIMASEPTIMA (GASTOS Y HONORARIOS
DE ABOGADO): EL DEUDOR se obliga a sufragar los gastos notariales de la
presente escritura, el de registro de los gravamenes hipotecarios y
anticreticos constituidos a favor de EL BANCO y el de cancelacion de dichos
gravamenes a favor de EL
19
REPUBLICA DE PANAMA
PAPEL NOTARIAL
[STAMP] [SEAL] [SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
BANCO, cuando llegue el momento oportuno, para ello, asi como los honorarios
de abogado por la redaccion y firma de la minuta respectiva al presente
contrato.----DECIMAOCTAVA: (CERTIFICACION): En todos los casos en que segun
este contrato EL BANCO pueda declarar anticipadamente el vencimiento de la
obligacion de EL DEUDOR y proceder al cobro de lo entonces adeudado, EL
DEUDOR renuncia a cualquier requerimiento previo y para los efectos de librar
ejecucion contra EL DEUDOR se presume veridico el incumplimiento de la
obligacion en que se ha incurrido EL DEUDOR, por lo que la obligacion de
pagar la totalidad de lo adeudado se tendra por cierta y de plazo
vencido----------------En igual forma, ya sea que se trate de vencimiento
natural del plazo de la obligacion o de vencimiento anticipado, se tendra
como liquida la suma adeudada que resulte de los libros de EL BANCO en contra
de EL DEUDOR, segun certificado que expedira EL BANCO, certificado que hara
plena fe del saldo deudor----------------DECIMANOVENA:(CESION DE CREDITO): EL
BANCO podra ceder el credito hipotecario y anticretico consignado en la
presente escritura publica, asi como tambien sus garantias, en cualquier
momento, sin que para ello sea necesario avisar ni notificar a EL
DEUDOR.----------------Presente en este estado el senor HOMERO EDUARDO
VELASQUEZ DORAN, de generales conocidas en esta escritura, actuando en nombre
y representacion de THE CHASE MANATTAN BANK, expuso que acepta las
obligaciones contraidas por EL DEUDOR, este es, PB REAL ESTATE, S.A., en la
forma convenida en el contrato contenido en la presente escritura, asi como
los gravamenes hipotecarios y anticreticos constituidos a su
favor.-----------------------Adverti a los comparecientes que una copia de
esta escritura publica debe presentarse al Registro Publico para su debida
inscripcion y leida como les fue la misma, en presencia de las
20
testigos instrumentales, ANALIDA DE DE LA CRUZ, con cedula de identidad
personal numero ocho-ciento setenta y siete-siete (8-177-7) y ANABEL ARCIA, con
cedula de identidad personal numero dos-noventa y siete-dos mil veintitres
(2-97-2023), mayores de edad, vecinas de esta ciudad, personas a quienes conozco
y son habiles para el cargo, la encontraron conforme, le impartieron su
aprobacion y la firman todos para constancia, ante mi el Notario que doy fe.
---------------------------------- El suscrito Notario hace constar que se le
han hecho presente los certificados de paz y salvo numeros: 321929; 321930;
321931; 321932; 321933; 321934; 321935; 321936; 321938; 321977; 321939; 321941;
321945; 321948; 321950; 321953; 321954; 321956; 321957; 321960; 321961; 321963;
321967; 321968; 321937; 321940; 321942; 321943; 321944; 321946; 321947; 321951;
321952; 321955; 321958; 321959; 321962; 321964; 321965; 321966; 323311 y 323161,
todos vigentes hasta el dia 31 de diciembre de 1999, expedido por la Direccion
General de Ingresos, que corresponden a las Fincas numeros 1) 41,054; 2) 41,055;
3) 41,056; 4) 41,057; 5) 41,058; 6) 41,059; 7) 41,060; 8) 41,061; 9) 41,062; 10)
41,063; 11) 41,064; 12) 41,065; 13) 41,066; 14) 41,067; 15) 41,068; 16) 41,069;
17) 41,070; 18) 41,071; 19) 41,072; 20) 41,073 21) 41,074; 22) 41,075; 23)
41,076; 24) 41,077; 25) 41,078; 26) 41,079; 27) 41,080; 28) 41,081; 29) 41,082;
30) 41,083; 31) 41,084; 32) 41,085; 33) 41,086; 34) 41,087; 35) 41,088; 36)
41,089; 37) 41,090; 38) 41,091; 39) 41,092; 40) 41,093; 41) 41,094 y 42) 41,095
respectivamente, a que hace referencia la presente escritura
publica.--------------------- EL SUSCRITO NOTARIO HACER CONSTAR QUE ESTA
ESCRITURA HA SIDO REDACTADA Y ELABORADA EN BASE A MINUTA FIRMADA POR LOS
ABOGADOS FABREGA, BARSALLO, MOLINO Y MULINO.------------------------ Esta
escritura en el protocolo del presente ano lleva el numero de
21
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIO DUODECIMA DEL CIRCUITO DE PANAMA
orden DOCE MIL CIENTO CUARENTA Y SEIS----------------------------(12146)
------------------------(Fdos.) JESUS ERNESTO GRIJALVA---------------RAFAEL
ERNESTO BARCENAS PEREZ----------HOMERO EDUARDO VELASQUEZ DORAN
---------ANALIDA de DE LA CRUZ-------ANABEL ARCIA-----------PLINIO FRANCISCO
VALDES, Notario Publico Duodecimo del Circuito.------------------------------
===============================================================================
PODER OTORGADO A ERNESTO GRIJALVA PARA SUSCRIBIR LA ESCRITURA PODER DE
ABOGADO----------Yo, Kurt A. May, Oficial Jefe de Operaciones de PriceSmart,
Inc., por este medio, designo a Jesus Ernesto Grijalva, varon, mayor de edad,
casado, abogado, ciudadano de los Estados Unidos de America, con pasaporte
norteamericano No. 37002689, como apoderado de PRICESMART, INC. para
comparecer ante Notario Publico en la Republica de Panama en representacion
de esta compania para otorgar la correspondiente escritura publica por la
cual PRICESMART, INC. cancela y libera de toda Primera Hipoteca y Anticresis
que la sociedad PB REAL ESTATE, S.A. otorgo en favor de dicha compania sobre
las fincas segun consta en la escritura publica No. 7541, fechada 24 de
septiembre de 1998, otorgada en la Notaria Duodecima del Circuito de Panama,
por la cual PRICESMART, INC. otorgo un prestamo a PB REAL ESTATE,
S.A.------(fdo.) Firma ilegible---Kurt A. May--Oficial Jefe de
Operaciones--PriceSmart, Inc.--------Estado de California, Condado de San
Diego------------- En noviembre 22 de 1999, ante mi, Evelisee Hernandez,
Notaria Publica, comparecio personalmente ante mi Kurt A. May, conocida por
mi como la persona a cuyo nombre aparece suscrito el instrumento que antecede
y reconocio ante mi que el ejecuto el mismo teniendo facultad autorizada y
que con su firma en tal instrumento la persona o entidad en cuyo nombre el
actuo, ejecuto y otorgo el instrumento.-----Evidencia mi puno y sello (fdo.)
Firma ilegible.--
22
---Aparecen dos sellos de goma impresos ilegibles------CONDADO DE SAN
DIEGO-----GREGORY J. SMITH-----ASESOR/ REGISTRADOR/ESCRIBANO DEL
CONDADO-----Internet:http://www.co.san-diego.ca.us.-----aparecen a ambos
costados de la pagina, en los extemos derecho e izquierdo dos sellos frios
impresos en el papel. Debajo del sello que aparece en el margen superior
izquierdo aparece la siguiente leyenda: Oficina del Asesor--1600 Pacific
Highway, RM. 103---San Diego, CA 92101-2480---(619) 236-3771--Fax (619)
557-4056--------En la parte inferior del sello que aparece al pargen superior
derecho aparece la siguiente leyenda: Registrador/Oficina del Secretario del
Condado---1600 Pacific Highway, RM. 260--P.O. Box 121750, San Diego, CA
92112-1750, (619) 237-0502-- Fax (619) 557-4155-------Yo, GREGORY J. SMITH,
Asesor/Registrador/Secretario del Condado de San Diego, Estado de California,
teniendo por ley un Sello, por este medio certifico que: EVELISSE HERNANDEZ cuyo
nombre aparece suscrito en el juramento o Certificado de Prueba o Reconocimiento
del instrumento adjunto y en el escrito, era al momento de tomar tal juramento,
or Prueba o Reconocimiento, un Notario Publico en y para ese Condado,
debidamente comisionado y juramentado y debidamente autorizado por las leyes de
dicho Estado para tomar el mismo y adminitrar juramentos y para tomar los
Reconocimientos y Pruebas de escritros o testimonios y otros instrumentos por
escrito para ser registrados en este Estado. Yo estoy familiarizado con el
manuscrito de dicho Notario Publico y considero que la firma de dicho juramento
o Certificado de Prueba de Reconocimiento es genuino. Yo, adicionalmente
certifico que bajo las leyes del Estado de California dicho juramento o
Certificado de Prueba de Reconocimiento es requerido para estar bajo sello, pero
la impresion de dicho sello no es requerida por las leyes del Estado de
California para ser presentado en mi despacho, ni en
[STAMP]
[SEAL] 23
REPUBLICA DE PANAMA
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
ningun otro lugar.------Aparece un sello impreso en el marge inferior izquierdo
ilegible-------Fechado Diciembre 8, 1999, Atestiguado a mano.--(fdo.) Firma
ilegible--------------GREGORY J. SMITH, Asesor del Condado/Registrador/
Secretario.------Certificado de Prueba de Notario. -----Lo anterior
es fiel traduccion al espanol del documento presentado ante mi en idioma ingles.
(Fdo.) Firma ilegible----Aparece un sello de goma en tinta, rectangular con el
siguiente contenido: Alvaro Aguilar Alfu--Resolucion No. 60 de 9 de junio de
1989--cedula 8-266-901.----------------- En el reverso de la hoja aparece
adherida una certificacion con las siguientes caracteristicas. En el margen
superior izquierdo aparece un sello de goma en forma circular que lee "Consulado
de Panama, San Diego, Calif. EE.UU. Y en el centro el escudo de la Republica de
Panama. Aparece el escudo de la Republica de Panama y debajo la siguiente
leyenda: REPUBLICA DE PANAMA--MINISTERIO DE RELACIONES EXTERIORES.----
CERTIFICADO DE AUTENTICACION---Recibo Oficial 21223-D---Arancel 60---Derechos
B/10.00, No. 245879-----Del lado izquierdo aparece el siguiente texto: El
suscrito Carolina T. De Mouritzen, Consul de Panama en San Diego, California--
CERTIFICA: que la firma que aparece en el documento adjunto que dice G.J. Smith
es autentica y corresponde a la que acostrumbra usar en los documentos que
autoriza en calidad de Asesor/Registrador/Secretario del Condado de San Diego,
Estado de California, Estados Unidos de America.---Dado en la Ciudad de San
Diego, California, el dia 10 del mes de diciembre de 1999.-----(fdo.) Firma
ilegible. Aparece a un costado un sello de goma estampado, de forma circular
que lee: CONSULADO DE PANAMA--SAN DIEGO, CALIF. EE.UU. Y en el centro el escudo
de la Republica de Panama.---------------------------
===============================================================================
CERTIFICACION QUE ACREDITA LA EXISTENCIA LEGAL DE PRICESMART, INC.
24
Estado de Delaware---Oficina del Secretario de Estado---------------Yo, EDWARD
J. FREEL, Secretario de Estado del Estado de Delaware, por este medio certifico
que "PRICESMART, INC." esta debidamente incorporada bajo las leyes del Estado de
Delaware y se encuentra al dia en el pago de sus obligaciones y tiene existencia
legal, segun indican los registros de esta oficina, hasta el catorceavo dia de
diciembre, A.D. 1999.-------24427225----8300-----991533791-----(fdo.) Firma
ilegible----Edward J. Freel, Secretario de Estado-------Aparece un sello
ilegible, adherido a la izquierda de la firma.---Autenticacion:
0139990---Fecha: 12-14-99.--------------------
===============================================================================
APOSTILLA-----(Convencion de la Haya del 5 de octubre de 1961)-----------------
1. Pais: Estados Unidos de America - Este documento publico:------------------
2. ha sido firmado por Edward J. Freel----------------------------------------
3. actuando en su condicion de Secretario del Estado de Delaware--------------
4. porta el sello/timbre de la Oficina del Secretario del Estado--------------
5. CERTIFICADO-------------------En Dover, Delaware---------------------------
6. El dia catorce dias de Diciembre A.D de 1999-------------------------------
7. Por el Secretario del Estado de Delawre Departamento de Estado-------------
8. Numero 0121002--------------9. Sello/Timbre: Aparece un sello redondo-----
10. Firma: Ilegible Secretario de Estado---------------------------------------
(Fdo.) Firma ilegible--Secretario de Estado.-----------------------------------
Lo anterior es fiel traduccion al espanol del documento presentado ante mi en
idioma ingles. (Fdo.) Firma ilegible---Aparece un sello de goma en tinta,
rectangular con el siguiente contenido: Alvaro Aguilar Alfu--Resolucion No. 60
de 9 junio de 1989--cedula 8-266-901.------------------------------------------
===============================================================================
---------ACTA DE JUNTA DIRECTIVA DE LA SOCIEDAD PB REAL ESTATE, S.A.-----------
En la Ciudad de Panama, a los 12 dias del mes de noviembre de 1999,
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
25
se celebro una reunion de Junta Directiva de la sociedad PB REAL ESTATE,
S.A., previa convocatoria.-----------Se encontraban presentes y/o representados
en dicha reunion la mayoria de los Directores, a saber; Por los directores
que representan las acciones clase A: Gilbert Partida, Robert Gans, Kevin C.
Breen y Robert Price, estos tres ultimos directores, representados mediante
poder otorgado a Gilbert Partida. Por los directores que representan las
acciones clase B: Rafael Barcenas, Carlos Nandwani y Morris Harari, estos dos
ultimos, mediante poder otorgado a Rafael Barcenas.-----------Presidio la
reunion, el Presidente de la Sociedad Gilbert Partida y actuo como
Secretario, el titular del cargo Rafael Barcenas.---------Iniciada la
reunion, el Presidente manifesto que el objeto de la reunion era considerar
la contratacion de un financiamiento con la entidad bancaria THE CHASE
MANHATTAN BANK.-------------A mocion debidamente presentada y sustentada, se
aprobo la siguiente Resolucion:----------Primero: Aprobar, como en efecto se
aprueba, la celebracion de un contrato de prestamo con THE CHASE MANHATTAN
BANK, hasta por la suma de Once Millones Trescientos Mil Dolares
(US$11,300,000.00) para ser utilizados de la siguiente manera: a) Para
cancelar el saldo que adeuda la Sociedad a PRICESMART, INC., del contrato de
prestamo suscrito entre ambos; b) La suma de Tres Millones de Dolares
(US$3,000,000.00) sera utilizado para la construccion de mejoras en el
almacen construido en el area de El Dorado, en la Ciudad de Panama y la suma
de Tres Millones Setecientos Veinticinco Mil Dolares (US$3,725,000.00) para
la adquisicion de un terreno en la Ciuidad de David, Provincia de Chiriqui y
la construccion de sus mejoras, consistentes en otro
almacen.----------Segundo: Aprobar, como en efecto se aprueba, la
constitucion de Primera Hipoteca y Anticresis a favor de THE CHASE MANHATTAN
BANK, hasta por la suma de ONCE MILLONES TRESCIENTOS MIL
26
DOLARES (US$11,300,000.00) sobre las fincas que se identifican a continuacion y
que constituyen el almacen localizado en el Centro Comercial Los Pueblos, S.A.:
1) cuarenta y un mil cincuenta y cuatro (41,054); 2) cuarenta y un mil cincuenta
y cinco (41,055); 3) cuarenta y un mil cincuenta y seis (41,056); 4) cuarenta y
un mil cincuenta y siete (41,057); 5) cuarenta y un mil cincuenta y ocho
(41,058); 6) cuarenta y un mil cincuenta y nueve (41,059); 7) cuarenta y un mil
sesenta (41,060); 8) cuarenta y un mil sesenta y uno (41,061); 9) cuarenta y un
mil sesenta y dos (41,062); 10) cuarenta y un mil sesenta y tres (41,063); 11)
cuarenta y un mil sesenta y cuatro (41,064); 12) cuarenta y un mil sesenta y
cinco (41,065); 13) cuarenta y un mil sesenta y seis (41,066); 14) cuarenta y un
mil sesenta y siete (41,067); 15) cuarenta y un mil sesenta y ocho (41,068); 16)
cuarenta y un mil sesenta y nueve (41,069); 17) cuarenta y un mil setenta
(41,070); 18) cuarenta y un mil setenta y uno (41,071); 19) cuarenta y un mil
setenta y dos (41,072); 20) cuarenta y un mil setenta y tres (41,073); 21)
cuarenta y un mil setenta y cuatro (41,074); 22) cuarenta y un mil setenta y
cinco (41,075); 23) cuarenta y un mil setenta y seis (41,076); 24) cuarenta y un
mil setenta y siete (41,077); 25) cuarenta y un mil setenta y ocho (41,078); 26)
cuarenta y un mil setenta y nueve (41,079); 27) cuarenta y un mil ochenta
(41,080); 28) cuarenta y un mil ochenta y uno (41,081); 29) cuarenta y un mil
ochenta y dos (41,082); 30) cuarenta y un mil ochenta y tres (41,083); 31)
cuarenta y un mil ochenta y cuatro (41,084); 32) cuarenta y un mil ochenta y
cinco (41,085); 33) cuarenta y un mil ochenta y seis (41,086); 34) cuarenta y un
mil ochenta y siete (41,087); 35) cuarenta y un mil ochenta y ocho (41,088); 36)
cuarenta y un mil ochenta y nueve (41,089); 37) cuarenta y un mil noventa
(41,090); 38) cuarenta y un mil noventa y uno (41,091); 39)
[STAMP] REPUBLICA DE PANAMA [SEAL]
PAPEL NOTARIAL
[SEAL]
NOTARIA DUODECIMA DEL CIRCUITO DE PANAMA
27
cuarenta y un mil noventa y dos (41,092); 40) cuarenta y un mil noventa y tres
(41,093); 41) cuarenta y un mil noventa y cuatro (41,094) y 42) cuarenta y un
mil noventa y cinco (41,095); todas inscritas al Rollo seis mil uno (6001),
Documento uno (1), Asiento uno (1) de la Seccion de la Propiedad Horizontal,
Provincia de Panama del Registro Publico.----------Tercero: Autorizar, como en
efecto se autoriza a RAFAEL BARCENAS, portador de cedula de identidad personal
No. 8-128-354, para que en nombre y representacion de la Sociedad suscriba con
THE CHASE MANHATTAN BANK la escritura de prestamo respectiva y constituya la
referida garantia hipotecaria y anticretica, en los terminos y condiciones que
convenga con el citado Banco.------No habiendo mas asuntos que tratar, la
reunion fue clausurada.-------(fdo).Gilberto Partida----Presidente -------(fdo.)
Rafael Barcenas-----Secretario.----------
================================================================================
Concuerda con su original esta copia que expido, sello y firmo en la Ciudad de
Panama, Republica de Panama, a los veinte (20) dias del mes de diciembre de mil
novecientos noventa y nueve (1999).---
[STAMP] [SEAL]
[STAMP] [SEAL]
[STAMP] [SEAL]
Exhibit 10.4(b)
REPUBLIC OF PANAMA
PROVINCE OF PANAMA
TWENTIETH NOTARY FOR THE CIRCUIT
Attorney Plinio F. Valdes F.
Twentieth Notary
COPY
PUBLIC DOCUMENT No.12146 OF December 20, 1999.
By which:
Whereby the corporation denominated PRICESMART, INC. declares that some
mortgage and antichresis liens established in its favor by the corporation
denominated PB REAL ESTATE, S.A. have been cancelled; the banking entity
denominated THE CHASE MANHATTAN BANK formalizes with the referred PB REAL
ESTATE, S.A. corporation an agreement for line of credit convertible in
guaranteed loan with First Mortgage and Antichresis on farms Nos.: 1) 41,054; 2)
41,055; 3) 41,056; 4) 41,057; 5) 41,058; 6) 41,059; 7) 41,060; 8) 41,061; 9)
41,062; 10) 41, 063; 11) 41,064; 12) 41,065; 13) 41,066; 14) 41,067; 15) 41,069;
16) 41,069; 17) 41,070; 18) 41,071; 19) 41,072; 20) 41,073; 21) 41,074; 22)
41,075; 23) 41,076; 24) 41,077; 25) 41,078; 26) 41,079; 27) 41,080; 28) 41,081;
29) 41,082; 30) 41,093; 31) 41,084; 32) 41,085; 33) 41,086; 34) 41,087; 35)
41,088; 36) 41,089; 37) 41,090; 38) 41,091; 39) 41,092; 40) 41,093; 41) 41,094
and 42) 41,095.
REPUBLIC OF PANAMA
NOTARIAL PAPER
TWENTIETH NOTARY FOR THE CIRCUIT OF PANAMA
PUBLIC DOCUMENT NUMBER TWELVE THOUSAND ONE HUNDRED AND
FORTY-SIX--------------------------------------(12146)--------------------------
By which the corporation denominated PRICESMART, INC. declares that some
mortgage and antithetic liens established in its favor by the corporation
denominated PB REAL ESTATE, S.A. have been cancelled; the banking entity
denominated THE CHASE MANHATTAN BANK formalizes with the referred PB REAL
ESTATE, S.A. corporation an agreement for line of credit convertible in
guaranteed loan with First Mortgage and Antichresis on farms Nos.: 1) 41,054; 2)
41,055; 3) 41,056; 4) 41,057; 5) 41,058; 6) 41,059; 7) 41,060; 8) 41,061; 9)
41,062; 10) 41, 063; 11) 41,064; 12) 41,065; 13) 41,066; 14) 41,067; 15) 41,069;
16) 41,069; 17) 41,070; 18) 41,071; 19) 41,072; 20) 41,073; 21) 41,074; 22)
41,075; 23) 41,076; 24) 41,077; 25) 41,078; 26) 41,079; 27) 41,080; 28) 41,081;
29) 41,082; 30) 41,093; 31) 41,084; 32) 41,085; 33) 41,086; 34) 41,087; 35)
41,088; 36) 41,089; 37) 41,090; 38) 41,091; 39) 41,092; 40) 41,093; 41) 41,094
and 42) 41,095.-----------------------------------------------------------------
-----------------------------Panama, December 20, 1999--------------------------
********************************************************************************
In the city of Panama, Capital of the Republic and Head of the Notarial Circuit
under the same name, on the twentieth (20th) day of the month of December of
nineteen hundred and ninety-nine (1999), before me, PLINIO FRANCISCO VALDES,
Twentieth Public Notary of the Circuit of Panama, with personal Identification
Card number eight-two hundred and eighty-nine-three hundred and eighty
(8-289-380),--------------------------------------------------------------------
Mr. JESUS ERNESTO GRIJALVA, male, Northamerican citizen, married, attorney, in
transit in this city, bearer of northamerican passport zero three seven zero
zero two six eight nine (037002689) made a personal appearance, who manifests he
knows the Spanish language, reason why he does not require the assistance of an
authorized public translator for this act, and who declares he is acting in
representation of PRICESMART, INC., corporation, established and
existing according to the laws of the State of Delaware, United States of North
America, according to what is recorded in certification issued by the Secretary
of State of the State of Delaware, United States of North America, which has
been presented to me duly translated to the Spanish language by an authorized
public translator and legalized by Apostille, with faculties for this act
according to record of power that has been given to me duly translated into the
Spanish language and legalized by the Consul of Panama in San Diego, California,
United States of America and by the Minister for Foreign Relations of Panama for
its recording in the protocol in this public document, on one part, from now on
identified as THE MORTGAGEE, person known to me and who requested that I record
the following:------------------------------------------------------------------
-----------------------------CANCELLATION OF LIENS------------------------------
ONE: The MORTGAGEE declares that by means of public document number seven
thousand five hundred and forty-one (7541), dated the twenty-fourth (24th) of
September of nineteen hundred and ninety-eight (1998), granted by the Twentieth
notary of the Circuit of Panama, formalized a Loan Agreement and Line of Credit,
with the corporation denominated PRICE COSTCO DE PANAMA, S.A. up to the sum of
Five Million Eight Hundred and seventy-five Thousand Dollars (US$5,875,000.00)
legal currency of the United States of America, that were guaranteed by PB REAL
ESTATE, S.A. corporation with First Mortgage and Antichresis on the Forty-two
(42) Farms that are described bellow: 1) forty one thousand fifty-four (41,054);
2) forty-one thousand fifty-five (41,055); 3) forty-one thousand fifty-six
(41,056); 4) forty-one thousand fifty-seven (41,057); 5) forty-one thousand
fifty-eight (41,058); 6) forty-one thousand fifty-nine (41,059); 7) forty-one
thousand and sixty (41,060); 8) forty-one thousand and sixty-one (41,061); 9)
forty-one thousand and sixty-two (41,062); 10) forty-one thousand and
sixty-three (41,063); 11) forty-one thousand and sixty-four (41,064); 12)
forty-one thousand and sixty-five (41,065); 13) forty-one thousand and sixty-six
(41,066); 14) forty-one thousand and sixty-seven (41,067); 15) forty-one
thousand and sixty-eight (41,068); 16) forty-one thousand and sixty-nine
(41,069); 17) forty-one thousand and seventy (41,070); 18) forty-one thousand
================================================================================
and seventy-one (41,071); 19) forty-one thousand and seventy-two (41,072); 20)
forty-one thousand and seventy-three (41,073); 21) forty-one thousand and
seventy-four (41,074); 22) forty-one thousand and seventy-five (41,075); 23)
forty-one thousand and seventy-six (41,076); 24) forty-one thousand and
seventy-seven (41,077); 25) forty-one thousand and seventy-eight (41,078); 26)
forty-one thousand and seventy-nine (41,079); 27) forty-one thousand and eighty
(41,080); 28) forty-one thousand and eighty-one (41,081); 29) forty-one thousand
and eighty-two (41,082); 30) forty-one thousand and eighty-three (41,083); 31)
forty-one thousand and eighty-four (41,084); 32) forty-one thousand and
eighty-five (41,085); 33) forty-one thousand and eighty-six (41,086); 34)
forty-one thousand and eighty-seven (41,087); 35) forty-one thousand and
eighty-eight (41,088); 36) forty-one thousand and eight-nine (41,089); 37)
forty-one thousand and ninety (41,090); 38) forty-one thousand and ninety-one
(41,091); 39) forty-one thousand and ninety-two (41,092); 40) forty-one thousand
and ninety-three (41,093); 41) forty-one thousand and ninety-four (41,094); 42)
forty-one thousand and ninety-five (41,095); all inscribed on Roll six thousand
and one (6001), Document one (1), entry one (1) of the Section for Horizontal
Property, Province of Panama of the Public Registration Office, just as is
inscribed in the Public Registry in File two hundred thousand seven hundred and
forty (200,740), Additional Page seven thousand nine hundred and forty-fine
(7949), Document one (1),Section for Microfilms (Mortgages and Antichresis).
-------------TWO: MORTGAGEE declares that he hereby cancels the First Mortgage
and Antichresis that weighs on the farms described in the previous clause, with
the intention that the same can be granted in First Mortgage and Antichresis in
favor of the banking entity denominated THE CHASE MANHATTAN BANK, as long as,
with the product of the loan that the mentioned banking entity has granted to PB
REAL ESTATE, S.A. by means of public document the loan that it granted to the
referred corporation is cancelled in favor of the MORTGAGEE, according to what
has been indicated in clause One of this part of this public document. ---------
================================================================================
Making an appearance in this condition are Messrs. HOMERO EDUARDO VELASQUEZ
DORAN, male, Panamanian, of legal age, married, banker, from the vicinity of
this city, bearer of personal identification card number eight-one hundred and
sixty-six-eight hundred and fifty-one (8-166-851), acting in his condition as
Universal Agent of THE CHASE MANHATTAN BANK, just as is recorded in the Public
Registry, Section for Microfilms (Mercantile) in File SE-seven hundred and
fifty-four (SE754), Roll fifty thousand four hundred and forty-three (50,443),
Image zero zero thirty-four (0034), who from now on will be denominated THE
BANK, for one party and, for the other party, RAFAEL ERNESTO BARCENAS PEREZ,
male, citizen of Panama, of legal age, married, businessman, from the vicinity
of this city, bearer of personal identification card number eight-one hundred
and twenty-eight-three hundred and fifty-four (8-128-354), who manifests he is
acting in the name and representation of the corporation denominated PB REAL
ESTATE, S.A., inscribed in the Public Registry in File three hundred and
thirty-one thousand three hundred and fifty (331,350), Roll fifty-four thousand
six hundred and sixteen (54,616), Image forty-one (41), duly authorized for this
act according to record in these minutes of the Board of Directors of the
referred corporation, that is given to me for its incorporation into this public
document, from now on identified as THE DEBTOR, person whom I know and who
requested that I record the following:-----------------
================================================================================
---II. AGREEMENT FOR LINE OF CREDIT CONVERTIBLE INTO A LOAN-------- ONE:
(AMOUNT): The BANK declares that it has made available to the DEBTOR a credit
facility consisting of an account or line of credit for the sum of ELEVEN
MILLION THREE HUNDRED THOUSAND DOLLARS (US$11,300,000.00) legal currency of the
United States of America, that the DEBTOR declares he has accepted and received
from the BANK and, consequently, owing it, the sum of THREE MILLION DOLLARS
(US$3,000,000.00) legal currency of the United States of America.-------- TWO:
(USE OF FUNDS): The DEBTOR is bound to use the funds object of the account or
line of credit referred to in the previous clause for the following purpose: a)
The sum of Three Million Dollars (US$3,000,000.00) legal currency of the United
States of America, that in the previous clause the DEBTOR has acknowledged he
has received from the BANK, to finance the construction of some betterments in
the store constructed in the area of El Dorado, in the City of Panama; b) The
sum of THREE MILLION SEVEN HUNDRED AND TWENTY-FIVE THOUSAND DOLLARS
(us$3,725,000.00) LEGAL CURRENCY OF THE United States of America, for the
acquisition of a parcel of land in the City of David, Province of Chiriqui and
the construction of its improvements, consisting of a store on the mentioned
parcel of land. In spite of the above, the parties agree that from the referred
facility for credit, the DEBTOR may only use the mentioned THREE MILLION SEVEN
HUNDRED AND TWENTY-FIVE THOUSAND DOLLARS (US$3,725,000.00) legal currency of the
United States of America, after the DEBTOR has granted a First Mortgage and
Antichresis in favor of the BANK on the land of the City of David, as soon as
the DEBTOR acquires its property and c) The difference of the amount of the
loan, to cancel the balance owed to PRICEMART, INC., at the moment of the
inscription of this public document, product of the loan referred to in the
First (I) part of this public document---------------THREE: (TERM) The parties
agree that the credit facility referred to in the previous clause will be
managed under the figure of an account or line of credit up to a term of ten
(10) months, as of the date of the signature of this public document, but, in no
case, after the thirty-first (31st) of October of the year two thousand (2,000).
Once the mentioned date has passed, the monies disbursed by the BANK to the
DEBTOR in virtue of the use of the account or line of credit they will be
converted in a long term loan, for a term of five (5) years, as of the
thirty-first (31st) of October of the year two thousand (2000). The difference
of the amount of the account or line of credit that is not used by the DEBTOR
upon expiration of the term referred to in this clause, will be credited by the
BANK and made available to the DEBTOR in an account, registering the mentioned
amount as a loan, also for a term of five (5) years, together with the sum of
THREE MILLION DOLLARS (US$3,000,000.00) legal currency of the United States of
America, that the DEBTOR has already used and that he accept owing to the
BANK in the First clause of this Second (II) part of this public document and
together with the amount of the line of credit used to cancel the amount owed by
the DEBTOR to PRICESMAR, INC.- ---------- FOUR: (INSTALLMENTS AND COMMISSION):
The DEBTOR declares that he is bound to cancel to the BANK, the total of the
sums owed in virtue of being able to convert it into a loan, meaning, the sum of
ELEVEN MILLION THREE HUNDRED THOUSAND DOLLARS (US$11,300,000.00) legal currency
of the United States of America, by means of the payment of fifty-nine (59)
consecutive monthly installments to capital, each one, for a sum of no less than
ONE HUNDRED AND EIGHTY-EIGHT THOUSAND THREE HUNDRED AND THIRTY-THREE THOUSAND
DOLLARS (US$188,333.000), legal currency of the United States of America, plus a
final last installment for an amount of ONE HUNDRED AND EIGHTY-EIGHT THOUSAND
THREE HUNDRED AND FIFTY-THREE DOLLARS (US$188,353.00), legal currency of the
United States of America, all of them in concept of capital, plus interests and
FECI, this last one equivalent to one percent (1%) corresponding to the state
rate assigned to the Fondo Especial de Compensacion de Intereses (F.E.C.I.)
(Special Fund for Compensation of Interests) under Law four (4) of nineteen
hundred and ninety-four (1994).-------------- The payments referred to in this
clause should be made on the twenty-fifth (25th) day of each month until the
total cancellation of the debt, authorizing the BANK to debit it or any other
amount of the current account it has in the BANK.---------- The DEBTOR by this
means authorizes, the BANK, so that when it receives an installment in relation
with the obligations that it contracts by this means in favor of the BANK, it
may freely allocate, at its entire discretion, the respective installment on
account of owed capital, with preference to the payment of the expired
interests, that in that under this assumption would be pending payment by the
DEBTOR.---------- In the case of payment arrears of the installments to capital
and/or interests, an interest on loan arrears will be generated equivalent to
four percent (4%) on the interest rate in effect agreed in the following clause.
The resulting interest rate will be applied to the total owed balance and it
will be in effect while the payment arrears persist.-------- FIVE:
(INTERESTS): The DEBTOR is bound to make monthly payments to the BANK, during
the term of the account or line of credit, meaning, up to the thirty-first
(31st) of October of the year two thousand (2,000), and during the term of the
loan that results from the conversion of the referred account or line of credit,
an annual interest of LIBOR [calculated at three (3) months], plus one point
seventy-five percent (1.75%) on the owed balance, up to the cancellation of the
loan, adjustable from time to time at the option of the BANK, payable monthly on
the twenty-fifth (25th) of each month, by means of a debit from its current
account made by the BANK and for which it is duly authorized by the
DEBTOR.------- The interests will be calculated at an annual rate on the owed
daily balance, by the exact number of natural days that have elapsed on the
basis of one year of three hundred and sixty (360) days..- ------------ For the
effects of this clause the LIBOR (LONDON INTERBANK OFFERING RATE) Rate is
defined as the interest rate quoted by The Chase Manhattan Bank for the supply
of Dollars in the exchange market. The LIBOR rate will be determined two (2)
working days before the first day of the interest period. This date will be
effective on the first day of the interest period.----SIX: (COMPENSATION): The
DEBTOR, authorizes the BANK to debit any sum that under any qualification it
maintains or receives in the BANK, with the purpose of compensating the sums
that are necessary for the redemption of capital, interests, F.E.C.I. tax
surcharge or of any other concept contracted by means of this public document,
without giving previous notice to the DEBTOR.---- SEVEN: (ASSIGNMENT OF CREDIT):
The DEBTOR agrees that the BANK may transfer at any moment, to any natural
person or legal entity, all or part, of the credits and other rights and
obligations of the BANK consigned in this public document, without the BANK
having to give any type of previous notice to the DEBTOR and without the BANK
having to require nor receive any approval from the DEBTOR. The DEBTOR
authorizes the BANK to provide to any third party, all the information that the
BANK deems necessary to facilitate the mentioned transfer, the DEBTOR expressly
exonerating the BANK from any consequence resulting from the exercise that the
BANK makes of the right referred to in this clause.-------------EIGHT (FINANCIAL
COMMITMENTS): The DEBTOR is bound
to the BANK, during the term of the loan and while the DEBTOR maintains debts
with the BANK, that its financial statements consolidated with its others
related corporations, including PRICE COSTCO DE PANAMA, S.A. will credit and
reflect the following financial conditions: One (1): Coverage for Debt Service
or "Debt Service Coverage Covenant" (EBITDA/Debt Service) of a minimum of one
point forty (1.490) during the term of the loan. EBITDA is defined as the Net
Income, plus interests, income tax, depreciation and amortization. Debt Service,
is the payment of the total sum owed corresponding to capital, plus interests.
The relation of the Debt Service Coverage will be calculated for the fiscal
period that has ended.----- Two (2): Leverage Covenant (Total
Liabilities/Tangible Net Worth of a maximum of two point zero zero (2.00) during
the term of the loan. Tangible Net Worth, is the net worth, minus intangible
assets (ex: betterment of real estate, loans to employees, loans to
shareholders). Net Worth, are the Total Assets minus Total Liabilities. The
relation of the Leverage Covenant will be calculated for the ending fiscal year.
Three (3): The shareholders will make a contribution or furnish capital for a
sum of no less than Two Million Two Hundred and Twelve Thousand Dollars
(US$2,212,000.00) legal currency of the United States of America, to partially
finance the new store leased to Price Costco de Panama, S.A., in the City of
David, Province of Chiriqui, Republic of Panama. The contribution or provision
of capital will be used, first, in the project, followed by the debits o
withdrawals from the credit facility. Four (4): For the construction of the new
store in El Dorado, in the City of Panama, Republic of Panama, Price Costco de
Panama, S.A. will contribute or provide the sum of Two Million Dollars
(US$2,000,000.00), legal currency of the United States of America originating
from its own cash flow, with the purpose of paying the betterments for the
store, and/or to pay the costs of the technical parts (permanent betterments for
the structure of the building). Five (5):give financial statements that have not
been audited in a quarterly manner, within sixty (60) days after the date of the
closing of each quarter and financial statements consolidated annually, audited,
which it should deliver within ninety (90) days after the date of the closing of
the fiscal period. Six (6): No Material Adverse Effect may take place in the
accounting and
consolidated situation of the DEBTOR and price Costco de Panama, S.A. Seven (7):
No changes may take place in the share majority existing at the moment of
granting this loan, of the DEBTOR, as well as in Price Costco de Panama, S.A. or
in the control of the mentioned corporations without previous and express
consent of the BANK, if upon its criteria, such changes can affect the rights of
the BANK with respect to the loan or mortgage security; Place the loan at risk
or produce a Material Adverse Effect with respect to the loan or of the
conditions by which the same was granted to the DEBTOR. Eight (8): Nor the
DEBTOR, nor Price Costco de Panama, S.A. may incur in additional debts besides
those which the DEBTOR has reported to the BANK, without its previous consent,
if upon the criteria of the BANK those changes affect the rights of the BANK
with respect to the loan or the mortgage security; place the loan at risk or
produce a Material Adverse Effect with respect to the loan or the conditions
under which the same was granted to the DEBTOR. Nine (9) The value of the assets
given as security of this loan should cover and secure the total amount of the
loan, according to recent assessment.- ------In addition to the above, the
DEBTOR is bound to give the BANK, within thirty (30) days after the date of
finalizing the construction of the store in David, Province of Chiriqui, an
appraisal made by a company of independent Appraisers and acceptable to the
BANK. In addition to the above, the DEBTOR is bound to grant First Mortgage and
Antichresis in favor of the BANK on the land that the DEBTOR is in the process
of acquiring in the City of David, Province of Chiriqui, as soon as it acquires
the property of the same.----------------------------III. GRANTING THE FIRST
MORTGAGE AND ANTICHRESIS.------------------LIMITATION TO THE OWNERSHIP RIGHT
----------------------------------NINE: (GRANTING THE SECURITY) The DEBTOR
declares that to secure the payment of the ELEVEN MILLION THREE HUNDRED THOUSAND
DOLLARS (us$11,300,000.00), legal currency of the United States of America that
the BANK made available to the DEBTOR, its interests. costs for collection, be
they leal or out of court and of any other type that may arise; as well as to
secure the faithful compliance of all and each one of the obligations that are
acquired by this means by the DEBTOR and during the time that any one of them
subsists, IT
GRANTS in favor of the BANK and up to the sum of ELEVEN MILLION TRHREE HUNDRED
THOUSAND DOLLARS (us$11,300,000.00), LEGAL CURRENCY OF THE United States of
America, First Mortgage and Antichresis on the forty-two (42) Farms that are
described below: 1) forty one thousand fifty-four (41,054); 2) forty-one
thousand fifty-five (41,055); 3) forty-one thousand fifty-six (41,056); 4)
forty-one thousand fifty-seven (41,057); 5) forty-one thousand fifty-eight
(41,058); 6) forty-one thousand fifty-nine (41,059); 7) forty-one thousand and
sixty (41,060); 8) forty-one thousand and sixty-one (41,061); 9) forty-one
thousand and sixty-two (41,062); 10) forty-one thousand and sixty-three
(41,063); 11) forty-one thousand and sixty-four (41,064); 12) forty-one thousand
and sixty-five (41,065); 13) forty-one thousand and sixty-six (41,066); 14)
forty-one thousand and sixty-seven (41,067); 15) forty-one thousand and
sixty-eight (41,068); 16) forty-one thousand and sixty-nine (41,069); 17)
forty-one thousand and seventy (41,070); 18) forty-one thousand and seventy-one
(41,071); 19) forty-one thousand and seventy-two (41,072); 20) forty-one
thousand and seventy-three (41,073); 21) forty-one thousand and seventy-four
(41,074); 22) forty-one thousand and seventy-five (41,075); 23) forty-one
thousand and seventy-six (41,076); 24) forty-one thousand and seventy-seven
(41,077); 25) forty-one thousand and seventy-eight (41,078); 26) forty-one
thousand and seventy-nine (41,079); 27) forty-one thousand and eighty (41,080);
28) forty-one thousand and eighty-one (41,081); 29) forty-one thousand and
eighty-two (41,082); 30) forty-one thousand and eighty-three (41,083); 31)
forty-one thousand and eighty-four (41,084); 32) forty-one thousand and
eighty-five (41,085); 33) forty-one thousand and eighty-six (41,086); 34)
forty-one thousand and eighty-seven (41,087); 35) forty-one thousand and
eighty-eight (41,088); 36) forty-one thousand and eight-nine (41,089); 37)
forty-one thousand and ninety (41,090); 38) forty-one thousand and ninety-one
(41,091); 39) forty-one thousand and ninety-two (41,092); 40) forty-one thousand
and ninety-three (41,093); 41) forty-one thousand and ninety-four (41,094); 42)
forty-one thousand and ninety-five (41,095); All inscribed in Roll six thousand
and one (6001),Document one (1), Entry one (1) of the Section for Horizontal
Property, Province of Panama of
the Public Registry.- ------------- TEN: (EXERCISE OF THE ANTICHRESIS): The BANK
may, when it deems convenient exercise it right as antichresis creditor, taking
possession of the mortgaged farms for their administration, giving notice to the
DEBTOR and without the need of process nor proceedings before the
authorities.---------In case that the mortgage execution is established, the
BANK will continue with the right to exercise the antichresis in a discretional
manner and take over the administration of the farms granted in antichresis
taking possession of the same, while the execution sale is verified.------------
It is agreed that the BANK or the person it designates to manage the assessed
farms will execute all the rights that are derived in favor of the DEBTOR as
owner of the mortgaged farms, without the need for rendering account for the
mentioned management, as the DEBTOR by this means expressly releases him from
the mentioned obligations.-------- For these effects, the BANK and DEBTOR agree
that, according to that provided in article one thousand six hundred and
twenty-three (1623), of the Civil Code, if the BANK were to execute its rights
as antichresis creditor, will not be bound to respond personally for the
expenses caused by the management, maintenance and conservation of the mortgaged
rights, nor for the insurance premiums against any type of risks or for taxes or
rates that fall on the mentioned assets.-------- The BANK and DEBTOR also agree
that in this assumption, the expenses referring to the farms and that are caused
in the execution of the antichresis right, will be covered by the incomes or
fruits produced by the farm granted in first mortgage and antichresis, in the
first place and the excess will be applied to the payment of the interests and
to the amortization of the capital, in that order, according to the obligations
contracted by the DEBTOR in this public document.---------- if the fruit r
incomes that are produced by the mortgaged farms are not sufficient to cover its
expenses and the obligations contracted by the DEBTOR, the BANK may proceed by
legal means for the collection of its credit. This faculty is understood without
prejudice of the ones that the BANK possesses by virtue of the assumptions
contemplated in the clause corresponding to the anticipated expiration of the
obligations.-----------------
ELEVEN: (INSURANCE): The DEBTOR is bound to maintain during the term of this
agreement, the assessed farms, as well as the betterments constructed on them,
insured against fire, with endorsement for extension of coverage and direct
damages caused by earthquake, and they will transfer or assign to the BANK the
right to receive the indemnification, that, the insurance company should pay in
case of damage and to that effect will immediately endorse and give the BANK the
respective insurance policy or policies, as well as the corresponding
renewals.-------- This insurance will always be for the sum of no less that
EIGHTY PERCENT (80%) of the value of the betterments constructed on the
mortgaged farms.------------ The BANK reserves the right to renew the insurance
policy once it expires, canceling the amount of the premium if the DEBTOR does
not cover the same; if this happens, the DEBTOR should pay the BANK upon
request, the value of the premium or premiums and the interests corresponding to
the sum disbursed by the BANK, at the rate that was then applied to this debt,
whereby the BANK, if it so decides, capitalize the value of the premiums,
whereby they are also secured with the liens that are established in favor of
the BANK, the sums disbursed by the BANK in virtue of that provided in this
clause.----- If the DEBTOR does not comply with the obligations contracted in
this document, the BANK may, at any moment, by means of a written notice to the
DEBTOR, immediately declare payable and callable the total of the owed sums and
all the accumulated interest and not paid on the same.--------- TWELVE:
(INSPECTIONS): The BANK reserves the right to make reasonable inspections of the
mortgaged farms, at any moment, with previous notice to the DEBTOR, during the
schedule for attention to the public on the part of Price Costco de Panama,
S.A., to establish whether with those farms there is sufficient assurance for
the obligations contracted by the DEBTOR in this public document, and the DEBTOR
is bound to bear the expenses of the inspection, if this takes place.------
THIRTEEN: (LIMITATIONS TO THE RIGHT OF OWNERSHIP): The DEBTOR is bound not to
encumber, nor sell, nor in any other way transfer, in total or in part, the
mortgaged farms without previous consent from the BANK, granted in the same
document where the corresponding operation is made.------- These
prohibitions establish, upon express agreement of the parties, a limitation of
the ownership of the mortgaged farms in this public document and the parties
request from the Public Registry, the special entry of the corresponding
marginal observations, as only with the express consent from the BANK, the
DEBTOR can transfer, assign or in any other manner sell Farms number : 1) forty
one thousand fifty-four (41,054); 2) forty-one thousand fifty-five (41,055); 3)
forty-one thousand fifty-six (41,056); 4) forty-one thousand fifty-seven
(41,057); 5) forty-one thousand fifty-eight (41,058); 6) forty-one thousand
fifty-nine (41,059); 7) forty-one thousand and sixty (41,060); 8) forty-one
thousand and sixty-one (41,061); 9) forty-one thousand and sixty-two (41,062);
10) forty-one thousand and sixty-three (41,063); 11) forty-one thousand and
sixty-four (41,064); 12) forty-one thousand and sixty-five (41,065); 13)
forty-one thousand and sixty-six (41,066); 14) forty-one thousand and
sixty-seven (41,067); 15) forty-one thousand and sixty-eight (41,068); 16)
forty-one thousand and sixty-nine (41,069); 17) forty-one thousand and seventy
(41,070); 18) forty-one thousand and seventy-one (41,071); 19) forty-one
thousand and seventy-two (41,072); 20) forty-one thousand and seventy-three
(41,073); 21) forty-one thousand and seventy-four (41,074); 22) forty-one
thousand and seventy-five (41,075); 23) forty-one thousand and seventy-six
(41,076); 24) forty-one thousand and seventy-seven (41,077); 25) forty-one
thousand and seventy-eight (41,078); 26) forty-one thousand and seventy-nine
(41,079); 27) forty-one thousand and eighty (41,080); 28) forty-one thousand and
eighty-one (41,081); 29) forty-one thousand and eighty-two (41,082); 30)
forty-one thousand and eighty-three (41,083); 31) forty-one thousand and
eighty-four (41,084); 32) forty-one thousand and eighty-five (41,085); 33)
forty-one thousand and eighty-six (41,086); 34) forty-one thousand and
eighty-seven (41,087); 35) forty-one thousand and eighty-eight (41,088); 36)
forty-one thousand and eight-nine (41,089); 37) forty-one thousand and ninety
(41,090); 38) forty-one thousand and ninety-one (41,091); 39) forty-one thousand
and ninety-two (41,092); 40) forty-one thousand and ninety-three (41,093); 41)
forty-one thousand and ninety-four (41,094); 42) forty-one thousand and
ninety-five (41,095); described in this public document.--------FOURTEEN:
(FINANCIAL REPORTS): The DEBTOR is bound to present to the BANK an annual report
on the financial situation and on the condition of each one of the businesses to
which it holds title o to which it is copartner as long as it owes a sum to the
BANK for reasons of this loan.------- These reports should be presented within
ninety (90) calendar day after the closing of the fiscal year of the
DEBTOR.----------- FIFTEEN: (ANTICIPATED EXPIRATION): The DEBTOR also agrees,
that the BANK may consider the total debt as that of expired term and proceed by
legal means in the following cases:------ONE (1): If the farms that the DEBTOR
grants the BANK in first mortgage and antichresis were seized, attached, or if
suspension is entered, marginal or claim in the Public Registry on them or if in
any other form they require action of the law.------TWO (2): In case the DEBTOR
is dissolved as a corporation or if there is a transfer of its assets or if it
declares bankruptcy or creditors' meetings, upon request of any of them or third
parties; ---------- THREE (3): If the DEBTOR does not present the BANK at the
moment it required, the certification that the farms are at peace and free of
the property tax, or any other national or municipal tax, rate or contribution,
in relation to the mortgaged farms, or that the DEBTOR is at peace and free with
any other taxes, rates or contributions, that in the future fall on those farms,
on assets of the DEBTOR, or on it in whether direct of personal.-----FOUR (4):
If the DEBTOR were in arrears of its obligations with the Fund for Social
Security and for these effects the BANK may also require at any moment, the
certification of peace and release with that official institution.-------- FIVE
(5): If the farms that the DEBTOR grants in first mortgage and antichresis
suffer depreciation, loss of condition or deterioration to such a degree, that
upon opinion of the BANK does not satisfactorily cover these obligations, with
the exception if the DEBTOR offers another assurance that satisfies the
BANK.--------- SIX (6): If the DEBTOR is sequestered or if liens are attached on
its businesses or on any other assets (real estate or goods and
chattels).-------------- SEVEN (7): If the DEBTOR does not comply with the
payments established in this agreement in concept of capital and
interests.-------- EIGHT (8): If the result of the inspection referred to in
clause
Twelve of this public document, determines that the mortgages farms are not in
good conditions to assure the obligations contracted by the
DEBTOR.--------------- NINE (9): If the DEBTOR does not comply with one of the
obligations that it contracts in one of the clauses of this public
document.------- TEN (10): If the DEBTOR performs a action to sell, encumber or
assign the farms that are granted as assurance without the express consent from
the BANK.------- ELEVEN (11): If the DEBTOR does not establish in favor of the
BANK first mortgage and antichresis on the land in the City of David, province
of Chiriqui, as soon as it acquires the ownership of the same.-------SIXTEEN:
(WAIVER OF DOMICILE AND OF PROCEEDINGS): The DEBTOR waives its domicile and the
proceedings of the executive process in the case that the BANK has the need of
resorting to the courts of justice and in the case of an auction, this will be
made based on the sum or which the respective request of legal sale made to the
courts.-------------- SIXTEEN: (EXPENSES AND LEGAL FEES): The DEBTOR is bound to
bear the expenses for the notary of this document, for the registration of the
mortgage and antichresis encumbrance established in favor of the BANK and for
the cancellation of the mentioned liens in favor of the BANK, when the
appropriate moment presents itself for this, as well as the fee for the attorney
for writing and signing the minutes regarding this agreement.------EIGHTEEN:
(CERTIFICATION): In all the cases where according to this agreement the BANK may
declare the anticipated expiration of the DEBTOR'S obligation and to proceed
with the collection of the amount owed, the DEBTOR waives any previous
requirement and for the effects to issue execution against the DEBTOR the
noncompliance of the obligation in which the DEBTOR incurred is assumed true,
reason why he obligation of paying the total amount of what is owed will be
taken as true and of matured term.----- Equally, whether it is about the natural
maturity of the term for the obligation or for the anticipated expiration, the
owed sum that results from the BANK books against the DEBTOR will be taken as
liquid, according to certificate issued by the BANK, certificate that will make
certify the owed balance.-------------- NINETEENTH: (ASSIGNMENT OF CREDIT): The
BANK may assign the mortgage and antichresis credit consigned
in this public document, as well as its securities, at any moment, without
needing to warning or notifying the
DEBTOR.----------------------------------------------------------- Present in
this condition is Mr. HOMERO EDUARDO VELASQUEZ DORAN, of particulars known in
this document, acting in the name and representation of THE CHASE MANHATTAN
BANK, he declared that he accepts the obligations contracted by the DEBTOR, that
is, PB REAL ESTATE, S.A., in the manner convened in the agreement included in
this document, as well as the mortgage and antichresis attachments established
in his favor.--------------------------------------
I advised the parties in attendance that one copy of this public document should
be presented to the Public Registry for its due inscription, and the same was
read for them, in the presence of the instrumental witnesses, ANALIDA de DE LA
CRUZ, with personal identification card number eight-one hundred and
sevent-seven-seven (8-177-7) and ANABEL ARCIA, with personal identification card
number two-ninety-seven-two thousand and twenty-three (2-97-2023), both of legal
age, from the vicinity of this city, persons whom I know and have the capacity
for the duty, found it acceptable, they all gave their approval and signed it
for certification, before me the Notary who certifies this
document.----------------- The subscribed Notary certifies that he has seen the
certificates of peace and release numbers: 321929; 321930; 321931; 321932;
321933; 321934; 321935; 321936; 321938; 321977; 321939; 321941; 321945; 321948;
321950; 321953; 321954; 321956; 321957; 321960; 321961; 321963; 321967; 321968;
321937; 321940; 321942; 321943; 321944; 321946; 321947; 321951; 321952; 321955;
321958; 321959; 321962; 321964; 321965; 321966; 323311; and 323161, all in
effect until December 31, 1999, issued by the Revenue Department, that
correspond to Farms 1)) 41,054; 2) 41,055; 3) 41,056; 4) 41,057; 5) 41,058; 6)
41,059; 7) 41,060; 8) 41,061; 9) 41,062; 10) 41;063; 11) 41,064; 12) 41,065; 13)
41,066; 14) 41,067; 15) 41,068; 16) 41,069; 17) 41,070; 18) 41,071; 19) 41,072;
20) 41,073; 21) 41,074; 22) 41,075: 23) 41,076; 24; 41,077; 25) 41,078; 26)
41,079; 27) 41,080; 28) 41,081; 29) 41,082; 30) 41,083; 31) 41, 084; 32) 41,085;
33) 41,086; 34) 41,087; 35) 41,088; 36) 41,089; 37) 41,090; 38) 41,091; 39)
41,092; 40) 41,093; 41) 41,094 AND 41) 41,095 respectively, referred to in this
public
document.-----------------------------------------------------------------------
THE SUBSCRIBED NOTARY CERTIFIES THAT THIS DOCUMENT HAS BEEN WRITTEN AND DRAWN UP
BASED ON THE MINUTES SIGNED BY ATTORNEYS FABREGA, BARSALLO, MOLINO AND
MULINO.-----------------------This document in the protocol for this year bears
number of order TWELVE THOUSAND ONE HUNDRED AND
FORTY-SIX--------------------------------------------
------------------------------------------(12146)-------------------------------
(Signatures.) JESUS ERNESTO GRIJALVA------------RAFAEL ERNESTO BARCENAS
PEREZ---------- HOMERO EDUARDO VELASQUEZ DORAN---------ANALIDA de DE LA
CRUZ----------ANABEL ARCIA----------PLINIO FRANCISCO VALDEZ, Twenty-second
Notary Public for the Circuit.-------------------------------------------------
================================================================================
POWER GRANTED TO ERNESTO GRIJALVA TO SUBSCRIBE THE DOCUMENT OF POWER OF
ATTORNEY-------- I, Kurt A. May, Chief Executive for Operations for PriceSmart,
In., by this means, I designate Jesus Ernesto Grijalva, male, of legal age,
married, attorney, citizen of the United States of America, with North American
passport No. 37002689, as legal representative for PRICESMART, INC. to make an
appearance before a Notary Public in the Republic of Pana representing this
corporation to grant the corresponding public document by which PRICESMART, INC.
cancels and releases from any First Mortgage and Antichresis that PB REAL
ESTATE, S.A. corporation granted in favor of the mentioned company on the farms
according the evidence in public document No. 7541, of September 24, 1998,
granted in the Twentieth Notary of the Circuit of Panama, by which PRICESMART,
INC. granted a loan to PB REAL ESTATE, S.A.---------(Signature) Signature not
legible--- Kurt A. May_--Chief Executive for Operations--PriceSmart, Inc.-----
State of California, San Diego County----On November 22, 1999, before me,
Evelisee Hernandez, Notary Public, personally appeared before me Kurt A. may,
known by me as the person in whose name the previous instrument is subscribed
and acknowledges before
me that he executed the same having the authorized faculty and that with his
signature in such an instrument the person or entity in whose name he has acted,
he executed and granted the instrument.-----I set my signature and seal
(signed). Signature not legible.---Two rubber seals appear printed and not
legible.---SAN DIEGO COUNTY---GREGORY J. SMITH-----ADVISOR/RECORDER/COURT CLERK
FOR THE COUNTY-----Internet:http//www.co.san-diego.ca.us.------- on both sides
of the page, in the Printed on both sides of the page, on the right side and
left side are to cold printed seals. Under the seal that appears on the upper
left margin appears the following legend: Office of the Advisor----1600 Pacific
Highway, RM. 103---San Diego, CA 92101-2480---(619) 236-3771---Fax (619)
557-4056-----On the lower part of the seal that appears on the upper right
margin appears the following legend: Recorder/Office of the Secretary for the
County----1600 Pacific Highway, R; 260---P.O. Box 121750, San Diego, CA
92112-1750, (619) 237-9592---Fax (619) 557-4155-----I, GREGORY J. SMITH,
Advisor/Recorder/ Secretary for the County of San Diego, State of California, by
law having a Seal, by this means I certify that: EVELISSE HERNANDEZ whose name
appears subscribed in the affidavit or Certificate of Proof or Acknowledgement
of the attached instrument and in the writ, was at the moment of taking the
sworn statement, or Proof or Acknowledgement, a Notary Public and in and for
that County, duly commissioned and sworn and duly authorized by the laws of that
State to take the same and administrate sworn declarations and to take the
Acknowledgements and Proofs of writs or testimonies and other instruments in
writing to be recorded in this State. I am familiar with the manuscript of the
mentioned Notary Public and I consider that the signature of the mentioned sworn
statement or Certificate of Evidence of Acknowledgement is genuine. Y,
additionally certify that under the laws of the State of California the
mentioned sworn declaration or Certificate of Evidence is required to be sealed,
but the impression of the mentioned seal is not required by the laws of the
State of California for presentation in my office, nor in any other
place.-------------A seal appears printed in the lower left margin an is not
legible----------Dated December
8, 1999, Witnessed by hand.----(signed) Signature not legible.------ GREGORY J.
SMITH, Advisor for the County/Recorder/Secretary.-------Certificate of Evidence
by the Notary.--------The above is a true translation into the Spanish language
of the document presented before me in the English language. (Signed) Signature
not legible.------An ink rubber seal appears, rectangular with the following
content: Alvaro Aguilar Alfu----Resolution No. 60, June 9,
1989----Identification Card 8-266-901.-------------------------- Adhered on the
reverse side of the page appears a certification with the following
characteristics. On the upper left margin appears a rubber seal in circular form
that reads "Consulate of Panama, San Diego, Calif. EE.UU. An in the center is
the coat-of-arms of the Republic of Panama. The coat-of arms of the Republic of
Panama and under this is the following legend: REPUBLIC OF PANAMA, SECRETARY OF
FOREIGN RELATIONS------ CERTIFICATE AND AUTHENTICATION-----official Receipt
21223-D-----Fee 60------Charges B/10.00, No. 245879-----From the left side
appears the following text: The subscribed Carolina T. De Mouritzen, Consul of
Panama in San Diego, California----CERTIFIES: that the signature that appears in
the attached document that reads G.J. Smith is authentic and corresponds to the
one that he is accustomed to using on the documents that he authorizes in the
capacity as Advisor/Recorder/Secretary for the County of San Diego, State of
California, United States of America.- Issued in the City of San Diego,
California, on December 10, 1999.-----(signed) Signature not legible. On the
side appears a rubber stamp, with a circular shape that reads: CONSULATE OF
PANAMA----SAN DIEGO, CALIF. EE.UU. An in the center the coat-of-arms of the
Republic of
Panama.-------------------------------------------------------------------------
================================================================================
CERTIFICATION THAT CREDITS THE LEGAL EXISTENCE OF PRICESMART, INC.--State of
Delaware----Office of the Secretary of State--------I, EDGARD J. FREEL,
Secretary of State for the State of Delaware, hereby certify that "PRICESMAR,
INC." is duly incorporated under the laws of the State of Delaware and it is up
to date in the payment of its obligations and it has legal existence, according
to that indicated by the records of this office, up to the fourteenth day
of December, A.D. 1999.------24427225----8300---------991533791------(signed)
Signature is not legible-------Edward J. Freel, Secretary of State----------- A
seal that is not legible appears adhered to the left hand side of the
signature.------------Authentication: 0139990-----Date: 12-14-99.---------------
================================================================================
APOSTILLE---------------(The Hague Convention of October 5,
1961)----------------- 1.- Country: United States of America - This public
document:------------------------ 2. has been signed by Edward J.
Freel------------------------------------------------------ 3. acting in his
condition as Secretary of the State of Delaware--------------------- 4. he holds
the seal/stamp of the Office of the Secretary for the State-------------- 5.
CERTIFIED--------------------------------------------In Dover,
Delaware---------------- 6. On the fourteenth day of December A.D. of
1999------------------------------------- 7. By the Secretary for the State of
Delaware, Department of State----------------- 8. Number 0121002----------------
9. Seal/Stamp: A round seal appears------------- 10. Signature: Not legible
Secretary of State------------------------------------------------ (Signed)
Signature not legible-----Secretary of
State.------------------------------------- The above is a true translation into
the Spanish language of the document presented before me in the English
language. (Signed) Signature not legible----An ink rubber stamp appears,
rectangular with the following content: Alvaro Aguilar Alfu----Resolution No. 60
of June 9, 1989---Identification Card
8-266-901.----------------------------------------------------------------------
================================================================================
MINUTES OF THE BOARD OF DIRECTORS OF PB REAL ESTATE, S.A.
CORPORATION.------------------------------ In the City of Panama, on the 12th
day of the month of november of 1999, a meeting was held for the board of
Directors for PB REAL ESTATE, S.A., with previous summons.---------------
Present and/or represented in that meeting were most of the Directors, namely;
For the directors that represent the class A shares: Gilbert Partida, Robert
Gans, Kevin C. Breen and Robert Price, the last three are directors, represented
by means of power of attorney granted to Gilbert Partida. For the directors who
represent the class B
shares: Rafael Barcenas, Carlos Nandwani and Morris Harari, the two last ones,
by means of power granted to Rafael Barcenas.-----------------------------------
The meeting was chaired, by he President of the Corporation Gilbert Partida and
acting as Secretary, the title holder of the commission Rafael
Barcenas.------------once the meeting was initiated, the President manifested
that the object of the meeting was to consider the contracting financing with
the banking entity denominated THE CHASE MANHATTAN BANK.------------------------
Upon duly presented and upheld motion, the following Resolution was approved:
--------One: Approve, as in effect it is approved, the formalization of a loan
agreement with THE CHASE MANHATTAN BANK, for a sum up to Eleven Million Three
hundred Thousand Dollars (US$11,300,000.00) to be used in the following manner:
a) To cancel the balance owed by PRICESMART, INC., of the loan agreement
subscribed between both; b) The sum of Three Milllion Dollars (US$3,000,000.00)
will be used for the construction of betterments in the store constructed in the
area of El Dorado, in the City of Panama and the sum of Three Million Seven
Hundred and Twenty-five Thousand Dollars (US$3,725,000.00) for the acquisition
of land in the City of David, Province of Chiriqui and the construction of its
betterments, consisting of another store.------ Two: Approved, as in effect it
is approved, the establishment of First Mortgage and Antichresis in favor of THE
CHASE MANHATTAN BANK, for a sum up to ELEVEN MILLION THRIEE HUNDRED THOUSAND
DOLLARS (us$11,300,000.00) on the farms that are identified below and that
constitute the store located in Centro Comercial Los Pueblos, S.A.; 1) 1) forty
one thousand fifty-four (41,054); 2) forty-one thousand fifty-five (41,055); 3)
forty-one thousand fifty-six (41,056); 4) forty-one thousand fifty-seven
(41,057); 5) forty-one thousand fifty-eight (41,058); 6) forty-one thousand
fifty-nine (41,059); 7) forty-one thousand and sixty (41,060); 8) forty-one
thousand and sixty-one (41,061); 9) forty-one thousand and sixty-two (41,062);
10) forty-one thousand and sixty-three (41,063); 11) forty-one thousand and
sixty-four (41,064); 12) forty-one thousand and sixty-five (41,065); 13)
forty-one thousand and sixty-six (41,066); 14) forty-one thousand and
sixty-seven (41,067); 15) forty-one thousand and sixty-eight (41,068); 16)
forty-one thousand
and sixty-nine (41,069); 17) forty-one thousand and seventy (41,070); 18)
forty-one thousand and seventy-one (41,071); 19) forty-one thousand and
seventy-two (41,072); 20) forty-one thousand and seventy-three (41,073); 21)
forty-one thousand and seventy-four (41,074); 22) forty-one thousand and
seventy-five (41,075); 23) forty-one thousand and seventy-six (41,076); 24)
forty-one thousand and seventy-seven (41,077); 25) forty-one thousand and
seventy-eight (41,078); 26) forty-one thousand and seventy-nine (41,079); 27)
forty-one thousand and eighty (41,080); 28) forty-one thousand and eighty-one
(41,081); 29) forty-one thousand and eighty-two (41,082); 30) forty-one thousand
and eighty-three (41,083); 31) forty-one thousand and eighty-four (41,084); 32)
forty-one thousand and eighty-five (41,085); 33) forty-one thousand and
eighty-six (41,086); 34) forty-one thousand and eighty-seven (41,087); 35)
forty-one thousand and eighty-eight (41,088); 36) forty-one thousand and
eight-nine (41,089); 37) forty-one thousand and ninety (41,090); 38) forty-one
thousand and ninety-one (41,091); 39) forty-one thousand and ninety-two
(41,092); 40) forty-one thousand and ninety-three (41,093); 41) forty-one
thousand and ninety-four (41,094); 42) forty-one thousand and ninety-five
(41,095); All inscribed in Roll six thousand and one (6001),Document one (1),
Entry one (1) of the Section for Horizontal Property, Province of Panama of the
Public Registry.- ------------- Three: Authorize, as in effect it has been
authorized, RAFAEL BARCENAS, bearer of personal Identification Card No.
8-128-354, so that in the name and in representation of the Corporation
subscribe with THE CHASE MANHATTAN BANK the respective loan document and
establish the referred mortgage and antichretic security, in the terms and
conditions that are agreed with the cited Bank.---- Not having anything further
to deal with, the meeting was closed.----------(signed) Gilberto Partida-------
President---------(signed) Rafael Barcenas--------Secretary.--------------------
This copy that I issue is consistent with its original, I seal and sign in the
City of Panama, Republic of Panama, on the twentieth (20th) day of the month of
december of nineteen hundred and ninety-nine
(1999).-------------------------------------------------------------------------
Signature: Plinio F. Valdez F.
RUBBER STAMP OF THE OFFICE FOR PUBLIC REGISTRATION- PANAMA
(Not legible) Signature: Not legible.
[STAMP] BANCO NACIONAL DE CREDITO, S.A.
PAGERE
El equivalente en US$1,000,000.00 Vencimiento:__________
Yo (nosotros), PriceSmart Dominicana, S.A., por el presente documento declaro
(amos), que debo (debemos) y pagare (pagaremos solidariamente) a la orden de
BANCO NACIONAL DE CREDITO, S. A., domiciliado en la Ave. John F. Kennedy esq.
Tiradentes, Santo Domingo, Republica Dominicana la suma de UN MILLON CON
00/100 dolares moneda de curso legal de los Estados Unidos de America, suma
esta que he (hemos) recibido de dicho Banco en calidad de prestamo, a mi
(nuestra) entera satisfaccion, para financiar importaciones bajo cartas de
credito o credito de suplidor, y que me (nos) obligo (obligamos) a pagarla.
Me (nos) obligo (obligamos solidariamente) a pagarle al Banco intereses sobre
la suma adeudada a la tasa de LIBOR A SEIS MESES mas 4.25% (Cuatro punto
veinticinco porciento) anual. Esta tasa de interes podra ser aumentada o
disminuida, una o mas veces, por el Banco. Los intereses se calcularan sobre
el total de la suma del prestamo arriba mencionado, y se causaran hasta el
dia en que esta obligacion sea cancelada. Convengo (convenimos) en que los
intereses vencidos y no pagados en sus respectivas fechas se capitalizaran y
devengaran los mismos intereses fijados para el capital.
En caso de repago del total o de una parte de la indicada suma, antes de la
llegada de la fecha de vencimiento de este pagare, autorizamos al Banco, a
cobrar una comision por penalidad de un dos por ciento (2%), calculado sobre
las sumas pagadas por anticipado.
El incumplimiento de una sola mensualidad convertira este Credito en uno de
plazo vencido, pudiendose exigir inmediatamente su pago total. De igual
forma, se acelerara el vencimiento de este documento en el caso en que se
dictase mandamiento de secuestro o embargo sobre cualesquiera de mis
(nuestros) bienes, en caso de muerte de cualesquiera de nosotros,
interdiccion, convenio judicial o extrajudicial de acreedores, suspension de
pagos, insolvencia o declaratoria de quiebra contra mi (uno de nosotros), y
en fin, por incumplimiento de cualesquiera de las obligaciones que mediante
este instrumento asumo (asumimos).
Hago (hacemos) constar que el importe de este prestamo lo dedicare
(dedicaremos) a operaciones de caracter mercantil. Todos los gastos de esta
operacion, inclusive de los de cobranza judicial o extrajudicial, y honorarios
de abogados, si los hubiere, sera por mi (nuestra) cuenta exclusiva.
Hago (hacemos) constar que renuncio (renunciamos) al domicilio, al protesto,
a la presentacion de este documento, al aviso de que este ha sido
desatendido, al beneficio de division y excision, a cualquier requerimiento
exigido en caso de mora para hacer el pago, a los tramites de juicio
ejecutivo y, desde ahora, relevo (relevamos) al Banco de la obligacion de
prestar fianza en relacion con cualquier ejecucion o juicio referente a esta
obligacion.
De igual forma manifiesto (manifestamos) que conozco (conocemos) y asumo
(asumimos) todas y cada una de las obligaciones, terminos y condiciones aqui
estipuladas. En fe de lo expresado firmo (firmamos) el presente documento en
la ciudad de Santiago, Republica Dominicana, a los ____________ (_______)
dias del mes de __________ del ano _____.
[SEAL]
DEUDO PRICESMART DOMINICANA, S.A. Firma(s) autorizada(s) /s/ [ILLEGIBLE]
----------------
[ILLEGIBLE]
Exhibit 10.5(b)
BANCO NACIONAL DE CREDITO, S.A.
PROMISSORY NOTE
The equivalent I US$1,000,000.00 Maturity Date____________
I (we), PriceSmart Dominicana, S.A., hereby declare, that I (we) owe and will
pay to the order of BANCO NACIONAL DE CREDITO, S.A., domiciled in Ave. John F.
Kennedy esq. Tiradentes, Santo Domingo, Dominican Republic the sum of ONE
MILLION with 00/100 Dollars, currency of the United States of America, sum that
I (we) have received from the mentioned Bank in the condition as a loan, to my
(0ur) entire satisfaction, to finance imports under letters of credit or
supplier credit, and that I (we) am (are) bound to cancel it.
I (we) am (are) bound to pay the Bank interests on the owed sum at the LIBOR
RATE WITHIN SIX MONTHS plus 4.25% (Four point twenty-five percent) annually.
This interest rate may be increased or decreased, one or more times, by the
Bank. The interests will be calculated on the total of the sum of the
above-mentioned loan, and it will be in effect up to the date when the
obligation is cancelled. I (we) agree that the matured and unpaid interests on
their respective dates will be capitalized and they will earn the same interests
as those established for the capital.
In the case of repayment of the total or of a part of the indicated sum, before
the date of maturity of this promissory note, we authorize the Bank, to collect
a commission for penalty of two percent (2%), calculated on the sums paid in
advance.
Default of only just one monthly payment will convert this Credit into one of
expired term, whereby the total payment may be required. Likewise, the
expiration of this document will be accelerated in the case that an order for
sequestration or lien is dictated on any of my (our) assets, in the case of
death of one of us, injunction, Judiciary or out of court agreement of
creditors, suspension of payments, insolvency or declaration of bankruptcy
against me (one of us), and so on, due to default of any if the obligations that
I (we) acquire.
I (we) certify that the amount of this loan will be dedicated to operation for
mercantile matters. All expenses of this operation, including those for
judiciary or out of court collection and legal fees, if any, will be by my (our)
exclusive account.
I (we) certify that I (we) waive the domicile, upon protest, upon the
presentation of this document, the notice that it has been dishonored, to the
benefit of division and exclusion, upon any requirement called for in the case
of arrears to make the payment, for the proceeding of executory process and, as
of now, I (we)
exonerate the Bank from the obligation of paying a security in relation with any
execution or proceeding regarding this obligation.
Likewise, I (we) manifest that I (we) know and take on all and each one of the
obligations, terms and conditions stipulated in this document. In witness
whereof I (we) sign this document in the city of Santiago, Dominican Republic,
on the ____ ( ) day of the month of _____________ of the year _____.
Debtor: PriceSmart Dominicana, S.A. Authorized Signatures: NOT LEGIBLE
(Rubber Stamp) ---------------
[LOGO] BANCO NACIONAL DE CREDITO, S.A.
PAGARE
El equivalente en US$1,000,000.00 Vencimiento:______________
Yo (nosotros), PriceSmart Dominicana, S.A., por el presente documento declaro
(amos), que debo (debemos) y pagare (pagaremos solidariamente) a la orden de
BANCO NACIONAL DE CREDITO, S.A., domiciliado en la Ave. John F. Kennedy esq.
Tiradentes, Santo Domingo, Republica Dominicana la suma de UN MILLON CON
00/100 dolares moneda de curso legal de los Estados Unidos de America, suma
esta que he (hemos) recibido de dicho Banco en calidad de prestamo, a mi
(nuestra) entera satisfaccion, para financiar importaciones bajo cartas de
credito o credito de suplidor, y que me (nos) obligo (obligamos) a pagarla.
Me (nos) obligo (obligamos solidariamente) a pagarle al Banco intereses sobre
la suma adeudada a la tasa de LIBOR A SEIS MESES mas 4.25% (Cuatro punto
veinticinco porciento) anual. Esta tasa de interes podra ser aumentada o
disminuida, una o mas veces, por el Banco. Los intereses se calcularan sobre
el total de la suma del prestamo arriba mencionado, y se causaran hasta el
dia en que esta obligacion sea cancelada. Convengo (convenimos) en que los
intereses vencidos y no pagados en sus respectivas fechas se capitalizaran y
devengaran los mismos intereses fijados para el capital.
En caso de repago del total o de una parte de la indicada suma, antes de la
llegada de la fecha de vencimiento de este pagare, autorizamos al Banco, a
cobrar una comision por penalidad de un dos por ciento (2%), calculado sobre
las sumas pagadas por anticipado.
El incumplimiento de una sola mensualidad convertira este Credito en uno de
plazo vencido, pudiendose exigir inmediatamente su pago total. De igual
forma, se acelerara el vencimiento de este documento en el caso en que se
dictase mandamiento de secuestro o embargo sobre cualesquiera de mis
(nuestros) bienes, en caso de muerte de cualesquiera de nosotros,
interdiccion, convenio judicial o extrajudicial de acreedores, suspension de
pagos, insolvencia o declaratoria de quiebra contra mi (uno de nosotros), y
en fin, por incumplimiento de cualesquiera de las obligaciones que mediante
este instrumento asumo (asumimos).
Hago (hacemos) constar que el importe de este prestamo lo dedicare
(dedicaremos) a operaciones de caracter mercantil. Todos los gastos de esta
operacion, inclusive de los de cobranza judicial o extrajudicial, y
honorarios de abogados, si los hubiere, sera por mi (nuestra) cuenta
exclusiva.
Hago (hacemos) constar que renuncio (renunciamos) al domicilio, al protesto,
a la presentacion de este documento, al aviso de que este ha sido
desatendido, al beneficio de division y excision, a cualquier requerimiento
exigido en caso de mora para hacer el pago, a los tramites de juicio ejecutivo
y, desde ahora, relevo (relevamos) al Banco de la obligacion de prestar
fianza en relacion con cualquier ejecucion o juicio referente a esta
obligacion.
De igual forma manifiesto (manifestamos) que conozco (conocemos) y asumo
(asumimos) todas y cada una de las obligaciones, terminos y condiciones aqui
estipuladas. En fe de lo expresado firmo (firmamos) el presente documento en
la ciudad de Santiago, Republica Dominicana, a los ___________ (________)
dias del mes de __________ del ano ________.
[SEAL]
DEUDO PRICESMART DOMINICANA, S.A. Firma(s) autorizada(s) /s/ [ILLEGIBLE]
-----------------
[ILLEGIBLE]
Exhibit 10.5(d)
BANCO NACIONAL DE CREDITO, S.A.
PROMISSORY NOTE
The equivalent I US$1,000,000.00 Maturity Date____________
I (we), PriceSmart Dominicana, S.A., hereby declare, that I (we) owe and will
pay to the order of BANCO NACIONAL DE CREDITO, S.A., domiciled in Ave. John F.
Kennedy esq. Tiradentes, Santo Domingo, Dominican Republic the sum of ONE
MILLION with 00/100 Dollars, currency of the United States of America, sum that
I (we) have received from the mentioned Bank in the condition as a loan, to my
(0ur) entire satisfaction, to finance imports under letters of credit or
supplier credit, and that I (we) am (are) bound to cancel it.
I (we) am (are) bound to pay the Bank interests on the owed sum at the LIBOR
RATE WITHIN SIX MONTHS plus 4.25% (Four point twenty-five percent) annually.
This interest rate may be increased or decreased, one or more times, by the
Bank. The interests will be calculated on the total of the sum of the
above-mentioned loan, and it will be in effect up to the date when the
obligation is cancelled. I (we) agree that the matured and unpaid interests on
their respective dates will be capitalized and they will earn the same interests
as those established for the capital.
In the case of repayment of the total or of a part of the indicated sum, before
the date of maturity of this promissory note, we authorize the Bank, to collect
a commission for penalty of two percent (2%), calculated on the sums paid in
advance.
Default of only just one monthly payment will convert this Credit into one of
expired term, whereby the total payment may be required. Likewise, the
expiration of this document will be accelerated in the case that an order for
sequestration or lien is dictated on any of my (our) assets, in the case of
death of one of us, injunction, Judiciary or out of court agreement of
creditors, suspension of payments, insolvency or declaration of bankruptcy
against me (one of us), and so on, due to default of any if the obligations that
I (we) acquire.
I (we) certify that the amount of this loan will be dedicated to operation for
mercantile matters. All expenses of this operation, including those for
judiciary or out of court collection and legal fees, if any, will be by my (our)
exclusive account.
I (we) certify that I (we) waive the domicile, upon protest, upon the
presentation of this document, the notice that it has been dishonored, to the
benefit of division and exclusion, upon any requirement called for in the case
of arrears to make the payment, for the proceeding of executory process and, as
of now, I (we)
exonerate the Bank from the obligation of paying a security in relation with any
execution or proceeding regarding this obligation.
Likewise, I (we) manifest that I (we) know and take on all and each one of the
obligations, terms and conditions stipulated in this document. In witness
whereof I (we) sign this document in the city of Santiago, Dominican Republic,
on the ____ ( ) day of the month of _____________ of the year _____.
Debtor: PriceSmart Dominicana, S.A. Authorized Signatures: NOT LEGIBLE
(Rubber Stamp) ---------------
"PAGARE COMERCIAL"
Vencimiento 22 de Junio de 2000
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Pro este pagare por valor recibido en __________________ el (los) suscrito(s)
se obliga (n) a pagar a la Orden del Banco Dominicano del Progroso S.A., que
en lo sucesivo se denominara EL BANCO, en su asiento social o on cualquiera
de sus sucursales la cantidad de DOS MILLONES CON 00/100 dolares de los
Estados Unidos de America. US$2,000,000.00, con intereses pagaderos
_______________ en la misma moneda a partir de ______________________ al tipo
de _____________, por ciento anual sobre los saldos insolutos de la suma
adeudada ademas de las comisiones al tipo de 10.5 por ciento anual sobre los
saldos insolutos, pero en caso de falta de pago a su vencimiento, los saldos
vencidos devengaran intereses a la tasa maxima permitida por la Ley Los pagos
del capital se realizaran de la siguiente manera.
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Si durante la vigencia de este pagare, una nueva ley, decreto o resolucion de
la Junta Monetaria, autorizara un sumento de la tasa de interes y/o comision
por encima de las pactadas en el presente pagare, o para el caso en que se
produjere un atraso respecto a la fecha en que debio ser efectuado algon pago
con cargo a dicho pagare. EL BANCO estara facultado a aumentar unilateralmente
las comisiones y/o intereses contemplados en este pagare hasta el monto
maximo que le fuere permitido, pravio aviso a los suscritos con cinco (5)
dias de anticipacion.
En caso de que el capital sea pagado mediante cuotas, el capital, los
intereses y comisiones vencidos a la fecha, seran pagados conjuntamente. Los
pagos de intereses y de capital se realizaran por el(los) suscrito(s) en el
domicilio de EL BANCO sin necesidad de cobranza ni de puesta en mora. El(los)
suscrito(s) se compromete(n) en caso de no cumplir a su vencimiento con una
cualquiera de sus obligaciones de pago, a pagar por concepto de mora, a
titulo de clausula penal, el ______________ % mensual sobre el monto de las
cuotas vencidas, sin formalidad judicial o extrajudicial alguna.
La falta de pago de une o mas cuotas de capital, intereses y/o comisiones
previstas en este pagare: el mandamiento de secuestro o embargo en alguna
ejecucion entablada en contra de cualquiera de el(los) suscrito(s) y en caso
de muerte, quiebra o interdiccion de uno cualquiera, prodocira de pleno
derecho y sin necesidad de ninguna formalidad judicial o extrajudicial la
caducidad del termino establecido, haciendose exigible inmediatamente el
capital adeudado mas los intereses y comisiones a la fecha.
El (los) suscrito(s) se compromate (n) a pagar en caso de incumplimiento de
la presente obligacion, todos los honorarios de abogados y gastos en que
pudiere incurrir EL BANCO en el cobro de la misma bion sea mediante
procedimiento judicial o de cualquier otra manera: estipulandose ademas, que
en caso de que se iniolara un procedimiento judicial para el cobro de esta
obligacion, el (los) suscrito (s) se compromete (n) a pagar al tenedos de esta
obligacion, una suma liquida para cubrir los honorarios del abogado,
equivalente a la que sea mayor entre el _____________ % del balance de la
misma y _________________________, mas las costas del procedimiento.
El (los) suscrito (s) y el (los) endosantes de este pagare, por el presente
renuncia (n) a la presentacion para el pago, notificacion de falta de pago,
protesto, notificacion del protesto y cada una conviene en que el (los)
tenedor (es) de este pagare, podra (n) prorrogar la fecha de pago, con o sin
aviso a todas o cada una de las partes de la obligacion y que en lo sucesivo
todas las partes continuaran siendo responsables de la misma, como si todas y
cada una de ellas, dubiese expresamente consentido en tal prorroga. Para la
ejecucion de la presente obligacion, se atribuye competencia a los tribunales
de comercio de la Republica Dominicana.
En caso de fallecimiento de el(los) suscrito(s), se considerara esta deuda
como indivisible fronte a sus herederos, quienes responderin individualmente
y por si mismos por la totalidad de la deuda, incluyendo intereses y
comisiones como si fueran ellos mismos. Tambien reconocen que la emision de
este pagare no implica novacion de la deuda existente con anterioridad el
mismo, por lo que mantiene su vigor y efecto, con todas las consecuencias que
la ley le otorga cualquier garantia real, prendaria, cesion de credito,
certificado de deposito o colateral que pudiese existir a favor de EL BANCO.
El(los) suscrito (s) expresamente autoriza (n) y faculta (n) a EL BANCO, a su
opcion, y en cualquier momento, a apropiarse y a aplicar el pago de este
pagare y de cualquier otra obligacion u obligaciones existentes en el
presente o en que incurran en el futuro el(los) syscrito(s), individual o
conjuntamente, en favor de EL BANCO, vencida o no, toda suma de dinero que
este actualmente o estuviere en el futuro en manos de EL BANCO bien sea en
deposito o en cualquier otra forma, acreditadas a, o pertenecientes a el(los)
suscrito(s).
El VEINTITRES (23) de DICIEMBRE de MIL NOVECIENTOS NOVENTA Y NUEVE
--------------- --------------- ----------------------------------
[SEAL] [SEAL]
/s/ [ILLEGIBLE] PRICESMART DOMINICANA, S.A.
---------------------------------------- ------------------------------------
Cedula 09390474 [ILLEGIBLE] Seria USA Cedula 001-0102205-1
---------------------- ----- -----------------------------
Exhibit 10.6(b)
"COMMERCIAL PROMISSORY NOTE"
COD-031C050036
Maturity: June 22, 2000
By way of this promissory note for the value received in ____________________
the undersigned party (parties) is (are) bound to pay to the Order of Banco
Dominicano del Progreso, S.A., from now on denominated THE BANK, at its business
headquarters or at any of its branches the amount of TWO MILLION DOLLARS WITH
00/100, currency of the United States of America. US$2,000,000.00, with
interests payable _____________________ in the same currency as of the
______________________ at the rate of ___________%, percent annually on the
unpaid balances of the due sum in addition to the commissions at the rate of
10.5 percent annually on the unpaid balance, but in the case of default in
payment upon maturity, the unpaid balances will earn interests at the maximum
rate allowed by the Law. The payments of capital will be made in the following
manner:
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If, during the term of this promissory note, a new law, decree or resolution is
enacted by the Monetary Board, it will authorize an increase in the interest
rate and/or commission over the rate agreed in this promissory note, or if there
is a delay regarding the date when a payment should have been made with a
surcharge on the mentioned promissory note. THE BANK will have the faculty to
unilaterally increase the commissions and/or interests contemplated in this
promissory note, up to an amount that is permitted, with previous notice to the
subscribed parties five (5) days in advance.
In the case the capital is paid through installments, the capital, the interests
and commissions that have matured to date, will be paid jointly. The payments of
interests and of capital will be made by the subscribed party (parties) at the
domicile of THE BANK without the need of collection nor of arrears. The
subscribed party (parties) are bound that in the case of default at the time of
maturity with one of their obligations for payment, to pay for the concept of
arrears, by way of penal clause, _______ % monthly on the amount of the expired
installments, without any judiciary or out of court formality
Default in payment of one or more installments of capital, interests and/or
commissions foreseen in this promissory note: the order of a forfeiture or lien
on and execution presented against one of the subscribed parties and in the case
of death, bankruptcy or interdiction of one of them, will produce in full right
and without the need of any judiciary or out of court formality, the expiration
of the
established term, immediately requiring the due capital plus the interests and
commissions to date.
The subscribed party (parties) is (are) bound to pay in case of default of this
obligation, all the attorneys' fees and expenses in which THE BANK may incur in
the collection of the same, whether by judiciary procedure or by any other
means; also stipulating, that in case that a judiciary procedure is initiated
for the collection of this obligation, the subscribed party (parties) is (are)
bound to pay the holder of this obligation, a liquid sum to cover the attorneys'
fees, equivalent to whichever is higher between ______% of the balance of the
same and ______________, plus the cost of the proceedings.
The subscribed party (parties) and the endorser (endorsers) of this promissory
note, hereby waive the presentation for the payment, notice of default in
payment, protest, notice of protest and he (each) agrees (agree) that the holder
(holders) of this promissory note, may extend the date of payment, with or
without notice to all or each one of the parties of the obligation and that in
the future all the parties will continue responsible for the same, as if all and
each one of them, had expressly consented to the extension. For the execution of
this obligation, competence is attributed to the courts of commerce of the
Dominican Republic.
In the case of death of the subscribed party (parties), this debt will be
considered indivisible in the charge of the heirs, who will respond individually
and per se for the total amount of the debt, including interests and commissions
as if it were they. They also acknowledge that the issuance of this promissory
note does not imply novation of the debt existing previous to the same, reason
why it keeps its term and effect, with all the consequences granted by law, any
security, real, pledge, assignment of credit, certificate of deposit or
collateral that could exist in favor of THE BANK.
The subscribed party (parties) expressly authorizes (authorize) and empowers
(empower) THE BANK, at its option, and at any moment, to take possession of and
to apply to the payment of this promissory note and of any other obligation or
obligations existing at the moment or in which the party (parties) may incur in
the future, individually or jointly, in favor of THE BANK, matured or not, any
sum of money that is currently or that in the future is in hands of THE BANK,
either in deposit or in any other manner, credited to, or belonging to the
subscribed party (parties).
ON THE TWENTY-THIRD (23RD) OF DECEMBER OF NINETEEN HUNDRED AND NINETY-NINE
(Signature, not legible)
(Rubber Stamp of PriceSmart Dominicana, S.A.)
Identification Card 093904746)
(Signature, not legible)
(Rubber Stamp of PriceSmart Dominicana, S.A.)
Identification Card No. 001-0102205-1
No. 725114 I
PROTOCOLO
NUMERO DIECISIETE: Ante mi, ROBERTO LEON GOMEZ, Notario Publico con oficina
en San Jose, comparecen: el senor JORGE OSBORNE GUELL, mayor, casado una
vez, Administrador de Empresas, vecino de Cartago, portador de la cedula de
identidad numero uno - seiscientos cincuenta y tres - cuatrocientos treinta y
cinco, actuando en su caracter de Apoderado Especial con facultades
sufficientes para este acto de la compania denominada FIDUCIARIA BFA S.A., en
adelante identificada en el presente documente como "BFA", con domicilio en
San Jose, La Uruca contiguo a LACSA, cedula de persona juridica numero
tres-cierito uno - ciento setenta y nueve mil ochocientos treinta y cinco,
personeria de cuya vigencia el suscrito Notario da fe con vista de la
escritura numero sesenta y uno del tomo cuarenta y tres del protocolo del
Notario Roberto Leon Gomez otorgada en San Jose el dia doce de enero del amo
dos mil, escritura de la cual no se guarda certificacion por constar en el
protocolo del Notario Leon Gomez: y, el senor, EDGAR ZURCHER GURDIAN, quien
es mayor, divorciado dos veces, abogado, vecino de San Jose, portador de la
cedula de identidad numero uno - quinientos treinta y dos - trescientos
noventa, actuando en su condicion de APODERADO ESPECIAL con facultades
suficientes para este acto de PRICSMARLANDCO, SOCIEDAD ANONIMA, cedula de
persona juridica numero tres - ciento uno - doscientos veintinueve mil
novecientos cuarenta y ocho con domicillo en San Jose calle primera, avenidas
nueve y once, numero novecientos cincuenta y nueve personeria de la cual da
fe el suscrito Notario con vista de la escritura numero setenta del tomo
noveno del protocolo del Notario Fernando Alfaro Chamberlain, que es
protocolizacion del acta de Asamblea General Extraordinaria de Accionistas
de la indicada companla, celebrada en San Pedro Sula, Republica de Honduras
a las ocho horas del dia veintinueve de setiembre de mil novecientos noventa
y nueve, escritura de la cual el suscrito Notario guargo copias en mi
protocolo de referencias. El suscrito Notario da fe de la vigencia del plazo
social de cada una de las companias indicadas en la comparecencia. Los
comparecientes DICEN: CAPITULO PRIMERO DE LA CANCELACION DE HIPOTECA:
FIDUCIARIA BFA S.A., en su condicion de fiduciara del fidelcomiso inscrito
en el Registro Publico de la Propiedad inmueble al TOMO CUATROCIENTOS
CUARENTA Y CINCO, ASIENTO NUEVE MIL OCHOCIENTOS SESENTA Y CINCO,
encontrandose debidamente autorizada al efecto por parte del Fidelcomisano
del fidelcomiso recien referido, sea COMMERCIAL INTERNATIONAL BANK & TRUST
CO. LTD., con cedula persona juridica
numero tres - cero doce - ciento veintiseis mil trescientos veinticuatro, al
no existir ninguna deuda que este siendo garantizada con las cedulas
hipotecariae que a continuacion se dira, procede a cancelar las mismas
dejando libre a la finca hipotecada, sea la finca del Partido de HEREDIA,
matricula de Folio Real Mecanizado Numero VEINTITRES MIL DOSCIENTOS CINCO -
CERO CERO CERO libre de estos gravamenes. Las cedulas hipotecarias que se
cancelan en este acto son las siguientes: i.) Cedula hipotecaria de primer
grado inscrita al tomo trescientos cincuenta y seis; asiento dieciocho mil
setecientos del Registro Publico de la Propledad Inmueble. ii.) Cedula
hipotecaria de segundo grado inscrita al tomo trescientos cincuenta y seis,
asiento dieciocho mil setecientos del Registro Publico de la Propledad
Inmueble. iii.) Cedula hipotecaria de fercer grado inscrita al tomo
trescientos setenta y ocho, asiento ocho mi cuatrocientos setenta y cuatro
del Registro Publico de la Propiedad Inmueble. iv.) Cedula hipotecaria de
cuarto grado inscrita al tomo trescientos ochenta y tres, asiento nueve mil
doscientos sesenta y uno del Registro Publico de la Propledad Inmueble. v.)
Cedula hipotecaria de quinto grado inscrita al tomo cuatrocientos dos,
asiento dieciocho mil doscientos treinta del Registro Publico de la Propledad
Inmueble. vi.) Cedula hipotecaria de sexto grado inscrita al tomo cuatrocientos
veinte, asiento once mil setecientos treinta y cinco del Registro Publico de
la Propledad Inmuemble. vii.) Cedula hipotecaria de setimo grado inscrita al
tomo cuatrocientos treinta y ocho asiento doce mil quinientos cincuenta y
cuatro del Registro Publico de la Propledad Inmueble. Se adjuntan las Indicadas
cedulas hipotecarias debidamente endosadas para su respective incineracion,
para lo cual se libera al Registro Publico de la Propledad Inmueble de toda
responsabilidad. CAPITULO SEGUNDO: DE LA COMPRAVENTA DE FINCA: PRIMERA:
FIDUCIARIA BFA S.A., en su condicion de propietaria fiduciaria de la finca
del Partido de HEREDIA, matricula de Folio Real Mecanizado Numero VEINTITRES
MIL DOSCIENTOS CINCO - CERO CERO CERO, que es terreno para construir
industrias, situado en el Distrito Primero San Pablo, del Canton Noveno San
Pablo, de la Provincia de Heredia, con una medida de CINCUENTA Y TRES MIL
OCHENTA Y SIETE METROS CON SESENTA Y NUEVE DECMETROS CUADRADOS, ilndando al
Norte con Francisco y Juan de Dos Murrillo, el Sur con Arabeta Villalobos
Jiminez y Otra, al Este con Quebrada Jestrudio y Linea Ferrea, y al Oeste
con celle publica, con el piano catastrado numero H - SEISCIENTOS OCHENTA Y
UN MIL SETECIENTOS TREINTA Y OCHO - OCHENTA Y SIETE, por encontrarse
debidamente Instruida y autorizada al efecto por parte del fidelcomisario del
fidelcomiso indicado en el Capitulo Primero de esta escritura, vende la
indicada finca a PRICSMARLANDCO S.A., quien acepta en esta acto a traves de
su representante. La indicada finca se vende libre de todo tipo de gravamenes
y ahotaciones. Del mismo modo, se deja constancia que la finca vendida en
este acto se encueantra al dia en
[SEAL] [STAMP]
cuenta al pago de todos los tributos que la afectan, SEGUNDA: El precio de la
compraventa lo constituye la suma de NOVECIENTOS MIL DOLARES, MONEDA DE LOS
ESTADOS UNIDOS DE AMERICA, los cuales el representante de la vendedora
manifiesta recibir en este acto a su entera satisfaccion y aceptacion. Es
todo. El suscrito Notario da fe de haber explicado a cada uno de los
comparecientes el valor de sus estipulaciones, a lo cual las partes han
manifestado que es su voluntad otorgar el presente documento. Expido un
primer testimonio en el acto de otorgar la matriz. Leido lo escrito a los
comparecientes se manifestaron conformes y firmamos en la ciudad de San Jose
a las quince horas del dia veintiocho de enero del ano dos mil.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
NUMERO DIECIOCHO: Ante mi ROBERTO LEON GOMEZ, Notario Publico con oficina en
San Jose, comparecen: el senor, EDGAR ZURCHER GURDIAN, quien es mayor,
divorciado dos veces, abogado, vecino de San Jose, portador de la cedula de
identidad numero uno - quinientos treinta y dos - trescientos noventa,
actuando en su condicion de APODERADO ESPECIAL con facultades suficientes
para este acto de PRICSMARLANDCO, SOCIEDAD ANONIMA, sociedad que en adelante
y para todos los efectos del CONTRATO DE PRESTAMO se denominara LA DEUDORA
con cedula de persona juridica numero tres - ciento uno - doscientos
veintinueve mil novecientos cuarenta y ocho, con domicillo en San Jose,
calle primera, avenidas nueve y once, numero novecientos cincuenta y nueve
personeria de la cual da fe el suscrito Notario con vista de la escritura
numero setenta del tomo noveno del protocolo del Notario Fernando Alfaro
Chamberlain, que es protocolizacion del acta de Asamblea General
Extraordinaria de Accionistas de la indicada compania, celebrada en San Pedro
Sula, Republica de Honduras a las ocho horas del dia veintinueve de setiembre
de mil novecientos noventa y nueve, ESCRITURA DE LA CUAL EL NOTARIO LEON
GOMEZ GUARDA COPLAS EN SU PROTOCOLO DE REFERENCIAS; en su caracter de
APODERADO
ESPECIAL con facultades suficientes para este acto de la sociedad PRISMAR DE
COSTA RICA, SOCIEDAD ANONIMA, cedula de persona juridica numero tres - ciento
uno - doscientos treinta y un mil setecientos siete, con domicilio en San
Jose, calle primera, avenidas nueve y once, numero novecientos cincuenta y
nueve personeria de la cual da el suscrito Notario con vista de la escritura
numero setenta y uno del tomo noveno del protocolo del Notario Fernando
Alfaro Chamberlain, que es protocolizacion del acta de Asamblea General
Extraordinaria de Accionistas de la indicada compania, celebrada en San Pedro
Sula, Republica de Honduras a las ocho horas con quince minutos del dia
veintinueve de setiembre de mil novecientos noventa y nueve, ESCRITURA DE LA
CUAL EL NOTARIO LEON GOMEZ GUARDA COPIAS EN SU PROTOCOLO DE REFERENCIAS; y,
en su condicion de APODERADO ESPECIAL con facultades suficientes para este
acto de la compania PSC, S.A., una empresa organizada y existente de
conformidad con las leyes de Panama, con oficinas en San Jose, calle primera,
avenidas nueve y once, numero novecientos cincuenta y nueve, personeria de la
cual da fe el suscrito Notario con vista de la escritura numero setenta y dos
del tomo noveno del protocolo del Notario Fernando Alfaro Chamberlain, que es
protocolizacion del acta de Junta Directiva de la indicada compania,
celebrada en Miami, Estado de la Florida, Estados Unidos de America, a las
diez horas del dia nueve de diciembre de mil novecientos noventa y nueve,
ESCRITURA DE LA CUAL EL SUSCRITO NOTARIO GUARDO COPIAS EN SU PROTOCOLO DE
REFERENCIAS; el senor JESUS ERNESTO GRIJALVA, mayor, casado una vez, abogado,
de unico apellido en razon de su nacionalidad Estadounidense, portador del
pasaporte de su pais numero cero tres siete cero cero dos seis ocho nueve,
vecino de San Diego, California, Estados Unidos de America, actuando en su
condicion de APODERADO ESPECIAL con facultades suficientes para este acto de
la compania denominada PSMT CARIBE INC., una compania debidamente constituida
y existente de conformidad con las leyes de la Republica de British Virgin
Islands, con oficinas en cuarenta y seis cuarenta y nueve Morena Boulevard,
San Diego California, nueve dos uno uno siete, personeria de la que da fe el
suscrito Notario con vista del Poder Especial otorgado por el Presidente de
la indicada compania en San Diego, California, Estados Unidos de America el
dia cuatro de enero del ano dos mil ante el Notario Evelisse Hernandez, de
unico apellido en razon de su nacionalidad estadounidense, ESCRITURA DE LA
CUAL EL SUSCRITO NOTARIO GUARDO CERTIFICACION DEBIDAMENTE LEGALIZADA POR EL
MINISTERIO DE RELACIONES EXTERIORES DE LA REPUBLICA DE COSTA RICA, en su
archivo de referencias; y, en su condicion de APODERADO ESPECIAL con
facultades suficientes
[SEAL] [STAMP]
para este acto de la sociedad PRICESMART, INC., una empresa organizada y
existente de conformidad con las leyes del Estado de Delaware, Estados Unidos
de America, con oficinas en cuarenta y seis cuarenta y nueve Morena
Boulevard, San Diego California, nueve dos uno uno siete, PERSONERIA DE LA
QUE DA FE EL SUSCRITO NOTARIO CON VISTA DEL PODER ESPECIAL OTORGADO POR EL
PRESIDENTE DE LA INDICADA COMPANIA EN SAN DIEGO, CALIFORNIA, ESTADOS UNIDOS
DE AMERICA EL DIA CUATRO DE ENERO DEL ANO DOS MIL ANTE EL NOTARIO EVELISSE
HERNANDEZ, DE UNICO APELLIDO EN RAZON DE SU NACIONALIDAD ESTADOUNIDENSE,
ESCRITURA DE LA CUAL EL SUSCRITO NOTARIO GUARDA CERTIFICACION, DEBIDAMENTE
LEGALIZADA POR EL MINISTERIO DE RELACIONES EXTERIORES DE LA REPUBLICA DE
COSTA RICA, EN SU ARCHIVO DE REFERENCIAS. Las ultimas cuatro companias seran
identificadas en forma conjunta en este contrato como LOS FIADORES. El
suscrito Notario doy fe de la vigencia del plazo social de cada una de las
companias indicadas en la comparecencia. Los comparecientes DICEN:
CONSIDERANDO A -) Que LA DEUDORA le ha solicitado a COMMERCIAL INTERNATIONAL
BANK & TRUST CO. LTD., en adelante identificada en este documento como "CIB",
domiciliada en Nassau, Bahamas, con oficinas en Nassau N.P. Bahamas, Apartado
Postal cuatro mil ochocientos sesenta y ocho, cedula de persona juridica
numero tres - cero doce - ciento veintiseis mil trescientos veinticuatro, y
al BANCO BFA S.A., en adelante identificado en este documento como "BFA", con
cedula de persona juridica numero tres - ciento uno - cero cincuenta y cuatro
mil cincuenta y uno, domiciliado en San Jose, La Uruca, del Puente Juan Pablo
II, ciento setenta y cinco metros al Norte, un prestamo sindicado mercantil
por la suma de TRES MILLONES NOVECIENTOS MIL DOLARES, MONEDA DE LOS ESTADOS
UNIDOS DE AMERICA. De los recursos de dicho prestamo, NOVECIENTOS MIL
DOLARES, MONEDA DE LOS ESTADOS UNIDOS DE AMERICA seran utilizados para el
financiamiento de la compra de la finca del Partido de HEREDIA, matricula de
Folio Real Mecanizado Numero VEINTITRES MIL DOSCIENTOS CINCO - CERO CERO
CERO, que es terreno para construir industrias, situado en el Distrito
Primero San Pablo, del Canton Noveno San Pablo, de la Provincia de Heredia,
con una medida de CINCUENTA Y TRES MIL OCHENTA Y SIETE METROS CON SESENTA Y
NUEVE DECIMETROS CUADRADOS, lindando al Norte con Francisco y Juan de Dios
Murillo, al Sur con Arabela Villalobos Jimenez y Otra, al Este con Quebrada
Jestrudio y Linea Ferrea, y al Oeste con calle publica, con el plano
catastrado numero H - SEISCIENTOS OCHENTA Y UN MIL SETECIENTOS TREINTA Y OCHO
- OCHENTA Y SIETE. Los restantes TRES
MILLONES DE DOLARES, MONEDA DE LOS ESTADOS UNIDOS DE AMERICA seran utilizados
para financiar la construccion de una tienda "PriceSmart" sobre la finca
anteriormente descrita. El prestamo sindicado de referencia sera identificado
en el presente contrato como el "PRESTAMO"; y, BFA y CIB seran identificadas
en forma conjunta en este documento como "LAS ACREEDORAS". Se deja constancia
que al amparo del PRESTAMO, CIB desembolsara la suma de DOS MILLONES
QUINIENTOS MIL DOLARES, MONEDA DE LOS ESTADOS UNIDOS DE AMERICA Y BFA
desembolsara la suma de UN MILLON CUATROCIENTOS MIL DOLARES, MONEDA DE LOS
ESTADOS UNIDOS DE AMERICA. De este modo, una vez que se hayan realizado todos
los desembolsos, CIB tendra una participacion de sindicalizacion del SESENTA
Y CUATRO PUNTO UNO POR CIENTO y BFA tendra una participacion de
sindicalizacion del TREINTA Y CINCO PUNTO NUEVE POR CIENTO. El Banco Agente
del presente prestamo sera BFA, quien se encargara de recibir todos los pagos
que deba efectuar LA DEUDORA y de transferirie a CIB el dinero que a esta le
corresponda. Tambien sera funcion del Banco Agente recibir toda la
documentacion e informacion que deba remitir LA DEUDORA A LAS ACREEDORAS. Por
el ejercicio de sus funciones como Banco Agente, BFA no devengara
remuneracion alguna. B -) QUE LA DEUDORA dara en garantia a LAS ACREEDORAS la
finca descrita en el Considerando A -) de este documento, garantia que
incluira cualquier mejora que se le haga a la misma, incluyendo futuras
construcciones. SIN QUE TOME NOTA EL REGISTRO: C -) QUE LA DEUDORA ha
cumplido con las siguientes condiciones precedentes para el otorgamiento del
PRESTAMO: i) LA DEUDORA ha proveido un esquema de garantias aceptable para
LAS ACREEDORAS, y ambas partes han llegado a un acuerdo de los terminos y
condiciones del PRESTAMO, la documentacion relacionada con esta transaccion,
incluyendo, pero no limitada a contratos de credito, polizas de seguro, etc,
tanto en su forma como en su contenido; ii) Los avaluos de la finca ofrecida
como garantia del PRESTAMO, fueron realizados por un perito valuador
seleccionado por LAS ACREEDORAS, determinandose que el valor de avaluo es
aceptable con relacion al monto del PRESTAMO. SIGUE TOMANDO NOTA EL REGISTRO:
D -) Que es de beneficio para LAS ACREEDORAS, LA DEUDORA, Y LOS FIADORES,
conceder, recibir y garantizar, respectivamente, el PRESTAMO, segun los
terminos y condiciones que aqui se estipulan. E -) Que de conformidad con los
considerandos anteriores, y por ser de beneficio para todas las partes, hemos
convenido, como en efecto convenimos, en el presente CONTRATO DE
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PRESTAMO, que se regira por las siguientes clausulas: CLAUSULA PRIMERA -
DEFINICIONES: Para los efectos de este CONTRATO DE PRESTAMO, las expresiones
siguientes, significaran: i -) FINCA HIPOTECADA: La finca descrita en el
Considerando A -) de este documento. ii -) DIA HABIL: Cualquier dia en que
las oficinas de BFA se encuentren abiertas al publico. iii -) DOLARES: la
unidad monetaria de los Estados Unidos de America; iv -) EFECTO ADVERSA
SIGNIFICATIVA: significa con respecto a cualquier persona juridica, el efecto
negativo resultante de cualquier acto de cualquier indole o naturaleza,
incluyendo pero no limitado a cualquier determinacion adversa de un litigio,
arbitraje, procedimiento judicial, extrajudicial o administrativo, o
cualquier investigacion de cualquier autoridad gubernamental o no, que
imponga una carga negativa y contraria, que dificulte de manera material y
altere negativamente la condicion financiera, operaciones de negocios,
activos o ganancias de dicha persona juridica. Para los efectos de esta
definicion, "de manera material" significara las posibilidades de
cumplimiento de las obligaciones establecidas en este contrato y sus
garantias. v -) ESTADOS FINANCIEROS: significa la hoja de balance y el estado
de cuenta de ganancias y perdidas, y el estado de flujo de caja, incluyendo
cualquier nota a ellos. En el caso de los Estados Financieros auditados, el
reporte de los auditores y el reporte del Presidente o administradores de LA
DEUDORA Y LAS FIADORAS. vi -) MORA LEGAL: falta de pago de un periodo de
interes o de uno de los abonos' o partes del principal que se hubiese
convenido que autoriza a LAS ACREEDORAS a considerar exigible la totalidad de
la deuda. vii -) PERIODO FISCAL: Con el periodo de tiempo que comienza el dia
primero de setiembre de cada ano y termina el dia treinta de agosto del ano
siguiente. En caso de que alguna de las FIADORAS cuente o llegara con un
periodo fiscal distinto al consignado en este punto, el mismo debera ser
comunicado a las ACREEDORAS dentro de los proximos treinta dias naturales
contados a partir la fecha en que se produzca el cambio de periodo fiscal
correspondiente. viii -) PRIME RATE: la tasa de interes variable de
referencia, segun sea publicada por The Wall Street Journal. Las partes
consideran y aceptan que la indicada Tasa es una tasa internacional objetiva
y de conocimiento publico, y que se define asi en concordancia con el
articulo cuatrocientos noventa y siete del Codigo de Comercio de Costa Rica,
sirviendo esa indicacion como fuente de eventuales certificaciones sobre el
nivel de esa tasa, que requieran las partes o las autoridades administrativas
y judiciales en relacion con el presente contrato. En el caso de que
desaparezca The Wall Street Journal, la tasa sera la que se determine
mediante una constancia del Banco
Central de Costa Rica. La Tasa Prime sera revisable y ajustable a la tasa
aplicable al dia que se deban hacer cada uno de los respectivos pagos. ix -)
RAZON DE APALANCAMIENTO: Relacion de pasivo total a patrimonio. x -) "BACK TO
BACK": Opereciones de credito garantizadas en un cien por ciento con
depositos de la misma entidad acreedora. xi -) FECHA VALOR: Es la fecha a
partir de la cual se contaran todos los plazos establecidos en este contrato,
incluyendo, pero no limitandose al plazo del prestamo, al periodo de gracia.
Para todos los efectos del presente contrato, se considera fecha valor el dia
siete de diciembre de mil novecientos noventa y nueve. CLAUSULA SEGUNDA - DEL
DESTINO DEL PRESTAMO Y LA PARTICIPACION DE SINDICALIZACION: Sujeto a los
terminos y condiciones que se estipulan en el presente CONTRATO DE PRESTAMO,
LAS ACREEDORAS otorgan en prestamo sindicado mercantil a LA DEUDORA, Y LA
DEUDORA acuerda tomar en prestamo de LAS ACREEDORAS, la suma de TRES MILLONES
NOVECIENTOS MIL DOLARES EXACTOS. El destino de los recursos del PRESTAMO y
las participacion de sindicalizacion de cada una de LAS ACREEDORAS, son los
que se indican en el Considerando A, de este documento. CLAUSULA TERCERA -
DESEMBOLSO: De los recursos del PRESTAMO, la suma de NOVECIENTOS MIL DOLARES,
MENOS LA SUMA CORRESPONDIENTE A LA COMISION DE ESTRUCTURACION A QUE REFIERE
LA CLAUSULA CUARTA INCISO C) DE ESTE CONTRATO, Y LOS GASTOS Y HONORARIOS
LEGALES CORRESPONDIENTES A LA CONFECCION E INSCRIPCION DE ESTA ESCRITURA, los
cuales han sido debidemente deducidos por LAS ACREEDORAS, son desembolsados
en este mismo acto mediante cheque emitido a favor de Fiduciaria BFA S.A.,
vendedora de la finca indicada en el Considerando A -) de este documento. Lo
anterior se ha realizado siguiendo instrucciones precisas de LA DEUDORA,
quien en este acto manifiesta su plena conformidad y satisfaccion con tal
procedimiento. Se deja constancia, que la totalidad de los NOVECIENTOS MIL
DOLARES que ya han sido desembolsados, han sido suministrado por CIB. Los
restantes TRES MILLONES DE DOLARES, de los cuales CIB aportara UN MILLON
SEISCIENTOS MIL DOLARES y BFA aportara UN MILLON CUATROCIENTOS MIL DOLARES,
seran puestos a disposicion de la DEUDORA una vez que haya concluido la
construccion de la tienda "PriceSmart" que se edificara sobre la finca que se
hipoteca en garantia del PRESTAMO. CLAUSULA CUARTA - INTERESES Y COMISIONES.
a. - INTERESES CORRIENTES: LA DEUDORA pagara intereses sobre saldos insolutos
de principal, desde la fecha del desembolso y hasta el pago total a una tasa
anual equivalente a DOS puntos porcentuales por encima de la TASA PRIME.
Consecuentemente, a esta fecha, como
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referencia para el primer pago de intereses, la tasa de interes corriente es
de DIEZ PUNTO CINCO por ciento anual, con base una TASA PRIME del ocho punto
cinco por ciento anual. Los intereses corrientes deberan cancelarse a LAS
ACREEDORAS en dolares, por mensualidades vencidas y consecutivas, los dias
siete de cada mes, o en caso de que esa fecha sea un dia inhabil, el pago
debera realizarse al dia habil siguiente. Los pagos mensuales por concepto de
intereses seran pagados mediante cheque, transferencia, u otro medio a entera
satisfaccion de LAS ACREEDORAS. Salvo en caso de que se realice una
transferencia, todos los pagos deberan efectuarse en las oficinas centrales
del BANCO BFA S.A. o en cualquiera de sus sucursales. La tasa de interes sera
revisable y ajustable mensualmente conforme a la variacion de la TASA PRIME.
A los efectos del ajuste, bastara en cualquier tiempo y para cualquier clase
de efectos legales, judiciales y administrativos, la sola indicacion de LAS
ACREEDORAS, para comprobar que el tipo de interes que esta senale, es el que
corresponde pagar y para que la nueva tasa de interes, se tenga por cierta,
correcta y aceptada por LA DEUDORA. Los intereses corrientes seran calculados
sobre la base de un ano de trescientos sesenta dias por el numero exacto de
los dias transcurridos desde la fecha del ultimo pago de principal hasta la
fecha siguiente de pago de principal, ambas fechas incluidas en el calculo de
intereses. B. - INTERESES MORATORIOS: En su caso, a una tasa de interes
variable equivalente a treinta por ciento por encima de la tasa de interes
corriente convenida, calculados sobre la base de un ano de trescientos
sesenta dias por el numero exacto de los dias transcurridos desde la fecha en
que LA DEUDORA incumplio el pago de principal correspondiente hasta la fecha
de pago efectivo a LAS ACREEDORAS, ambas fechas incluides en el calculo de
intereses. De este modo, mientras no se realice ajuste alguno a la tasa de
interes corriente, de conformidad con lo establecido en el Punto A -) de esta
clausula, la tasa moratoria seria del TRECE PUNTO SESENTA Y CINCO por ciento
anual. Dichos intereses moratorios tambien debera pagarlos LA DEUDORA en
dolares. C.- COMISION DE ESTRUCTURACION: LA DEUDORA debe pagar la suma de
CINCUENTA Y OCHO MIL QUINIENTOS DOLARES a LAS ACREEDORAS, por concepto de la
estructuracion del credito por una unica vez, suma que LA DEUDORA autoriza y
solicita a LAS ACREEDORAS a deducir del monto del primer desembolso. CLAUSULA
QUINTA: IMPUESTOS Y MONEDA DE PAGO. Todos los pagos que haga LA DEUDORA
deberan ser libres y sin deduccion de ningun impuesto, tasa, derecho,
gravamen, retencion o contribucion, que exista o llegare a imponer en el
futuro cualquier autoridad politica, administrativa
o jurisdiccional del domicillo de LA DEUDORA SI LA DEUDORA estuviere o
llegare a estar obligada a deducir o retener suma alguna por cualquier
motivo, esta incrementara el pago de tal modo que LAS ACREEDORAS reciban a su
vencimiento la suma completa a que tienen derecho conforme a los terminos de
este contrato. SI LAS ACREEDORAS pagaren alguna suma de dinero por cuenta de
LA DEUDORA, por impuestos o para mantener la vigencia de las garentias, o
asegurar pagos u obligaciones de LA DEUDORA, esta les reembolsara
inmediatamente a su importe en la moneda que indique el recibo junto con sus
intereses correspondientes a las tasas anteriormente pactadas. En vista de
que el presente prestamo es una operacion en dolares, moneda de los Estados
Unidos de America LA DEUDORA se compromete y obliga irrevocablemente a pagar
todas las sumas exigibles al amparo del presente prestamo en esa misma
moneda. CLAUSULA SEXTA - PLAZO: El plazo es de cinco anos y seis meses,
contados a partir de la FECHA VALOR, segun lo definido en el punto xi -) de
la Clausula Primero de este contrato, see que vence el dia siete de junio del
ano dos mil cinco. CLAUSULA SETIMA - FORMA Y LUGAR DE PAGO DEL CAPITAL
ADEUDADO: A.- ABONOS: LA DEUDORA debera pagar a LAS ACREEDORAS la suma de
principal adeudado, mediante el pago oportuno de veinte abonos de capital,
trimestrales, vencidos, fijos y consecutivos, por la suma de CIENTO TREINTA Y
NUEVE MIL DOSCIENTOS OCHENTA Y CINCO DOLARES CON SETENTA Y DOS CENTAVOS cada
uno, pagaderos los dias Siete de cada mes en que se inicia cada trimestre,
comenzando el dia SIETE DE SETIEMBRE del afio dos mil, en virtud de una
periodo de gracia de seis meses para el pago de principal que han otorgado
LAS ACREEDORAS a la DEUDORA. El saldo, sea la suma de UN MILLON CIENTO
CATORCE MIL DOSCIENTOS OCHENTA Y CINCO DOLARES CON SETENTA CENTAVOS sera
pagado al vencimiento de la operacion, sea el siete de setiembre del ano dos
mil cinco. Los abonos trimestrales por pagar a LAS ACREEDORAS seran pagados
mediante cheque, transferencia, o cualquier otro medio a entera satisfaccion
de LAS ACREEDORAS. Salvo que los pagos se realicen mediante transferencia,
estos deberan efectuarse en las oficinas centrales del BANCO BFA S.A. UBICADES
EN LA URUCA, CIENTO SETENTA Y CINCO METROS al Norte del Puente Juan Pablo
Segundo, o en cualquiera de las sucursales de dicho Banco. Para mayor
entendimiento, se aclara que los intereses seran pagaderos por mensualidades,
de conformidad con la clausula Cuarta. CLAUSULA OCTAVA; SIN QUE TOME NOTA EL
REGISTRO: A.- Condiciones precedentes al desembolso del credito: Previo al
DESEMBOLSE DEL CREDITO, LA DEUDORA debera haber entregado
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PROTOCOLO
A LAS ACREEDORAS lo siguiente: i.- Estados Financieros: Tres anos de estados
financieros, incluyendo el balance, estado de ganancias y perdidas, y el
flujo de caja de PriceSmart, Inc.. PriceSmart Inc. se compromete a lo
anterior por medio de su representante. ii.- Plan de negocios y proyecciones
de flujo de caja por el plazo del credito de LA DEUDORA Y PRISMAR DE COSTA
RICA, S.A. en forma consolidada. iii.- Plan de negocios y proyecciones de
flujo de caja de PriceSmart, Inc. para el periodo mil novecientos noventa y
nueve - dos mil. PriceSmart Inc. se compromete a lo anterior por medio de su
representante. B.- CONDICIONES ESPECIALES DEL PRESTAMO: i.- SEGUROS: Conforme
se realicen construcciones sobre la finca que garantiza al PRESTAMO, LA
DEUDORA se compromete a suscribir por medio de INTERSEGUROS S.A., polizas de
seguros contra todo riesgo, incluyendo pero no limitado a riesgos de
incendio, huracan, conmocion civil, terremoto, inundaciones, responsabilidad
por accidentes e interrupcion de negocios y cualquier otro dano, por un monto
razonable a satisfaccion de las ACREEDORAS el cual podra ser igual a los
saldos adeudados por concepto de principal del PRESTAMO. Los derechos
derivados de las anteriores polizas de seguro deberan cederse a favor de LAS
ACREEDORAS durante la vigencia del presente CONTRATO DE PRESTAMO. Los montos
pagados por el ente asegurador por una poliza de seguros podran ser aplicados
al pago del principal e intereses del presente prestamo sindicado, o en su
defecto, con la autorizacion de las acreedoras, podra ser utilizado para la
restauracion de todo o alguna parte de las instalaciones que se encuentren
garantizando el PRESTAMO. Lo anterior sera sin perjuicio de cualquier otro
derecho o remedio que tengan LAS ACREEDORAS segun se establece en este
CONTRATO DE PRESTAMO. Las ACREEDORAS podran autorizar a LA DEUDORA a efecto
de que se suscriba las polizas de seguros anteriormente referidas por medio
de otra compania distinta a INTERSEGUROS S.A. En este caso, LA DEUDORA debera
entregar a LAS ACREEDORAS en el momento en que estas se lo soliciten, una
certificacion de la existencia de las polizas aqui relacionadas.
Adicionalmente, LA DEUDORA entregara a LAS ACREEDORAS en el aniversario de
cada poliza de seguro sin que deba ser requerida, o a pedido de LAS
ACREEDORAS, en el momento en que estas lo estimen pertinente, duplicados
originales de todas las polizas o contratos de seguros efectuados de
conformidad con las estipulaciones anteriores, asi como las copias de los
recibos de las primas pagadas, y una confirmacion emitida por el asegurador
de que las polizas se encuentran vigentes y con pleno efecto, y de que LAS
ACREEDORAS aparecen registrada
como acreedoras hipotecarias y beneficiarias de las mismas. Queda entendido,
que en caso de que la DEUDORA no pague en el momento oportuno las cuotas de
las polizas de seguros aqui relacionadas, LAS ACREEDORAS podran proceder a
realizar los pagos correspondientes, y la DEUDORA estara obligada a pagarle a
LAS ACREEDORAS las sumas que estas hayan pagado por concepto de poliza de
seguros dentro del mes siguiente a la fecha en que LAS ACREEDORAS hayan
efectuado dicho pago. El incumplimiento de esta obligacion por parte de LA
DEUDORA sera causa de vencimiento anticipado del PRESTAMO. ii.- Prepago: LA
DEUDORA se reserva el derecho de pagar anticipadamente el prestamo a su cargo
pero, en tal circunstancia, no tendra derecho a descuento alguno ni a la
devolucion de las comisiones ya pagadas. Todo prepago sera aplicado al
principal en el orden inverso de madurez del prestamo y todos los intereses
devengados sobre la suma de dicho prepago seran pagados al mismo momento. El
pago anticipado podra ser total o parcial. En caso de que LA DEUDORA efectue
prepagos parciales, los mismos seran en partidas no menores a DOSCIENTOS
OCHENTA Y SEIS MIL SETECIENTOS CINCUENTA DOLARES, y no estara obligada al
pago de ninguna multa. Queda entendido que cualquier prepago debera coincidir
necesariamente con las fechas de pago de intereses. En cualquier evento de
prepago, LA DEUDORA debera notificar a LAS ACREEDORAS con dos dias habiles
de anticipacion su intencion de efectuario. LA DEUDORA indemnizara a LAS
ACREEDORAS contra cualquier perdida, costo o gasto incurrido por LAS
ACREEDORAS como resultado de no haber honrado un prepago solicitado y
confirmado por LA DEUDORA. SIGA TOMANDO NOTA EL REGISTRO; CLAUSULA NOVENA;
OBLIGACIONES AFIRMATIVAS DE LA DEUDORA Y DE PRISMAR DE COSTA RICA, S.A.: LA
DEUDORA y PRISMAR DE COSTA RICA, S.A. expresamente se obligan y comprometen
por todo el plazo del prestamo y hasta que todas las obligaciones pecuniarias
derivadas de el hayan sido canceladas en su totalidad y durante el plazo de
vigencia de todas las garantias rendidas y constituidas conforme con este
contrato, a lo siguiente; i) EXISTENCIA Y LICENCIAS DE OPERACION; LA DEUDORA
y PRISMAR DE COSTA RICA, S.A. preservaran y mantendran con pleno efecto legal
su existencia corporativa y su capacidad plena para operar en Costa Rica, asi
como todo tipo de licencias y permisos para operar sus actividades. Asimismo,
LA DEUDORA y PRISMAR DE COSTA RICA, S.A. cumpliran con todos los aspectos
materiales de las leyes, reglamentos, decretos, resoluciones, sentencias,
dictamenes y ordenes aplicables o restricciones impuestas por cualquier
entidad o autoridad gubernamental,
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judicial d administrativa, que sean aplicables a la conduccion de sus
negocios y actividades, y a la propiedad de sus bienes y activos y de las
subsidiarias relacionadas, incluyendo las leyes ambientales; y pagaran y
mantendran al dia todas las obligaciones materiales que tengan o lleguen a
tener durante la vigencia de este prestamo, ii) CONDUCCION DE SUS NEGOCIOS;
Continuaran conduciendo y operando sus negocios substancialmente como se le
ha descrito a LAS ACREEDORAS en relacion con este CONTRATO DE PRESTAMO. iii)
ACTIVOS Y PROPIEDADES; Mantendra la finca que garantiza a las presente
obligacion en la misma o mejor condicion en que se encuentra en la
actualidad. Del mismo modo, mantendra la tienda "PriceSmart" que se construya
sobre la indicada finca, en perfecto estado de conservacion y mantenimiento.
Particulamente LA DEUDORA Y PRISMAR DE COSTA RICA, S.A. no podran enajenar,
traspasar o disponer en forma alguna de la finca hipotecada en garantia del
PRESTAMO. iv) AUDITORIAS E INSPECCIONES: LA DEUDORA Y PRISMAR DE COSTA RICA,
S.A. se obligan a colaborar en las inspecciones que sobre los prestamos y sus
garantias efectue la Superintendencia General de Entidades Financieras.
Adicionalmente, LA DEUDORA y PRISMAR DE COSTA RICA, S.A. se comprometen a
acompanar a los representantes legales de LAS ACREEDORAS a fin de inspeccionar
los bienes dados en garantia, en el momento en que LAS ACREEDORAS asi lo
estimen necesario, siempre y cuando sea en horas habiles. v) REPORTES: ESTADOS
FINANCIEROS: LA DEUDORA y las FIADORAS deberan presentar a LAS ACREEDORAS
dentro de los noventa dias posteriores a la fecha de su cierre fiscal, sus
Estados Financieros Anuales auditados por una firma de auditoria externa de
aceptacion de LAS ACREEDORAS. En el caso de LA DEUDORA Y PRISMAR DE COSTA
RICA, S.A. los Estados Financieros antes referidos seran consolidados. En
caso de que LAS ACREEDORAS no aprobara en determinado momento la firma de
auditoria externa lo notificara a LA DEUDORA y/o las FIADORAS junto con LAS
RAZONES QUE JUSTIFIQUEN SU DESAPROBACION. En dicho caso, LA DEUDORA y/o LAS
FIADORAS tendran un plazo de treinta dias contados a partir de la fecha de
comunicacion para designar una nueva compania que estara sujeta del mismo
modo a revision y aprobacion de LAS ACREEDORAS. Pasado este periodo sin que
se hubiese obtenido la aprobacion de LAS ACREEDORAS estas tendran derecho a
tener por vencidas en forma anticipada y conjuntamente todas las obligaciones
pecunlarias a su favor. ESTADOS FINANCIEROS INTERNOS; LA DEUDORA y las
FIADORAS deberan presentar a LAS ACREEDORAS trimestralmente dentro de los
cuarenta y
cinco dias posteriores a la fecha de finalizacion de cada trimestre, sus
estados financieros internos e interinos. En el caso de la DEUDORA Y PRISMAR
DE COSTA RICA, S.A. estos deberan ser consolidados. Todos los estados deberan
contener una declaracion jurada de un representante legal manifestando el
cumplimiento con los compromisos aqui adquiridos, incluyendo pero no limitado
a: las razones financieras respectivas vi) PAGO DE IMPUESTOS: LA DEUDORA Y
PRISMAR DE COSTA RICA, S.A. presentaran en tiempo y forma todas y cada una de
las declaraciones de renta e informes, y pagara a tiempotodos los impuestos
municipales y de bienes inmuebles y cargas Impositivas gubernamentales o que
cualquier motivo pesen sobre sus actividades y bienes muebles e
inmuebles, en especial los que afecten a la finca que se hipoteca en esta
escritura. LA DEUDORA y PRISMAR DE COSTA RICA, S.A. no tendran obligacion de
pager dichos impuestos mientras este reclamando la validez o el monto de los
mismos, de buena fe y por medio de procedimientos legales apropiados, pero
debera reflejar en sus estados financieros la reserva o aprovisionamiento
necesario para el pago de los mismos en caso de que dicho pago deba
producirse. vii) MANTENIMIENTO DE CIERTAS RAZONES FINANCIERAS LAS CUALES
SERAN REVISABLES EN FORMA TRIMESTRAL: Durante el plazo del credito, LA
DEUDORA y PRISMAR DE COSTA RICA, S.A. en forma consolidada, deberan mantener
los siguientes indices financieros calculados por ano fiscal en su caso: a-)
Razon de servicio de la deuda excluyendo operaciones tipo "Back to Back", de
al menos uno punto uno por el ano dos mil; uno punto quince por el ano dos
mil uno, uno punto veinticinco por el ano dos mil dos y uno punto cinco a
partir del ano dos mil tres y siguientes; medidos en todos los casos al
final de cada trimestre y calculados a razon de doce meses renovables. Se
define la razon de servicio a la deuda como: la utilidad neta mas intereses,
mas depreciacion, mas amoritzacion, todo lo anterior dividido entre el
principal mas los pagos de intereses; b-) La razon de cobertura de intereses,
excluyendo operaciones del tipo "Back to Back", no debera bajar del nivel de
uno punto setenta y cinco por ciento por el ano dos mil; de dos puntos por el
ano dos mil uno; de dos punto cinco por el ano dos mil dos; y, de tres por
los anos siguientes. c-) La deuda total, exluyendo operaciones del tipo
"Back to Back"/EBITDA no podran ser superiores a; cinco por el ano dos mil;
cuatro por el ano dos mil uno; dos punto setenta y cinco por el ano dos mil
dos; dos punto cinco por los anos dos mil tres y dos mil cuatro. EBITDA sera
calculado utilizando los doce meses pasados al momento del calculo, y sera
definida como: la suma (sin duplicacion) de; uno-)utilidad neta mas
dos-)depreciacion y amortizacion, mas tres
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-) gasto de interesas, mas cuatro -) todos los otros gastos contables que no
representen salida de efectivo durante el periodo, incluyendo pero no
limitado a; perdidas no realizadas derivadas de diferencial cambiario o
correcciones monetarias y, solo cuando ese gasto haya sido deducido en
conexion con la determinacion de la utilldad neta; mas gastos de impuesto a
las ganancias, solo cuando ese gasto haya sido deducido en conexion con la
determinacion de la utilidad neta, menos ingresos contables que no represente
una entrada de efectivo durante el periodo, incluyendo pero no limitado a
ganancias por diferencial cambiario y correcciones monetarias, menos ingreso
de capital por la participacion en subsidiaras o afiliadas, mas dividendos en
efectivo recibidos de subsidiaras y afiliadas d-) La razon de apalancamiento
de LA DEUDORA no debe ser superior a tres para el ano dos mil, a dos punto
cinco para el ano dos mil uno y a dos para los siguientes anos. La razon de
apalancamiento esta definida como "el total de la deuda" menos operaciones
tipo "back to back" sobre el patrimonio mas operaciones tipo "back to back".
viii) NOTIFICACION DE LITIGIOS, PROCEDIMIENTOS ADMINISTRATIVOS,
RECALIFICACIONES DE IMPUESTOS; LA DEUDORA notificara por escrito a LAS
ACREEDORAS, inmediatamente despues de que LA DEUDORA tenga conocimiento, de
cualquier litigio, procedimiento administrativo o arbitral, o
recalificaciones de impuestos, que afecten a LA DEUDORA, que se desarrolle
adversamente, o que amenace con ser establecido en contra de ella, y que sea
posible que tenga un efecto material adverso sobre los negocios, activos o
condicion financiera de LA DEUDORA, o que afecte o sea materialmente posible
que afecte la capacidad de LA DEUDORA de ejectuar las obligaciones adquiridas
por esta escritura y bajo el CONTRATO DE PRESTAMO que aqui se conviene. ix)
REVISIONES ANUALES DEL PRESTAMO; LA DEUDORA y PRISMAR DE COSTA RICA, S.A. se
obligan y comprometen a respetar las revisiones anuales que del prestamo
efectuen LAS ACREEDORAS, y a respetar todos equallos requerimientos
adicionales que resultare necesario imponer a LA DEUDORA Y A PRISMAR DE COSTA
RICA, S.A. con motivo de dichas revisiones. x) MANTEINMIENTO DE LIBROS Y
REGISTROS; LA DEUDORA Y PRISMAR DE COSTA RICA, S.A. se comprometen a mantener
adecuadamente y con precision todos los libros y registros necesarios y
comunes que se utilicen en empresas similares xi) NEGOCIOS CON AFILIADAS; Las
partes acuerdan que, tanto LA DEUDORA COMO PRISMAR DE COSTA RICA, S.A. podran
realizar negocios o transacciones con afiliadas, siempre y cuando dichas
negociaciones sean en las mismas condiciones en que sean realizades con
terceros independientes. CLAUSULA DECIMA; OBLIGACIONES NEGATIVAS DE LA
DEUDORA Y DE PRISMAR DE COSTA RICA, S.A. LA DEUDORA Y PRISMAR DE COSTA RICA,
S.A. expresamente se obligan y comprometen por todo el plazo del prestamo y
hasta que todas las obligaciones pecuniarias derivadas de el hayan sido
canceladas en su totalidad y durante el plazo de vigencia de todas las
garantias rendidas y constituidas conforme con este contrato, a que; i)
PROPIEDAD ACCIONARIA: No realizaran o permitiran que se realice ningun cambio
en su estructura accionaria, que implique un cambio de control accionario en
LA DEUDORA Y/O EN PRISMAR DE COSTA RICA, S.A., en tanto se encuentre vigente
este contrato o exista alguna obligacion pecuniaria derivada de este contrato
o sus garantias, no pagada de forma parcial o total, todo ello sin el previo
consentimiento expreso y por escrito de LAS ACREEDORAS. Quedara excluda de
esta prohibicion y de cualquier prohibicion relacionada con el cambio de
participacion accionaria de la DEUDORA Y LAS FIADORAS, cualquier transaccion
que implique un aumento en la participacion accionaria de PRICESMART INC. en
cualquiera de sus subsidiarias. ii) EXISTENCIA DE LA DEUDORA Y PRISMAR DE
COSTA RICA, S.A., LA DEUDORA y PRISMAR DE COSTA RICA, S.A. no adoptaran
ningun acuerdo de fusion, ni se liquidara, disolvera o consolidara con
ninguna otra sociedad o entidad, ni realizaran inversiones en subsidiarias,
afiliadas o terceras entidades, ni garantizaran obligaciones de terceros, sin
el consentimiento previo y por escrito de LAS ACREEDORAS. En todo caso la
negativa de LAS ACREEDORAS debera basarse en criterios razonables y
sustentados que puedan ser discutidos con LA DEUDORA y PRISMAR DE COSTA RICA,
S.A. Ni LA DEUDORA ni PRISMAR DE COSTA RICA, S.A. invertiran en el capital
social o en titulos de ninguna subsidaria o afiliada, excepto en el curso
ordinario de su negocio. iii) LA DEUDORA Y PRISMAR DE COSTA RICA, S.A. no
podren realizar ninguna de las siguientes transacciones en relacion con la
finca que se hipoteca en este acto, con la tienda que se construira en la
misma y con los activos e inventarios de esta, si las mismas superan los
doscientos cincuenta mil dolares al ano, a menos que cuenten con autorizacion
expresa de LAS ACREEDORAS, la que no sera denegada sin fundamentos
razonables; adquisiciones, ventas o transferencias de activos; arrendamientos
o ventas, venta con arrendamiento, recompra o rescate de acciones emitidas y
en circulacion (incluyendo opciones y cupones de suscripcion de acciones),
intercambios, revocaciones o resoluciones, reformas o recompras de deuda y
obligaciones de arrendamientos de capital y arrendamientos operativos. Esta
restriccion no aplica a inversiones en mejoras que se pretenda realizar en la
finca hipotecada en este acto, asi como en la tienda
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"PriceSmart" que se construira on dicha finca. Se considarara meojores el
reemplazo de todo el equipo que so encuentre en la tienda al momento de su
apertura. iv-) LA DEUDORA Y PRISMAR DE COSTA RICA, S.A. se comprometen a no
hipotecal, prendar o de cualquier manera dar en garantia la finca que se
hipoteca en este acto, asi como ninguno de los bienes relacionados con la
tienda que se construira en dicha finca, sin que exista la previa y expresa
autorizacion de LAS ACREEDORAS, la que no sera denegada sin fundamentos
razonables. Clausula Undecima: Declaraciones y Garantias: Con el fin de que
LAS ACREEDORAS haye convenido con LA DEUDORA en este CONTRATO DE PRESTAMO,
apercibido por el suscrito Notario y entendido de las penas con que la ley
costarricense castiga el falso testimonio y perjurio, el representante de LA
DEUDORA rinde las siguientes declaraciones y garantias, bajo fe de juramento:
i) El personero de LA DEUDORA declara y garantiza que LA DEUDORA es una
socieded que se encuentra debidamente organizada conforma a les leyes de
Costa Rica, legalmente existeria a esta fecha y con pliana capacidad juridica
para otorgar el presente CONTRATO DE PRESTAMO y los documentos que lo
complementan. ii) El personero de LA DEUDORA declara y garantiza que cuanta
con poder y/o autorizaciones, conforme a derecho es necesario, para actuar en
nombre y representacion de este y para suscribir esta escritura, este
CONTRATO DE PRESTAMO y los documentos que lo complementan, iii) El personero
de LA DEUDORA, declara y garantiza que LA DEUDORA ha presentado sin omision.
todas las declaracionos de impuestos que la ley sequiero que sean
presentadas; que ha pagado sin omision todos los impuestos resultantes de
tales declaraciones o de cualquier tasacion, recalificacion o requerimiento
por impuestos; que ni el ni LA DEUDORA tienen conocimiento de obligaction,
tasacion, impuesto, requerimiento o recalificacion alguna con respecto a
perirodos cubiertos por declaraciones o comunicaciones presentadas antes del
die de hoy, mas alla de aquellos que aparecen en tales declaraciones y
communicaciones; que ni el ni LA DEUDORA han sido notificados por las
autoridades competentes de ninguna deficienca, error o recalificacion de sus
obligaciones tributaries y/o de cualquier otra naturaleza; y que ni el ni LA
DEUDORA preveen causa alguna para que esto suceda. iv) El personero de LA
DEUDORA, declara que expresamente consiente y garantiza su colaboracion, en
las inspecciones que realice la Superintendencia General de Entidades
Financieras y/o LAS ACREEDORAS para verificar, el cumplimiento del plan de
inversion que se encuentra presentado en el expediente de credito a que se
refiere este CONTRATO DE PRESTAMO y se compromete y
obliga a suministrar a las ACREEDORAS cualquier informe relativo a la
inversion del prestamo, asi como el reporte actualizado do sus estados
financieros. v) El personero de LA DEUDORA y PRISMAR DE COSTA RICA, S.A.
declara y garantiza que LA DEUDORA ha obtenido todas las autorizaciones,
licencias y permisos necasarios para realizar todas las actividades conexas
con sus negocios y operacion comercial y que los mismos permanceran vigentes
durante todo el plazo de la deuda vi) El personero de LA DEUDORA declara y
garantiza que todas las obligaciones y estipulaciones expresadas y asumidas
por LA DEUDORA mediante este escritura, constituyen obligaciones legales,
validas, vinculantes y ejecutables contra LA DEUDORA de conformidad con sus
respectivos terminos, y que las mismas no requieren de ninguna autorizacion
adicional por parte de su estructura corporativa, representantes legales,
autoridades administrativas, gubermamentales, judiciales o arbitrales, o por
cualquier legislacion o regiamentacion que resultane aplicable o vinculente a
LA DEUDORA. vii) El perconoro de LA DUEDORA declara y garantiza que LA
DEUDORA, a le techa de otorgamiento de esta escritura, no se encuentra en
incumplimiento de cualquier ley, regiamentacion, compromiso, contrato,
hipoteca, fideicomiso, acuerdo, licencia o cualquier otro instrumento,
obligacion o deber por el cual ella o cualquiera de su propiedades esta
vinculada o afectada, que sea un incumplimiento que afecte significativa y
adversamente su capacidad de cumplir ejecular cualquiera de las obligaciones
de este CONTRATO DE PRESTAMO. viii) El personero de LA DEUDORA declara y
garantize que ringun litigio, arbitraja o reclamo que pueda en si o junto con
cualquier otro procedimiento o reclamo, significativa y adversamente afectar
su facuitad de cumplir o ejecuter sue obligaciones bajo este CONTRATO DE
PRESTAMO, esta sucediendo o pendiente o amenaza en contra de LA DEUDORA y sus
activos, hasla donde esta tiene conocimiento, estimacion e informacion a la
fecha, ix) El personero de LA DEUDORA declara y garantiza que LA DEUDORA ha
revelado totalmente a LAS ACREEDORAS todos los hechos relativos a ella que
conoce o que razonablemente deberia conocer, y que han resultado utiles y
necesarios e la suscripcion de este CONTRATO DE PRESTAMO y para que LAS
ACREEDORAS convinieran en la suscripcion del mismo. x) El personero de LA
DEUDORA Y PRISMAR DE COSTA RICA, S.A. declara y garantiza que no ha tomado
ninguns accion el ningun peso por o en contra o o con referencia a LA DEUDORA
para su liquidacion, disolucion, quiebra, reorganizacion, o para el
nombramiento de un interventor, fiduciario, curador, o personero similar con
respecto a cualquiera o todos los activos o entradas de
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LA DEUDORA, xi) El personero de LA DEUDORA declara y garantiza que no tiene
ninguna obligacion significativa o ninguna obligacion contingente
significative que no haya sido revelada a LAS ACREEDORAS, Las
representaciones, declaraciones y garantias establecidas en esta clausula
sobreviviran a la ejacucion de esta CONTRATO DE PRESTAMO y se estimara que
son repetidas en cualquier techa subsecuania hasta que el prestamo y obos
montos debidos originados en el se encuentren debidamente cancelados a LAS
ACREEDORAS, asi como que todas las obligaciones contempladas on el hayen sito
complidas glausuia cuoeima incumplimiento: (i) el atraso en el pago de
principal, por parte de LA DEUDORA como se no pacrado, (ii) el atrasco en el
pago de una o mas mensualidades de intereses corrientes, como se he pactado,
(iii) el incumplimiento en el pago de cualquier obligaciones de LA DEUDORA
y/o de PRISMAR DE COSTA RICA, S.A. con cualquier persona fisica a juridica,
cuando dicho incumplimiento persista por mas de treinta dias despues de la
techa en que se debio cumplir, con excepcion de aquellas deudas existentes
con PriceSmart Inc., cuyo incumplimiento podra prolongarse por noventa dias;
y aquelias obligaciones que esten garantizadas con "back to back" y en todos
los casos siampre y cuando las obligacionas cobradas no estan siendo
cuestionadas razonablemente, (iv) el incumplimiento de cualesquiera otras
obligaciones pecuniarias e no pecuniarias establecidas en esta contrato, (v)
si LA DEUDORA y/o PRISMAR DE COSTA RICA, S.A. se ecogiete a gestiones de
disolucion, liquidacion, Administracion y Reorganizacion por intervencion
Judicial, sea declarada en quiebra a solicitare cualquier tipo de
procedimiento concursal, convenios de acreedores, o si consiente en el
nombramiento de cualquier interventos, o si entrars en oesacion de pagos, con
excepcion de aquellas deudas garantizadas con "backs to back", (vi) el
incumplimiento de cualquier representacion a garantia hecha por la DEUDORA,
Prisma de Costa Rica, S.A. o cualquiera de los demas fiadores o la
determinacion de que dicha garantia o representacion era materialmente
incorrecta, o si cualquiera de los acuerdos no son cumplidos por estas; (vii)
o si las garantias que se constituyen por esta escritura no pudieren
inscribirse en el Registro Publico por causas imputables a LA DEUDORA, (viii)
si este CONTRATO DE PRESTAMO o cualquier garantia de las rendidas por LA
DEUDORA cesen de constituir un derecho valido y perfecto de garantia, o se
puedan liegar a tener por cualquier circumstancia un electo adverso
significativo en su naturaleza de garantias para LAS ACREEDORAS, (ix) si
cualquier procesa legal o administrativa le impiden de manera material a LA
DEUDORA continuar
con el curso normal de sus negacios y operaciones, o si estos llegaren a
tener un efecto adverso significativo en los negocios, operaciones y estados
financieros de LA DEUDORA, (x) si la validez o afectividad de este CONTRATO
DE PRESTAMO o cualquier garantia rendida con relacion a el, es
exitosamente impugnada por cualquier autoridad de Gobierno, o cualquier
tercero persona fisica o juridica, (xi) Si la Junta Directiva o la alta
administracion de LA DEUDORA y/o PRISMAR DE COSTA RICA, S.A. toman decisiones
que conjuntamente con otras o de manera separada, afecten, o pudieran afectar
adversamente el patrimonio de LA DEUDORA, o la calidad, conservacion y/o
estado de la garantia, en los terminos del articulo setecientos setenta y
siete del Codigo Civil de la Republica de Costa Rica, por lo que cualquier
deterioro implicara que debe otorgar garantia en exceso y que esta
incurriendo en incumplimiento de la garantia. Para todo electo LA DEUDORA
reconoce como suficiente para acreditar tal desmejoro o potencialidad
inminente de la desmajore la opinion de sus auditores externas, en conjunto
con la opinion del departamento de crredito y de la Gerencia General de LAS
ACREEDORAS. (xii) se da un cambio de propiedad, administracion a contral en
la DEUDORA, PRISMAR DE COSTA RICA, S.A., sin el consentimiento previo y
escrito, de LAS ACREEDORAS. (xiii)si las FIADORAS incumplen con las
cualquiera e las obligacionas que asumen en este CONTRATO DE PRESTAMO: o
(xiv) si ocurre algun cambio materialmente adverso en la condicion financiera
o de otro tipo o en el negocio o en las perspectivas de negocio de LA DEUDORA
Y/O DE PRISMAR DE COSTA RICA, S.A.;(xv) Si existen cambios materiales en las
layes o reglamentos que afecten materialmente la posibilidad de cumplir las
obligaciones aqui pactadas; (xvi) si la garantia otorgada en este acto no es
considerada privilegiada frente a las demas deudes de LA DEUDORA y/o PRISMAR
DE COSTA RICA, S.A.; (xv) si ocurre algun cambio materialmente adverso en la
condicion financiera o de otro tipo o en el negocio o en las perspectivas de
negocio de LA DEUDORA Y/O DE PRISMAR DE COSTA RICA, S.A. (xvi) Si LA DEUDORA
y/o PRISMAR DE COSTA RICA S.A., incumpliera cualquiera de las obligaciones
que han asumido en contrato; y (xviii) si las declaraciones e informacion
suministrada por LA DEUDORA Y PRISMAR DE COSTA RICA S.A., que llevaron al
otorgamiento del PRESTAMO fueran falsas o leigiversadas; ENTONCES: LAS
ACREEDORAS tendren derecho a tener por vencidas en forma anticipada y
conjuntamento todas las obligaciones pecuniarias a su favor y la facultara
exigir judicialmente el pago del PRESTAMO con base en el presente contrato,
el cual para todos los efectos legales constituye titulo ejecutivo. Ninguna
falta o atraso por parte de
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LAS ACREEDORAS en ejecutar o ejercer cualquier derecho derivado del presente
contrato se interpretara como una renuncia de ese o cualquier derecho o
facultad que le corresponde segun el presente contrato o la Ley; todos los
derechos contenidos en el presenta contrato y cualesquiera garantias de el
son acumulativos y pueden ser ejercitados conjunta o separadamente, Clausula
Decima Tercera: Periodo para la correccion de incumplimientos y razones para
el vencimiento anticipado: Sin menoscabo a lo establecido en la clausula
Decima Primera y sin afectar las consecuencias del incumplimiento o
vencimiento anticipado, entre ellas pero no limitadas a el derecho a cobrar
intereses moratorios, LAS ACREEDORAS se comprometen a otorgar, previo a
ejercer cualquier accion judicial a que tenga derecho segun las garantias
otorgadas, un periodo para la correccion de dichos incumplimiento o razonas
para el vencimiento anticipado, de conformidad con lo siguiente: i-) En los
casos en que el incumplimiento sea del pago de alguna suma adeudada en virtud
del CONTRATO DE PRESTAMO. LAS ACREEDORAS notificaran a LA DEUDORA de la
existencia de dicho incumplimiento otorgandole un plazo improrrogable de diez
dias naturales para la correccion inmediata y definitiva de la causal de
incumplimento, II-) En los demas casos de incumplimiento o razones para el
vencimiento anticipadado, sea aquellas que no impliquen la falta de pago de
sumas adeudadas en virtud del CONTRATO DE PRESTAMO, LAS ACREEDORAS
notificeren a LA DEUDORA de la existencia de dicho incumplimiento o razon
para el vencimiento anticipado, olorgandola un piazo improrrogable de treinta
dias naturales para la correction inmediata y definitiva de la causal de
incumplimiento o razon de vencimiento anticipado. Clausula Decima Cuarta:
Garantia: Para responder por el pago del monto de principal adeudado,
intereses corrientes, intereses moratorios en su caso, las costas personales
y procasales de un eventual cobro y de todas las demas responsabilidades
pecuniatias o de otra naturaleza e cargo de LA DEUDORA consignades en este
CONTRATO DE PRESTAMO, LAS ACREEDORAS notificaran a LA DEUDORA de la
existencia de dicho incumplimiento o razon para el vencimiento anticipado,
olorgandole un piazo improrrogable de trienta dias naturales para la
correccion inmediata y definitva de la causel de incomplimimiento o razon de
vencimiento anticipado. Clausula Decima Cuarta; Garantia: Para responder por
el pago del monto de principal adeudado, intereses corrientes, intereses
moratorios en su caso, las costas personales y procasales de un eventual
cobra y de todas las demas responsabilidades pecuniatias o de otra naturaleza
a cargo de LA DEUDORA consignades en esie CONTRATO DE PRESTAMO, y/o los danos
y perjulcios causados por el incumplimiento de LA DEUDORA, LA DEUDORA otorga:
A. - HIPOTECA EN PRIMER GRADO por la suma de TRES MILLONES NOVECIENTOS MIL
DOLARES, a favor de LAS ACREEDORAS, sobre la finca desorita en el Considerando
A -) de este documento. La participacion que tendra cada una de las deudoras
en la garantia que se constituye en este acto, es la que se establecio en el
indicado Considerando A. Dicha finca respondera por el monto total del
principal del PRESTAMO, mas los intereses correspondientes. En caso de un
eventual remate en la via judicial, el precio base para la venta de la finca
aqui hipotecada lo
consistira la suma adeudada por concepto de principal del PRESTAMO, segun la
indiquen LAS ACREEDORAS el momento de presentar el juisia ejecutive
hipateraria respetiva. En cualquiar momento en que LA DEUDORA, con el
consentimiento previo y discrecional de LAS ACREEDORAS, venda parte de la
fince hipotecada, el precio por metro de libercacion parcial de la garantia se
constituye en esta acto que debera pagar LA DEUDORA a LAS ACREEDORAS como
abono el principal del PRESTAMO, lo consistira el precio por metro que se
establezca en el ultimo avaluo que se haya realizado sobre le finca de
referencia o el noventa por ciento del precio por metro de la vanta
realizada. B. - FIANZA: Se constituyen como fiadores solidarios de las
obligaciones pecuniarias a cargo de LA DEUDORA consignadas en el presente
CONTRATO DE PRESTAMO, las siguientes companias en las proporciones que a
continuacion se indican: I-) PRISMAR DE COSTA RICA, S.A. Y PSMT CARIBE INC.,
cada una de ellas en forma solidaria y absolula por todo el monto de la
deuda. II-) PriceSmart, Inc., por un monto que no excedera el sesenta por
ciento del principal, mas los intereses correspondientes, y iii -) PSC, S.A,
por un monto que no excedera al cuaraenta porciente del principal mas los
intereses correspondiente. estes empresas hacen las mismas renuncias y
estipulaciones que LA DEUDORA y otorgan desde ahora su autorizacion para
conceder prorrogas u otras facilidados, sin que se les consulte o notifique,
renunciando a su domicilio y los requerimientos de pago. SIN QUE TOME NOTA EL
REGISTRO: LAS ACREEDORAS reduciran la responsabilidad de las fianzas de
conformidad con lo siguiente: a.- Dolar por dolar con el repago del credito
de conformidad con la tabla de amortizaciones. LA CUAL EE ANEXA AL PRESENTE
CONTRATO Y FORMARA PARTE INTEGRAL DEL MISMO PARA TODOS LOS EFECTOS LEGALES Y
CONFRACTUALES, b.- Al cincuenta por ciento de la deuda pendiente de pago el
momento en que la relacion entre el monto original del credito y el saido
pendiente de pago sea igual o menor al cincuenta por ciento, y que
adicionalmente, durante los anteriores doce meses, la utilidad neta operative
del proyecto haya cubierto le razon de servicio de deuda (Intereses y
amortizacion principal) en el prestamo a razon de uno punto cinco a uno, como
minimo: y c.- Al treinta por ciento de la deuda pendiente de pago el momento
en que la relacion entre el monto original del credito y el saldo pendiente
de pago ses igual o menor que el trienta por ciento y, por los anteriores
doce meses, la utilidad, neta operativo del proyecto haya la razon de
servicio de deuda (intereses y amortizacion principal) en el prestamo a
razon de uno punto setenia y cinco a uno, como minimo. Estas reducciones bas
otorgaran LAS ACREEDORAS a solicitud
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expresa de LAS FIADORAS, de lo contrario las fianzas quedaran vigentas como
se pecten originalmento. En cualquier caso, esta reduccion no aplica para la
fianza solidaria otorgada por Prismar de Costa Rica, S.A. la cual se
mantendia vigente en iguales torminos durante todo el plazo de la deuda. SIGA
TOMANDO NOTA EL REGISTRO: LA DEUDORA y LOS FIADORES renuncian e su domicilio,
a los requerimientos de pago y a los tramites de juicio ejecutivo. Los
gravamenes comprenden, sin estar limitado a: cualquier mejora de la finca
hipotecada, incluso las electuadas por terceros, asi como cualquier exceso de
cabida que exista entre la medide que conate en el Registro Publico y la
medida real de dicira finca, con todo lo cual LA DEUDORA esta de acuerdo. La
imputacion de pagos quenda a juicio exclusivo de LAS ACREEDORAS, sun despues
del eventual remate. LA DEUDORA se obliga a pagar todos los impuestos que se
apliquen a la linca hipotecada en este acto y a entregar a LAS ACREEDORAS por
todo el plazo en que el gravemen hipotecario se encuantre vigente, todas las
comunicaciones que reciba sobre impuestos y los recibos de su efectiva pago,
inciuyondo cualquier interes o multa aplicable. LA DEUDORA se compromente y
oblige a no trespasar, consentir u otorgar cualquier otro gravarmen sobre la
finca hipotecada en es escritura, sin el consentimiento previo y por escrito
de LAS ACREEDORAS, y asimismo a descargar otro gravamen que pueda llegar a
tener vigencia sobre los bienes dados en garantia mientras los gravamenez
impuestos medianto esta esctitura se encuntren vigentes. CLEUSULA DECIMA
QUINTA: Compromisos adicionales de las fladoras: PriceSmart, Inc. se
compromente a mantener un patrimonio noto minimo de cincuente y cinco
milliones de dolares durante todo el plaza en que se encuentre vigente la
deuda. Igualmenta, PriceSmart, Inc. se compromente a mantener una
participacion del sesenta por ciento del capital social de PSMT Caribe, Inc.,
una empresa constituida y organizado segun los leyes de British Virgin
Islands. Por su parte, PSC, S.A. se compromete a mantener un patrimonio neto
minimo de diez milliones de dolares durante todo el plazo en que se encuentre
vigente la deuda. Igualmente, PSC, S.A. se compromete a mantener la
participacion en el capital social que actualmente tiene en PSMT Caribe,
Inc., una empress constituida y organizada segun las leyes de Las Islas
Virgenes Britanicas. PSMT CARIBE INC. se compremente a mantener un patrimonio
minimo de vienticinco milliones de dolares. EN todo los casas antes dichos
podran existir excepciones si asi lo autorizan en forma previa y escrita LAS
ACREEDORAS. CLEUSULA DECIMA SAXTE: GASTOS Y HONORARIES: Todos los gastos y
honorarios. Impuestros, tasas, umbres, y cargas, correspondientes a la
negociacion, preparacion, otorgamiento, administracion y ejecucion de este
CONTRATO DE PRESTAMO, sus garantias y damas actos y documentos
relacionados, correran por cuenta de LA DEUDORA y seran pagados por esta
inmediatamente a requerimiento de LAS ACREEDORAS. LA DEUDORA esta de acuerdo y
consiente en asumir y pagar las costas personales y procesales de todas y
cada una de las eventuales acciones que llegare a ejercer LAS ACREEDORAS
contra LA DEUDORA. Clausula Decima Setima: Nutidad Parcial a incumplimiento
de Obligaciones: La nulidad o llegalidad de alguna de las estipulaciones de
este CONTRADO DE PRESTAMO, no afectara la validez, legalidad y exigibilidad
de las demas clausulas. Todos los derechos y recursos establecidos en esta
escritura o en cualquier documento de garantia son acumulativos y pueden ser
ejercitados contemporanea o sucesivamente, son en adicion y no excluyentes de
cualquier otro derecho o recurso establicido por la ley. El hecho que LAS
ACREEDORAS no exijan el exacto cumplimiente de todas o cualquiera de las
obligaciones que so ceriven para LA DEUDORA de la presente escritura, no
implicara ni podra reputarse como una dispensa, modifiacion, aceptacion o
renuncia de los terminos, condiciones y derechos establecidos en el CONTRATO
DE PRESTAMO, ya que para que asi eso y tenga validez entre las partez, las
mismes deberan constar por escrito aceptadas por embee partes. Clausula
Decima Octava: Ausencia de Joint Ventura: Nada de lo aqui estipulado y
contenido-constituye o puede ser interpretado como creacion de una asociation
conjunta o joint ventura o sociedad para la realizacion de un proposito comon
entre LA DEURDORA y LAS ACREEDORAS. LAS ACREEDORAS no asumen la
responsabiliad por ninguna obilgacion o riesgo derivado de los negocios y
arotividedes de LA DEUDORA en forma directa o indirecta. Clausula Decima
Novena: Constancia de mutuo beneficio: LAS ACREEDORAS, y LA DEUDORA, dejan
constancia expresa de que lo convenido por ellos en el presente CONTRATO DE
PRESTAMO, es el resultado de negociaciones y concesiones mutuas que a todos
ellos favorecen y benefician. Clausula Vigesima: Ley Aplicable y Jurisdiccion:
LAS ACREEDORAS, LA DEUDORA y LAS FIADORAS, se sometan a las leyes de la
Republica de Costa Rica, para la interpretacion de este CONTRATO DE PRESTAMO
Cualquier demanda, accion o procedimiento relacionado con este CONTRACTO DE
PRESTAMO o su ejecucion, se sometera a conocimiento de tribunal compentente
de la cuidad de San Jose, en la Republica de Costa Rica, para lo cual todas
las partes renuncian a su domicitio. Clausula Vigesima Primera:
Comunicaciones, Notificaciones o Requerimientos: Cualquier comunicacion,
notificacion o requerimiento, relativo a
[SEAL] [STAMP]
PROTOCOLO
este CONTRATO DE PRESTAMO, debera hacerse por escrito mediante carta
certificada, con razon de recibido en el domicilio que consta en presente
contrato, en las siguientes direcciones; A LAS ACREEDORAS: En las oficinas
del Banco BFA S.A., en La Uruca, contiguo a las oficinas del Grupo Taca. A LA
DEUDORA Y A LOS FIADORES: En el Bufete Zurcher Montoya & Zurcher, calle
primera, avenidas nueve y once, Apartado cuatro cero seis seis - mil, San
Jose; o al facsimil dos dos uno nueve uno dos siete, a la atencion del Lic.
Edgar Zurcher Gurdian. Adicionalmente, se debera enviar copias de estas
notificaciones por fax al senor Ernesto Grijalva en sus oficinas en cuarenta
y seis cuarenta y nueve Morena Boulevar, San Diego California, nueve dos uno
uno siete Por ultimo, menifiestan LA DEUDORA Y LOS FIADORES, a traves de sus
personeros debidamente acreditados y relacionados en esta escritura, que sin
perjuicio de la renuncia a su domicilio, senalan expresamente para oir
notificaciones en caso de incumplimiento de la obligacion que aqui contrae,
la direccion indicada en esta documento, para los [ILLEGIBLE] del articulo
cuatro de la ley numero siete mil seiscientos treinta y siete da Citaciones y
Notificaciones Judiciates y del articulo ciento sesenta y cuatro bis del
Codigo Procesal Civil, y declaran que en la direccion que se ha indicado
podra notificaraeles personalmente o por medio de cedula, y que entienden que
en caso de que su domicilio resultare impreciso o inexistente, podran ser
notificados por medio de Edieto publicado en el Boletin Judicial y en un
periodico de circulacion nacional. Las partes autorizon al suscrito Notario
para que por razon notarial, en forma conjunta o separado, [ILLEGIBLE] los
correcciones, aclaraciones y adiciones de forma necesaries al testimonio de
esta escritura para su debida inscripcion en el Registro Publico, sin afectar
el fondo del negocio entre los partes. El suscrito Notario advierte a los
comparecentes del alcance legal de sus renuncias y estipulaciones, y de las
obligaciones implicitas que eltas envuelven, quienes entendidos las aceptan
plenamente. Es todo. Expido un primer testimonio para las acreedoras en el
acto de otorgar la matriz. Leldo lo escrito a los comparecientes, lo
aproetan, y jurnos firmamos en la ciudad de San Jose, a las quince horas con
treinta minutos del dia veintiocho del ano dos mil. [ILLEGIBLE]
[ILLEGIBLE]
Exhibit 10.7(b)
I, AMALIA CHIA SHUM, Judicial Interpreter of the Court of First Instance of the
National District, duly sworn for the legal exercise
of my duties; CERTIFY: That I have proceeded with a legal translation of a
document written in Spanish language, the English version of which, according to
the undersigned, reads as follows:
--------------------------------------------------------------------------------
NUMBER SEVENTEEN: Before me, ROBERTO LEON GOMEZ, Notary Public with office in
San Jose, appear: Mr. JORGE OSBORNE GUELL, of legal age, married, Business
Administrator, resident at Cartago, bearer of personal identification number one
- sixty hundred fifty three four hundred thirty five, acting in capacity of
Special Assignee with enough faculties for this act of the company named
FIDUCIARIA BFA, S. A., hereinafter denominated as "BFA", with domicile in San
Jose, La Uruca, next to LACSA, entity identification number three - hundred one
- one hundred seventy nine thousand eight hundred thirty five, capacity of which
the undersigning Notary attest under number sixty one of volume forty three of
the register of Notary Roberto Leon Gomez given in San Jose on the twelfth day
of January of the year 2000 document of which is not notarized since it appears
in the protocol ; and Mr. EDGAR ZURCHER GURDIAN, of legal age, divorced twice,
attorney, resident of San Jose, bearer of personal identification number one
-five hundred thirty two - three hundred ninety, acting in capacity of SPECIAL
ASSIGNEE, with enough faculties for this act of PRICSMARLANDCO, STOCK COMPANY,
entity identification number three - hundred one - two hundred twenty nine
thousand nine hundred forty eight, with domicile in San Jose, First Street,
Avenues Nine and Eleven, number nine hundred fifty nine, capacity of which the
undersigning Notary attest under number seventy of volume nine of the registry
of notary Fernando Alfaro Chamberlain, registration of act of the Extraordinary
General Meeting of Shareholders of the mentioned company, held in San Pedro
Sula, Republic of Honduras, at eight o'clock on the twenty-ninth day of the
month of September of the year nineteen hundred ninety nine, document of which
the undersigning Notary keeps a copy in my register of references. The
undersigning Notary certifies the validity of the business term of each of the
companies indicated in the deposition. The deponent STATE: FIRST CHAPTER,
CANCELLATION OF MORTGAGE: FIDUCIARIA BFA, S. A., fiduciary of the trust
subscribed in the Public Registration of Real Estate Property on VOLUME FOUR
HUNDRED FORTY FIVE,
RECORD NINE THOUSAND EIGHT HUNDRED SIXTY FIVE, been duly authorized to this
effect by the Trustee of the Trust recently referred, be it COMMERCIAL
INTERNATIONAL BANK & TRUST CO. LTD., with entity identification number three -
zero twelve - one hundred twenty six thousand three hundred twenty four, upon
the non-existence of debt being guaranteed with mortgage certificates herein
below indicated, proceeds to cancel the same, discharging the property mortgage,
be it property of the Party of HEREDIA, registration of Mechanized Royal Folio
Number TWENTY THREE THOUSAND TWO HUNDRED FIVE - ZERO, ZERO, ZERO free of these
liens. The mortgage certificates cancelled upon this act are the following: 1)
Mortgage certificate of first degree registered on volume three hundred fifty
six, record eighteen thousand seven hundred of the Public Registration of Real
Estate Property. II) Mortgage Certificate of second degree on volume three fifty
six, record eighteen thousand seven hundred of the Public Registration of Real
Estate Property. III) Mortgage Certificate of third degreee on volume three
hundred seventy eight, record eight thousand four hundred seventy four of the
Public Registration of Real Estate Property. IV) Mortgage Certificate of fourth
degree on volume three hundred eighty three, record nine thousand seventy one
the Public Registration of Real Estate Property. V) Mortgage Certificate of
fifth degree on volume four hundred two, record eighteen thousand two hundred
thirty of the Public Registration of Real Estate Property. VI) Mortgage
Certificate of sixth degree on volume four hundred twenty, record eleven
thousand seven hundred thirty five of the Public Registration of Real Estate
Property. VII) Mortgage Certificate of seventh degree on volume four hundred
thirty eight, record twelve thousand five hundred fifty four of the Public
Registration of Real Estate Property. The mentioned mortgage certificates, duly
endorsed, are attached for their respective incineration, for which the Public
Registration of Real Estate Property is discharged of any responsibility.
CHAPTER SECOND: THE PURCHASE-SALE OF FARMING PROPERTY: FIRST: FIDUCIARIA BFA, S.
A., in capacity of fiduciary owner of farm of the Party of HEREDIA, license of
Mechanized Royal Folio Number TWENTY THREE THOUSAND TWO HUNDRED FIVE - ZERO,
ZERO, ZERO, which is a land to build industries, located in the First District
San Pablo, of Ninth =CANTON= San Pablo, of the Province of Heredia, with a
measure of FIFTY THREE THOUSAND EIGHTY SEVEN METERS WITH SIXTY NINE SQUARE
DECIMETERS; adjacent to the North with Francisco y Juan de Dios Murillo, to the
South
with Arabela Villalobos Jimenez y Otra, to the East with Quebrada Jestrudio y
Linea Ferrea; and to the West with public street, with CADASTRAL PLAN number
H-Six Hundred Eighty One Thousand Seven Hundred Thirty Eight Eighty Seven, been
duly instructed and authorized to this effect by the trustee of the trust
indicated in Chapter one of this document, sells the mentioned farm to
PRICSMARLANDCO, S.A., which accepts in this act through its representative, the
indicated farm is sold free of any type of liens and notes. Likewise, it is
stated that the farm sold in this act is up to date in regards to the payment of
related taxes; SECOND: the price of the purchase-sale constitutes the amount of
NINE HUNDRED THOUSAND DOLLARS, currency of the United States of America, which
the representative of the seller confirms to receive in this act, upon its
entire satisfaction and acceptance. This is all. The undersigning notary attests
having explained to each of the deponents the value of its stipulations, upon
which the parties have indicated that it is their will to grant this document. I
issue a first testimony in the act of granting the property. Read the draft to
the deponents; who accepted and signed in the city of San Jose at fifteen hours
on the twenty eighth day of January of the year two thousand. (Signature)
IN FAITH OF WHICH, I sign and seal this document, upon the request of the
interested party, in Santo Domingo, National District, Capital of the Dominican
Republic, on this eighteenth (18th) day of the month of February of the year two
thousand. This is a faithful translation effected from the copy of the original.
Internal Revenue Stamps:
RD$1.00 No. Amalia Chia Shum
RD$0.25 No. Judicial Interpreter
I, AMALIA CHIA SHUM, Judicial Interpreter of the Court of First Instance of the
National District, duly sworn for the legal exercise
of my duties; CERTIFY: That I have proceeded with a legal translation of a
document written in Spanish language, the English version of which, according to
the undersigned, reads as follows:
--------------------------------------------------------------------------------
NUMBER EIGHTEEN: Before me, ROBERTO LEON GOMEZ, Notary Public with office in San
Jose, appears: MR. EDGAR ZURCHER GURDIAN, of legal age, divorced twice,
attorney, resident at San Jose, bearer of personal identification number one -
five hundred thirty two - three hundred ninety, acting in capacity of SPECIAL
ASSIGNEE with enough faculties for this act of PRICSMARLANDCO, S. A., entity
hereinafter and for all the effects of the LOAN CONTRACT shall be denominated
THE DEBTOR, bearer of identification number three - one hundred one - two
hundred twenty nine thousand nine hundred forty eight, with domicile in San
Jose, First Street, Avenues Nine and Eleven, number nine hundred fifty nine, of
which the undersigning Notary attest under number seventy of volume nine of the
protocol of Notary Fernando Alfaro Chamberlain, which is protocol of the minutes
of the Extraordinary General Meeting of Shareholders of the mentioned company,
held in San Pedro Sula, Republic of Honduras at eight hours of the twenty ninth
day of September of the year nineteen hundred ninety nine, document of which
Notary Leon Gomez keeps copy in his protocol of reference; in his capacity of
this act of the society PRISMAR DE COSTA RICA, S. A., bearer of identification
number three - one hundred one - two hundred thirty one seven hundred seven,
with domicile in San Jose, First Street, Avenues Nine and Eleven, number nine
hundred fifty nine, entity of which the undersigning Notary attest under number
seventy one of volume nine of the protocol of the Notary Fernando Alfaro
Chamberlain, which is registration of the minutes of the Extraordinary General
Meeting of Shareholders of the mentioned company, held in San Pedro Sula,
Republic of Honduras at eight hours fifteen minutes of the twenty ninth day of
September of the year nineteen hundred ninety nine, document of which the Notary
keeps copy in his protocol of reference; and in capacity of SPECIAL ASIGNEE with
enough faculties for this act of the company PSC, S. A, an entity organized and
existing according to the laws of Panama, with offices in San Jose, First
Street, Avenues Nine and Eleven, number nine hundred fifty nine, entity of which
the undersigning Notary attest under number seventy two of volume nine of the
protocol of Notary Fernando Alfaro Chamberlain, which is registration of the
minutes of the Board of Directors Meeting of the mentioned company, held in
Miami, State of Florida, United States of America, at ten hours of the ninth day
of December of the year nineteen hundred ninety nine, document of which the
undersigning Notary keeps copy in his protocol of reference: Mr. JESUS ERNESTO
GRIJALVA, of legal age, married once, attorney, with only one last due to his US
citizenship, bearer of US Passport number zero three seven zero zero two six
eight nine, resident at San Diego, California, United States of America, acting
in this capacity of SPECIAL ASSIGNEE with enough faculty for this act of the
company named PSMT CARIBE, INC. a company duly constituted and existing
according to the laws of the Republic of British Virgin Islands, with offices in
forty six forty nine Morena Boulevard, San Diego, California, nine two one one
seven, company of which the undersigning Notary attest with Special Power
granted by the President of the mentioned company in San Diego, United States of
America on the fourth day of January of the year two thousand before Notary
Evelisse
Hernandez, who holds one last due to her US citizenship, document of which the
undersigning Notary keeps certification, duly legalized by the Ministry of
Foreign Affairs of the Republic of Costa Rica in the file of reference; and in
his capacity of SPECIAL ASSIGNEE with enough faculties for this act of the
company PRICESMART INC., a company organized and existing according to the laws
of the State of Delaware, United States of America, with offices in forty
offices in forty six forty nine Morena Boulevard, San Diego, California, nine
two one one seven, company of which the undersigning Notary attest with Special
Power granted by the President of the mentioned company in San Diego, United
States of America on the fourth day of January of the year two thousand before
Notary Evelisse Hernandez, who holds one last due to her US citizenship,
document of which the undersigning Notary keeps certification, duly legalized by
the Ministry of Foreign Affairs of the Republic of Costa Rica in the file of
reference. The last four companies shall be identified in joint manner in this
contract as THE GUARANTORS. The undersigning Notary attest the validity of the
business period of each of the companies mentioned in the statement. The
deponents STATE: WHEREAS A-) That THE DEBTOR has requested a COMMERCIAL
INTERNATIONAL BANK & TRUST CO. LTD. hereinafter identified in this document as
"CIB", domiciled in Nassau, Bahamas, with offices in Nassau N. P. Bahamas, Post
Office Box four thousand eight hundred sixty eight, bearer of identification
number three - zero twelve one hundred twenty six thousand three hundred twenty
four, and BANCO BFA, S. A., hereinafter identified in this document as "BFA",
bearer of identification number three -one hundred one - zero fifty four
thousand fifty one, domiciled in San Jose, La Uruca, of Puente Juan Pablo II,
one hundred seventy five meters to the North, a commercial loan for the amount
of THREE MILLION NINE HUNDRED THOUSAND DOLLARS, CURRENCY OF THE UNITED STATES OF
AMERICA. From the resources of such loan, NINE HUNDRED THOUSAND DOLLARS,
CURRENCY OF THE UNITED STATES OF AMERICA shall be used for the financing of the
purchase of the farm of HEREDIA, license of the Mechanized Royal Folio number
TWENTY THREE THOUSAND TWO HUNDRED FIVE - ZERO ZERO ZERO, which is property to
build industries, located in Distrito Primero San Pablo, of Canton Noveno San
Pablo, of the Province of Heredia, with measure of FIFTY THREE THOUSAND EIGHT
HUNDRED SEVEN METERS WITH SEVENTY NINE SQUARE DECIMETERS, adjacent to the North
with Francisco y Juan de Dios Murillo, to the South with Arabela Villalobos
Jimenez y Otra, to the East with Quebrada Jestrudio y Linea Ferrea and to the
West with public street, with cadastral plan number H - SEVEN HUNDRED EIGTHY ONE
THOUSAND SEVEN HUNDRED THIRTY EIGHT - EIGHTY SEVEN. The remaining THREE MILLION
DOLLARS, CURRENCY OF THE UNITED STATES OF AMERICA, shall be used to finance the
construction of a store "PriceSmart" over the farm previously described. The
loan in reference shall be identified in this contract as the "LOAN" and, BFA
and CIB shall be identified jointly in this document as "THE CREDITORS". It is
noted that upon the LOAN, CIB will disburse the amount of TWO MILLION FIVE
HUNDRED THOUSAND DOLLARS, CURRENCY OF THE UNITED STATES OF AMERICA and BFA shall
disburse the amount of ONE MILLION FOUR HUNDRED THOUSAND DOLLARS, CURRENCY OF
THE UNITED STATES. In this sense, once executed all the disbursements, CIB shall
have a trusteeship participation of SIXTY FOUR POINT ONE PERCENT and BFA shall
have a trusteeship participation of THIRY FIVE POINT NINE PERCENT. The Agent
Bank of this loan will be
BFA, which will be in charge of receiving all the payments that THE DEBTOR has
to make and transferring the pertaining monies to CIB. The Agent Bank will also
receive all the documentation and information to be remitted by THE DEBTOR to
THE CREDITORS. For the exercise of its tasks as Agent Bank, BFA will not earn
any remuneration. B -) That THE DEBTOR will give in guarantee to THE CREDITORS
the farm described in Clause A -) of this document, guarantee which will include
any improvement made to the same, including future constructions, [WITHOUT
TAKING NOTE ON THE REGISTRY]: C -) That THE DEBTOR has complied with the
following precedent conditions for the granting of the LOAN: I) THE DEBTOR has
given a scheme of guarantee acceptable by THE CREDITORS, and both parties have
reached an agreement of the terms and conditions of the LOAN, the documentation
related to this transaction, including but not limited to, credit contracts,
insurance policies, etc., both in form and substance; II) The appraisals of the
farm given as guarantee of the LOAN, were made by an expert chosen by THE
CREDITORS, who determined the value of the appraisal is acceptable in regards to
the amount of the LOAN. [CONTINUES TAKING NOTE ON THE REGISTRY]: D -) That is of
the benefit of THE CREDITORS, THE DEBTOR and THE GUARANTORS, to grant, receive
and guarantee, respectively the LOAN according to the terms and conditions
herein stipulated. E -) That according to the previous considerations, and for
the benefit of all the parties, it has been convened in this LOAN CONTRACT, that
the same will be ruled by the following clauses: First Clause - Definitions: For
the effects of this LOAN CONTRACT, the following expressions will have the
meaning: i) Mortgaged Farm: The farm described in Clause A -) of this document.
ii) Working Day: Any day on which the offices of BFA are open for the public.
iii) Dollars: the monetary unit of the United States of America. iv) Significant
Adverse Effect: means in regards to any entity, the negative effect resulting
from any act of any type or nature, including but not limited to any adverse
determination of a litigation, arbitration, judicial, extrajudicial or
administrative procedure, or any investigation of any governmental or
non-governmental authority which imposes a negative or contrary charge, impairs
in a material manner and alters negatively the financial condition, business
operations, assets or benefits of such entity. For the effects of this
definition, "in a material manner" shall mean the possibilities of compliance of
the established obligations in this contract and its guarantees. v) Financial
Statements: means the balance sheet and loss and profit statements, and the
statement of cash flow, including any note on the same. In case of audited
Financial Statements, the report of the auditors and the report of the President
or administrators of THE DEBTOR and THE GUARANTORS. vi) Legal Moratorium: lack
of payment of a period of interest of one of the settlements or parts of the
capital convened that THE CREDITORS authorize to consider payable on demand the
total of the debt. vii) Fiscal Year: With the period of time which begins the
first day of September of each year and concludes the thirtieth day of August of
the following year. In the event that any of the GUARANTORS counts on or arrives
with a fiscal year different to the one consigned in this paragraph, the same
shall be notified to the CREDITORS within the following thirty days upon the
date in which the change for the pertaining fiscal year has been made. viii)
Prime Rate: the variable interest rate of reference, according to the
publication of The Wall Street Journal. The parties consider and accept that the
indicated rate is an objective international rate and of public acknowledgment,
and it is so defined according to article four hundred ninety seven of the
Commercial Code of Costa Rica, considering this note as source of occasional
certifications on the level of such rate, that the parties or administrative and
judicial authorities may require in regards to the present contract. In the
event of disappearance of The Wall Street Journal, the rate shall be the one
determined through a certification of the Central Bank of Costa Rica. The Prime
Rate will be revisable and adjustable to the rate applicable on the day that
each respective payment must be done. ix) Leverage Proportion: Relation of total
liability to patrimony. x) "Back to Back": Credit operations guaranteed in a
hundred percent with deposits of the same crediting entity. xi) Value Date: Is
the date upon which all the established periods established in this contract
will be counted, including but not limited to the period of the loan, the period
of grace. For all the effects of this contract, it is considered as value date
the seventh day of December of the year nineteen hundred ninety nine. Second
Clause: Destination of the Loan and participation of Trusteeship: Subject to the
terms and conditions stipulated in this LOAN CONTRACT, THE CREDITORS grant in
commercial trusteeship loan to THE DEBTOR, and THE DEBTOR agrees to take a loan
from THE CREDITORS, the amount of THREE MILLION NINE HUNDRED THOUSAND DOLLARS
WITH NO CENTS. The destination of the resources of the LOAN and the
participation in trusteeship of each of THE CREDITORS are stated in Clause A of
this document. Third Clause: Disbursement: From the resources of the LOAN, the
amount of NINE HUNDRED THOUSAND DOLLAS, minus the sum pertaining to the
structuring commission referred upon the fourth clause paragraph c) of this
contract, and the expenses and legal fees pertaining to the drafting and
registration of this document, which have been duly deducted by THE CREDITORS,
are disbursed in this same act through any check issued in favor of Fiduciaria
BFA, S. A., seller of the farm mentioned in Clause A) of this document. The
aforementioned has been executed following the precise instruction of THE DEBTOR
who in this act its full agreement and satisfaction with such procedure. It is
noted that the totality of the NINE HUNDRED THOUSAND DOLLARS already disbursed,
have been provided by CIB. The remaining THREE MILLION DOLLARS, of which CIB
will grant ONE MILLION SIX HUNDRED ONE THOUSAND and BFA shall grant ONE MILLION
FOUR HUNDRED THOUSAND DOLLARS, shall be placed at the disposal of the DEBTOR
once concluded the construction of the store "PriceSmart" which will be built on
the farm mortgaged in guarantee of the LOAN. Fourth Clause - Interests and
Commissions. a.- Current Interests: THE DEBTOR shall pay interests on unpaid
balances of capital, since the date of the disbursement and until completed the
payment at an annual rate equivalent to TWO percentage points above the PRIME
RATE. In consequence, up to this date, as reference for the first payment of
interests, the current interest rate is of TEN POINT FIVE percent annually, with
a basic PRIME RATE of eight point five percent annually. The current interests
shall be paid to THE CREDITORS in Dollars, on monthly expired and consecutive
installments, on the seventh day of each month, or in the event this date is
holiday, the payment shall be made the next working day available. Monthly
payments for concept of interests shall be paid through check, wire transfer or
any other means upon entire satisfaction of THE CREDITORS. Except in the event
of making transfer, all payments shall be made in the main offices of BANCO BFA,
S.A. or any of its branches. The interest rate shall be revisable and adjustable
every month according to the variation of the PRIME RATE. To the effects of the
adjustment, during any time and for any type of legal, judicial and
administrative effects, it will be enough the sole indication of THE CREDITORS,
to confirm that the type of interest notified by this latter, is
the one indicated to be paid and that the new rate of interest is true, correct
and accepted by THE DEBTOR. Current interests shall be calculated based upon a
year of three hundred sixty five days by the exact amount of days occurred since
the date of the last payment of capital until the next date of payment of
capital, both dates included in the calculation of interests. b.- Moratorium
Interests: In its case, a variable interest rate equivalent to thirty percent
above the current agreed interest rate, calculated upon the basis of one year of
three hundred sixty days by the exact amount of days occurred since the date in
which THE DEBTOR failed in the payment of the pertaining capital until the
effective date of payment to THE CREDITORS, both dates included in the
calculation of interests. In this sense, while no adjustment is made to the
current interest rate, according to what is established in Paragraph A -) of
this clause, the moratorium rate would be THIRTEEN POINT SIXTY FIVE percent
annually. Such moratorium interests shall also be paid by THE DEBTOR in Dollars.
c.- Structuring Commission: THE DEBTOR must pay the amount of FIFTY EIGHT
THOUSAND FIVE HUNDRED DOLLARS to the CREDITORS, for concept of restructuring of
credit for the sole time, amount that THE DEBTOR authorizes and requests the
deduction of the amount of first disbursement. Fifth Clause: Duties and
Currency. All payments made by THE DEBTOR shall be free and without deduction of
any duty, rate, right, lien, retention or contribution, that may exist or is
imposed in the future by any political, administrative or judicial authority of
the domicile of THE DEBTOR. If The DEBTOR is or will be bound to deduct or
retain any amount for any reason, this shall increase the payment in such manner
that THE CREDITORS receive upon expiration the complete amount entitled
according to the terms of this contract. If THE CREDITORS pays any amount of
money charged to THE DEBTOR, for duties or to maintain the validity of the
guarantees, or assure payments or obligations of THE DEBTOR, this will reimburse
immediately the amount in the currency indicated in the receipt along with the
interests pertaining to the rates previously agreed. Considering the fact that
this loan is an operation in Dollars, currency of the United States of America,
THE DEBTOR is bound and irrevocably has the obligation to pay all the amount
required under this loan in the same currency. Sixth Clause - Period: The period
is five years and six months, counted upon the VALUE DATE, according to what is
stipulated in paragraph xi -) of the First Clause of this contract, be it the
expiration date June seven of the year two thousand five. Seventh Clause - Form
and Place of Payment of the capital owed: a.- Settlements: THE DEBTOR shall pay
THE CREDITORS the amount of the capital owed, through the pertaining payment of
twenty installments of capital, quarterly, expired, fixed and consecutive, for
the amount of ONE HUNDRED THIRTY NINE THOUSAND TWO HUNDRED EIGHTY FIVE DOLLARS
WITH SEVENTY TWO CENTS each, payable on the seventh day of each month beginning
every quarter, starting the SEVENTH DAY OF SEPTEMBER of the year two thousand,
by virtue of a period of grace of six months for the payment of capital which
has been granted by THE CREIDTORS to the DEBTOR. The balance, that is the amount
of ONE MILLION ONE HUNDRED FOURTEEN THOUSAND TWO HUNDRED EIGHTY FIVE DOLLARS
WITH SEVENTY CENTS shall be paid upon the expiration of the operation, be it the
seventh day of September of the year two thousand five. The quarterly
installments to be paid to THE CREDITORS shall be paid through checks, wire
transfer, or any other means to the entire satisfaction to THE CREDITORS. Unless
the payments are performed through wire transfer, these shall be made in the
main offices of Banco BFA, S. A., located in La Uruca, one
hundred seventy five meters to the North of Puente Juan Pablo Segundo, or in any
branch of such Bank. For better understanding, it is noted that the interests
shall be paid monthly, according to the fourth clause. Eighth Clause: [WITHOUT
TAKING NOTE ON THE REGISTRY]: A.- Conditions preceeding to the disbursement of
the credit: Previous to the disbursement of the credit, THE DEBTOR shall have
delivered to THE CREDITORS the following: i.- Financial Statements: Three years
of financial statements, including the balance, statement of loss and profit,
and cash flow of PriceSmart, Inc.. PriceSmart, Inc. is bound to the
aforementioned through its representative. ii.- Business Plan and Projected Cash
Flow for the period of the credit of THE DEBTOR and PRISMAR DE COSTA RICA, S. A.
in a consolidated manner. iii.- Business Plan and Projected Cash Flow of
PriceSmart, Inc. for the period nineteen hundred ninety nine - two thousand.
PriceSmart, Inc. is bound to the aforementioned through its representative. B.-
Special Conditions of the loan: i.- Insurance: As constructions are been carried
out in the farm which guarantees the LOAN, THE DEBTOR is bound to subscribe by
means of INTERSEGUROS, S. A., insurance policies against all risk, including but
not limited to risks on fire, hurricane, civil disturbance, earthquake, floods,
responsibility of accidents and business interruption and any other prejudice,
for an amount reasonable to the satisfaction of THE CREDITORS which shall be
equal to the balances due for concept of capital of the LOAN. The rights derived
from previous insurance policies shall be assigned in favor of THE CREDITORS
while this LOAN CONTRACT is in force. The amounts paid by the insurance company
for an insurance policy shall be applied to the payment of capital and interests
of this trusteeship loan, or in its defect, with the authorization of the
creditors, it shall be used for the restoration of all or part of the facilities
which are guaranteeing the LOAN. The aforementioned fact will be without
prejudice to any other right or remedy that THE CREDITORS may have according to
this LOAN CONTRACT. THE CREDITORS may authorize THE DEBTOR to subscribe the
above indicated insurance policies by means of other company different to
INTERSEGUROS, S. A.. In this case, THE DEBTOR shall provide THE CREDITORS upon
their request, a certification of the existence of the policies herein stated.
In addition, THE DEBTOR shall give THE CREDITORS in the anniversary of each
insurance policy without requirement, or upon request of THE CREDITORS at the
moment this latter redeem necessary, the duplicated originals of all the
insurance policies or contracts executed according to the previous stipulations,
as well as copies of the receipts of premiums paid, an a confirmation issued by
the insurer stating that the policies are in force and in full effect, and that
THE CREDITORS are registered as mortgage creditors and beneficiary of the same.
It is understood that in the event the DEBTOR does not pay on the pertaining
date the quotas of the insurance policies herein stated, THE CREDITORS may
proceed to make such payments, and the DEBTOR will be bound to pay THE CREDITORS
the amount paid for insurance policy within the month following to the date in
which THE CREDITORS have made such payment. The noncompliance of this obligation
by THE DEBTOR shall be cause of anticipated expiration of the LOAN. ii.-
Prepayment: THE DEBTOR reserves the right to pay in advance the loan owed but,
in such case, shall not have right to any discount or return of the commissions
already paid. Any prepayment shall be applied to the capital in inverse order of
expiration of the loan and all the interests earned on the amount of such
prepayment shall be paid at the same time. The anticipated payment may be total
or partial. In the event THE DEBTOR makes partial prepayments, the same shall be
in quotas not less than TWO HUNDRED EIGHTY
SIX THOUSAND SEVEN HUNDRED FIFTY DOLLARS, and will not be bound to the payment
of any fine. It is understood that any prepayment shall necessarily coincide
with the dates of payment of interests. In any case of prepayment, THE DEBTOR
shall notify THE CREDITORS four days in advance its intention. THE DEBTOR shall
compensate the CREDITORS against any loss, cost or expense incurred by THE
CREDITORS as result of noncompliance of a prepayment required and confirmed by
THE DEBTOR. [CONTINUES TAKING NOTE ON THE REGISTRY]: Ninth Clause: THE DEBTOR
and PRISMAR DE COSTA RICA, S. A. expressly bind themselves and agree for the
entire period of the loan and until all the financial obligations derived from
the same have been cancelled in its totality and during the period in force of
all the guarantees given and constituted according to this contract, to the
following: i) Existence and Licenses of Operation: THE DEBTOR and PRISMAR DE
COSTA RICA, S. A., shall keep and maintain with full legal effect its corporate
existence full capacity to operate in Costa Rica, as well as all type of
licenses and permits to operate its activities. Likewise, THE DEBTOR and PRISMAR
DE COSTA RICA, S. A. shall comply with all important aspects related to the
applicable laws, rules, decrees, resolutions, sentences, and orders or
restrictions imposed by any entity or governmental, judicial or administrative
authority, be it applicable to the performance of its business and activities,
and to the property of their properties and assets and the related subsidiaries,
including environmental laws; and shall pay and maintain updated all the
material obligations which they may have during the period of this loan. ii)
Performance of their business: They shall continue performing and operating
their business as described to THE CREDITORS in regards to this LOAN CONTRACT.
iii) Assets and Properties: The farm will be kept in guarantee of this
obligation in the same or better condition in which is currently found.
Likewise, the store "PriceSmart" is kept to build in the mentioned farm, in
perfect state of conservation and maintenance. THE DEBTOR and PRISMAR DE COSTA
RICA, S. A. in particular, may not lien, assign or dispose of in any manner the
farm mortgaged in guarantee of the LOAN. iv) Auditing and inspections: THE
DEBTOR and PRISMAR DE COSTA RICA, S. A. are bound to cooperate in the inspection
on loans and guarantees carried out by the General Superintendency of Financial
Entities. In addition, THE DEBTOR and PRISMAR DE COSTA RICA, S. A. are bound to
accompany the legal representatives of THE CREDITORS in order to inspect the
properties granted in guarantee, at the moment in which THE CREDITORS consider
necessary, provided that it is during working hours. v) Reports: Financial
Statements: THE DEBTOR and GUARANTORS shall present to THE CREDITORS within
ninety days following to the date of its business year, the Annual Financial
Statements audited by an external auditing firm accepted by THE CREDITORS. In
case of THE DEBTOR and PRISMAR DE COSTA RICA, S. A., the Financial Statements
above mentioned shall be consolidated. In the event that THE CREDITORS would not
approve in a determined moment the external auditing firm, the same shall notify
THE DEBTOR and/or the GUARANTORS indicating the reasons justifying its refusal.
In such case, THE DEBTOR and/or GUARANTORS shall have a period of thirty days
upon the date of the notice to appoint a new company that shall be subject in
the same manner to review and approval by THE CREDITORS. Once passed this period
without receiving the approval from THE CREDITORS these shall have right to
consider due in advance and along with all the financial obligations in its
favor. Internal Financial Statements: THE DEBTOR and GUARANTORS shall present to
THE CREDITORS quarterly within forty five days following the date of
closing of each quarter, their internal financial statements. In case of the
DEBTOR and PRISMAR DE COSTA RICA, S. A., these shall be consolidated. All
statements shall obtain a sworn statement of a legal representative stating the
compliance of all the obligations herein contracted, including but not limited
to: the respective financial reasons. vi) Payment of duties: THE DEBTOR and
PRISMAR DE COSTA RICA, S. A. shall present on a timely basis all and every one
of the statements of rent and reports, and shall pay on a timely basis all
municipal and property duties and governmental taxes or charges that for any
other reason are due to their activities and real estate, in particular those
which affect the farm mortgaged under this document. THE DEBTOR and PRISMAR DE
COSTA RICA, S. A. shall have no obligation to pay such duties while claiming the
validity or the amount of the same, in good faith and through the proper legal
procedures; nevertheless, it shall present in their financial statements the
reserve or provision necessary for the payment of the same in the event that
such payment must be made. vii) Maintenance of such financial reasons that shall
be reviewed on a quarterly basis: During the period of the credit, THE DEBTOR
and PRISMAR DE COSTA RICA, S. A., in a consolidated manner, shall maintain the
following financial indexes calculated by fiscal year in case: a -) Reason of
the service of the debt excluding "Back to Back" type operations, provide at
least one point one for the year two thousand; one point fifteen for the year
two thousand one, one point twenty five for the year two thousand two and one
point five after year two thousand three and following; measure in all cases at
the end of each quarter and calculated in proportion to twelve renewable months.
It is defined the reason of service of the debt as: the net utility plus
interests, plus depreciation, plus amortization, all of the previous divided by
the capital plus the payment of interests: b -) The reason of coverage of
interests, excluding "Back to Back" type operations, it shall not be lower than
the level of one point seventy five percent for the year two thousand; of two
points for the year two thousand one; of two point five of the year two thousand
two; and of three for the following years; c -) The total debt, excluding "Back
to Back" type operations/ EDBITFA shall not be over: five for the year two
thousand; four for the year two thousand one; two point seventy five for the
year two thousand; two point five for the years two thousand three and two
thousand four. EDITDA shall be calculated using the past twelve months upon the
moment of the calculation, and shall be defined as: the amount (without
duplication) of: one -) net utility plus two -) depreciation and amortization,
plus three -) interest expenses, plus four -) all other accounting expenses
which do not represent outcome of cash during the period, including but not
limited to: losses not performed derived from the exchange differential or
currency corrections, and only when such expense has been deducted in regards to
the determination of the net utility; plus tax expenses to the profits, only
when this expense has been deducted in relation to the determination of the net
utility, minus accounting income which do not represent an income of cash during
the period, including but not limited to: profits due to exchange differential
and currency corrections, minus income of capital from participation in
subsidiaries or affiliates, plus dividends in cash received from subsidiaries
and affiliates. d -) The reason of leverage of THE DEBTOR must not be over three
for the year two thousand, two point five for the year two thousand one and two
for the following years. The reason of leverage is defined as "the total of the
debt" minus "back to back" type operations over the patrimony plus "back to
back" type operations. viii) Notice of litigation, administrative procedures,
requalification of taxes: THE DEBTOR shall notify in writing THE CREDITORS,
immediately after THE DEBTOR has knowledge of any litigation, administrative or
arbitration procedure, or requalification of taxes, which affect THE DEBTOR,
developed adversely, or that threatens to be set against it, and it may be
possible to have an adverse material effect over the business, assets or
financial condition of THE DEBTOR, or that affects or may possibly affect the
capacity of THE DEBTOR to execute de obligations acquired by this document and
under the LOAN CONTRACT herein convened. ix) Annual reviews of the loan: THE
DEBTOR and PRISMAR DE COSTA RICA, S. A. bind themselves and agree to adhere to
the annual reviews of the loan carried out by THE CREDITORS, and to adhere to
those additional requirements which may be necessary to impose to THE DEBTOR and
PRISMAR DE COSTA RICA, S. A. due to such reviews. x) Maintenance of books and
registries: THE DEBTOR and PRISMAR DE COSTA RICA, S. A. are bound to maintain
properly and accurately all necessary and common books and registries used in
similar companies. xi) Business with affiliates: The parties agree that, both
THE DEBTOR and PRISMAR DE COSTA RICA, S. A. shall carry out business or
transactions with affiliates, provided that such negotiations are in the same
conditions as those carried out with independent third parties. Tenth clause:
Negative obligations of THE DEBTOR and PRISMAR DE COSTA RICA, S. A.: THE DEBTOR
and PRISMAR DE COSTA RICA, S. A. expressly bind themselves and agree for all the
period of the loan and until all the financial obligations derived from the same
have been cancelled entirely and during the term in force of all the guarantees
granted and constituted according to this contract, that: i) Shareholding
Property: Will not carry out or will not allow the performance of any change in
stock structure, which implies a change of stock control in THE DEBTOR and/or
PRISMAR DE COSTA RICA, S. A., while this contract is in effect or there is a
financial obligation derived from this contract or its guarantees, not paid in
part or totally, all of which without the previous express and written consent
of THE CREDITORS. It shall be excluded of this prohibition and of any
prohibition related to the change of stock participation of THE DEBTOR and THE
GUARANTORS, any transaction which implies an increase of the stock participation
of PRICESMART, INC. in any of its subsidiaries. ii) Existence of THE DEBTOR and
PRISMAR DE COSTA RICA, S. A.: THE DEBTOR and PRISMAR DE COSTA RICA, S. A. will
not adopt any agreement of merge, or shall not be liquidated, dissolved or
consolidated with any other society or entity, nor will carry out investments in
subsidiaries, affiliated or third parties, nor shall guarantee obligations of
this parties without the previous written consent of THE CREDITORS. In any
event, the refusal of THE CREDITORS shall be based upon reasonable criteria and
sustained in order to be discussed with THE DEBTOR and PRISMAR DE COSTA RICA, S.
A.. Neither THE DEBTOR or PRISMAR DE COSTA RICA, S. A. shall invest in the stock
capital or in titles of any subsidiary or affiliate, except in the ordinary
course of its business. iii) THE DEBTOR and PRISMAR DE COSTA RICA, S. A. shall
not carry out any of the following transactions in regards to the farm mortgaged
in this act, with the store to be built in the same and with the assets and
inventory of the same, if these exceed the two hundred fifty thousand dollars a
year, unless they count with express authorization of THE CREDITORS, which shall
not be denied without reasons: acquisitions, sales or transfer of shares, leases
or sales, sales with lease, repurchase or redemption of issued and outstanding
shares (including options and coupons of share subscription), exchanges,
cancellations or resolutions, reforms or repurchase of debts and obligations of
capital lease and operative leases. This restriction does not apply to
investments in improvements intended to be carried out in the farm mortgaged in
this act, as
well as the store "PriceSmart" which will be built on such farm. It will be
considered as improvement the substitution of all the equipment found in the
store at the moment of its opening. iv) THE DEBTOR and PRISMAR DE COSTA RICA, S.
A. are bound to not mortgage, pledge or in any manner grant in guarantee the
farm mortgaged in this act, as well as any of the properties related with the
store to be built in such farm, without the previous and express authorization
of THE CREDITORS, which shall not be denied without reasonable basis. Eleventh
clause: Statement and Guarantees: With the purpose that THE CREDITORS have
convened with THE DEBTOR in this LOAN CONTRACT, furnished by the undersigning
Notary and understanding the penalties established by the Costarrican law for
fake statement and perjury, the representative of THE DEBTOR provides the
following statement and guarantees under faith of oath: i) the representative of
THE DEBTOR declares and guarantees that THE DEBTOR is a society duly organized
according the laws of Costa Rica, legally existing on this date and with full
judicial capacity to grant this LOAN CONTRACT and the documents which complement
it. ii) The representative of THE DEBTOR declares and guarantees that the same
counts with power and/or authorizations, according to law are necessary to act
in name and representation of the same and to subscribe this document, this LOAN
CONTRACT and the documents that complement it. iii) The representative of THE
DEBTOR declares and guarantees that THE DEBTOR has provided without omission,
all the tax statements that the law requires to be presented; that it has paid
without omission all the taxes resulting from such statements or from any
appraisal, requalification or requirements for duties; that neither him or THE
DEBTOR has knowledge of obligation, appraisal, tax, requirement or any
requalification in regards to periods covered by statements or notices presented
before today, further than those appearing in such statements and notices, that
neither him or THE DEBTOR have been notified by the competent authorities of any
deficiency, error or requalification of its tax obligations and/or any other
nature; and that neither him or THE DEBTOR expect any cause for this to happen.
iv) The representative of THE DEBTOR declares that the same consents and
guarantees the collaboration in the inspections carried out by the General
Superintendency of Financial Entities and/or THE CREDITORS to verify the
compliance of the investment plan found in the credit file to which this LOAN
CONTRACT refers to and binds himself and agrees to provide THE CREDITORS any
report related to the investment of the loan, as well as the updated report of
its financial statements. v) the representative of THE DEBTOR and PRISMAR DE
COSTA RICA, S. A. declares and guarantees that THE DEBTOR has obtained all the
authorizations, licenses and permits necessary to carry out all the activities
pertaining to its businesses and commercial operation and that the same shall
remain in effect during all the period of the debt. vi) The representative of
THE DEBTOR declares and guarantees that all the obligations and stipulations
expressed and assumed by THE DEBTOR through this document, constitute legal,
valid, relating and executable obligations against THE DEBTOR in accordance to
the pertaining terms, and that the same do not require any additional
authorization from its corporate structure, legal representatives,
administrative, governmental, judicial or arbitration authorities or by any
legislation or rule that may be applicable or related to THE DEBTOR. viii) The
representative of THE DEBTOR declares and guarantees that THE DEBTOR up to the
date of granting of this document is
found complying any law, rule, agreement, contract, mortgage, trust, convention,
license or any other instrument, obligation or task by which the same or any of
its properties is related or affected, be it a noncompliance affecting
significantly and adversely its capacity to comply or execute any of the
obligation of this LOAN CONTRACT. viii) The representative of THE DEBTOR
declares and guarantees that no litigation, arbitration or claim which may, by
itself or jointly with any other procedure or claim, significantly and adversely
affect its faculty to comply or execute its obligations under this LOAN
CONTRACT, happening or pending or threatening against THE DEBTOR and its assets,
up to where the same has knowledge, estimate and information until this date.
ix) The representative of THE DEBTOR declares and guarantees that THE DEBTOR has
totally revealed to THE CREDITORS all the facts related to the same which are
known or which should be reasonably known, and that these have resulted useful
and necessary to the subscription of this LOAN CONTRACT and for THE CREDITORS to
convene the subscription of the same. x) The representative of THE DEBTOR and
PRISMAR DE COSTA RICA, S. A. declares and guarantees that he has not taken any
decision or any step for or against or related to THE DEBTOR for its
liquidation, dissolution, bankruptcy, reorganization or for the appointment of
an intermediary, trustee, or representative similar in regards to any or all the
assets or entries of THE DEBTOR. xi) The representative of THE DEBTOR declares
and guarantees that it does not have any significant obligation or any
significant contingent obligation which has not be revealed to THE CREDITORS.
The representations, statements and guarantees established in this clause will
continue after the execution of this LOAN CONTRACT and shall be considered as
repeated in any subsequent date until the loan and other outstanding amounts
originated in the same are duly cancelled to THE CREDITORS, as well as all the
obligations stipulated in the same have been complied. Twelfth Clause:
Non-compliance: i) The delay in the payment of capital, by THE DEBTOR according
to what has been agreed. ii) the delay in the payment of one or more
installments of outstanding interests, as convened. iii) the non-compliance of
the payment of any obligations of THE DEBTOR and/or of PRISMAR DE COSTA RICA, S.
A. with any individual or entity, when such non-compliance goes on for more than
thirty days after the due date, with exception of those debts existing with
PriceSmart, Inc., whose non-compliance shall be extended for ninety days; and
those obligations which are guaranteed with "back to back" and in all cases
provided that the obligations collected are not being reasonably questioned. iv)
the non-compliance of any other financial or non-financial obligations
established in this contract. v) if THE DEBTOR or PRISMAR DE COSTA RICA, S. A.
adheres to the dissolution, liquidation, administration and reorganization due
to judicial receiver, be it declared in bankruptcy or may request any type of
procedure, agreement with creditors, or if it is consented in the appointment of
any receiver or if begins the cease of payments, with exception of all those
debts guaranteed with "back to back". vi) the non-compliance of any
representation or guarantee made by the DEBTOR, Prismar de Costa Rica, S. A. or
any of the other guarantors or the determination that such guarantee or
representation was incorrect, or if any of the agreements are not complied by
these. vii) or if the guarantees constituted by this document may not be
registered in the Public Registry Office due to THE DEBTOR. viii) if this LOAN
CONTRACT or any guarantee of those granted by THE
DEBTOR cease of being a valid and perfect right of guarantee, or if these may
have due to any circumstance a significant adverse effect in its nature of
guarantees for THE CREDITORS. ix) if any legal or administrative process objects
in a material manner THE DEBTOR to continue with the normal business and
operations, of if these may have a significant adverse effect in the business,
operations and financial statements of THE DEBTOR. x) if the validity or term of
this LOAN CONTRACT or any guarantee granted in regards to the same is
successfully executed by any authority of the Government or any individual or
entity third party. xi) If the Board of Directors or high management of THE
DEBTOR and/or PRISMAR DE COSTA RICA, S. A. make decisions which jointly with
others or in a separate manner affect or may adversely affect the patrimony of
THE DEBTOR, or the quality, preservation and/or status of the guarantee, in
terms of article seven hundred seventy seven of the Civil Code of the Republic
of Costa Rica, for which any damage shall imply that the same must grant
guarantee in excess and that it is involving the non-compliance of the
guarantee. For any effect THE DEBTOR recognizes as sufficient to consider such
deterioration or potentiality of deterioration the opinion of its external
auditors, along with the opinion of the department of Credit and the General
Management of THE CREDITORS. xii)a change of property, management or control
occurs in THE DEBTOR, PRISMAR DE COSTA RICA, S. A. without the previous and
written consent of THE CREDITORS. xiii) If the GUARANTORS do not comply with any
of the obligations assumed in this LOAN CONTRACT; or xiv) if any materially
adverse change occurs in the financial condition or of any other type or in the
business or in the perspective of business of THE DEBTOR and/or PRISMAR DE COSTA
RICA, S. A. xv) If any material changes happen in the laws or rules which may
seriously affect the possibility of complying the obligations herein stipulated.
xvi) If the guarantee granted in this act is not considered privileged before
the other debts of THE DEBTOR and/or PRISMAR DE COSTA RICA, S. A. xv) if any
materially adverse change occurs in the financial condition or of any other type
or in the business or in the perspective of business of THE DEBTOR and/or
PRISMAR DE COSTA RICA, S. A. xvi) If THE DEBTOR and/or PRISMAR DE COSTA RICA, S.
A. do not comply with any of the obligations assumed in the contract: and xviii)
If the statements and information provided by THE DEBTOR and PRISMAR DE COSTA
RICA, S. A. which lead to the concession of the LOAN were false or distorted;
THEN: THE CREDITORS shall have right to consider past due in an anticipated
manner and jointly with all financial obligations in its favor and shall have
the faculty to judicially demand the payment of the LOAN based upon the
contract, which for all legal effects constitute executory title. No fault or
delay from THE CREDITORS in executing or exercise any right resulting from the
present contract shall be interpreted as a resignation to this or any right or
faculty which corresponds according to this contract or the Law; all the rights
contained in this contract or any guarantee of the same are accrued and may be
exercised in jointly or separately. Thirteenth Clause: Period for the correction
of non-compliance and reasons for the anticipated expiration: Without prejudice
to what is established in the Eleventh Clause and without affecting the
consequences of the non-compliance or anticipated expiration, amongst them but
not limited to the right to collect moratorium interests, THE CREDITORS bind
themselves to grant, previous to the execution of any judicial action to which
the same
is entitled according to the guarantees furnished, a period for the remedy of
such non-compliance or reasons for the anticipated expiration, according to the
following: i) In the event that the non-compliance is of the payment of any
amount owed by virtue of the LOAN CONTRACT. THE CREDITORS shall notify THE
DEBTOR of the existence of such non-compliance granting an unpostponable period
of thirty days for the immediate and definite correction of the cause for
non-compliance or reason of anticipated expiration. Fourteenth Clause:
Guarantee: To reply for the payment of the amount of capital owed, outstanding
interests, moratorium interests in case, personal and processing fees of an
possible collection and all other financial responsibilities or of other nature
charged to THE DEBTOR established in this LOAN CONTRACT, and/or damages and
prejudices caused due to the non-compliance of THE DEBTOR, THE DEBTOR grants:
A.- Mortgage in first degree for the amount of THREE MILLION NINE HUNDRED
THOUSAND DOLLARS, in favor of THE CREDITORS, over a farm described in Paragraph
A -) of this document. The participation that each of the debtors will have in
the guarantee constituted in this act is the one established in the mentioned
Paragraph A. Such farm shall cover the total amount of capital of the LOAN plus
the pertaining interests. In the event of a possible auction via judicial
processing, the base price for the sale of the farm herein mortgaged will be the
amount owed for concept of capital of the LOAN, according to what THE CREDITORS
establish upon the moment of presenting the corresponding executory demand. At
any moment in which THE DEBTOR, with the previous and discretional consent of
THE CREDITORS sells part of the mortgaged farm, the price per meter of partial
discharge of the guarantee constituted in this act that THE DEBTOR shall pay to
THE CREDITORS as installment to the capital of the LOAN, will consist in the
price per meter established on the last appraisal carried out over the farm in
reference or the ninety percent of the price per meter of the sale performed.
B.- Guarantee: Are constituted as solidary guarantors of the financial
obligations charged to THE DEBTOR consigned in this LOAN CONTRACT, the following
companies in the proportion hereinbelow indicated: i -) Prismar de Costa Rica,
S. A. and PSMT CARIBE, INC., each of them in solidary and absolute manner for
the total amount of the debt. ii) PriceSmart, Inc., for an amount which shall
not exceed the sixty percent of the capital, plus the pertaining interests, and
iii) PSC, S. A., for an amount which shall not exceed the forty percent of the
capital plus the pertaining interests. These companies make the same waivers and
stipulations that THE DEBTOR and grant from this moment their authorization to
provide extensions and other facilities, without need to advise or notify,
waiving its domicile and payment requirements. [WITHOUT TAKING NOTE ON THE
REGISTRY]: THE CREDITORS shall reduce the possibility of the guarantees
according to the following: a. Dollar per dollar with the repayment of the
credit in accordance to the amortization table, which is attached to the present
contract and shall be integral part of the same for all legal and contracting
effects. b.- The fifty percent of the outstanding debt is equal or lesser than
the fifty percent, and that in addition, during the previous twelve months, the
operating net utility of the project has covered the proportion of service of
debt (interests and capital amortization) in the loan in proportion of one point
five to one, as minimum; and c.- To thirty percent of the debt outstanding of
payment at the moment in which the relation between the original amount of the
credit and the outstanding balance of the payment is equal or lesser than the
thirty percent and, for the previous twelve months, the operating net
utility of the project has covered the proportion of service of one point
seventy five to one, as minimum. These reductions shall be given by THE
CREDITORS upon express request of THE GUARANTORS, otherwise the guarantees will
remain in effect as originally agreed. In any event, this reduction does not
apply for the solidary guarantee granted by Prismar de Costa Rica, S. A., which
will remain in force in equal periods during the complete term of the debt. .
[CONTINUES TAKING NOTE ON THE REGISTRY]: THE DEBTOR and THE GUARANTORS waive to
the domicile, payment requirements and executory demand processing. The liens
cover, without been limited to: any improvement on the mortgaged farm, including
those made by third parties, as well as any excess room existing between the
measure indicated on the Public Registry and the actual measure of such farm,
all of which THE DEBTOR agrees with. The assignment of payment is upon exclusive
judgement of THE CREDITORS, even after the possible auction. THE DEBTOR is bound
to pay all the taxes applied to the farm mortgaged in this act and to give THE
CREDITORS during the complete period while the mortgage lien is in force, all
the communications received regarding duties and the receipts of payment in
cash, including any applicable interest or fine. THE DEBTOR is bound and agrees
not transfer, consent or grant any other lien over the mortgaged farm in this
document, without the previous and written consent of THE CREDITORS, and
likewise discharge another lien that may be valid over the properties given in
guarantee while the liens imposed through this document are in effect. Fifteenth
Clause: Additional obligations of the Guarantors: PriceSmart, Inc. binds itself
to maintain a net minimum patrimony of fifty five million dollars during the
period in which the debt is in force. Likewise, PriceSmart, Inc. is bound to
maintain a participation of sixty percent of the stock capital of PSMT Caribe,
Inc. an entity constituted and organized according to the laws of the British
Virgin Islands. PSMT CARIBE, INC. is bound to keep a minimum patrimony of twenty
five million dollars. In all of the above cases exceptions may exist if
authorized in a previous and written manner by THE CREDITORS. Sixteenth Clause:
Expenses and Honorary: All the expenses and honorary, taxes, rates stamps,
chares pertaining to the negotiation, preparation, granting, management and
execution of this LOAN CONTRACT, its guarantees and other acts and related
documents, shall be charged to THE DEBTOR and shall be paid by this latter
immediately upon request of THE CREDITORS. THE DEBTOR agrees and consents in
assuming and paying the personal and processing fees of all and each of the
possible actions that THE CREDITORS may execute against THE DEBTOR. Seventeenth
Clause: Partial cancellation and non-compliance of the obligation: The
cancellation or illegality of any of the stipulations of this LOAN CONTRACT
shall not affect the validity, legality or requirement of all other clauses. All
the rights and recourses established in this document or in any guarantee
document are accruable and may be executed contemporary or consecutively, are in
addition and not exclusive of any other right or recourse established by law.
The fact that THE CREDITORS do not require the precise compliance of all or any
of the obligations resulting for THE DEBTOR of this document, shall not imply or
shall be considered as an excuse, amendment, acceptance or resignation to the
terms, conditions and rights established in the LOAN CONTRACT, since in order to
be valid amongst the parties, the same shall be made in writing and accepted by
the parties. Eighteenth Clause: Lack of Joint Venture: Nothing of what is herein
stated and contained constitute or may be construed as creation of an joint
association or joint venture or society for the performance of a common goal
between THE DEBTOR and THE CREDITORS. THE CREDITORS do
not assume the responsibility for any obligation or risk derived from the
business and activities of THE DEBTOR in a direct or indirect manner. Nineteenth
Clause: Statement of mutual benefit: THE CREDITORS and THE DEBTOR make express
statement
Nineteenth Clause: Statement of Mutual benefit: THE CREDITORS and THE DEBTOR
makes expressed consent that what have been convened by them in this LOAN
CONTRACT is the result of the mutual negotiations and concessions that benefit
them. Twentieth Clause: Applicable Law and Jurisdiction: THE CREDITORS, THE
DEBTOR and THE GUARANTORS adhere to the laws of the Republic of Costa Rica for
the interpretation of this LOAN CONTRACT. Any demand, action or procedure
related to this LOAN CONTRACT or its execution, shall be submitted to the
knowledge of the competent court f the city of San Jose, in the Republic of
Costa Rica, for which all the parties waive their domicile. Twentyfirst Clause:
Communications, notices and requirements: Any communication, notice or
requirement related to this LOAN CONTRACT, shall be made in writing through
certified letter with acknowledgment receipt in the domicile stated in this
contract, to the following addresses: To THE CREDITORS: In the offices of Banco
BFA, S. A. in La Uruca, next to the offices of Grupo Taca. To THE DEBTOR and THE
GUARANTORS: At the Attorney Office Zurcher Montoya & Zurcher, First Street,
Avenues Nine and Eleven, Post Office Box four zero six six thousand, San Jose or
at fax two two one nine one two seven, to the attention of Edgar Zurcher
Gurdian. In addition, copies shall be sent via fax to Mr. Ernesto Grijalva at
his offices in forty six forty nine Morena Boulevard, San Diego, California,
nine two one one seven. In closing, THE DEBTOR and THE GUARANTORS, through their
representatives duly credited and related to this document, without prejudice to
their waiver to domicile, expressly indicate to hear notices in the event of
non-compliance of the obligation herein contracted, the address stated in this
document, for the effects of article four of the Law number seven thousand six
hundred thirty seven of Judicial Summons and Notices and of article one hundred
sixty four bis of the Civil Processing Code, and declare that in the address
herein mentioned they may be notified personally or via identification, and that
they understand that in case their domicile may result inaccurate or inexistent,
they shall be summoned by means of the Order published in the Judicial Bulletin
and in a national newspaper. The parties authorize the undersigning Notary to
proceed joint or separately as notary to carry out all the corrections,
clarifications and additions in such necessary manner to the witness of this
document for its proper registration to the Public Registry, without affecting
the substance of the business between the parties. The undersigning Notary
informs the deponent the legal approaches of their waivers and stipulations and
the implied obligations related, who after understanding accept in full. This is
all. Issued in first testimony for the creditors in the act of granting the
document. Read the document to the deponents, who approve and jointly sign in
the city of San Jose, at fifteen hours thirty minutes of the twenty eighth day
of the year two thousand. [signed] [signed]
IN FAITH OF WHICH, I sign and seal this document, upon the request of the
interested party, in Santo Domingo, National District, Capital of the Dominican
Republic, on this eighteenth (18th) day of the month of February of the year two
thousand. This is a faithful translation effected from the copy of the original.
Internal Revenue Stamps:
RD$1.00 No. Amalia Chia Shum
RD$0.25 No. Judicial Interpreter
CONTRATO DE PRESTAMO ACCESORIO CON
GARANTIA DE PRENDA SIN DESAPODERAMIENTO
ENTRE:
BANCO NACIONAL DE CREDITO, S. A., sociedad bancaria, organizada y existente
de conformidad con las Leyes de la Republica Dominicana, con su domicilio
social y principal establecimiento ubicado en la esquina de las avenidas John
F. Kennedy y Tiradentes de esta ciudad de Santo Domingo, debidamente
representada por los senores Wilfrido Flores y Rosangela Pellerano,
dominicanos, mayores de edad, casados, ejecutivos bancarios, portadores de
las cedulas de identidad personal y electoral Nos. 001-0172017-5 y
001-0170307-2, domiciliados y residentes en esta ciudad de Santo Domingo,
quienes actuan en sus calidades de Vicepresidente de Administracion de Riegos
y Legal y Vicepresidente de Banca Corporativa; Institucion que en lo adelante
se denominara "EL BANCO".
PRICESMART DOMINICANA, S. A., compania organizada y existente de conformidad
con las leyes de la Republica Dominicana, con su domicilio social y principal
establecimiento sito en la Avenida San Martin No. 253, Edificio Santanita I,
Suite 403 de esta ciudad de Santo Domingo; debidamente representada por
Alberto Bonetti, dominicano, mayor de edad, casado, empresario, portador de
la cedula No. 001-0102205-1, domiciliado y residente en la casa No. 33 de la
calle Porfirio Herrera del Ensanche Plantini de esta ciudad, y Eric Torres de
nacionalidad norteamericana, mayor de edad, portador del Pasaporte de los
Estados Unidos de Norteamerica No. 093904746, domiciliado en la avenida
Charles Summer No. 54 de esta ciudad de Santo Domingo; quienes actuan en
virtud de la resolucion del Consejo de Administracion de fecha 14 del mes de
febrero del ano 2000; quienes actuan en virtud de la resolucion del Consejo
de Administracion de fecha 14 del mes de febrero del ano 2000; E INMOBILIARIA
PRICESMART, S. A., sociedad existente acorde con las leyes de la Republica
Dominicana con su domicilio social y principal establecimiento
ubicado en la Avenida San Martin No. 253, Edificio Santanita I, Suite No. 403
de esta ciudad de Santo Domingo; debidamente representada a los fines del
presente acto por Alberto Bonetti, dominicano, mayor de edad, casado,
empresario, portador de la cedula No. 001-0102205-1, domiciliado y residente
en la casa No. 33 de la calle Porfirio Herrera del Ensanche Piantini de esta
ciudad; y Eric Torres de nacionalidad norteamericana, mayor de edad, portador
del Pasaporte de los Estados Unidos de Norteamerica No. 093904746,
domiciliado en la avenida Charles Summer No. 54 de esta ciudad de Santo
Domingo; quienes actuan en virtud de la resolucion del Consejo de
Administracion de fecha 14 del mes de febrero del ano 2000; entidades de
comercio que se denominaran "LOS DEUDORES", o por sus propios nombres
indistintamente.
PSMT CARIBE, INC., entidad de comercio organizada acorde con las leyes de
las Islas Virgenes Britanicas, con su domicilio social ubicado en las
oficinas de Ernst & Young Trust Corporation (BVI) Limited, P.O. Box 3340,
Road Town, Tortola Islas Virgenes Britanicas; y accidentalmente en la
edificacion ubicada en el No. 10 de la Avenida John F. Kennedy de esta ciudad
de Santo Domingo; debidamente representada a los fines del presente acto por
Jesus Ernesto Grijalva Garcia, de nacionalidad estadounidense, mayor de edad,
casado, portador del pasaporte No. 037002689, domiciliado y residente en el
No. 4649 Morena Blvd., San Diego, California, y accidentalmente en esta
ciudad de Santo Domingo; quien actua en virtud del Poder del Presidente de la
PSMT CARIBE, INC. de fecha 15 del mes de febrero del ano 2000, legalizada la
firma por la Notario Publico Evelisse Hernandez, y debidamente legalizado por
el Consulado Dominicano en la ciudad de San Francisco California; PRICESMART,
INC, entidad de comercio organizada acorde con las leyes de entidad de
comercio organizada acorde con las leyes de Estado de Delaware, con su
domicilio social ubicado en el No. 4649 Morena Blvd, San Diego, California; y
quien ha hecho eleccion de domicilio para fines del presente contrato en el
Edificio marcado No. 10 de la Avenida John F. Kennedy de esta ciudad de Santo
Domingo; debidamente representada a los fines del presente acto por Gilbert
Anthony Partida, de nacionalidad norteamericana, casado, empresario, portador
del Pasaporte No. 155092042, domiciliado y residente accidentalmente en esta
2
ciudad de Santo Domingo, quien actua la seccion No. 5 de los Estatutos
Sociales; PSC, S. A., entidad de comercio organizada y existente acorde con
las leyes de Panama, con su domicilio social y principal establecimiento
ubicado en la ciudad de Panama y accidentalmente en la edificacion ubicada en
la Avenida John F. Kennedy de esta ciudad de Santo Domingo, debidamente
representada a los fines del presente acto por Alberto Bonetti Brea,
dominicano, mayor de edad, casado, empresario, portador de la cedula No.
001-0102205-1, domiciliado y residente en la casa No. 33 de la calle Porfirio
Herrera del Ensanche Piantini de esta ciudad; quien actua en virtud de
resolucion de la Junta de Directores de fecha 9 del mes de diciembre del ano
1999; entidades que de manera conjunta se denominaran LAS FIADORAS SOLIDARIAS
E INDIVISIBLES
POR CUANTO: En fecha 22 del mes de febrero del ano 2000, "LOS DEUDORES" Y LAS
FIADORAS SOLIDARIAS E INDIVISIBLES suscribieron con "EL BANCO" un Contrato
Prestamo en Dolares con Garantia Hipotecaria por la suma de CUATRO MILLONES
CIENTO CINCUENTA Y TRES MIL DOLARES DE LOS ESTADOS UNIDOS CON 00/100
(US$4,153,000.00), para financiar construccion ya terminada de un almacen de
PriceSmart Dominicana, S. A., localizado en la ciudad de Santiago, Republica
Dominicana
POR CUANTO: Para garantia y seguridad del pago de las sumas adeudadas en
virtud del contrato de prestamo antes senalado fueron consentidas garantias
hipotecarias y solidarias, como se discriben a continuacion: (1) hipoteca en
primer rango sobre el inmueble que se describe a continuacion:
UNA PORCION DE DIECISIETE MIL QUINIENTOS METROS CUADRADOS (17,500 MTS2)
LOCALIZADOS DENTRO DEL AMBITO DE LA PARCELA NO. 7-C-8-I DEL DISTRITO
CATASTRAL NO. 8 DEL MUNICIPIO DE SANTIAGO, SECCION J DE RINCON LARGO,
PROVINCIA DE SANTIAGO CON LOS SIGUIENTES LINDEROS: AL NORTE, AVENIDA ESTRELLA
SADHALA Y PARCELA NO. 7-C-8-I (RESTO); AL ESTE LA AVENIDA ESTRELLA SADHALA;
AL SUR LA PARCELA NO. 7-C-8-I (RESTO) Y ARROYO GURABO; Y AL OESTE LA PARCELA
NO. 7-C-8-I (RESTO). AMPARADA LA PROPIEDAD DE DICHA PORCION EN EL CERTIFICADO
DE TITULO NO. _______________, EXPEDIDO POR EL REGISTRADOR DE
3
TITULOS DEL DEPARTAMENTO DE SANTIAGO, A FAVOR DE INMOBILLARIA PRICESMART, S. A..
y ( b ) garantia solidaria de las entidades de comercio PSMT CARIBE, INC;
PRICESMART, INC Y PSC, S.A., cuyas generales figuran descritas en la primer
pagina del presente acto, se convierte, en fiadores solidarlos e indivisibles
de todas y cada una de las obligaciones contraidas por LOS DEUDORES, en la
siguiente proporcion: ( 1 ) PSMT CARIBE, INC. por el cien por ciento (100%)
del monto del prestamo mas los intereses; ( 2 ) PRICESMART, INC., hasta el
sesenta por ciento (60%) del monto del prestamo mas los intereses y ( 3 )
PSC, S. A. hasta el cuarenta por ciento (40%) del monto del prestamo mas los
intereses. Asimismo, se acuerda que dichos garantes no podran oponerle a EL
BANCO el beneficio de excusion que se refiere el articulo No.2021 y siguientes
del Codigo Civil vigente.
POR CUANTO: Accesoriamente a la garantia hipotecaria en PRIMER RANGO
concentida por "LOS DEUDORES", asi como la garantia solidaria, en virtud del
contrato antes senalado, "LOS DEUDORES" consienten de manera accesoria una
Prenda Sin Desapoderamiento, sobre bienes de su propiedad, con un valor
estimado de tasacion de TREINTA Y CUATRO MILLONES CIENTO NOVENTA Y NUEVE MIL
TRESCIENTOS CON 00/100 (RD$34,199,300.00) a fin de garantizar las sumas dadas
en prestamo.
POR TANTO, los anteriores POR CUANTOS forman parte integral del presente
contrato las partes,
HAN CONVENIO Y PACTADO LO SIGUIENTE:
ARTICULO PRIMERO: MONTO. Queda entendido que para mayor seguridad y garantia
del pago de la suma de CUATRO MILLONES CIENTO CINCUENTA Y TRES MIL DOLARES DE
LOS ESTADOS UNIDOS DE NORTEAMERICA CON 00/100 (US$4,153,000.00) prestada por EL
BANCO a EL DEUDOR, en virtud del contrato de prestamo con garantia hipotecaria
fechado 22 del mes de febrero del ano 2000, LOS DEUDORES consienten una garantia
de prenda sin desapoderamiento sobre los bienes muebles con un valor
4
estimado de tasacion de TREINTA Y CUATRO MILLONES CIENTO NOVENTA Y NUEVE MIL
TRESCIENTOS CON 00/100 (RD$34,199,300.00) y que se describen en lo adelante en
este mismo contrato.
PARRAFO: CONDICIONES ESPECIALES. Queda expresamente convenido entre las
partes que todo lo relativo a la forma de pago, recobro, tasa de interes,
comisiones, condiciones y terminos contenidos en el contrato de prestamo con
garantia hipotecaria celebrado entre LOS DEUDORES y EL BANCO en fecha 22 del
mes de febrero del ano 2000, y por un monto de CUATRO MILLONES CIENTO
CINCUENTA Y TRES MIL PESOS CON 00/100 (US$4,153,000.00), seran los mismos que
reglamenten el presente contrato. Asimismo, las partes acuerdan que cualquier
falta de las previstas en el contrato principal que cometa LOS DEUDORES
frente a EL BANCO haciendolo exigible, y por ende ejecutable la garantia
hipotecaria a esta ultima parte otorgada, hara que la prenda por este
contrato consentida pueda ser ejecutada, a opcion de EL BANCO.
ARTICULO SEGUNDO: VIGENCIA DE LA PRENDA. La prenda consentida sobre los bienes
mencionados en este mismo contrato estar vigente con toda su fuerza y alcance
hasta el dia en que se produzca el pago total y difinitivo del prestamo otorgado
en capital e intereses en virtud del contrato de fecha 22 del mes de febrero del
ano 2000, celebrado entre las mismas partes y del cual este contrato es
accesorio; en el entendido de que las obligaciones contraidas por EL DEUDOR
frente a EL BANCO tendran como vencimiento los plazos convenidos en los efectos
y/o documentos comprobantes de los desembolsos del contrato de fecha 22 del mes
de febrero del ano 2000, anteriormente senalado, reservandose EL BANCO la
facultad de renovar a su discrecion los referidos efectos y/o documentos, en
cuyo caso la prenda anteriormente mencionada continuar en vigor sin restriccion
de ninguna especie, en cuyo caso, la falta de pago por parte de LOS DEUDORES de
esos efectos y/o documentos sus vencimientos respectivos Implica de pieno
derecho, la perdida del beneficio del termino que se establece en este contrato,
y la exigencia de todas las obligaciones no vencidas que haya contraido LOS
DEUDORES con EL BANCO y en consecuencia, la prenda
5
consentida podra ser ejecutada de conformidad con la ley, sin tener que esperar
el vencimiento del termino.
ARTICULO TERCERO: GARANTIA PRENDARIA: Para mayor seguridad y garantia del pago
de las sumas adeudadas en virtud del Contrato de Prestamo con Garantia
Hipotecaria de fecha 22 del mes de febrero del ano 2000; "LOS DEUDORES"
consiente en gravar con una prenda sin desapoderamiento al amparo de la Ley 6186
de fecha 12 de febrero de 1963 y sus modificaciones, sobre los bienes que se
describen a cotinuacion:
( a ) EQUIPOS Y MATERIALES DE ALMACEN
<TABLE>
<CAPTION>
DESCRIPCION VALOR TASADO EN RD$
<S> <C>
Dos Niveles de embarcaderos
"Yale" Mod.CM6 5W-8L (30,000Lbs) 123,300.00
Cinco Sistemas Neumaticos "Airlink"
Para depositar dinero por tuberias 125,600.00
Gabinetes estantes para Joyeria, Mem
Bresia, Fotografia, Materiales cobrables
Y Casa de Cambio 303,200.00
Maquina de envolver plastico transparente
Belco Mod. STC2016 167,000.00
Diez (10) carretillas elevadoras manuales
Big Joe, Mod L50 Fourway 104,600.00
Dos plataformas "Deka", para baterias y
Cargadores de baterias, Mod. RBS 18-25 33,100.00
Seis Batrias "Deka", Mod. 18-P137-15 y
Treas cargadores de bateria Deka, Mod.
880C3-18/950, para montacargas 610,100.00
</TABLE>
6
<TABLE>
<S> <C>
Carro para trasnportar "Deka" Mod.,
TC-24-PP motorizada por cinta 106,000.00
Tres Montacargas "Yale" Mod. ESC30ZA 1,132,800.00
Compactador "Galbreath" Mod. 30/60
HD2200 para cajas de carton 169,700.00
Estantes para paletas de madera 2,458,900.00
Canastos, anaqueles para ropa
Anaqueles y badejas para pan 350,000.00
Diez y Seis Muebles "Kilson", Mod
Kcu3500-PGT 442,600.00
Sistema de alarma 361,600.00
Sistema telefonico 298,300.00
Limpiadora a vapor "Yale"
Mod. 680 54,200.00
Cuatro corrales para carritos de mercancia
"Rehrig", Mod 4300-15 y 400 carritos "Rehrig"
Mod 1200-50 761,600.00
Caja fuerte "Safe & Vault", Mod SVM 6030 PCD 73,900.00
Limpiador de piso "Marco", Mod. 29 144,800.00
Seis postes divisorios "Lavi" Mod. 30000LT,
Vallas, senales y otros miscelaneos 556,000.00
SERVICIO DE COMIDA
------------------
Estanterias "Amco", para los freezers Mod.
CC183E-SBP y para almacenaje en seco Mod
CC184Z-SBP 36,300.00
7
Refrigerador "Continental" para pizza 51,700.00
Prensa para la masa de la pizza
"Proprocess", Mod DP-1100 55,800.00
Exhibidor de pizza "Universal",
Mod. P/C-5SLS-30 48,900.00
Cuatro mesas de acero inoxidables (SS)
Para manejo de alimentos 26,500.00
Horno doble de gas "Middleby", para
Pizza, Mod. PS2220FS-D-G 374,800.00
Extractor de humo en SS con su ventilador
"Larkin" 52,000.00
Freezer de una seccion "Continental" Mod 1F 36,200.00
Dos fregaderos en SS para las manos y
Para los utensilios 54,700.00
Tres carros para la masa de pizza 48,100.00
Cocinador de Hot-Dog "Craig", Mod
RB-78-33SC 130,000.00
Mueble mostrador en SS "Universal"
Mod. P-S-Custom de 149" de largo 80,500.00
Exhibidor de churros "Star", Mod HFD-3 22,100.00
Mueble dispensador de bebidas SS
"Universal", Mod. P/C-BC-76 (44" x 71") 43,900.00
Dispensador de hielo y soda "Booth-Crystal"
Mod. 220205061BC-50 66,500.00
Maquina de hielo "Cristal Tips"
8
MOD 802CAS251-30 60,000.00
Mueble en SS para condimentar "Universal"
Mod. P/C-CC-9624-2(a) (24" x 96") 59,100.00
Anaqueles y estantes 69,600.00
Miscelaneos "New Asia" 50,700.00
Filtro de Agua para los dispensadores
"Cuno" Mod. 4S 14,500.00
Mesas y sillas "Plymold-seating", 24" x 44" 295,100.00
Letreros de Menu, PriceSmart, etc 147,600.00
Sistema de tratamiento de agua "Nimbus"
Mod. 2000 92,100.00
POLLO ROSTIZADO
---------------
Dos hornos para pollos Mod. MSR-2 409,900.00
Gabinete para mantener el pollo
Mod. HC-72/13 65,900.00
Unidad de autoservicio, Mod. SSW-4 116,300.00
Mesa en SS 30" x 40", fregadero en SS,
Estante, etc 32,200.00
PANADERIA
---------
Dos hornos "Baxter" 206,400.00
Mezcladores de harina de 30 Cuartos 53,900.00
Envolvedora al vacio "Minipack" Mod
"Sintesis 760" 80,000.00
</TABLE>
9
<TABLE>
<S> <C>
Estantes, caserolas para muffins, mesa
en SS (30" x 60"), refrigerador, etc 103,700.00
CARNICERIA
----------
oledora de carne "Hollymatic", Mod. 175 131,700.00
Sierra para carne "Hollymatic" Mod. Hi Yield 16 86,300.00
Bulker "Hollymatic" Mod. 120 57,700.00
Peso con su printer "Berkel", Mod. CX20ET 73,600.00
Envolvedora de plastico "Berkel", Mod. HWS-1 26,600.00
Masa de trabajo en SS 30" x 60" 15,300.00
Carritos, estantes, bandejas, cuchilios, etc. 30,200.00
Dos fregaderos en SS 16,400.00
Dos mesas en SS con gabinetes de pared 29,100.00
DELICATESEN
-----------
Maquina rebanadora "Berkel", Mod. 834EPB 240,800.00
Maquina de vacio "Berkel", Mod. 350 80,400.00
Peso con su printer "Berkel", Mod. CX20ET 53,900.00
Masa de trabajo en SS 30" x 60" 15,300.00
PRODUCTOS AGRICOLAS
-------------------
Dos pesos con su printer "Berkel", Mod. CX20ET 107,800.00
10
Veinte cajones de madera 126,600.00
DEPARTAMENTO DE FOTOGRAFIA
--------------------------
Equipo de revelado en minutos "Noritsu", Mod.
QSS-1701MCC S/W QSF-V50 1,817,000.00
CENTRO DE GOMAS
---------------
Maquina para balancear gomas "Coats" Mod. 1050 93,200.00
Maquina para cambiar gomas "Coats" Mod. 5060A 73,600.00
Maquina para cambiar gomas "Coats" Mod. 4050A 47,500.00
Compresor de aire "Ingersoll-Rand", Mod.
2475N5, de 5HP, Se. N*30T 917741 27,400.00
Dos gatos hidraulicos "Acanus Lift" 120,100.00
Herramientas y accesorios para el centro
de gomas 131,700.00
EQUIPO DE REFRIGERACION
-----------------------
Incluye equipos, estantes, anaqueles, materiales
de instalacion, puertas de los freezers y puertas
exhibidoras de vidrio, material impermeabilizante
Y la mano de obra de la instalacion 12,002,900.00
EQUIPOS Y PROGRAMAS DE COMPUTADORAS
-----------------------------------
7,211,900.00
MUEBLES Y EQUIPOS DE OFICINA
---------------------------- 217,000.00
TOTAL MAQUINARIAS Y EQUIPOS: RD$34,199,300.00
</TABLE>
11
Los bienes descritos anteriormente se encuentran en poder de "LOS DEUDORES" y
los mismos poseen un valor total de tasacion de TREINTA Y CUATRO MILLONES
CIENTO NOVENTA Y NUEVE MIL TRESCIENTOS PESOS CON 00/100 (RD$34,199,300.00);
"LOS DEUDORES" declaran bajo la fe de juramento que son propietarios de los
bienes descritos anteriormente. De igual manera queda expresamente
establecido que dichos bienes estan ubicados en la avenida Estrella Sahdala
No. 22, Zona Universitaria de la ciudad de Santiago, Republica Dominicana.
PARRAFO I: Se conviene expresamente entre las partes que los bienes dados en
prenda permaneceran en el mismo lugar ya indicado y no podran ser trasladados
sin el previo consentimiento escrito de "EL BANCO", salvo caso de fuerza
mayor para su preservacion, en cuyo caso "LOS DEUDORES" deberan avisar por
escrito a "EL BANCO" dentro de las proximas cuarentiocho (48) horas sobre
cualquier tipo de disminucion, perdida o cualquier otra variacion que se
produzca de los bienes dados en prenda en virtud de este contrato. Quedando
expresamente acordado que en tales supuestos "LOS DEUDORES" se comprometen a
producir una subrogacion real que sustituya plenamente la garantia disminuida.
Queda entendido, que las disposiciones de este articulo no implica en modo
alguno autorizacion de "EL BANCO" a "LOS DEUDORES" para que sin su
consentimiento puedan disponer de los bienes dados en prenda, pues esta
facultad se estipula, no en su beneficio, sino en proteccion de los intereses
de "EL BANCO".
PARRAFO II: "LOS DEUDORES" declaran, bajo la fe del juramento que los bienes
dados en prenda en este contrato son de su propiedad exclusiva e individual y
que sobre ellos no pesa ningun gravamen legal, convencional o judicial y que
los valores y demas menciones en relacion con los mismos, son absolutamente
correctos.
ARTICULO CUARTO: LITIGIOS. LOS DEUDORES por medio del presente documento
declaran bajo la fe del juramento que sobre la garantia senalada
anteriormente no existe pendiente o, a su mejor conocimiento, que no hay
ninguna sentencia, accion,
12
demanda (civil, comercial, penal, de tierras, etc...), litigio o
procedimiento existente o potencial por ante ningun tribunal, autoridad
gubernamental o regulatoria, agencia, comision, junta de arbitraje, o
cualquier otro organismo sin importar su denominacion.
ARTICULO QUINTO: VENCIMIENTO DE LA PRENDA: Queda expresamente convenido en
caso de transcurrido el plazo previsto en el Articulo 214 de la referida Ley
6186 del 1963, a discrecion, derecho y voluntad exclusiva de "EL BANCO" se
operara una prorroga inmediata y automatica de la prenda prevista en este
contrato por el espacio de tiempo que "EL BANCO" soberanamente juzgue
conveniente y sin que el uso de esta facultad por parte de "EL BANCO: pueda
ser en ningun momento, considerado como una renuncia a sus derechos o como
una prerrogativa adquirida en beneficio de "LOS DEUDORES".
ARTICULO SEXTO: EJECUCION DE LA GARANTIA: Queda expresamente convenido por las
partes que, en caso de ser necesaria la ejecucion de la garantia prevista en
este contrato, "EL BANCO" utilzara las vias de ejecucion que le otorga la Ley
6186 de 1963.
PARRAFO I: Queda convenido entre las partes que, para el caso de que una ley
posterior a la fecha de este contrato fuere aprobada y puesta en vigor por
las autoridades competentes, la cual permita una ejecucion mas rapida y
expedita de las garantias previstas en el presente contrato, "EL BANCO"
estara autorizado y facultado por "LOS DEUDORES" a utilizar esas nuevas vias
de ejecucion; sin que ello implique en modo alguno restriccion para "EL
BANCO", el cual seguira siendo libre para utilizar, a su discrecion, las vias
de ejecucion actualmente vigentes o las que en el futuro sean creadas.
PARRAFO II: GASTOS LEGALES: Queda convenido que todos los gastos legales,
inscripciones, certificaciones e impuestos que fuere necesario pagar para la
formalizacion y ejecucion de este contrato correran por cuenta de "LOS
DEUDORES".
ARTICULO SEPTIMO: SUPERVISIONES. Los funcionarios y tecnicos de "EL BANCO"
podran realizar supervisiones cuantas
13
veces lo crean necesarios, para vigilar la garantia que ampara el emprestito
durante todo el tiempo que dure la vigencia del credito, conviniendo "LOS
DEUDORES" en facilitar las labores de inspeccion y revision, suministrando los
datos, informaciones, documentos, registros y todo cuando le sea requerido por
los mencionados funcionarios y tecnicos, para los fines que senala este acapite.
ARTICULO OCTAVO: COMPROBANTE DE LA DUEDA, Queda expresamente establecido entre
las partes que los desembolsos que "EL BANCO" haga en favor de "LOS DEUDORES" en
virtud del presente contrato, seran comprobados mediante recibos, por la emision
de pagares o cualquier otro efecto de comercio que "EL BANCO" considere
conveniente sin que se produzca la novacion de este contrato por la emision de
tales documentos.
ARTICULO NOVENO. LUGAR DE PAGO: Todos los desembolsos realizados por "EL BANCO",
como los pagos hechos por "LOS DEUDORES" deberan ser hechos en el domicilio de
"EL BANCO". En lo que se refiere a los pagos de intereses, comisiones y capital,
los mismos deberan hacerse con toda puntualidad y sin necesidad de cobranzas,
puesta en mora, ni ninguna otra formalidad judicial y/o extrajudicial.
ARTICULO DECIMO: DERECHOS DE "EL BANCO". La falta o retraso por parte de "EL
BANCO" de exigir or ejecutar cualquiera de sus derechos bajo este contrato, no
significara la perdida ni el derecho de los acuerdos exigibles bajo el mismo,
cualquier cambio a este acuerdo, debera ser hecho por escrito y en base a un
acuerdo de ambas partes.
ARTICULO DECIMO PRIMERO: ENDOSO DE POLIZA. "LOS DEUDORES" se obligan a
mantener las polizas de seguros que le fueron requeridas con inclusion de los
riesgos que "EL BANCO" juzgue necesarias dentro de las referidas polizas.
Dichas polizas seran contratadas con entidades aseguradoras aceptables para
"EL BANCO" y deberan ser endosadas a favor de este ultimo, hasta el limite de
sus intereses. Asimismo, "LOS DEUDORES" autorizan formalmente por medio del
presente contrato a "EL BANCO" para que proceda a renovar el o las polizas de
seguros ya mencionadas para el caso en que dichas polizas sean reducidas en
sus montos y/o coberturas cuantitativas o cualitativas. En tales casos, "EL
14
BANCO" cobrara un doce (12%) de interes anual sobre las sumas pagadas a tales
fines, calculado desde la fecha de pago hecho por "EL BANCO" hasta la fecha en
que se produzca el reembolso por parte de "LOS DEUDORES".
PARRAFO: Sin perjuicio de los convenido en la parte capital del presente
articulo, "LOS DEUDORES" se comprometen especialmente a suscribir y mantener una
poliza de seguro de incendio y lineas aliadas por el plazo de vigencia del
prestamo, endosada a favor de "EL BANCO" por un monto de TREINTA Y CUATRO
MILLONES CIENTO NOVENTA Y NUEVE MIL PESOS CON 00/100 (RD$34,199,000.00).
ARTICULO DECIMO SEGUNDO: TRASPASO DEL CONTRATO. "EL BANCO" se reserva el derecho
de traspasar con o sin recursos como garante parcial o totalmente, el prestamo
aqui otorgado para fines de refinanciamiento propio; en cuyo caso, los acuerdos
aqui tomados son traspasables por parte de "LOS DEUDORES" al nuevo acreedor.
ARTICULO DECIMO TERCERO: ELECCION DE DOMICILIO. Las partes eligen domicilio para
todos los fines y consecuencias de ejecucion de este contrato, en sus
respectivos domicilios indicados en la pagina primera del presente contrato.
HECHO Y FIRMADO en diez (10) originales, de un mismo tenor y efecto, en la
ciudad de Santo Domingo, Distrito Nacional, Capital de la Republica Dominicana,
a los veintidos (22) dias del mes de febrero (2000).
POR "EL BANCO"
/s/ Wilfrido Flores
-----------------------------------
WILFRIDO FLORES
/s/ Rosangela Pellerano [SEAL]
-----------------------------------
ROSANGELA PELLERANO
15
POR "LOS DEUDORES"
PRICESMART DOMINICANA, S.A.
[STAMP]
/s/ Eric Torres
---------------------------------
ERIC TORRES
/s/ Alberto Bonetti
---------------------------------
ALBERTO BONETTI
INMOBILIARIA PRICESMART, S.A.
/s/ Eric Torres
---------------------------------
ERIC TORRES
INMOBILIARIA PRICESMART, S.A.
SANTO DOMINGO, R.D.
/s/ Alberto Bonetti
---------------------------------
ALBERTO BONETTI
POR LAS FIADORAS SOLIDARIAS E INDIVISIBLES:
"PSMT CARIBE, INC"
/s/ Jesus Ernesto Grijalva Garcia
---------------------------------
JESUS ERNESTO GRIJALVA GARCIA
PRICESMART, INC
/s/ Gilbert Anthony Partida
---------------------------------
GILBERT ANTHONY PARTIDA
PSC, S.A
16
[STAMP]
/s/ Alberto Bonetti
----------------------------------
ALBERTO BONETTI
Yo, ____________________________ Abogado Notario Publico de los del Numero del
Distrito Nacional, CERTIFICO Y DOY FE que por ante mi han comparecido los
senores WILFRIDO FLORES, ROSANGELA PELLERANO, ERIC TORRES, ALBERTO BONETTI,
GILBERT A. PARTIDA y JESUS ERNESTO GRIJALVA GARCIA, de generales que constan
precedentemente y me han declarado bajo la fe del juramento que esas son las
firmas que acostumbran a usar en todos los actos de sus vidas publica y privada,
por lo que se le debe dar entera credibilidad. En la ciudad de Santo Domingo,
Distrito Nacional, Capital de la Republica Dominicana, a los veintidos (22) dias
del mes de febrero del ano dos mil (2000).
NOTARIO PUBLICO
17
CONTRATO DE PRESTAMO EN DOLARES CON GARANTIA
HIPOTECARIA
ENTRE:
BANCO NACIONAL DE CREDITO, S. A., sociedad bancaria, organizada y existente de
conformidad con las Leyes de la Republica Dominicana, con su domicilio social y
principal establecimiento ubicado en la esquina de las avenidas John F. Kennedy
y Tiradentes de esta ciudad de Santo Domingo, debidamente representada por los
senores Wilfrido Flores y Roseangela Pellerano, dominicanos, mayores de edad,
casados, ejecutivos bancarios, portadores de las cedulas de identidad personal y
electoral Nos. 001-0172017-5 y 001-0170307-2, domiciliados y residentes en esta
ciudad de Santo Domingo, quienes actuan en sus calidades de Vicepresidente de
Administracion de Riesgos y Legal y Vicepresidente de Banca Corporativa;
institucion que en lo adelante se denominara "EL BANCO".
PRICESMART DOMINICANA, S. A., compania organizada y existente de conformidad con
las leyes de la Republica Dominicana, con su domicilio social y principal
establecimiento sito en la Avenida San Martin No. 253, Edificio Santanita I,
Suite 403 de esta ciudad de Santo Domingo; debidamente representada por Alberto
Bonetti, dominicano, mayor de edad, casado, empresario, portador de la cedula
No. 001-0102205-1, domiciliado y residente en la casa No. 33 de la calle
Porfirio Herrera del Ensanche Plantini de esta ciudad, y Eric Torres de
nacionalidad norteamerica, mayor de edad, portador del Pasaporte de los
Estados Unidos de Norteamerica No. 093904746, domiciliado en la avenida
Charles Summer No. 54 de esta ciudad de Santo Domingo; quienes actuan en virtud
de la resolucion del Consejo de Administracion de fecha 14 del mes de febrero
del ano 2000; quienes actuan en virtud de la resolucion del Consejo de
Administracion de fecha 14 del mes de febrero del ano 2000; E INMOBILIARIA
PRICESMART, S. A., sociedad existente acorde con las leyes de la Republica
Dominicana con su domicilio social y principal establecimiento ubicado en la
Avenida San Martin No. 253, Edificio Santanita I,
Suite No. 403 de esta ciudad de Santo Domingo; debidamente representada a los
fines del presente acto por Alberto Bonetti, dominicano, mayor de edad,
casado, empresario, portador de la cedula No. 001-0102205-1, domiciliado y
residente en la casa No. 33 de la calle Porfirio Herrera del Ensanche
Plantini de esta ciudad; y Eric Torres de nacionalidad norteamericana, mayor
de edad, portador del Pasaporte de los Estados Unidos de Norteamerica No.
093904746, domiciliado en la avenida Charles Summer No. 54 de esta ciudad de
Santo Domingo; quienes actuan en virtud de la resolucion del Consejo de
Administracion de fecha 14 del mes de febrero del ano 2000; entidades de
comercio que se denominaran "LOS DEUDORES", o por sus propios nombres
indistintamente.
PSMT CARIBE, INC., entidad de comercio organizada acorde con las leyes Islas
Virgenes Britanicas, con su domicilio social ubicado en las oficinas de Ernst
& Young Trust Corporation (BVI) Limited, P.O. Box 3340, Road Town, Tortola
Islas Virgenes BritanicasIslas Virgenes Britanicas; y accidentalmente en la
edificacion ubicada en el No. 10 de la Avenida John F. Kennedy de esta ciudad
de Santo Domingo; debidamente representada a los fines del presente acto por
Jesus Ernesto Grijalva Garcia, de nacionalidad estadounidense, mayor de edad,
casado, portador del pasaporte No. 037002689, domiciliado y residente en el
No. 4649 Morena Blvd., San Diego, California, y accidentalmente en esta
ciudad de Santo Domingo; quien actua en virtud del Poder del Presidente de la
PSMT CARIBE, INC. de fecha 15 del mes de febrero del ano 2000, legalizada la
firma por la Notario Publico Evelisse Hernandez, y debidamente legalizado por
el Consulado Dominicano en la ciudad de San Francisco California; PRICESMART,
INC, entidad de comercio organizada acorde con las leyes de Estado de
Delaware, con su domicilio social ubicado en el No. 4649 Morena Blvd, San
Diego, California; y quien ha hecho eleccion de domicilio para fines del
presente contrato en el Edificio marcado No. 10 de la Avenida John F. Kennedy
de esta ciudad de Santo Domingo; debidamente representada a los fines del
presente acto por Gilbert Anthony Partida, de nacionalidad norteamericana,
casado, empresario, portador del Pasaporte No. 155092042, domiciliado y
residente accidentalmente en esta ciudad de Santo Domingo, quien actua la
seccion No. 5 de los Estatutos Sociales; PSC, S. A.,
2
entidad de comercio organizada y existente acorde con las leyes de Panama,
con su domicilio social y principal establecimiento ubicado en la ciudad de
Panama y accidentalmente en la edificacion ubicada en la Avenida John F.
Kennedy de esta ciudad de Santo Domingo, debidamente representada a los fines
del presente acto por Alberto Bonetti Brea, dominicano, mayor de edad,
casado, empresario, portador de la cedula No. 001-0102205-1, domiciliado y
residente en la casa No. 33 de la calle Porfirio Herrera del Ensanche
Piantini de esta ciudad; quien actua en virtud de resolucion de la Junta de
Directores de fecha 9 del mes de diciembre del ano 1999; entidades que de
manera conjunta se denominaran LAS FIADORAS SOLIDARIAS E INDIVISIBLES
POR CUANTO: "LOS DEUDORES" han solicitado a "EL BANCO" la concesion de un
prestamo por la suma de CUATRO MILLONES CIENTO CINCUENTA Y TRES MIL DOLARES
NORTEAMERICANOS CON 00/100 (US$4,153,000.00), con el objeto de financiar
construccion ya terminada de un almacen de PriceSmart Dominicana, S. A.,
localizado en la ciudad de Santiago, Republica Dominicana.
POR CUANTO: "EL BANCO" esta en condiciones de otorgar dicho prestamo bajo las
condiciones y especificaciones que se expondran mas adelante.
POR TANTO, y en el entendido de que los anteriores por cuantos forman parte
integral del presente contrato, las partes,
HAN CONVENIDO Y PACTADO LO SIGUIENTE:
ARTICULO PRIMERO: MONTO. Por medio del presente contrato "EL BANCO" otorga a
"LOS DEUDORES", quien acepta, un prestamo con recursos propios por la suma de
CUATRO MILLONES CIENTO CINCUENTA Y TRES MIL DOLARES NORTEAMERICANOS CON
00/100 (US$4,153,000.00).
ARTICULO SEGUNDO: PROPOSITO DEL PRESTAMO. Queda expresamente convenido entre
las partes que "LOS DEUDORES" se compromete a utilizar los fondos
provenientes del prestamo a
3
otorgarse en virtud del presente contrato, en la forma prevista en el primer
POR CUANTO del presente acto, es decir, para financiar construccion ya
terminada de un almacen de PriceSmart Dominicana, S. A., localizado en la
ciudad de Santiago, Republica Dominicana.
ARTICULO TERCERO: DESEMBOLSOS. Queda convenido entre las partes, que el (los)
desembolso (s) del prestamo se realizara(n), siempre que haya disponibilidad,
mediante creditos a favor de "LOS DEUDORES" en su cuenta de cheques abierta
en Banco Nacional de Credito, S.A., mediante cheque (s) emitido (s) a favor
de LOS DEUDORES, constatando su compromiso "LOS DEUDORES" mediante la
suscripcion del o de los pagares que las partes acuerden suscribir.
PARRAFO: Las partes convienen de mutuo acuerdo que si EL BANCO no
desembolsare a LOS DEUDORES el prestamo otorgado en virtud del presente
contrato en un plazo de treinta (30) dias, contados a partir de la fecha del
deposito efectuado por la Asociacion la Previsora, S. A. Por ante el registro
de titulos del Departamento de Santiago del acto de compraventa intervenido
entre la INMOBILIARIA BHD, S. A. E INMOBILIARIA PRICESMART, S. A., el
presente contrato quedara resuelto de pleno derecho, sin responsabilidad para
las partes contratantes.
ARTICULO CUARTO: PLAZO, VENCIMIENTO Y RECOBRO. El prestamo por la suma de
CUATRO MILLONES CIENTO CINCUENTA TRES MIL DOLARES NORTEAMERICANOS CON 00/100
(US$4,153,000.00), otorgado en este contrato por "EL BANCO" a "LOS DEUDORES",
permanecera en vigor por un periodo cinco (5) anos, contados a partir de la
fecha del desembolso del prestamo. "LOS DEUDORES" pagaran a "EL BANCO" el
prestamo otorgado mediante veinte (20) cuotas iguales y trimestrales de
capital ascendente a la suma de DOSCIENTOS SIETE MIL SEISCIENTOS CINCUENTA
DOLARES NORTEAMERICANOS CON 00/100 (US$207,650.00), cada una, o su
equivalente en pesos dominicanos calculados a la tasa de cambio que estipule
El Banco Central de la Republica Dominicana, para la venta al publico de los
dolares
4
norteamericanos el dia en que deba efectuarse el pago correspondiente a la
senalada cuota de capital, incluyendo la comision cambiaria fijada por el
Banco Central de la Republica Dominicana el dia en que deba efectuarse el
pago. La primera cuota sera pagadera a los noventa (90) dias de haberse
efectuado el desembolso del prestamo. Los intereses que sean generados por el
prestamo deberan ser pagados mensualmente, el ultimo dia habil de cada mes,
en dolares norteamericanos o su equivalente en pesos dominicanos calculados a
la tasa de cambio que estipule El Banco Central de la Republica Dominicana,
para la venta al publico de los dolares norteamericanos el dia en que deba
efectuarse el pago correspondiente a la senalada cuota de capital, incluyendo
la comision cambiaria fijada por el Banco Central de la Republica Dominicana
el dia en que deba efectuarse el pago; y seran calculados sobre saldo
insoluto en base a un ano de 360 dias. "LOS DEUDORES" autorizan a debitar de
la cuento marcada con el No. 035-4-104507 las sumas correspondientes a las
cuotas de capital y los intereses previstos en el presente articulo y
cualquier otro gasto, no especificado en este contrato a cargo de "LOS
DEUDORES", sin previa notificacion todos en dolares norteamericanos.
PARRAFO I: Queda expresamente acordado que los pagos realizados por LOS
DEUDORES mediante la utilizacion de cheques solo seran considerados como
efectivos y liberatorios el dia en que el banco girado acepte el cheque y
efectue el pago correspondiente.
PARRAFO II: LOS DEUDORES autorizan a EL BANCO a revisar periodicamente el
monto de la cuota mensual para realizar los ajustes de lugar conforme a las
variaciones que registren en el mercado la tasa de interes, quedando
expresamente convenido entre las partes que las disposiciones adoptadas por
EL BANCO relativas a la tasa de interes se aplicaran Inmediatamente a partir
de la fecha, al saldo insoluto adeudado por LOS DEUDORES segun este contrato
y a la cuota establecida por este mismo articulo quedara modificada en la
forma que resulte de la aplicacion de la nueva tasa de interes.
5
PARRAFO III: Queda convenido que LOS DEUDORES se comprometen y obligan a
mantener en la cuenta indicada en el articulo anterior fondos sufficientes y
disponibles para realizar los cargos correspondientes a las cuotas de capital
e intereses, y demas gastos no especificados en este contrato como una
obligacion para LOS DEUDORES.
PARRAFO IV: LOS DEUDORES autorizan formalmente a EL BANCO convertir a dolares
norteamericanos la suma disponible en pesos dominicanos, en la cuenta antes
senalada, utilizando para dicha operacion como mecanismo de conversion el
metodo ya descrito en la parte capital del presente articulo, luego de lo
cual EL BANCO procedera a aplicar esa suma convertida a dolares, a las
obligaciones vencidas y adeudados por LOS DEUDORES en virtud de este contrato.
PARRAFO V: La falta de pago de cualquier cuota a que se obliga a pagar "LOS
DEUDORES" segun el (los) pagare (s) que se emita (n) como consecuencia del
(los) desembolso (s) del prestamo, implica de pleno derecho la resolucion
inmediata del presente contrato, a opcion de "EL BANCO" y sin formalidad
previa judicial o extrajudicial, perdiendo "LOS DEUDORES" el beneficio del
termino y siendo ejecutable la garantia del prestamo, consentida en este
contrato.
ARTICULO QUINTO: TASA DE INTERES. "LOS DEUDORES" pagaran mensualmente a "EL
BANCO" una tasa de interes LIBOR (London Inter-Bank Offer Rate) a seis (6)
meses mas quinientos sesenta y cuatro punto cinco (565.5) puntos basicos,
sobre el saldo insoluto y cuya tasa sera calculada en base a un ano de 360
dias y sera revisable semestralmente, conforme a las condiciones del mercado
internacional. Cualquier cambio efectuado sobre la tasa sera informado, por
escrito, mediante el uso de cualquier via que EL BANCO, a su unica opcion,
considere de lugar. Las nuevas tasas se aplicaran solamente al balance de
capital pendiente a la fecha del aviso de las mismas. Queda entendido entre
las partes que la tasa LIBOR sera la establecida por la entidad Bloomberg
Professional.
6
ARTICULO SEXTO: VENCIMIENTO LOS DIAS FERIADOS. Todo pago o cualquier acto que
de conformidad con este contrato, debiere lievarse a cabo en sabado o en dia
feriado o de acuerdo con la ley del lugar en que deba ser hecho, se entendera
validamente efectuado en el primer dia habil que sobrevenga, sin que en tal
caso proceda recargo alguno.
ARTICULO SEPTIMO: COMPENSACION. "LOS DEUDORES" autorizan y facultan a "EL
BANCO" a su opcion, aplicar en cualquier momento, cualquier suma de dinero
que este en el momento, o en el futuro, en manos de "EL BANCO", sea en
deposito o cualquier titulo, acreditada o perteneciente a "LOS DEUDORES" para
con la misma cubrir cualquier valor en capital, intereses y accesorios
convencionales o de derecho, relativos al pago de toda deuda vencida que se
origine con motivo del presente contrato.
ARTICULO OCTAVO: LUGAR DE PAGO. Todos los pagos previstos en este contrato
deberan efectuarse sin demora, requerimiento o formalidad previa, en el
domicilio social de "EL BANCO" cuya ubicacion ha sido ya descrita en la parte
introductiva del presente acto.
ARTICULO NOVENO: IMPUTACION DE LOS PAGOS. Todo pago se efectuara en la fecha
convenida y se imputara primeramente a los intereses vencidos y gastos, si
los hubiere, y luego al saldo. "EL BANCO" se reserva el derecho y la facultad
de aceptar el pago de las cuotas establecidas con posterioridad a los
vencimientos convenidos, quedando expresamente convenido entre las partes que
vencida la fecha estipulada, "LOS DEUDORES" pagaran por cada mes o fraccion
de mes de retraso un cuatro (4%) por ciento adicional, calculados sobre la
base del monto del capital de las sumas o cuotas atrasadas, constituyendo
este pago una sancion o penalidad por el retraso incurrido.
ARTICULO DECIMO: GARANTIA HIPOTECARIA. Para seguridad y garantia de la suma
adeudada en virtud de este contrato, "INMOBILIARIA PRICESMART, S. A.",
consiente en favor de "EL BANCO" una hipoteca en PRIMER RANGO compartida con
la Asociacion La Previsora, S. A., por un monto de CUATRO
7
MILLONES CIENTO CINCUENTA Y TRES MIL DOLARES NORTEAMERICANOS CON 00/100
(US$4,153,000.00), o su equivalente en pesos dominicanos calculados a la tasa
de referencia de DIECHIOCHO PESOS DOMINICANOS CON 00/100 (RD$18.00) por cada
DOLAR NORTEAMERICANO (US$1.00) sobre el inmueble descrito a continuacion:
UNA PORCION DE DIECISIETE MIL QUINIENTOS METROS CUADRADOS (17,500 MTS2)
LOCALIZADOS DENTRO DEL AMBITO DE LA PARCELA NO. 7-C-8-I DEL DISTRITO
CATASTRAL NO. 8 DEL MUNICIPIO DE SANTIAGO, SECCION J DE RINCON LARGO,
PROVINCIA DE SANTIAGO CON LOS SIGUIENTES LINDEROS: AL NORTE, AVENIDA ESTRELLA
SADHALA Y PARCELA NO. 7-C-8-I (RESTO): AL ESTE LA AVENIDA ESTRELLA SADHALA;
AL SUR LA PARCELA NO. 7-C-8-I (RESTO) Y ARROYO GURABO; Y AL OESTE LA PARCELA
NO. 7-C-8-I (RESTO). AMPARADA LA PROPIEDAD DE DICHA PORCION EN EL CERTIFICADO
DE TITULO NO. ___________, EXPEDIDO POR EL REGISTRADOR DE TITULOS DEL
DEPARTAMENTO DE SANTIAGO.
PARRAFO I: Queda expresamente consagrado que la hipoteca consentida sobre el
inmueble anteriormente senalado tambien gravara todos las mejoras
construidas, o por construirse, con todas sus anexidades y dependencias,
inmuebles por destinacion, maquinarias o instalaciones, inciuyendo todos los
aparatos, ascensores, e instalaciones de cualquier clase para suplir o
distribuir energia electrica, agua, ya sea que esten en el momento instaladas
o que en el futuro se instalen.
PARRAFO II: Esta garantia es continua y cubrira todas las deudas y
responsabilidades en que incurran "LOS DEUDORES" frente a "EL BANCO", a
consecuencia del presente contrato, quedando entendido que "EL BANCO" podra
rehusar creditos, conceder prorrogas, admitir y sustituir garantias, aceptar
y rechazar cesiones, novaciones, y delegaciones, convenir arreglos y otorgar
nuevos prestamos, a opcion de "EL BANCO", no pudiendo "LOS DEUDORES" otorgar
esta garantia a favor de terceros, sin la previa autorizacion por escrito de
"EL BANCO".
PARRAFO III: AUTORIZACION RETIRO CERTIFICADO DE TITULO: "LOS DEUDORES" por
medio del presente acto,
8
autorizan a "EL BANCO" y/o sus abogados a retirar del Registrador de Titulos
correspondiente, el Certificado de Titulo, Duplicado del Dueno, a opcion de
esta ultima parte.
PARRAFO IV: Las partes acuerdan que en adicion a la garantia descrita en el
articulo precedente, y de manera accesoria, las entidades de comercio PSMT
CARIBE, INC; PRICESMART, INC y PSC, S.A., cuyas generales figuran descritas en
la primer pagina del presente acto, se convierte, en fiadoras solidarias e
indivisibles de todas y cada una de las obligaciones contraidas por LOS
DEUDORES, en la siguiente proporcion: (1) PSMT CARIBE, INC. por el cien por
ciento (100%) del monto del prestamo, intereses y accesorios convencionales o
de derecho; (2) PRICESMART, INC., hasta el sesenta por ciento (60%) del monto
del prestamo, intereses y accesorios convencionales o de derecho (3) PSC,
S.A. hasta el cuarenta por ciento (40%) del monto del prestamo, los intereses
y accesorios convencionales o de derecho. Asimismo, se acuerda que dichos
garantes no podran oponerie a EL BANCO el beneficio de excusion que se
refiere el articulo No. 2021 y siguientes del Codigo Civil vigente.
PARRAFO V: GARANTIA ACCESORIA. Queda expresamente consagrado que en adicion a
las garantias otorgadas en virtud del presente contrato, LOS DEUDORES se
obligan a consentir una prenda sin desapoderamiento sobre maquinarias,
equipos e instalaciones que forman parte del almacen, con un valor estimado
de tasacion de TREINTA Y CUATRO MILLONES CIENTO NOVENTA Y NUEVE MIL
TRESCIENTOS PESOS CON 00/100 (RD$34,199,300.00), bienes que son propiedad
absoluta y exclusiva de LOS DEUDORES, dicho contrato estara regido por los
terminos y condiciones establecidos en el presente acto.
ARTICULO DECIMO PRIMERO: LITIGIOS Y EXPROPIACIONES. LOS DEUDORES por medio
del presente documento declaran bajo la fe del juramento que sobre la
garantia senalada anteriormente no existe pendiente e, a su mejor
conocimiento, que no hay ninguna sentencia, accion, demanda (civil, comercial,
penal, de tierras, etc...), litigio o procedimiento existente o potencial por
ante ningun tribunal,
9
autoridad gubernamental o regulatoria, agencia, comision, junta de arbitraje,
o cualquier otro organismo sin importar su denominacion.
PARRAFO: Asimismo, en caso de que la totalidad o parte de la garantia dada
en hipoteca en virtud de este contrato sea apropriada por el Estado
Dominicano, o por cualquier otro organismo competente, o vendidole de grado a
grado, el precio que se pague por dicho inmueble sera entregado por el
expropiante o adquiriente a EL BANCO para aplicario al pago de los valores
que por concepto de este prestamo adeudaren LOS DEUDORES a EL BANCO. En
consecuencia, y para el caso de producirse la expropiacion o adquisicion,
LOS DEUDORES autorizan desde ahora, y mientras este vigente el presente
contrato, para que entregue directamente los valores provenientes de esa
operacion a EL BANCO a los fines de aplicario a la amortizacion y/o
cancelacion del saldo adeudado por LOS DEUDORES. En caso de pago el excedente,
si lo hubiere, sera reintegrado a LOS DEUDORES por parte de EL BANCO.
ARTICULO DECIMO SEGUNDO: PROHIBICION DE TRASPASO Y MODIFICACION DE GARANTIA.
Queda expresamente convenido que "LOS DEUDORES" no podran, sin previa
autorizacion por escrito de "EL BANCO", realizar sobre el inmueble dado en
garantia, descrito en el articulo decimo de este contrato, las siguientes
operaciones:
a) Otorgar nueva hipoteca u otros gravamenes a favor de terceros.
b) Enajenario o cederio en cualquier forma o bajo cualquier causa o
circumstancia, a ninguna persona fisica o moral.
c) Modificar su estructura, ni variario de modo que disminuya
substancialmente su valor.
d) Cancelar la poliza de seguro que es garantia accesoria de este contrato.
PARRAFO: Queda convenido que "EL BANCO" podra, en cualquier momento, aceptar
el pago de cualquier suma adeudada
10
con posterioridad al vencimiento, sin que ello implique renuncia a la
facultad que le otorga este articulo.
ARTICULO DECIMO TERCERO: CONVENIOS AFIRMATIVOS. "LOS DEUDORES" se comprometen
hasta el completo pago de la suma otorgada en virtud del prestamo a que se
refiere este contrato:
a) Proseguir las operaciones de que trata el presente contrato con debida
diligencia hasta su terminacion final, de acuerdo con las mas eficientes
normas tecnicas y recomendaciones que proporcionen los tecnicos de "EL BANCO".
b) Mantener y llevar de manera regular y ordenada todos los registros y libros
de conformidad con el Codigo de Comercio de la Republica Dominicana, y otros
textos legales, que deben ser levados por comerciantes o empresarios, y que
aconsejen las buenas normas de contabilidad, para mantener en forma correcta
todos los ingresos y egresos de sus operaciones.
c) "LOS DEUDORES" Y LOS FIADORAS SOLIDARIAS E INDIVISIBLES se comprometen a
suministrar estados financieros semestrales no auditados de los cuarenta y
cinco (45) dias posteriores a los ciclos semestrales correspondientes al ano
fiscal.
d) "LOS DEUDORES" Y LOS FIADORAS SOLIDARIAS E INDIVISIBLES se comprometen a
suministrar estados financieros anuales, auditados por una firma de
contadores publicos autorizados aceptables para "EL BANCO", dentro de los 120
dias posteriores al termino del ano fiscal. Dichos estados deberan incluir un
balance de situacion, un estado de ganancias y perididas y un flujo de
fuentes y uso de fondos, y los comentarios de los auditores.
e) Los servicios de auditoria que LOS DEUDORES contraten deberan ser
obtenidos de una firma de auditores de "primera categoria Big Five" que sea
aceptable por EL BANCO, a su unica opcion. Cualquier cambio a otra firma de
contadores publicos autorizados debera ser aprobado previamente, y de manera
11
escrita, por EL BANCO. Los gastos que se incurran por este servicio seran
cubiertos por LOS DEUDORES.
f) Suministrar a "EL BANCO", cuando este lo requiera, cualquier infomacion
relativa a los asuntos de que trata el presente contrato y a los negocios de
"LOS DEUDORES" Y "FIADORAS SOLIDARIAS E INDIVISIBLES" que "EL BANCO" desee
obtener, autorizando a sus mandatarios, empleados u oficiales a discutir los
asuntos, finanzas, con los funcionarios que designe "EL BANCO" todo con la
frecuencia que este ultimo requiera.
g) "LOS DEUDORES" Y LAS FIADORAS SOLIDARIAS E INDISIVISIBLES, se comprometen
durante la vigencia de la facilidad crediticia otorgada, a entregar a "EL
BANCO" coplas certificadas de las Asambleas Ordinarias y Extraordinarias de
Accionistas, asi como copias certificadas de las actas del Consejo de
Directores o de Administracion.
h) Mantener proteccion adecuada sobre todos sus activos mediante la
contratacion de polizas de seguros que cubran adecuadamente su cobertura de
riesgo. Asimismo, mantener al dia dichas polizas de seguros y pagar las
primas con anticipacion, si fuere necesario.
i) Notificar a "EL BANCO" cualquier hecho que pueda ocasionar una disminucion
material en los activos o un aumento material en los pasivos, conforme al
grado de significacion estimado por auditores reconocidos por el Instituto de
Contadores Publicos Autorizados de la Republica Dominicana.
j) "LOS DEUDORES" autorizan a "EL BANCO" hacer tasaciones (cuando este lo
estime necesario o le sea requerido por cualquier organismo gubernamental)
por peritos aceptables para "EL BANCO", de los bienes dados en garantia en
virtud del presente contrato, asi como cualquier otro que le sea accesorio;
los gastos que ocasiones dichas tasaciones seran cargados directamente a la
cuenta de "LOS DEUDORES".
k) LOS DEUDORES deberan mantener de manera consolidada un indice minimo de
razon corriente del 1.25 durante la vigencia de esta facilidad, a partir del
segundo ano de operaciones.
12
l) El indice de cobertura de las deuda no debera disminuir de 1.0 para el ano
2001, y de 1.25 en los anos siguientes, durante la vigencia del prestamo. Este
indice se define como: ingresos operacionales netos mas depreciacion y
amortizacion entre capital e intereses adeudados.
m) La cobertura de los intereses no debera disminuir de 1.5 para el ano
2001, de 2.0 para el ano 2002 y 2.5 para los anos subsiguientes.
n) Queda expresamente convenico que si por cualquier motivo la
Superintendencia de Bancos reduce la clasificacion de riesgo del presente
prestamo por debajo de B, LOS DEUDORES se comprometen y obligan a pagar a EL
BANCO el costo del monto de la provision que EL BANCO se vea obligado a
provisionar.
PARRAFO: LOS DEUDORES reconocen y aceptan:
1- Que mediante la 2da. Resolucion de la Junta Monetaria, dictada en fecha 29
de junio de 1993, asi como sus modificaciones, se establecieron normas
bancarias y prudenciales con relacion a las facilidades crediticias otorgadas
por las instituciones bancarias para regular el comportamiento y la capacidad
de pago de los deudores, el nivel de las garantias y la calidad de dichas
facilidades;
2- Que de acuerdo a lo dispuesto por la senalada resolucion, EL BANCO tiene
la obligacion de constituir provisiones de acuerdo al grado del deterioro que
sufran los creditos concedidos;
3- Que el incumplimiento de las obligaciones puestas a su cargo en virtud del
presente contrato de prestamo puede dar lugar a un grave perjuicio para EL
BANCO, el cual debe ser comopensado;
4- Que en virtud de lo senalado en el ordinal 3, de este mismo parrafo, LOS
DEUDORES se comprometen y obligan a pagar a EL BANCO el costo del monto de la
provision que esta ultima parte se vea obligada a hacer en relacion al
prestamo de que se trata, calculado en base a las tasas de interes, en el
entendido de que
13
esta compensacion es adicional a los demas costos financieros previstos para
este prestamo.
ARTICULO DECIMO CUARTO: CONVENIOS FINANCIEROS APLICABLES A LAS FIADORAS
SOLIDARIAS E INDIVISIBLES.-
a) PRICESMART, INC,, se compromete durante la vigencia del prestamo a
mantener un patrimonio neto minimo de CINCUENTA Y CINCO MILLONES DE DOLARES
NORTEAMERICANOS CON 00/100 (US$55,000,000.00).
b) PRICESMART, INC., se compromete durante la vigencia del prestamo a no
disminuir su participacion accionaria en PSMT CARIBE, INC.
c) PSC, S.A. debera mantener durante la vigenda del prestamo un patrimonio
neto no menor de DIEZ MILLONES DE DOLARES NORTEAMERICANOS CON 00/100
(US$10,000,000.00)
d) PSC, S.A. debera, durante la vigencia del prestamo, mantener su
participacion accionaria en PSMT CARIBE, INC., excepto en el caso de que la
venta de acciones sea a la compania PRICESMART INC.
e) PSMT CARIBE, INC., debera mantener, durante la vigencia del prestamo, un
patrimonio neto no menor de VEINTICINCO MILLONES DE DOLARES NORTEAMERICANOS
CON 00/100 (US$25,000,000.00).
ARTICULO DECIMO QUINTO.- PROHIBICIONES A "LOS DEUDORES": Queda convenido que
mientras "LOS DEUDORES" tengan pendientes con "EL BANCO" alguna de las
obligaciones principales y accesorias origininadas este contrato, "LOS
DEUDORES" no podran sin permiso expreso y por escrito de "EL BANCO":
1) Transferir o ceder parcial o totalmente los derechos y obligaciones
contenidas en el presente contrato.
14
2) Incurrir, asumir, garantizar o permitir que exista cualquier otra
obligacion definitiva o contingente que no tenga su origen en las operaciones
normales del comercio.
3) Proceder a su liquidacion, reorganizacion o fusion con cualquier otra
persona fisica o moral.
4) Si "LOS DEUDORES" se encontrare atrasado en el pago de sus obligaciones
con el "EL BANCO", no podra hacer pago de dividendos en efectivo o en
naturaleza, anticipos, adelantos, prestamos a sus accionistas o directivos,
asi como cualquier operacion similar.
5) Contraer mas obligaciones financieras que pudieran comprometer o debilitar
sus posibilidades de pago.
ARTICULO DECIMO SEXTO: RESOLUCION DEL CONTRATO Y EJECUCION DE LA GARANTIA: El
presente contrato quedara resuelto de pleno derecho, a opcion de "EL BANCO" y
sin ningun tipo de formalidad previa judicial o extrajudicial, perdiendo "LOS
DEUDORES" el beneficio del termino y siendo en consecuencia ejecutable las
garantias otorgadas en los sigulentes casos:
a) Por falta de cumplimiento de una cualquiera de las obligaciones contraidas
en el presente contrato, luego de notificado este hecho por escrito y LOS
DEDUDORES no obtemperar a dicho requerimiento en un plazo no mayor de cinco
(5) dias contados a partir de la fecha de la notificacion.
b) Si "EL BANCO" tuviere conocimiento de que un efecto de comercio o
documento librado por "LOS DEUDORES" haya sido protestado por el tenedor del
mismo, o se inicien contra este cualquier procedimiento de cobro de pesos
ante cualquier tribunal.
c) Si "LOS DEUDORES" se hallaren en cesacion de pago o sujeto a una tentativa
de arreglo ante la Camara de Comercio.
d) Modificacion en la propiedad, gerencia y control de PRICESMART DOMINICANA,
S. A., excepto cualquier
15
incremento directo o indirecto de propiedad por PRICESMART, INC, sin permiso
expreso y por escrito de EL BANCO.
e) Terminacion, por PRICESMART, INC., de la licencia, transferencia de
tecnologia y acuerdos de suministro. En el caso de que PRICESMART, INC.,
elija terminar la licencia otorgada a PRICESMART DOMINICANA, S.A. durante la
vigencia del prestamo, debera notificare por escrito a EL BANCO de su
intencion con seis (6) meses de antelacion.
PARRAFO: Queda convenido que "EL BANCO" podra, en cualquier momento, aceptar
el pago de cualquier suma adeudada con posterioridad al vencimiento, sin que
ello implique renuncia a la facultad que le otorga este articulo.
ARTICULO DECIMO SEPTIMO: SUPERVISIONES: Los funcionarios y tecnicos de "EL
BANCO" podran realizar supervisiones razonables, cuantas veces lo crean
necesarios, para vigilar la garantia que ampara el emprestito durante todo el
tiempo que dure la vigencia del credito, conviniendo "LOS DEUDORES" en
facilitar las labores de inspeccion y revision, suministrando los datos,
informaciones, documentos, registros y todo cuando le sea requerido por los
mencionados funcionarios y tecnicos, para los fines que senala este acapite.
ARTICULO DECIMO OCTAVO: ENDOSO DE POLIZA: Queda expresamente convenido que
"LOS DEUDORES" se comprometen y obligan a suscribir y mantener durante la
vigencia del prestamo, una poliza de incendio y lineas aliadas que asegure
los bienes otorgados como garantia en este contrato, por un monto no menor
del valor de la suma otorgada en prestamo, mientras "LOS DEUDORES" deban
alguna suma generada por este prestamo "EL BANCO". En caso de destruccion
parcial o total de los bienes dados, en garantia, el privilegio de "EL BANCO"
se trasladara de pleno derecho a la indemnizacion. "LOS DEUDORES" autorizan a
"EL BANCO" a renovar por cuenta del primero, sin que con ello implique
obligacion, la poliza de seguro antes mencionada, para el caso de que "LOS
DEUDORES" no lo hagan por si mismos, cobrandole a "LOS DEUDORES" los
intereses a la tasa prevaieciente al momento en el mercado, entre la fecha de
16
renovacion de la poliza y la fecha en que "LOS DEUDORES" reembolsen a "EL
BANCO" los gastos ocasionados para el mantenimiento de esta poliza. Las sumas
que "EL BANCO" avance por tal concepto, estaran garantizada por las garantias
descritas en el presente contrato.
PARRAFO: "LOS DEUDORES" se comprometen a endosar en favor de "EL BANCO", la
poliza de seguro sobre el inmueble dado en garantia, por el periodo de
vigencia del prestamo concedido en virtud del presente contrato, por un valor
de SETENTA Y CUATRO MILLONES SETECIENTOS CINCUENTA Y CUATRO MIL PESOS CON
00/100 (RD$ 74,754,000,000).
ARTICULO DECIMO NOVENO: TRASPASO DEL CONTRATO: "EL BANCO" se reserva el
derecho de traspasar con o sin recurso como garante parcial o totalmente del
prestamo aqui acordado, para fines de financiamiento propio, en cuyo caso los
acuerdos tomados son traspasables por parte de "LOS DEUDORES" al nuevo
acreedor.
ARTICULO VIGESIMO. GASTOS LEGALES: Queda convenido entre las partes que LOS
DEUDORES pagaran hasta un monto de OCHO MIL DOLARES NORTEAMERICANOS CON 00/100
(US$8,000.00), por concepto de gastos legales por redaccion, formalizacion y
ejecucion de este contrato. Exceptuando, los gastos y honorarios que puedan
originarse con motivo de las diligencias, demandas y damas actos judiciales
y/o extrajudiciales que sea necesario ejecutar, eventualmente, para exigir y
obtener el cumplimiento de las obligaciones principales y accesorias
resultantes del presente contrato. Asimismo, "LOS DEUDORES" pagaran o
reembolsaran a "EL BANCO" todos los gastos razonables, de cualquier
naturaleza, necesarios para la administracion, supervision preservacion o
proteccion de las garantias reales y/o personales convenidas para la
seguridad del prestamo otorgado.
ARTICULO VIGESIMO PRIMERO: AUTORIZACION DE INFORMACION CREDITICIA: "LOS
DEUDORES" autorizan expresa y formalmente a "EL BANCO" a suministrar a
centros de informacion crediticia la informacion patrimonial y
17
extrapatrimonial necesaria a los fines de evaluacion de credito por parte de
otras instituciones suscriptores de dichos centros de informacion,
reconociendo y garantizando que la revelacion de dichas informacion por parte
de "EL BANCO" y/o por los centros de informacion crediticia y/o por sus
respectivos empleados, funcionarios y accionistas no conllevara violacion de
secreto profesional a los efectos del Articulo 377 del Codigo Penal ni
generara responsibilidad bajo los Articulos 1382 siguientes del Codigo Civil,
ni bajo ningun otro texto legal, al tiempo de renunciar expresa y formalmente
al ejercicio de cualesquiera acciones o demandas a los fines de la
reclamacion de danos y perjuicios por dicha causa o motivo, o por el
suministro de informacion inexacta y prometiendo la sumision de sus
representantes, accionistas y demas causahablentes a lo pactado en este
articulo en virtud de las disposiciones del Articulo 1120 del Codigo Civil.
ARTICULO VIGESIMO SEGUNDO: NUEVO MILENIO. LOS DEUDORES declara que renuncia
de manera formal, expresa e irrevocablemente, al ejercicio de toda accion,
pretension, derecho, reclamacion, interes e instancia, que pudieran provenir
de cualquier incumplimiento o violacion por EL BANCO, del presente contrato,
como consecuencia del cambio de milenio y derivado directa o indirectamente de
las normativas de certificacion para el cambio de milenio del sistema
financiero nacional. Asimismo, LOS DEUDORES declaran que todos sus sistemas
operacionales y financieros estan adaptados a los cambios requeridos para las
operaciones comerciales y contables a partir del ano 2000. La inobservancia
de este requerimiento sera causa de caducidad del presente contrato bajo los
terminos fijados en el mismo.
ARTICULO VIGESIMO TERCERO: INVALIDEZ Si cualquier estipulacion del presente
contrato fuere declarada nula, invalida o imposible de hacerse cumplir, tal
nulidad, invalidez o imposibilidad de cumplimiento se aplicara solo a tal
estipulacion y no afectara ni invalidara ni impedira el cumplimiento de
cualquier otra estipulacion del presente convenio. Si cualquier tribunal o
jurisdiccion competente (judicial o arbitral) considerare que cualquier
estipulacion, de las establecidas en este contrato fuera invalida o imposible
de hacerse cumplir, el presente convenio se
18
considerara modificado o limitado en las medida y forma que sea necesario de
manera que tal estipulacion en caso de ser declarada nula se considerara no
escrita, manteniendo las dermas clausulas todo su rigor y validez juridica.
Declaran las partes que el presente articulo constituye una clausula
fundamental del presente contrato.
ARTICULO VIGESIMO CUARTO: JURISDICCION. - (a) en lo relativo a la ejecucion
de las garantias reales (hipotecarias y prendarias) las partes convienen
atribuir competencia a los tribunales de la Republica Dominicana; y (b) todo
litigo, controversia o reclamacion relativo a la eventual ejecucion de la
garantia de fianza solidaria prevista en este Contrato sera sometido al
Arbitraje, bajo las reglas de Arbitraje Comercial de las Asociacion
Americana de Arbitraje (AAA), y por ante los Arbitros que designare la
ASOCIACION AMERICANA DE ARBITRAJE (AAA) con su asiento en San Juan, Puerto
Rico (y a falta de sede u oficina de dicha Asociacion en la isla de Puerto
Rico), por la sede u oficina regional de la prealudida Asociacion en la
ciudad de Miami, Florida, Estados Unidos de America; conviniendose que, en
todo caso, las audiencias relativas a tales procedimientos arbitrales seran
celebradas, a opcion de los arbitros, en idioma espanol y/o ingles, en la
ciudad de San Juan, Puerto Rico; y/o en la ciudad de Santo Domingo de Guzman,
Distrito Nacional, Republica Dominicana, asumiendo cada parte los respectivos
costos que generen dichos procedimientos. Las partes convienen en someter
todas las controversias anteriormente senaladas ante tres (3) Arbitros
seleccionados de los paneles de arbitros de las AAA, salvo que por escrito
convengan para casos particulares en escoger un solo arbitro, quien (es)
debera(n) aplicar, en la solucion de esos conflictos, las siguientes reglas:
1). - Los convenios expresos plasmados en el presente contrato; y 2). - Las
leyes de la Republica Dominicana. Previamente al lanzamiento de toda demanda
arbitral en virtud de esta clausula, la parte interesada debera agotar un
preliminar conciliatorio de NEGOCIACION DIRECTA con las partes a ser
demandadas. A tales fines, la parte interesada convocara a las demas partes
y/o a sus representantes legales, a una reunion de negociacion directa, con
por lo menos dos (2) dias de anticipacion. La reunion podra realizarse ON
LINE, mediante tecnicas de teleconferencias o CHAT ROOM. En principio, la
NEGOCIACION DIRECTA, no se prolongara por mas de cinco (5) habiles dias,
19
contados a partir de la primera convocatoria a reunion. Sin embargo, las
partes de mutuo acuerdo, podran prorrogar dicho plazo, y aun decidir que
dicha negociacion se realice con la asistencia de uno o mas mediadores, segun
las reglas de mediacion que tengan a bien elegir en su oportunidad. La
negociacion directa y/o la eventual mediacion llegaran a su fin ya sea
mediante un acuerdo transaccional, o ya sea por simple vencimiento del plazo
de cinco dias habiles antes mencionado en el caso de que las partes no
acordaren prorrogar dicho plazo, y en caso de prorrogacion, tan pronto una de
las partes manifieste por escrito su deseo de concluir la fase conciliatoria
con o sin la asistencia de mediador (es). En todo caso, sea que intervenga
acuerdo transaccional o no, las partes levantaran acta en un sentido o en el
otro. Sin una de ellas no desea firmar, de todas formas la parte interesada
procedera a levantar el acta de noacuerdo y consignara esa circunstancia en
dicha acta. Finalmente, para el caso de que se utilice la via arbitral arriba
descrita, las partes convienen que el laudo arbitral que interviniere sera
firme, concluyente, definitivo y ejecutorio entre las partes. Las partes
acuerdan que este tribunal arbitral quedara facultado para decidir sobre las
compensaciones y/o reclamaciones de danos y perjuicios, asi como sobre las
costas procesales.
ARTICULO VIGESIMO QUINTO: ELECCION DE DOMICILIO
Para la ejecucion del presente contrato y demas fines pertinentes, las partes
hacen eleccion de domicilio en:
( a ) EL BANCO en sus oficinas principales en la edificacion ubicada en la
interseccion de las avenidas Tiradentes y John F. Kennedy de la ciudad de
Santo Domingo;
( b ) LOS DEUDORES : ( 1 ) PRICESMART DOMINICANA, S.A. en la Avenida San
Martin No. 253, Edificio Santanita I, Suite 403 de esta ciudad de Santo
Domingo; ( 2 ) INMOBILIARIA PRICESMART, S. A. en la Avenida San Martin No.
253, Edificio Santanita I, Suite 403 de esta ciudad de Santo Domingo.
( c ) LAS FIADORAS SOLIDARIAS E INDIVISIBLES: ( 1 ) PRICESMART, INC., en la
edificacion marcada con el No. 10 de la Avenida John F. Kennedy de esta
ciudad de esta ciudad de Santo
20
Domingo ( 2 ) PMST CARIBE, INC., en la edificacion marcada con el No. 10 de
la Avenida John F. Kennedy de esta ciudad de Santo Domingo ( 3 ) PSC, S. A.
la edificacion marcada con el No. 10 de la Avenida John F. Kennedy de esta
ciudad de Santo Domingo
HECHO Y FIRMADO en nueve (9) originales, de un mismo tenor y efecto, en la
ciudad de Santo Domingo, Distrito Nacional, Capital de la Republica
Dominicana, a los veintidos (22) dias del mes de febrero del ano dos mil
(2000).
POR "EL BANCO"
/s/ Wilfrido Flores
--------------------------------------
WILFRIDO FLORES
[SEAL]
/s/ Rosangela Pellerano
--------------------------------------
ROSANGELA PELLERANO
POR "LOS DEUDORES"
PRICESMART DOMINICANA, S. A.
[SEAL]
/s/ Eric Torres
--------------------------------------
ERIC TORRES
21
/s/ Alberto Bonetti
--------------------------------------
ALBERTO BONETTI
INMOBILIARIA PRICESMART, S. A.
/s/ Eric Torres
--------------------------------------
ERIC TORRES INMOBILIARIA PRICESMART, S. A.
[ILLEGIBLE]
/s/ Alberto Bonetti
--------------------------------------
ALBERTO BONETTI
POR LAS FIADORAS SOLIDARIAS E INDIVISIBLES:
"PSMT CARIBE, INC"
/s/ Jesus Ernesto Grijalva Garcia
--------------------------------------
JESUS ERNESTO GRIJALVA GARCIA
PRICESMART, INC
/s/ Gilbert Anthony Partida
--------------------------------------
GILBERT ANTHONY PARTIDA
22
PSC, S. A.
[SEAL]
/s/ Alberto Bonetti
--------------------------------------
ALBERTO BONETTI
Yo, ___________________________________ Abogado Notario Publico de los del
Numero del Distrito Nacional, CERTIFICO Y DOY FE que por ante mi han
comparecido los senores WILFRIDO FLORES, ROSANGELA PELLERANO, ERIC TORRES,
ALBERTO BONETTI, GILBERT A. PARTIDA Y JESUS ERNESTO GRIJALVA GARCIA de
generales que constan precedentemente y me han declarado bajo la fe del
juramento que esas son las firmas que acostumbran a usar en todos los actos
de sus vidas publica y privada, por lo que se le debe dar entera
credibilidad. En la ciudad de Santo Domingo, Distrito Nacional, Capital de
la Republica Dominicana, a los veintidos (22) dias del mes de febrero del ano
dos mil (2000).
NOTARIO PUBLICO
23
Exhibit 10.8(b)
ACCESORY LOAN AGREEMENT WITH
ASSURANCE OF SECURITY WITHOUT DISPOSSESSION
BETWEEN:
BANCO NACIONAL DE CREDITO, S.A., a banking corporation, organized and existing
according to the Laws of the Dominican Republic, with business address and main
offices located on the corner of avenidas John F. Kennedy and Tiradentes of this
city of Santo Domingo, duly represented by Messrs. Wilfrido Flores and Rosangela
Pellerano, Dominicans, of legal age, married, bank executives, bearers of
personal and electoral Identification Cards Nos. 001-0172017-5 and
001-0170307-2, domiciled and residents in this city of Santo Domingo, who act in
their conditions as Vice-president for Risk Administration and Legal and
Vice-president of Corporate Banking; Institution that from now on will be
denominated "THE BANK".
PRICESMART DOMINICANA, S.A., a corporation organized and existing according to
the laws of the Dominican Republic, with its business address and principal
offices in Avenida San Martin No. 253, Santanita Building I, Suite 403 of this
city of Santo Domingo; duly represented by Alberto Bonetti, Dominican, of legal
age, married, businessman, bearer of Identification Card No. 11-0102205-1,
domiciled and resident in house No. 33 of calle Porfirio Herrera del Ensanche
Plantini of this city, and Eric Torres of North American nationality, of legal
age, bearer of Passport of the United States of America No. 093904746, domiciled
at avenida Charles Summer No. 54 of this city of Santo Domingo; who act in
virtue of resolution of the Board of Administration of February 14th, 2000; and
INMOBILIARIA PRICESMART, S.A., a corporation existing according to the laws of
the Dominican Republic with business address and main offices located at Avenida
San Martin No. 253, Edificio Santanita I, Suite No. 403 of this city of Santo
Domingo; duly represented for the purpose of this act by Alberto Bonetti,
Dominican, of legal age, married, businessman, bearer of Identification Card No.
001-0102205-1, domiciled and resident in house No. 33 on calle Porfirio Herrera
del Ensanche Plantini of this city; and Eric Torres of North American
Nationality, of legal age, bearer of Passport of the United States of North
America No. 093904746, domiciled at avenida Charles Summer No. 54 of this city
of Santo Domingo; who act in virtue of resolution of the Board of Administration
of February 14th, 2000; business entities that will be denominated "THE
DEBTORS", or by their own names without distinction.
PSMT CARIBE, INC., business entity organized according to the laws of the
British Virgin Islands, with its business address located in the offices of
Ernst & Young Trust Corporation (BVI) Limited, P.O. Box 3340, Road Town, Tortola
British Virgin Islands; and accidentally in the building located at No. 10 of
Avenida John F. Kennedy of this city of Santo Domingo; duly represented for the
purpose of this act by Jesus Ernesto Grijalva Garcia, of North American
nationality, of legal age, married, bearer of passport No. 037002689, domiciled
and resident at No. 4649 Morena Blvd., San Diego, California, and accidentally
in this city of Santo Domingo; who acts in virtue of the Power of the President
of PSMT CARIBE, INC. of February 15th, 2000, the signature has been legalized by
Notary Public Evelisse Hernandez, and duly legalized by the Consul for the
Dominican Republic in the city of San Francisco, California; PRICESMART, INC.,
business entity organized according to the laws of the State of Delaware, with
its business address located in No. 4649 Morena Blvd, San Diego, California; and
who has
chosen as domicile for the purpose of this agreement, the building marked No. 10
of Avenida John F. Kennedy in this city of Santo Domingo; duly represented for
the purposes of this act by Gilbert Anthony Partida, of North American
Nationality, married, businessman, bearer of Passport No. 155092042, domiciled
and resident accidentally in this city of Santo Domingo, who acts section No. 5
of the By-laws; PSC, S.A., business entity organized and existing according to
the laws of Panama, with its business address and main office located in the
city of Panama and accidentally in the building located in Avenida John F.
Kennedy of this city of Santo Domingo, duly represented for the purpose of this
act by Alberto Bonetti Brea, Dominican, of legal age, married, businessman,
bearer of Identification No. 001-0102205-1, domiciled and resident in house No.
33 of calle Porfirio Herrera del Ensanche Plantini of this city; who acts in
virtue of resolutio of the Board of Directors of December 9th, 1999; entities
that jointly will be denominated "THE SEVERAL AND INDIVISIBLE SURETY"
WHEREAS: On the 22nd of February, 2000, "THE DEBTORS" and THE SEVERAL AND
INDIVISIBLE SURETY subscribe with "THE BANK" a Loan Agreement with Mortgage
Guarantee in Dollars for the sum of FOUR MILLION ONE HUNDRED AND FIFTY-THREE
THOUSAND DOLLARS OF THE UNITED STATES OF AMERICA WITH 00/100 (US4,153,000.00),
to finance the already finished construction of a store for PriceSmart
Dominicana, S.A., located in the city of Santiago, Dominican Republic.
WHEREAS: As a guarantee and security of the payment of the pending sums by
virtue of the above mentioned loan agreement the several and indivisible
securities were accepted, as is described below: (1) mortgage in first rank on
the property that is described below:
A PORTION OF SEVENTEEN THOUSAND FIVE HUNDRED SQUARE METERS (17,500 MTS2) LOCATED
WITHIN THE LIMITS OF PARCEL OF LAND NO. 7-C-8-I OF THE OF THE CADASTRAL DISTRICT
NO. 8 OF THE MUNICIPALITY OF SANTIAGO, SECTION 3 OF RINCON LARGO, PROVINCE OF
SANTIAGO WITH THE FOLLOWING LIMITS: TO THE NORTH, AVENIDA ESTRELLA SADHALA AND
PARCEL NO. 7-C-B-I (REMAINDER): TO THE EAST AVENIDA ESTRELLA SADHALA; TO THE
SOUTH PARCEL NO. 7-C-8-I (REMAINDER) AND ARROYO GURABO; AND TO THE WEST PARCEL
NO. 7-C-8-I (REMAINDER). THE PROPERTY OF THE MENTIONED PORTION IS COVERED IN
CERTIFICATE OF TITLE NO. _____________, ISSUED BY THE TITLE RECORDER OF THE
DEPARTMENT OF SANTIAGO, IN FAVOR OF INMOBILIARIA PRICESMART, S.A.,
and ( b ) several security of the business entities PSMT CARIBE, INC; PRICEMART,
INC and PSC, S.A.., their relevant particular are described in the first page of
this document, become several and indivisible guarantors of all and each one of
the obligations contracted by "THE DEBTORS", in the following proportion: (1)
PSMT CARIBE, INC. for one hundred percent (100%) of the amount of the loan plus
the interests; (2) PRICESMART, INC., up to sixty percent (60%) of the amount of
the loan plus the interests and ( 3 ) PSC, S.A., up to forty percent (40%) of
the amount of the loan plus the interests. Likewise, it has been agreed that the
mentioned guarantors may not oppose "THE BANK" in the benefit of discussion
referred to in article No. 2021 and the ones that follow in of the Civil Code in
force.
WHEREAS: As accessory to the mortgage security in FIRST RANK accepted by "THE
DEBTORS", as well as the several security, by virtue of previously mentioned
agreement,
2
"THE DEBTORS" accept in an accessory manner a Pledge Without Dispossession, on
assets of his property, with an estimated appraisal value of THIRTY-FOUR MILLION
ONE HUNDRED AND NINETY-NINE THOUSAND THREE HUNDRED WITH 00/100
(RD$34,199.300.00) with the purpose of guaranteeing the sums given as loan.
WHEREAS: The above WHEREAS clauses form and integral part of this agreement, the
parties,
HAVE AGREED AND CONVENED THE FOLLOWING:
ARTICLE ONE: AMOUNT. It has been understood that for more security and guarantee
of the payment of the sum of FOUR MILLION ONE HUNDRED AND FORTY THREE THOUSAND
DOLLARS OF THE UNITED STATES OF NORTH AMERICA WITH 00/100 (US$4,153,000.00)
loaned by "THE BANK" to "THE DEBTOR", by virtue of the loan agreement with
mortgage security of February 22nd, 2000, "THE DEBTORS" accept a collateral
guarantee without dispossession on the properties with an estimated appraisal
value OF THIRTY-FOUR MILLION ONE HUNDRED AND NINETY-NINE THOUSAND THREE HUNDRED
WITH 00/100 (RD$34,199,300.00) and that will be described in this same
agreement.
PARAGRAPH: SPECIAL CONDITIONS.- It has been specially agreed between the parties
that everything related to the manner of payment, recovery, interest rate,
commissions, conditions and terms included in the loan agreement with mortgage
guarantee entered y "THE DEBTORS" and "THE BANK" on February 22nd, 2000, and for
an amount of FOUR MILLION ONE HUNDRED AND FIFTY-THREE THOUSAND PESOS WITH 00/100
(US$4,153,000.00), will be the same that regulate this agreement. Likewise, the
parties agree any violation of those foreseen in the principal agreement that is
committed by "THE DEBTORS" in dealing with "THE BANK" making it callable, and
therefore enforceable, and therefore making the mortgage guarantee for the
latter granted party enforeceable, by option of "THE BANK", it will make
possible the execution of the pledge accepted by this agreement.
ARTICLE TWO: TERM OF THE SECURITY. The security accepted on the assets mentioned
in this agreement will be in effect with all its force and scope up to the date
of the total and definite payment of the loan granted in capital and interests
in virtue of the agreement of February 22, 2000, held between the parties and of
which this agreement is an accessory; with the understanding that the obligation
contracted by "THE DEBTOR" with "THE BANK" will have as expiration the terms
agreed in the effects and/or documents proof of the disbursements of the
agreement of February 22, 2000, previously indicated, whereby "THE BANK"
reserves the faculty to renew at its discretion the referred effects and/or
documents, in which case the above mentioned collateral will continue in effect
without restriction of any kind, in which case, default in payment on the part
of "THE DEBTORS" of those effects and/or documents their respective maturities
imply in full right, the loss of the benefit of the term that is established in
this agreement, and the requirement of all the obligations that have not matures
that have been contracted by "THE DEBTORS" with "THE BANK" and consequently, the
accepted collateral may be executed according to the Law, without having to wait
for the maturity of the term.
3
ARTICLE THREE: COLLATERAL SECURITY. For more security and guarantee of payments
of the owed sums in virtue of the Loan Agreement with Mortgage Security of
February 22, 2000; "THE DEBTORS" accept to encumber with a collateral without
dispossession under Law 6186 of February 12, 1963 and its modifications, on the
assets that are described below:
( a ) EQUIPMENT AND MATERIALS FOR THE STORE
<TABLE>
<CAPTION>
Description Assessed Value in Rd$
----------- ---------------------
<S> <C>
Two levels of loading docks
"Yale" Mod. CM6 5W-8L (30,000Lbs) 123,300.00
Five "Airlink" Pneumatic Systems
to deposit money in tubes 125,600.00
Cabinets, shelves for jewelry, Membership,
Photographs, collectable materials and
Exchange house 303,200.00
Machine for wrapping transparent plastic
Belco Mod. STC2016 167,000.00
Ten (10) Big Joe manual elevating carts,
Model L50 Fourway. 104,600.00
Two "Deka" Platforms, for batteries and
Battery Chargers, Mod. RBS 18-25 33,100.00
Six "Deka" Batteries, Mod. 18-P137-15 and
three "Deka" battery chargers, Mod. 880C3-
18/950, for hyster 610,100.00
"Deka" transporting car, Mod.,
TC-24-PP motorized by belt 106,000.00
Three "Yale" hoisting cars
Mod. ESC30ZA 1,132,800.00
"Galbreath" Compactor, Mod. 30/60
HD2200 for cardboard boxes 169,700.00
Shelves for wooden palettes 2,458,900.00
Baskets, shelves for clothes
Trays and shelves for bread 350,000.00
</TABLE>
4
<TABLE>
<S> <C>
Sixteen "Kilson" pieces of furniture
Kcu3500-PGT 442,600.00
Alarm system 361,600.00
Telephone system 298,300.00
"Yale" steam cleaner
Mod 680 54,200.00
Four "Rehrig" pens for cars for merchandise,
Mod 4300-15 and 400 "Rherig" carts
Mod 1200-50 761,600.00
"Safe & Vault" Safe, Mod SVM 6030 PCD 79,900.00
"Marco" Floor Cleaner, Mod. 29 144,800.00
Six "Lavi" dividing posts, Mod. 30000LT,
fences, signs and other miscellaneous 556,000.00
FOOD SERVICE
"Amco" shelves, for freezers, Mod.
CC183E-SBP and for dry storage, Mod.
CC184Z-SBP 36,300.00
"Continental" Refrigerator for pizza 51,700.00
"Process" press for pizza dough,
Mod. DP-1100 55,800.00
"Universal" show cabinet for pizza,
Mod. P/C-5SL-30 48,900.00
Four stainless steel tables
for handling food 26,500.00
"Middleby" bouble gas oven, for pizza,
Mod. Ps222OFS-D-G 374,800.00
"Larkin" Smoke extractor, SS with its ventilator 52,000.00
"Continental" one section freezer, Mod. 1F 36,200.00
</TABLE>
5
<TABLE>
<S> <C>
Two SS washbasins for hands and utensils 54,700.00
Three carts for pizza dough 48,100.00
"Craig" Hot-Dog Cooker, Mod.
RB-78-33SC 130,000.00
"Universal" SS show case,
Mod. P-S-Custom, 149" in length 80,500.00
"Star" showcase for churros, Mod. HFD-3 22,100.00
"Universal" SS Dispenser for Sodas,
Mod. P/C.BC-76 (44" x 71") 43,900.00
"Booth-Crystal" Ice and soda dispenser,
Mod. 220205061BC-50 66,500.00
"CristalTip" Ice maker,
Mod. 802CAS251-30 60,000.00
"Universal" SS piece of furniture for seasoning
Mod. P/C-CC-9624-2a (24" x 96") 59,100.00
Shelves and stands 69,600.00
"New Asia" Miscellaneous 50,700.00
"Cuno" Water filter for dispensers
Mod. 4S 14,500.00
"Plymold-seating" Tables and chairs, 24"
x 44" 295,000.00
Signs for menu, PriceSmart, etc. 147,600.00
"Nimbus" Water treatment system
Mod. 2000 92,100.00
BROILED CHICKEN
Two ovens for chicken Mod. MSR-2 409,900.00
Cabinet for keeping the chicken
Mod. HC-72/13 65,900.00
</TABLE>
6
<TABLE>
<S> <C>
Selfservice unit, Mod. SSW-4 116,300.00
SS table 30" x 40", SS wash basin,
Shelf, etc. 32,200.00
BAKERY
Two "Baxter" ovens 206,400.00
Flour mixer for 30 Quarts 53,900.00
"Minipack" vacuum packer
Mod. "Sintesis 760" 80,000.00
Shelves, muffin pans, SS table (30" x 60")
refrigerator, etc. 103,700.00
MEAT AREA
"Hollymatic" meat grinder, Mod. 175 131,700.00
Hollymatic" meat saw, Model. Hi Yield 16 86,300.00
"Hollymatic" Bulker, Mod. 120 57,700.00
"Berkel" scale with printer, Mod. CX20ET 73,600.00
"Berkel" plastic wrapper, Mod. HWS-1 26,600.00
SS Work mass, 30" x 60" 15,300.00
Carts, shelves, trays, knives, etc. 30,200.00
Two SS washers 16,400.00
Two SS tables with cabinets for the wall 29,100.00
DELICATESSEN
"Berkel" slicing machine, Mod. 834EPB 240,800.00
"Berkel" vaccum machine, Mod. 350 80,400.00
"Berkel" scale with printer, Mod. CX20ET 53,900.00
SS Work mass, 30" x 60" 15,300.00
</TABLE>
7
<TABLE>
<S> <C>
AGRICULTURAL PRODUCTS
Two "Berkel" scales with printer, Mod. CX20ET 107,800.00
Twenty wooden boxes 126,600.00
Photograph Department
"Noritsu" quick development equipment, Mod.
QSS-1701MCC s/W QSF-V50 1,817,000.00
TYRE DEPARTMENT
"Coats" Machine for balancing tires,
Mod. 1050 93,200.00
"Coats" Machine for changing tires,
Mod. 5060A 73,600.00
"Coats" Machine for changing types,
Mod. 4050A 47,500.00
"Ingersoll-Rand" air compressor, Mod.
2475N4, 5HP, Ser. No. 30T 917741 27,400.00
Two "Acanus Lift" Hydraulic jacks 120,100.00
Tools and accessories for the tyre department 131,700.00
REFRIGERATION EQUIPMENT
It includes equipment, stands, shelves, material for installation, doors for
freezers and doors for glass show-cases, waterproofing material and labor for
the
installation 12,002,900.00
Computer Equipment and Programs 7,211,900.00
Office Furniture and Equipment 217,000.00
TOTAL MACHINERY AND EQUIPMENT RD$ 34,199,300.00
</TABLE>
8
The assets described above are in possession of "THE DEBTORS" and the same have
a total appraisal value of THIRTY-FOUR MILLION ONE HUNDRED AND NINETY-NINE
THOUSAND THREE HUNDRED PESOS WITH 00/100 (RD$34,199,300.00); "THE DEBTORS"
declare under oath that they are owners of the assets described above. Likewise,
it is expressly established that those assets are located at avenida Estrella
Sahdala No. 22, Zona Universitaria of the city of Santiago, Dominican Republic.
PARAGRAPH I: It has been expressly agreed between the parties that the assets
given in collateral will remain in the same place as indicated and they may
not be transferred without previous written approval FROM "THE BANK", unless
it is due to force majeure due to their preservation, in which case "THE
DEBTORS" should notify "THE BANK" in writing within the next forty-eight (48)
hours about any type of shortage, loss or any other variation that is
produced with the assets given ass collateral in virtue of this agreement. It
has been expressly agreed that under such assumptions "THE DEBTORS" are bound
to produce a real subrogation that fully substitutes the shortage of the
security.
It is understood that the provisions f this article do not imply in any way
authorization from "THE BANK" to "THE DEBTORS" so that without their consent
they can make free use of the assets given as collateral, as this faculty is
stipulated, not in its benefit, but as protection of the interests of "THE
BANK".
PARAGRAPH II: "THE DEBTORS" declare under oath that the assets given as
collateral in this agreement belong exclusively and individually to them and
that there is no legal, conventional or judiciary lien and that the values and
others mentioned in relation with the same, are absolutely correct.
ARTICLE FOUR: LITIGATIONS. THE DEBTORS by means of this document declare under
oath that on the above mentioned guarantee there is no pending, or to the best
of their knowledge, any sentence, action, lawsuit (civil, commercial, criminal,
property, etc..), existing or potential procedure before a tribunal, government
or regulatory authority, agency, committee, board of arbitrators, or any other
organization no matter the denomination.
ARTICLE FIVE: MATURITY OF THE COLLATERAL: It is expressly agreed that in case
the term provided in Article 214 of referred Law 6186 of 1963 has passed, upon
exclusive discretion, right and will of "THE BANK" an immediate and automatic
extension will be operated for the collateral foreseen in this agreement for a
term that "THE BANK" sovereignly deems convenient and without the use of this
faculty on the part of "THE BANK": can at any moment be considered as a waiver
to its rights or as a prerogative acquired in benefit of "THE DEBTORS".
ARTICLE SIX: EXECUTION OF THE GUARANTEE: It has been expressly agreed by the
parties, that in case it is necessary to call the guarantee foreseen in this
agreement, "THE BANK" will use the enforcement procedures granted by Law 6186 of
1963.
PARAGRAPH I: It has been agreed by the parties that, in the case of a law
posterior to the date of this agreement was approved and put into effect by the
competent authorities, that permits
9
a prompt and expeditious execution of the guarantees foreseen in this agreement,
"THE BANK" will be authorized and will have the faculty from "THE DEBTORS" for
using these new means of enforcement; without this implying in any manner a
restriction for "THE BANK", that will continue being free to use, at its
discretion, the means for enforcement that are in effect or those that are
created in the future.
PARAGRAPH II: LEGAL EXPENSES: It has been agreed that all legal expenses,
inscriptions, certifications and taxes where payment is necessary for
formalizing and executing this agreement will be on the account of "THE
DEBTORS".
ARTICLE SEVEN: SUPERVISIONS. The executives and technicians of "THE BANK" may
carry out as many supervisions they deem necessary, to watch over the guarantee
that covers the loan during the time of the effect of the credit, whereby "THE
DEBTORS" agree to facilitate the work for inspectio and revision, providing the
data, information, documents, records and everything that is required by the
mentioned executives and technicians, for the purpose indicated in this
paragraph.
ARTICLE EIGHT: VOUCHER OF INDEBTEDNESS. It is expressly established between the
parties that the disbursements that "THE BANK" makes in favor of "THE DEBTORS"
in virtue of this agreement, will be proven by means of receipts, for the
issuance of promissory notes or any other effect of commerce that "THE BANK"
considers convenient without producing the substitution of this agreement due to
the issuance of those documents.
ARTICLE NINE: PLACE OF PAYMENT: All disbursements made by "THE BANK", as
payments made by "THE DEBTORS" should be made in the domicile of "THE BANK". In
that referring to the payments of interests, commissions and capital, the same
should be made promptly and without the need of collection, being in arrears,
nor any other judiciary and/or out of court formality.
ARTICLE TEN: RIGHTS OF "THE BANK": Default or delay in payment on the part of
"THE BANK" of requiring or executing any of its rights under this agreement,
will not mean the loss or de right of the agreements required under the same,
any change to this agreement, should be made in writing and based on the
agreement of both parties.
ARTICLE ELEVEN: ENDORSEMENT OF THE POLICY. "THE DEBTORS" are bound to maintain
the insurance policies that were required with inclusion of the risks that "THE
BANK" deems necessary within the referred policies. Those policies will be
contracted with insurance entities acceptable for "THE BANK" and they should be
endorsed in favor of this last party, up to the limit of its interests.
likewise, "THE DEBTORS" formally authorize "THE BANK", by means of this
agreement, to proceed to renew the aforementioned insurance policy or policies
in the case that those policies are reduced in their amounts and/or quantitative
or qualitative coverage. In these cases "THE BANK" will charge a twelve percent
(12%) annual interest on the sums paid for such purposes, calculated from the
date of the payments, made by "THE BANK" until de date when the disbursement is
produced on the part of "THE DEBTORS".
10
PARAGRAPH: Without prejudice of what has been agreed in the capital part of this
article, "THE DEBTORS" are specially bound to subscribe and maintain an
insurance policy against fire and allied lines for the term of the effect of the
loan, endorsed in favor of "THE BANK" for an amount of THIRTY-FOUR MILION ONE
HUNDRED AND NINETY-NINE THOUSAND PESOS WITH OO/100 (RD$34,199,000.00).
ARTICLE TWELVE: TRANSFER OF THE AGREEMENT: "THE BANK" reserves the right to
transfer with or without applications as partial or total guarantor, the loan
that has been granted for the purpose of its own financing; in which case, the
agreements here taken are transferable on the part of "THE DEBTORS" to the new
creditor.
ARTICLE THIRTEEN: CHOICE OF DOMICILE. The parties select a domicile for all the
purposes and consequences of execution of this agreement, in their respective
domiciles indicated in the first page of this agreement.
ISSUED AND SIGNED in ten (10) originals, for one same tenor and effect, in the
city of Santo Domingo, National District, Capital of the Dominican Republic, on
the twenty-second day of the month of February (2000)
FOR "THE BANK"
/s/ WILFRIDO FLORES
-------------------
WILFRIDO FLORES
/s/ ROSANGELA PELLERANO
-----------------------
ROSANGELA PELLERANO
FOR "THE DEBTORS"
PRICESMART DOMINICANA, S.A.
/s/ ERIC TORRES
---------------
ERIC TORRES
/s/ ALBERTO BONETTI
-------------------
ALBERTO BONETTI
11
FOR THE SEVERAL AND INDIVISIBLE GUARANTORS:
"PSMT CARIBE, INC"
/s/ JESUS ERNESTO GRIJALVA GARCIA
---------------------------------
JESUS ERNESTO GRIJALVA GARCIA
PRICESMART, INC.
/s/ GILBERT ANTHONY PARTIDA
---------------------------
GILBERT ANTHONY PARTIDA
PSC, S.A.
/s/ ALBERTO BONETTI
-------------------
ALBERTO BONETTI
I, _______________________________ Attorney and Notary Public of those of the
Number of the National District, I HEREBY CERTIFY AND SWEAR that the following
parties appeared before me, Messrs WILFRIDO FLORES, ROSANGELA PELLERANO, ERIC
TORRES, ALBERTO BONETTI, GILBERT A. PARTIDA AND JESUS ERNESTO GRIJALVA GARCIA,
of relevant particulars that are included in this document and they have
declared under oath that those are the signatures that they are accustomed to
using in their public and private lives reason why total credibility should be
given. In the city of Santo Doming, National District, Capital of the Dominican
Republic, on day twenty-two (22) of the month of February of this year 2000.
PUBLIC NOTARY
12
CREDIT AGREEMENT
This CREDIT AGREEMENT (the "AGREEMENT'), dated as of February 25, 2000
is executed among Inmobiliaria PriceSmart Honduras, Sociedad Anonima de Capital
Variable, or simply Inmobiliaria Pricesmart, S.A. de C.V., a company organized
and existing under the laws of Honduras (the "BORROWER"), PriceSmart Honduras,
Sociedad Anonima de Capital Variable, or simply PriceSmart Honduras, S. A. De C.
V., a company organized under the laws of Honduras, (the "GUARANTOR"), PSMT
Caribe Inc., a corporation organized according to the laws of the British Virgin
Islands, (the "GUARANTOR") PriceSmart, Inc., a corporation organized according
to the laws of the State of Delaware, United States of America, (the "'GUARANTOR
AND ASSIGNOR), PSC, S.A., a company organized under the laws of the Republic of
Panama (the "GUARANTOR), Ventures Services Inc., a corporation organized
according to the laws of the State of Delaware, United States of America (the
"ASSIGNOR" and Citibank, N.A. (I.B.F.), an international banking facility
organized in accordance with the laws of the State of New York, United States of
America (the "Lender").
PRELIMINARY STATEMENTS:
1.- INMOBILIARIA PRICESMART HONDURAS, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply INMOBILLARIA PRICESMART, S. A. DE C. V. (the "Borrower) has
applied to the LENDER, for a medium term nonrevolving loan of an amount of THREE
MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS (USS3,500,000.00).
2.- In order to provide funds to finance a completed PriceSmart
warehouse containing approximately five thousand square meters (5,000 M2) in San
Pedro Sula, Honduras, the BORROWER has requested that the LENDER enter into this
Agreement.
3, PSMT Caribe, Inc. has complied with a capital injection of at least
THREE MILLION SEVEN HUNDRED THOUSAND Dollars (US$3,750,000.00) into the
Borrower.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1,01. CERTAIN DEFINED TERMS. Certain capitalized terms are
used in this Agreement with the specific meanings defined below in this Section
1.01. Except as otherwise explicitly specified to the contrary or unless the
context clearly requires otherwise, (a) the capitalized term "Section" refers to
sections of this Agreement;
(b) the capitalized term "Exhibit" refers to exhibits to this Agreement; (c)
references to a - particular Section include all subsections thereof; (d) the
word "including" shall be construed as "including without limitation"; (e)
references to a particular Person include such Person's successors and assigns
to the extent permitted by this Agreement and the other Loan Documents; and (f)
the use of the plural includes the singular and of the masculine includes the
feminine, and vice-versa. References to "the date hereof' mean the date fast set
forth above.
"Borrower" has the meaning set forth in the preliminary statements to
this Agreement.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day on
which banks in New York, New York or San Pedro Sula, Honduras are
authorized or required by law or other governmental action to close.
"CAPITAL EXPENDITURES" means any payments which am made by a Person
for, or in connection with, the rental, lease, purchase, construction or
use of any real or personal property the value or cost of which, under
Honduras GAAP, should be capitalized and appear on such Persons balance
sheet in THE category of property, plant or equipment, without regard to
the manner in which such payments or the instrument pursuant to which they
are made are characterized by such Person or any other Person.
"CITIBANK" has the meaning set forth in the preamble to this
Agreement.
"COLLATERAL" means all "Collateral" (as defined in any Collateral
Documents), First Security Interest on land, building, fixtures and
equipment owned or leased by the Borrower, Assignment of all rents, leases
and license agreements and other assets and property that in accordance
with the terms of the Collateral Documents is or will be subject to any
Lien in favor of the Lenders.
"COLLATERAL DOCUMENTS" means the Pledges of furniture, fixtures and
equipment and the Mortgage on Real Property owned by or leased by the
Borrower, the Assignment of all rents, of all leases and of the Licensing
Technology Transfer, Training and Sourcing Agreement.
"LEMPIRAS" means the lawful currency of the Republic of Honduras.
"CONSOLIDATED" means the consolidation of accounts in accordance with
Honduran GAAP.
"CROSS-BORDER INSURANCE 'MEANS the insurance policy between the Leader
and OPIC.
"DISBURSEMENT" means the amount of THREE MILLION FIVE HUNDRED THOUSAND
DOLLARS (US$3,500,000.00) which the Lender will deliver to the Borrower pursuant
to this Agreement on the Closing Date.
"DOLLARS" and the sign "M " each mean the lawful currency of the
United States of America.
"EBITDA" means, during any period the sum (without duplication) of (i)
the-net income of the Borrower, plus (ii) depreciation and amortizations
plus (iii) Interest Expense, plus (iv) all other non cash expenses
including, but limited to, unrealized losses from foreign exchange and
monetary correction, and only to the extent that any such expense was
deducted, plus (v) income tax expense, to the extent that any such tax was
deducted in connection with the determination of net income, minus (vi) non
cash gains, including, but not limited to, foreign exchange gains and
monetary corrections, minus (vii) equity income from participation in
subsidiaries and affiliates plus (viii) cash dividends received from
subsidiaries and affiliates
"Honduras" means the Republic of Honduras.
"ENVIRONMENTAL ACTION" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law or any
Environmental Permit including, without limitation, (a) any claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any
Environmental Law and (b) any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment.
"ENVIRONMENTAL -LAW" means any Honduran national, departmental, local
or municipal law, rule, regulation, code, order, writ judgment, injunction,
decree or judicial or agency written interpretation, written policy or
written guidance relating to the protection of the environment health,
safety or Hazardous Materials or regulating the use, disposal or exposure
to substances by reason of their effect on the health or safety of humans
or of the environment.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Honduran
Environmental Law.
"EVENTS OF DEFAULT " has the meaning specified in Section 6.01.
"FACILITY" means, at any time, the aggregate amount of the Lenders'
Commitments at such time.
"FISCAL YEAR means a fiscal year of the Borrower ending on August 31st
in any calendar year.
"GUARANTEES" in connection with the full repayment of all principal
and interest outstanding means (i) joint and several from the Borrower,
PriceSmart Honduras, S.A.de C.V. and PSMT Caribe, Inc, (ii) from
PriceSmart, Inc., in an amount up to but not exceeding 60% of all principal
and interest outstanding from time to time and (iii) from PSC, S.A.", in an
amount up to but not exceeding 40% of all principal and interest
outstanding from time to time.
"GUARANTEE REDUCTION PROVISION" means the Lender agrees to reduce the
guarantees dollar for dollar with the repayment of the Loan pursuant to the
amortization schedule; provided that the maximum reduction shall be as
follows: (i) 50% of the loan ONE MILLION SEVEN HUNDRED FIFTY THOUSAND
Dollars (US$1,750,000.00) at such time as the loan to value is equal to or
less than 50% and, for the prior 12-month period, the net operating income
for the Project covered combined debt service (interest and principal
amortization) on the loan at a minimum 1.50: 1 ratio, and (ii) 30% of the
loan ONE MILLION FIFTY THOUSAND Dollars (US$ 1,050,000.00) at such time as
the loan to value is equal to or less than 30% and, for the prior 12-month
period, the net operating income from the project covered combined debt
service on the loan at a minimum 1.50:1 ratio.
"INTEREST EXPENSE" means, for any period of the Borrower, the
aggregate amount of interest paid or required to be paid in cash by the
Borrower in respect of all Debt.
"INTEREST PERIOD" means, the period commencing on the date of such
Disbursement and ending on the next succeeding Payment Date and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next succeeding
Payment Date; PROVIDED, HOWEVER that:
(a) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(b) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month in such Interest Period, such Interest Period shall
end on the last Business Day of such succeeding calendar month.
"INTEREST Rate" will be calculated on the basis of 3-months LIBOR Rate
+ 5.125% p.a. All interest will be calculated on a 365/360 days convention.
Interest payments shall be due and payable on a monthly basis.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the hen or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"LOAN CLOSING" MEANS date on which all parties hereto have executed
this Agreement.
"LOAN DOCUMENTS" means this Agreement, the Recognition of Debt, the
Collateral Documents, in each case as amended or otherwise modified from
time to time.
"LOAN PARTY' means each of the Borrower, PriceSmart Honduras, S.A.de
C.V., PSMT Caribe, Inc., PriceSmart, Inc., PSC, S.A., and Ventures
Services, Inc., any other pledgor assignor or guarantor under any
Collateral Document and their successors and permitted assigns.
"LOAN TERM" means five years from Loan Closing.
"MATERIAL ADVERSE CHANGE" means any substantive alteration in (a) -the
business condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, PriceSmart Honduras, S.A.de C.V.,
PSMT Caribe, Inc., PriceSmart, Inc., PSC, S.A. which significantly
diminishes any of the parties ability to perform the obligations stated
herein
"MATERIAL ADVERSE EFFECT " means any variation in the financial
condition, business, properties or prospects or results of the operations
of the Borrower and /or PriceSmart Honduras, S.A. De C.V. Which, in the
good faith opinion of the Lender, could reasonably be expected to
significantly diminish THE Borrower's ability to perform its obligations
stated herein.
"MATERIAL CONTRACT " means, with respect to any Pawn, any written
contract that is material to the business condition (financial or
otherwise), operations, performance, properties or prospects of such,
Person, including, without limitation, with respect to the Borrower, the
Leasing Agreements, the License Agreements or other similar contract.
7
"MATURITY DATE" means March 3, 2005.
"MORTGAGE ON REAL PROPERTY" means the mortgage entered into on the
date hereof by the Borrower and the Lender for its benefit, substantially
in the form of Exhibit I attached hereto.
"NEW YORK LOAN DOCUMENTS" means this Agreement, the Assignment
Agreement, dated as of February 25, 2000, in each case, as amended or
otherwise modified from time to time.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 4.01 (g). Without limiting the generality
of the foregoing, the Obligations of the Borrower under the Loan Documents
include (a) the obligation to pay principal, interest, charges, expenses,
fees, premiums with respect to Cross-Border Insurance, attorneys' fees and
disbursements, indemnities and other amounts payable by the Borrower under
any Loan Document and (b) the obligation of the Borrower to reimburse any
amount in respect of any of the foregoing that the Lender shall pay or
advance on behalf of the Borrower as contemplated in this Agreement.
"OPIC": Overseas Private Investment Corporation is an agency of the
United States Government, with the mandate of facilitating economically
productive and environmentally sound United States private investments in
developing countries and emerging economies.
"OTHER TAXES" has the meaning specified in Section 2.08.
"PAYMENT DATE" means each 3rd day of the month beginning April 3rd,
2000 for monthly interest payments and each 2nd day of the month beginning
June 3, 2000 for quarterly principal payments.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Sections 5.02
(b) and 5.03 [(a)B] hereof; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and
other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days; (c)
pledges or deposits to secure obligations under workers' compensation laws
or similar legislation or to secure public or statutory
8
obligations; and (d) easements, rights of way and other encumbrances
on title to real property that do not render title to the property
encumbered thereby unmarketable or materially adversely affect the
use of such property for its present purposes.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"PLEDGES OF FURNITURE, FIXTURES AND EQUIPMENT" means the pledge
agreements entered into on the date hereof in respect of furniture,
fixtures and equipment and certain other movable assets owned by Pricesmart
Honduras, S.A. de C.V. on the date hereof between the Borrower and the
Lender for its benefit, substantially in the form of Exhibit __ attached
hereto.
"PROCESS AGENT" has the meaning specified in Section 7.04.
"RECOGNITION OF DEBT" means a Loan Recognition, under Honduran law.
"RESPONSIBLE OFFICER" means any authorized officer of the Borrower.
"ROLLING PERIOD" means for any fiscal quarter, such quarter and the
immediately preceding fiscal quarter.
"HONDURAN "GAAP" has the meaning specified in Section 1.03.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) the fair market value of the property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts
as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay such debts and liabilities as they mature and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light
of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"TAXES" has the meaning specified in Section 2.08.
9
"WORKING CAPITAL" means, as of any date, the current assets of the
Borrower, other than cash and other marketable securities, minus the
current liabilities of the Borrower, other than the current portion of long
term debt, in each case, in accordance with Honduran GAAP, as of such date.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.03. ACCOUNTING TERMS. All accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Citibank, N.A. hereunder shall be
prepared in accordance with Honduran generally accepted accounting principles
applied on a basis consistent with those applied in the preparation of the
latest financial statements furnished to the Lender hereunder (which, prior to
the delivery of the first financial statements under Section 5.04, shall be the
unaudited financial statements as at December 31,1999, referred to in Section
5.04 ("HONDURAN GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE LOAN
SECTION 2.01. (a) The Lender agrees to lend to the Borrower an amount up to
THREE MILLION FIVE HUNDRED THOUSAND Dollars (US$3,500,000.00). The loan amount
is not to exceed 80% of the direct and indirect hard and soft construction
costs, including furniture, fixtures and equipment, organization and start-up
costs, excluding land cost.
The Borrower acknowledges that this in an IBF facility and as such,
according to the Board of Governors of the Federal Reserve System of the United
States, that extensions of credit by international banking facilities, this loan
may be used only to finance operations outside the United States of the Borrower
or of the Borrower's affiliated outside the United States. The Borrower
indicates its understanding of this provision by initialling the blank which
follows this paragraph.
Initial: [ILLEGIBLE]
-------------------
(b) To effect the Disbursement, the Lender shall transfer the amount of the
Disbursement in United States Dollars to that account in Citibank, N.A., for
the account of PriceSmart Honduras, S.A. de C.V.
10
In addition to those conditions precedent to the obligation of the Lender
to make the Disbursement set forth in Sections 3.01 and 4.01 below, on or before
the Date of the Disbursement, the Borrower shall deliver to the Lender a
promissory note substantially in the form of Exhibit II hereto (the "Note")
executed by an authorized signatory of the Borrower. The Lender shall have no
obligation hereunder to effect the Disbursement if it shall not have previously
received such Note, as executed by the Borrower, at the principal offices of
Citibank, NA
(c) Repayment of the Disbursement. The Borrower agrees that the principal
mechanism for the repayment of the Disbursement to the Lender shall be the
delivery to the Lender of the amount corresponding to the amortization schedule
determined in Section 2.03. Every payment shall be made in the same currency
that it was delivered (US dollars). If for governmental or any other reason, the
Borrower has to make payments in local currency, the amount will be calculated
based on the average dollar sales price dictated by Citibank N.A., for the day
that the payment takes place. If the Borrower were to make the payments in local
currency without any valid reason, the loan will terminate and the Lender will
have the right to ask for repayment of the full amount plus the corresponding
interest.
The Borrower will make all principal and interest payments in Citibank,
N.A., or where the Lender designates. Payments will first cover interest due and
then principal.
SECTION 2.02. FEES; PREMIUMS. (a) COMMITMENT FEE. THE Borrower shall pay to
the Lender a structuring fee set forth below:
STRUCTURING FEE. The Borrower shall pay to the Lender at loan closing 0.5%
flat (SEVENTEEN THOUSAND FIVE HUNDRED DOLLARS US$17,500.00). This fee will be
deducted from the loan amount.
SECTION 2.03. REPAYMENT OF LOAN. The Borrower shall repay to the Lender a
minimum amortization of FIVE HUNDRED SIXTY THOUSAND Dollars (US$560,000.00) per
annum. Amortization payments will be due and payable on a quarterly basis,
commencing June 3rd, 2000. The residual amount outstanding totaling
approximately EIGHT HUNDRED FORTY THOUSAND DOLLARS (US$840,000.00) shall be due
and payable at the end of the Loan Term.
SECTION 2.04. PREPAYMENTS. With the exception of scheduled principal
amortization payments, full repayment of the Loan is not permitted for a minimum
of 24 months following Loan closing, with the exception that country devaluation
is equal to or surpasses 12% p.a. Thereafter, the Borrower agrees to notify
Lender in writing, at least 90 days prior to the date of any full repayment of
the Loan. Also partial prepayments may
11
only take place on the date when interest rates are adjusted, according to
3-months Libor Rate.
SECTION 2.05. INTEREST. (a) SCHEDULED INTEREST. The Borrower shall pay
interest on the unpaid principal amount owing to the Lender from the date of
disbursement until such principal amount shall be paid in full, at a rate per
annum equal at all times during each Interest Period for such Disbursement of
the sum of 3-months LIBOR Rate for such Interest Period PLUS 5.125% p.a.,
in effect from time to time, due and payable on a monthly basis. All interest
will be calculated on a 365/360 days convention.
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of a
Default, the Borrower shall pay interest on the unpaid principal amount the
amount owing to the Lender, payable in arrears on the dates referred to in
clause (a) above and on demand, at a rate per annum equal at all times to 5% per
annum above the prevailing rate per annum that would be required to be paid on
the Loan pursuant to clause (a) above.
SECTION 2.06. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation after the date of this Agreement or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Lender, related specifically to this loan, (excluding for
purposes of this Section 2.06 any such increased costs resulting from (i)
Taxes or Other Taxes (as to which Section 2.08 shall govern) and (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the laws of which
the Lender is organized or any political subdivision thereof), then the
Borrower shall from time to time, upon demand by the Lender, pay to the
Lender Agent for the account of the Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the
amount of such increased cost, submitted to the Borrower and the Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(b) If the Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) not currently in effect,
increases the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender based upon the existence of
the Lender's commitment to lend hereunder and other commitments of this type
and that such increase in capital represents an additional cost to the Lender
relating to this transaction, then, upon demand by the Lender, the Borrower
shall pay to the Lender, from time to time specified by the Lender,
additional amounts sufficient to compensate the Lender or such corporation,
on a proportional basis, for such increased cost in the light of such
circumstances, to the extent that the Lender reasonably determines such
increase in capital to be allocable to the existence of the Lender's
commitment to lend to the Borrower and to result in an additional cost for
the Lender. A certificate as to the amount of such increased cost,
12
explaining in detail how such change in capital required entails additional cost
for the Lender, submitted to the Borrower and the Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(c) Any additional amounts payable under this Section 2.06 by the
Borrower to a Lender assignee shall not exceed the additional amounts the
Borrower would have been required to pay to the Lender assignor who assigned its
rights and obligations under this Agreement to such assignee if no such
assignment had occurred.
(d) Before making any demand for additional amounts under this Section
2.06, the Lender agrees to use its reasonable efforts (consistent with its
internal policy and any applicable legal and regulatory restrictions) to
minimize any such amounts.
SECTION 2.07. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall
make each payment hereunder not later than 11:00 A.M. (New York City time) on
the day when due in Dollars to the Lender at the Lender's Account in same-day
funds. In the event that the amount of funds received by the Lender are
insufficient to satisfy the payments due and payable hereunder, the Lender
shall apply such funds in the following order of priority: (i) first: ratably
to all interest due and payable hereunder, (ii) second: ratably to all
amounts due and payable under Section 2.02: ratably to all principal due and
payable with respect to the Loan and (iv) fourth: ratably to all other
amounts due and payable hereunder.
(b) The Borrower hereby authorizes the Lender, if and to the extent
payment owed to the Lender is not made when due hereunder, to charge from time
to time against any or all of the Borrower's accounts with the Lender any amount
so due. The Lender agrees to provide prompt written notice to the Borrower as to
the occurrence of any such charges against the Borrower's accounts by the Lender
in respect of amounts due hereunder, the amount of such charges and the specific
Borrower's account so charged.
(c) All computations of fees and interest based on the 3-months LIBOR
Rate shall be made by the Lender on the basis of a year of 360/365 days, in each
case for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is payable. Each
determination by the Lender of interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.08. TAXES. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.03, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
EXCLUDING, in the case of the Lender, taxes imposed on its income and franchise
taxes imposed on it in lieu of income taxes by
13
the jurisdiction under the laws of which the Lender is organized or its
principal office is located or any political subdivision thereof and, in the
case of the Lender, taxes imposed on its income or revenues and franchise and
any other taxes imposed on it in lieu of income taxes by the jurisdiction of the
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or the Recognition of Debt being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or the
Recognition of Debt to the Lender, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.08) the Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay (or shall cause to be paid)
any present or future stamp, documentary taxes, value added or any other excise
or property taxes, charges or similar levies imposed by Honduras, that arise
from any payment made hereunder or the Recognition of Debt or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any of the other Loan Documents or any other taxes as may be agreed
upon by the Borrower and the Lender (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify the Lender for the full amount of
Taxes and Other Taxes, and for the full amount of taxes of any kind imposed on
amounts payable under this Section 2.08, paid by the Lender and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date the Lender makes written demand therefor accompanied by written
evidence of payment of such Taxes or other Taxes.
(d) If the Lender actually and irrevocably realizes, by reason of a
refund, deduction or credit of any Taxes paid or reimbursed by the Borrower
pursuant to subsection (a) or (c) above in respect of payments under this
Agreement or the Recognition of Debt, a monetary benefit that it would otherwise
not have obtained, and that would result in the total payments under this
Section 2.08 exceeding the amount needed to make the Lender whole, the Lender
shall pay to the Borrower, with reasonable promptness following the date on
which it actually and irrevocably realizes such benefit, an amount equal to the
lesser of the amount of such benefit or the amount of such excess, (in each case
net of all out-of-pocket expenses in securing such refund, deduction or credit).
SECTION 2.09. USE OF PROCEEDS. The proceeds of the Loan shall be
available to the Borrower for the following: to refinance a completed PriceSmart
warehouse containing approximately 5,000 M2 located in San Pedro Sula,
Honduras.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL BORROWING. The
obligation of the Lender to make a Disbursement on occasion of the Borrowing
hereunder is subject to the satisfaction of the following conditions
precedent:
(a) The Lender shall be satisfied with the terms and conditions
of this Agreement and the other Loan Documents and the aggregate
amount of the Loan shall be THREE MILLION FIVE HUNDRED THOUSAND
DOLLARS (US$3,500,000.00).
(b) The Lender shall have a valid and perfected first-priority
security interest in the Collateral (other than the real property of
the Borrower, listed in Schedule A, that shall be registered and
perfected in accordance with Section 5.02 n); all filings,
recordations, and searches necessary or desirable in connection with
such security interests shall have been duly made or obtained; and
all filing and recording taxes and fees shall have been paid.
(c) The Lender shall be satisfied with the corporate and legal
structure and capitalization of the Borrower and each of its
Guarantors, including, without limitation, the terms and conditions of
the corporate organizational documents and shareholders' agreement (if
any) of the Borrower and each such Guarantor and of each agreement or
instrument relating thereto.
(d) All Material Contracts shall be in full force and effect and
delivered to the Lender prior to the date hereof with certification
from the Borrower as to their completeness and effectiveness and (ii)
have not been amended, modified or rescinded since such delivery,
shall be satisfactory to the Lender.
(e) There shall have occurred no event or circumstance that could
reasonably be expected to (i) result in a Material Adverse Change,
(ii) have a material adverse effect on the ability of the Borrower to
meet its obligations under any Loan Document or Material Contract to
which it is a party.
(f) The Lender shall have received each of the following in form
and substance satisfactory to the Lender: (i) three years historical
financial statements (including Balance Sheets, profit and Loss, and
Cash Flow Statements) of PriceSmart, Inc.; (ii) Business Plan and Cash
Flow Projections for the Borrower and PriceSmart Honduras for the
duration of the Loan Term; (iii) Business Plan
15
and Cash Flow Projections for PriceSmart Inc. and PSMT Caribe Inc.
for 2000-2001, (iv) As-Built Plans and Specifications; Environmental
Impact Report, if required, soil reports, occupancy permits and
required governmental approvals; (v) Leasing, Shareholder and
Licensing Agreements including: a) Licensing, Technology Transfer,
Training and Sourcing Agreement among PriceSmart, Inc., Venture
Services, Inc. and PriceSmart Honduras, dated September 1, 1999, b)
Lease Agreement between the Borrower and PriceSmart, which will be
signed before closing of the loan and c) Shareholder Agreement
between PriceSmart, Inc. and PSC, S.A, dated September 14, 1998;
(vi) MAI Appraisal, in a form and from an appraisal firm acceptable
to the Lender. Such appraisal is to result in a minimum valuation of
FIVE MILLION DOLLARS (US$5,000,000.00) for the property on an "As-is"
basis and (vii) such other documents as reasonably required by the
Lender.
(g) There shall exist no action, suit, investigation, litigation
or proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality that (i) could reasonably
be expected to have a Material Adverse Effect or (ii) purports to
affect in a manner adverse to the Lender the legality, validity or
enforceability of any Loan Document or the consummation of the
transactions contemplated thereby.
(h) All governmental and third party consents, approvals,
authorizations and licenses necessary in connection with any Loan
Document or the transactions contemplated thereby, if any, shall have
been obtained, shall be in full force and effect and, except for the
governmental and third party consents, approvals, authorizations and
licenses listed in Schedule I that (i) were delivered to the Lender
prior to the date hereof with certification from the Borrower as to
their completeness and effectiveness and (ii) have not been amended,
modified or rescinded since such delivery, shall be satisfactory to
the Lender; all applicable waiting periods shall have expired without
any action being taken by any competent authority; and no law or
regulation shall be applicable in the judgment of the Lender that
restrains, prevents or imposes materially adverse conditions on the
Borrower, any Loan Document or the transactions contemplated thereby.
(i) The Cross-Border Insurance shall be in full force and effect
and shall be satisfactory in all respects to the Lender.
(j) The Lender shall have received on or before the date of the
initial Borrowing the following, each dated such day (unless otherwise
specified), in form and substance satisfactory to the Lender (unless
otherwise specified) and in sufficient copies for the Lender:
(i) Notarized declaration of the Corporate Secretary of the
board of directors of each Loan Party establishing that all said
parties have met all necessary corporate requirements to the
satisfaction of the Lender,
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and the transactions contemplated thereby and of all documents
evidencing other necessary corporate requirements and
governmental and other third party approvals and consents, if
any, with respect to such Loan Document.
(ii) Copies of the organizational documents of each Loan
Party and all amendments thereto certified by the General
Manager, a Vice President or Secretary of such Loan Party as
being a true, correct and complete copy thereof.
(iii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to sign
each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.
(iv) Certified copies of all Material Contracts of the
Borrower listed in Schedule B (Leasing Agreement, License
Agreement, etc.) duly executed by the parties thereto, all of
which shall be in full force and effect.
(v) Each of the Mortgage on Real Property, the Pledge of
Equipment, the Pledge of the Furniture, Pledge of the Fixtures,
Assignment of the Leasing Agreement and of the Licensing,
Technology Transfer, Training and Sourcing Agreement, in each
case duly executed by the parties thereto on the date hereof and
substantially in the form of the relevant Exhibit hereto,
together with:
(A) evidence of the completion of all recordings,
filings, registrations and notices of or with respect to
each such Collateral Document (other than the registration
of the Mortgages on Real Property with the appropriate
Honduran registries that shall be completed in accordance
with Section 5.02 n) that the Lender may deem necessary or
desirable in order to perfect and protect the Liens created
thereby; and
(B) evidence that all other action that the Lender may
deem necessary or desirable in order to perfect and protect
the first priority liens and security interests created
under each such Collateral Document.
(vi) The Cross-Border Insurance, duly executed by OPIC and
the Lender, substantially in the form of Exhibit __ hereto, which
agreement shall be in full force and effect.
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(vii) Recognition of Debt in respect of the Borrowing, duly
executed by the Borrower, substantially in the form of Exhibit
III hereto.
(viii) A certificate of the Chief Financial Officer of the
Borrower, in form and substance satisfactory to the Lender,
certifying as to the a) DEBT SERVICE RATIO. Debt Service Ratio
for the San Pedro Sula store shall not fall below the level of
1.10 for year 2000 and 2001, 1.20 for year 2002, and 1.30 for
year 2003, and 1.5 for year 2004. Debt Service Ratio for the
consolidated San Pedro Sula and Tegucigalpa stores shall not
fall below the level of 1.50 for year 2001, 2.0 for year 2002,
2.1 for year 2003, and 2.50 for year 2004. The debt service ratio
is defined as: net income plus interest plus depreciation plus
amortization divided by principal plus interest payment. Cash
Coverage Ratio, defined below, for the consolidated San Pedro
Sula and Tegucigalpa stores shall not fall below 1.4 for year
2000. Cash Coverage Ratio is defined as: EBITDA + Cash at hand -
US$500,000.00) / (Interest Exp. + Current Maturity of Long term
debt). EBITDA will be calculated utilizing the past twelve
months. (b) INTEREST COVERAGE. Interest Coverage for the San
Pedro Sula store shall not fall below the level of 2.0 for year
2000 and for year 2001, 2.5 for year 2002, and 3.0 thereafter.
Interest coverage for the consolidated San Pedro Sula and
Tegucigalpa stores shall not fall below the level of 3.0 of year
2001, 4.0 for year 2002, and 5.0 thereafter. (c) LEVERAGE RATIO.
Leverage Ratio for the consolidated San Pedro Sula and
Tegucigalpa stores shall not be greater than 2.5 for the tenor of
the loan. Leverage is defined as: the total debt divided by net
worth. (d) TOTAL DEBT / EBITDA. Total Debt/EBITDA for the San
Pedro Sula store shall not be greater than 6.50 for year 2000.
Total Debt/EBITDA for the consolidated San Pedro Sula and
Tegucigalpa stores shall not be greater than 3.5 for year 2001,
3.0 for year 2002, 2.5 for year 2003, and 2.0 for year 2004.
EBITDA will be calculated utilizing the past twelve months.
(ix) Such other approvals, opinions or documents as the
Lender may reasonably request; PROVIDED that for the avoidance of
doubt such corporate resolutions, certificates and documents of
PriceSmart Honduras, S.A. de C.V., PriceSmart, Inc., PMST Caribe,
Inc., PSC, S.A. and Ventures Services, Inc. shall relate to the
transactions contemplated by the Loan Documents or the corporate
existence of such Loan Parties.
(k) The Borrower shall have paid (i) all accrued fees of the
Lenders and (ii) as provided in Section 2.05, all accrued expenses of
the Lender (including the reasonably accrued fees and expenses of the
local counsel to the Lender).
SECTION 3.02. CONDITIONS PRECEDENT TO THE BORROWING. The obligation
of the Lender to make the disbursement on the occasion of the Borrowing shall
be subject to the further conditions precedent that on the date of the Borrowing
(i) the Lender shall
18
have received the Recognition of Debt in respect of the Borrowing, duly executed
by the Borrower, substantially in the form of Exhibit III hereto, and (ii) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, and the acceptance by the Borrower of the proceeds of the
Borrowing shall constitute a representation and warranty by the Borrower that
both on the date of such notice and on the date of the Borrowing such statements
are true):
(a) the representations and warranties contained in the Loan
Document are correct on and as of such date, before and after giving
effect to the Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date;
(b) no event has occurred and is continuing, or would result from
the Borrowing or from the application of the proceeds therefrom, that
constitutes a Default; and
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01 and 3.02. For purposes
of determining compliance with the conditions specified in Sections 3.01 and
3.02, the Lender shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender by its
execution of this agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation (San Pedro Sula, Honduras), (ii) is duly qualified and in
good standing as a foreign corporation in each other jurisdiction in
which it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed could not reasonably be expected to have a
Material Adverse Effect and (iii) has all requisite corporate power and
authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties
and to carry on its business as now conducted and as proposed to be
conducted. All of the outstanding capital stock of the Borrower has been
validly issued, is fully paid and non-assessable. The outstanding
capital stock of the Borrower is free and clear of all Liens.
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(b) The Borrower has no Subsidiaries.
(c) The execution, delivery and performance by the Borrower of the
Loan Document to which it is or is to be a party, and the consummation of
the transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene the Borrower's organizational documents, (ii) violate
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
the Borrower or any of their properties or (iv) except for the Liens
created under the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of the
Borrower.
(d) No authorization or approval or other action by, and no notice to
or filing with, any Honduran governmental authority or regulatory body or
any other third party is required for (i) the due execution, delivery,
recordation, filing or performance by the Borrower of any Loan Document to
which it is or is to be a party, or for the consummation of the
transactions contemplated hereby, (ii) the grant by the Borrower of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by the
Lender of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings.
(e) This Agreement has been duly executed and delivered by the
Borrower. This Agreement is, the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.
(f) The pro forma and forecasted balance sheets, income statements and
statements of cash flows of the Borrower delivered to the Lender pursuant
to Section 3.01 were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in the light of conditions
existing at the time of delivery of such forecasts, and represented, at the
time of delivery, the Borrower's best estimate of its future financial
performance.
(g) No information, exhibit or report furnished by the Borrower to the
Lender (including the Information Memorandum when delivered) in connection
with the negotiation of the Loan Documents or pursuant to the terms of the
Loan Documents contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements made therein not
misleading.
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(h) The Lender has received and reviewed the Insurance Policies and
has found them acceptable.
(i) There is no action, suit, investigation, litigation or proceeding,
including any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) could reasonably be expected to
have a Material Adverse Effect or (ii) purports to materially affect the
legality, validity or enforceability of this Agreement or the consummation
of the transactions contemplated hereby.
(j) The operations and properties of the Borrower comply in all
material respects with all applicable Environmental Laws and Environmental
Permits, all past material non-compliance with such Environmental Laws and
Environmental Permits has been resolved without ongoing obligations or
costs, and no circumstances exist that could (i) form the basis of an
Environmental Action against such Person or any of its properties that
could reasonably be expected to have a Material Adverse Effect or (ii)
cause any such property to be subject to any material restrictions on
ownership, occupancy, use or transferability under any Environmental Law.
(k) The Borrower is not a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction that, in each case, could reasonably be
expected to have a Material Adverse Effect.
(l) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral, securing the payment of the
Obligations owing to the Secured Party under the Loan Documents and all
filings and other actions necessary or desirable to perfect and protect
such security interest set forth therein shall have been duly taken. The
Borrower is the legal and beneficial owner of the Collateral pledged by it
and that the Collateral is free and clear of any Lien, except for the liens
and security interests created or permitted under the Loan Documents.
(m) Neither the business nor the properties of the Borrower are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or other
casualty (whether or not covered by insurance) that could be reasonably
likely to have a Material Adverse Effect.
(n) Set forth on Schedule 3.01(m)(vi) hereto is a complete and
accurate list of all Material Contracts of the Borrower, showing as of the
date hereof the parties, subject matter and term thereof. Each Material
Contract has been duly authorized, executed and delivered by all parties
thereto, has not been
21
amended or otherwise modified, is in full force and effect and is binding
upon and enforceable against all parties thereto in accordance with its
terms, and there exists no default under any Material Contract by any
party thereto.
(o) The Borrower and the Guarantors have obtained insurance with
responsible and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general
areas in which the Borrower operates and as otherwise contemplated in the
Collateral Documents.
(p) The Borrower nor any of the Guarantors and their respective
property has any immunity from jurisdiction of any court or from set-off or
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) under the
laws of Honduras.
(q) This Agreement, the Notes and the other Loan Documents are subject
to the laws of the United States of America but are enforceable under the
laws of Honduras and United States of America, and to ensure the legality,
validity, enforceability or admissibility in evidence of this Agreement and
the other Loan Documents in Honduras, it is not necessary that this
Agreement, the Notes or any other Loan Documents or any other document be
filed or recorded at this time with any court or other authority in
Honduras with the exception of the Collateral Guarantee documented in the
Public Deed or that any stamp or similar tax be paid on or in respect of
this Agreement and the Notes. Them is no tax, levy, impost, deduction,
charge or withholding imposed by Honduras or any political subdivision,
thereof either (i) on or by virtue of the execution or delivery of the
Agreement, the Notes, any other Loan Document or (ii) on any payment to be
made by the Borrower pursuant to the Agreement or the other Loan Document,
except for a withholding tax imposed on payments of interest to
non-Honduran institutions.
(r) Each of the Borrower and the Guarantors is, individually and
together, Solvent.
(s) The Borrower has (i) initiated a review and assessment of all
areas within its business and operations (including those affected by
suppliers, vendors and customers) that could be adversely affected by the
"Year 2000 Problem" (that is, the risk that computer applications used by
the Borrower (or suppliers and vendors) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Based on the
foregoing, the Borrower believes that all computer applications (including
those of its suppliers and vendors) that are material to its
22
business and operations are reasonably expected on a timely basis to
be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000
compliant"), except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER AND PRICESMART HONDURAS, S.A. DE
C.V.
SECTION 5.01. FINANCIAL COVENANTS ON A CONSOLIDATED BASIS. So long as
any amount of the Loan shall remain unpaid, the Borrower and PriceSmart
Honduras, Sociedad Anonima de Capital Variable, or simply PriceSmart Honduras,
S. A., de C. V. on a consolidated basis, shall:
(a) REVIEW OF COVENANTS. Permit covenants to be reviewed at the end of
each quarter (calculated and measured using a 12 month rolling basis)
commencing with the conclusion of the first full year of operation.
(b) DEBT SERVICE RATIO. Debt Service Ratio for the San Pedro Sula
store shall not fall below the level of 1.10 for year 2000 and 2001, 1.20
for year 2002, and 1.30 for year 2003, and 1.5 for year 2004. Debt Service
Ratio for the consolidated San Pedro Sula and Tegucigalpa stores shall not
fall below the level of 1.50 for year 2001, 2.0 for year 2002, 2.1 for year
2003, and 2.50 for year 2004. The debt service ratio is defined as: net
income plus interest plus depreciation plus amortization divided by
principal plus interest payment. Cash Coverage Ratio, defined below, for
the consolidated San Pedro Sula and Tegucigalpa stores shall not fall below
1.4 for year 2000. Cash Coverage Ratio is defined as: EBITDA + Cash at
hand - (US$500,000.00) / (Interest Exp. + Current Maturity of Long term
debt).
(c) INTEREST COVERAGE. Interest Coverage for the San Pedro Sula store
shall not fall below the level of 2.0 for year 2000 and for year 2001, 2.5
for year 2002, and 3.0 thereafter. Interest coverage for the consolidated
San Pedro Sula and Tegucigalpa stores shall not fall below the level of 3.0
of year 2001, 4.0 for year 2002, and 5.0 thereafter.
(d) LEVERAGE RATIO. Leverage Ratio for the consolidated San Pedro Sula
and Tegucigalpa stores shall not be greater than 2.5 for the tenor of the
loan. Leverage is defined as: the total debt divided by net worth.
(e) TOTAL DEBT / EBITDA. Total Debt/EBITDA for the San Pedro Sula
store shall not be greater than 6.50 for year 2000. Total Debt/EBITDA for
23
the consolidated San Pedro Sula and Tegucigalpa stores shall not be
greater than 3.5 for year 2001, 3.0 for year 2002, 2.5 for year
2003, and 2.0 for year 2004. EBITDA will be calculated utilizing the
past twelve months.
SECTION 5.02. AFFIRMATIVE COVENANTS. So long as any amount of the Loan
shall remain unpaid, or the Lender shall have any Commitment hereunder, the
Borrower and PriceSmart Honduras, Sociedad Anonima de Capital Variable, or
simply PriceSmart Honduras, S. A. de C. V. shall:
(a) COMPLIANCE WITH LAWS, ETC. (i) Comply with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, all pension laws and Environmental Laws, except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect and (ii) obtain and maintain all necessary permits,
licenses, authorizations and approvals with any governmental authority
or regulatory body or any other third party required in connection with
the performance by the Borrower under any Loan Document or any Material
Contract, requiring that all the transactions with its affiliates shall
be conducted at "arms length".
(b) PAYMENT OF TAXES, ETC. Pay and discharge before the same shall
become delinquent and maintain appropriate reserves for (A) all taxes,
assessments and governmental charges or levies imposed upon it or upon
its property and (B) all lawful claims that, if unpaid, might by law
become a Lien upon its property; PROVIDED, HOWEVER, that the Borrower
and PriceSmart Honduras, S. A. de C. V. shall not be required to pay or
discharge, any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) PAYMENT OF MATERIAL OBLIGATIONS. The Borrower and PriceSmart
Honduras, S. A. de C. V. shall comply with all their material
obligations.
(d) MAINTENANCE OF INSURANCE. Maintain insurance with responsible
and reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Borrower or PriceSmart Honduras, S. A. de C. V., as
the case may be, operate and as otherwise contemplated in the
Collateral Documents.
(e) MAINTENANCE OF TITLE INSURANCE. Maintain title insurance in
favor of the Lender from a title insurance company acceptable by the
Lender.
24
(f) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of
its properties and all necessary governmental approvals, licenses and
permits, that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted. No changes
in ownership are permitted without the Lender's consent.
(g) YEARLY CAPITAL EXPENDITURES. The yearly Capital Expenditures
should not exceed an amount of FOUR HUNDRED THOUSAND Dollars
(US$400,000.00). The amount stated herein refers to additional CAPEX,
incremental from the financing provided by the Lender.
(h) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises, to
the extent that failure to preserve and maintain the same could produce
a Material Adverse Effect, and conduct its business in accordance with
prudent business practices. The Borrower and PriceSmart Honduras, S. A.
de C. V. will not be allowed to contract any of the following without
the Lender's prior consent: mergers, consolidations and divestitures;
and changes in conduct of the business of either's corporate structure.
(i) VISITATION RIGHTS. During normal business hours and from time
to time, with reasonable notice, permit the Lender, or any of the
insurer parties to the Political Risk Insurance or any agents or
representatives thereof, to examine the records and books of account of,
and visit the properties of, the Borrower PriceSmart Honduras, S. A. de
C. V., and to discuss the affairs, finances and accounts of the Borrower
and of PriceSmart Honduras, S. A. de C. V. with any of its officers or
directors and with its independent certified public accountants.
(j) KEEPING OF BOOKS. Keep appropriate and accurate books of record
and accounts, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and
of PriceSmart Honduras, S. A. de C. V. in accordance with Honduran GAAP.
(k) COMPLIANCE WITH TERMS OF REAL PROPERTY LEASEHOLDS. Make all
payments and otherwise perform all obligations in respect of all leases
of real property to which the Borrower or PriceSmart Honduras, S. A. De
C. V., as applicable, is a party; keep such leases in full force and
effect and not allow such leases to lapse or be terminated or any rights
to renew such leases to be forfeited or canceled, notify the Lender of
any default by any party with respect to such leases and cooperate with
the Lender in all respects to cure any such default, except where the
failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(l) PROPERTY AND CASUALTY INSURANCE. The Borrower shall maintain
property and casualty insurance customary in the industry, properly
25
endorsed in favor of the Lender from an insurance company accepted by
the Lender.
(m) TITLE INSURANCE. The Borrower shall maintain Lender Title
Insurance in favor of the Lender from a title insurance company accepted
by the Lender.
(n) PERFECTION OF SECURITY INTERESTS. Maintain the recording,
priority and perfection of the Liens on the Collateral created by the
Collateral Documents and keep all Collateral free and clear of Liens
except for the Liens created under Collateral Documents.
(o) FURTHER ASSURANCES. From time to time, do and perform any and
all acts and execute any and all documents as may be necessary or as
reasonably requested by the Lender or the insurers in order to effect
the purposes of this Agreement or to protect the rights or interests of
the Lenders or the insurer parties to the Political Risk Insurance, in
each case, or under the Loan Documents or as may be otherwise
contemplated in the Political Risk Insurance.
(p) YEAR 2000 COMPLIANT. Promptly notify the Lender in the event
the Borrower discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to the
Borrower's business and operations will not be Year 2000 compliant,
except to the extent that such failure could not reasonably be expected
to have a Material Adverse Effect.
(q) WORKER RIGHTS. The Borrower agrees not to take any action, and
to ensure that no action will be taken by any contractor (or any
subcontractor) of the Borrower performing engineering, procurement and
construction services contracted for after the date of the Loan
Documents, or providing operating and management services contracted for
after the date of this Agreement, for the project (each a "contractor"
collectively the "contractors") to prevent employees of the Borrower or
of any such contractor performing such services for the project from
lawfully under the laws of Honduras exercising their right of
association and their right to bargain collectively. It agrees to
observe, and to cause each contractor to observe, with respect to its
respective employees, applicable laws relating to acceptable conditions
of work with respect to minimum wages, hours of work, and occupational
health and safety. Furthermore, in connection with the project it
agrees, and agrees to cause each contractor, (i) not to use forced
labor, (ii) not to employ any person under age 16 for any hazardous
activity, (iii) that all employees will have the right to remove
themselves from hazardous situations without jeopardizing their
continued employment and (iv) that all employees will be guaranteed a 24
hour rest period per week.
(r) ENVIRONMENTAL COMPLIANCE. Comply with (i) the International
Finance Corporation's Environmental, Health and Safety Guidelines for
Office Buildings, dated July 1, 1998, and (ii) the
26
provisions of all applicable environmental, health and safety laws,
codes and ordinances, and all rules and regulations promulgated
thereunder, with respect to the project.
(s) GOVERNMENTAL COMPLIANCE. Conduct its business in compliance
with all applicable laws and directives of governmental bodies having
force of law, including without limitation, corrupt practices laws and
shall implement internal management and accounting practices and
controls adequate to ensure compliance with applicable corrupt practices
laws. The Borrower shall use the proceeds of its Facility Loan solely
for the project and shall not engage in any business in connection with
the project other than its present business activities and those related
to its project, as each are described in the information provided to
OPIC and other activities similar, thereto, without the prior written
consent of OPIC.
(t) ADDITIONAL TERMS. Comply with such additional terms and
conditions as may be required in connection with each OPIC Approval.
(u) NO LIABILITY FOR OPIC. Agree that OPIC shall bear no liability
if a Facility Loan is not funded in whole or in part.
(v) GROSS-UP OF PAYMENTS. Agree to the gross-up payments by it for
taxes and increased costs on terms to be agreed upon between the Lender
and OPIC.
(w) OPIC'S OPTION TO PURCHASE. Consent to the exercise of OPIC's
option to purchase the Facility Loan, if applicable
(x) SELF-MONITORING QUESTIONNAIRE. The Borrower shall complete and
annually submit the OPIC Self-Monitoring Questionnaire, which will be
provided by the Lender, with respect to the operation of the related
project Unless waived in writing by OPIC, the Borrower shall, upon
request of OPIC, give access to OPIC representatives during normal
business hours to permit them to inspect their facilities and properties.
The Borrower acknowledges that the Lender is required to (i) notify
OPIC upon becoming aware of any violation of the covenants in this
Section letters (r), (s), (t), (u), (v), (w), (x) and (y) by the
Borrower, (ii) consult with OPIC concerning appropriate actions to be
taken with respect to such violations, and (iii) if OPIC so directs,
accelerate, or cause the applicable Branch to accelerate the related
Loan, provided it or the applicable Branch has the power to do so under
applicable law.
SECTION 5.03. NEGATIVE COVENANTS. So long as any amount of the Loan
shall remain unpaid, or the Lender shall have any Commitment hereunder, the
Borrower shall not, and, except as set forth below, at any time:
27
(a) LIENS, ETC. Create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character now
owned, or assign any right to receive income EXCLUDING:
(A) Liens created under the Loan Documents;
(B) Permitted Liens; and
(b) MERGERS, ETC. Contract any of the following without the
Lender's prior written consent: mergers, consolidations and
divestitures; and changes in conduct of the business or corporate
structure.
(c) SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise
dispose of any Collateral or any part of its assets other than
Collateral, or grant any option or other right to purchase, lease or
otherwise acquire any Collateral or any part of its assets other than
Collateral, other than (i) in the case of the Borrower inventory to be
sold in the ordinary course of its business, (ii) assets no longer
used or useful in its operations.
(d) INVESTMENTS IN OTHER PERSONS. Contract any of the following
without the Lender's prior written consent: investments in
subsidiaries, affiliates and/or third parties; and guarantees to third
parties. Invest in the capital stock or securities of any subsidiary
or affiliated corporations except in the ordinary course of business.
(e) CHANGE IN NATURE OF BUSINESS. Make any material change in the
nature of its business as carried on at the date hereof.
(f) ACCOUNTING CHANGES. Make or permit any change in accounting
policies or reporting practices, except as required to comply with
Salvadoran GAAP.
(g) PREPAYMENTS, ETC. OF DEBT. Prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of this Agreement, other
than, prepayment of (A) the Loan in accordance with the terms of
this Agreement and (B) trade account payables incurred in the
ordinary course of business.
(h) AMENDMENT, ETC. OF CERTAIN CONTRACTS. Amend, modify or change
in any manner any material term or condition of, or cancel or
terminate, or consent to or accept any cancellation or termination of,
or give any consent, waiver or approval under, or waive any default
under or breach of any material term or condition of, the Lease and
License Agreement, without the prior written consent of the Lender.
28
(i) PARTNERSHIPS. Become a general partner in any general or
limited partnership.
(j) ACQUISITIONS. Contract any of the following without the
Lender's prior consent if they should exceed the amount of
US$250,000.00 per year (excluding capital expenditures);
acquisitions, sales or transfers of assets; leases or sale /
leasebacks of assets, repurchases or redemptions of outstanding
stock (including options or warrants); exchanges defeasances,
amendments or repurchases of long term indebtedness; and capital
lease and operating lease obligations.
(k) CHARTER AMENDMENTS. Make any amendment or modification of its
corporate organizational documents in a manner that could reasonably
be expected to be materially adverse to the rights, remedies or
interests of the Lender or the ability of the Borrower or any other
Loan Party to perform under any Loan Document, or impair the value of
the Collateral.
(l) NEGATIVE PLEDGE. Enter into or suffer to exist any agreement
on all assets which are the subject of this loan.
SECTION 5.04. ADDITIONAL GUARANTOR CONVENANTS. So long as any
amount of the Loan shall remain unpaid, or the Lender shall have any Commitment
hereunder, the Guarantors shall:
(a) MINIMUM NET WORTH. PriceSmart, Inc. shall maintain a minimum
net worth of US$55,000,000.00, at all times.
(b) EXISTING OWNERSHIP. PriceSmart, Inc., shall not diminish
existing ownership in PSMT Caribe, Inc.
(c) MINIMUM NET WORTH. PSC, S.A. shall maintain a minimum net
worth of US$10,000,000.00.
(d) EXISTING OWNERSHIP. PSC, S.A. shall maintain existing
ownership in PSMT Caribe, Inc.
(e) MINIMUM NET WORTH. PSMT Caribe, Inc. Shall maintain a minimum
net worth of US$25,000,000.00.
(f) VARIANCE FROM COVENANTS. In the event that the Guarantors
anticipate a variance from any of the above covenants, except wherein
PriceSmart, Inc. obtains greater percentage interest in PSMT Caribe,
Inc., the Borrower, and/or PriceSmart Honduras, S. A. de C.V., the
Guarantors must obtain the Lender's consent thereto with an advance 60
days notice, which consent may be withheld at the Lender's sole
discretion.
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SECTION 5.05.- REPORTING REQUIREMENTS. So long as the Loan or any
part of the Loan shall remain unpaid, the Borrower will furnish to the Lender:
(a) DEFAULT NOTICE. As soon as possible and in any event no later
than five Business Days, (i) after the General Manager or the Chief
Financial Officer of the Borrower obtains knowledge of the occurrence
of each Default, a statement of a senior officer of the Borrower
setting forth details of such Default, other "default" or Material
Adverse Change and the action that the Borrower has taken and proposes
to take with respect thereto; (ii) In the event that non-compliance or
potential non-compliance with covenants in Sections 5.02(q) and 5.03
(m), with respect to the employees of the Borrower or any contractor
comes to the attention of the Borrower, it shall give prompt notice
thereof to the Lender and OPIC and, if applicable, to such contractor.
It (i) shall (a) cure such non-compliance or (b) cause such contractor
to cure such non-compliance, in either case to the satisfaction of
OPIC, and (ii) shall terminate that contract with such contractor (the
"contract") unless such non-compliance is cured to the satisfaction of
OPIC within 90 days of such notice thereof from the Lender of OPIC to
it, whichever occurs first.
(b) QUARTERLY FINANCIALS. As soon as available and in any event
within 45 days after the end of each of the quarters of each Fiscal
Year, a Consolidated and consolidating balance sheet of the Borrower,
PriceSmart Honduras, S.A. de C.V, and the Guarantors as of the end of
such quarter. All financial statements shall include a certificate
from the management detailing compliance of the Financial Covenants
and certifying that no Default or Event of Default has occurred.
(c) ANNUAL AUDITED FINANCIALS. As soon as available and in any
event within 90 days after the end of each Fiscal Year, a consolidated
and consolidating audited balance sheet of the Borrower, PriceSmart,
S. A. de C.V. and the Guarantors. All financial statements shall
include a certificate from the management detailing compliance of the
Financial Covenants and certifying that no Default or Event of Default
has occurred.
(d) LITIGATION. (i) Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (A)
which could have a Material Adverse Effect on the Borrower or any
other Loan Party, (B) or which could reasonably be expected to have a
material adverse effect on the business, condition (financial or
otherwise), operations, performance, properties or prospects of the
Borrower and (ii) as soon as possible and in any event no later than
five Business Days after the General Manager or the Chief Financial
Officer of the Borrower obtains knowledge of the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board,
30
bureau, agency or instrumentality, domestic or foreign, which could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance, properties or prospect of the Borrower.
(e) OTHER INFORMATION. Within fifteen days of a written request
by the Lender, such other information respecting the business,
condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower as the Lender may from time to
time reasonably request.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrower and PriceSmart Honduras, S. A. de C.V. shall
fail to pay any principal or interest of the Loan when the same shall
become due and payable or (ii) the Borrower and PriceSmart Honduras,
S. A. de C.V. shall fail to pay any other amounts to any party due and
payable, where such failure shall continue unremedied for 30 days
after due date. Payments due to PriceSmart, Inc. are exempt from this
provision.
(b) any Guarantor shall fail to honor the obligations under the
Loan Documents.
(c) any representation or warranty made by the Borrower,
PriceSmart Honduras, S.A. de C.V. and any of the Guarantors (or any of
its officers) in the Loan Document or any certificate or other
document delivered in connection with the Loan Documents shall prove
to have been incorrect in any material respect when made or confirmed;
or
(d) the Borrower, PriceSmart Honduras, S. A. de C.V. or any of
the Guarantors shall fail to perform or observe any term, covenant or
agreement contained in Sections 5.01, 5.02, 5.03, 5.04, and 5.05;
(e) Material Breach: any representation or warranty by Borrower,
PriceSmart Honduras and Guarantors proves to be incorrect in any
material aspect, or any other covenants are not complied with;
(f) Bankruptcy, insolvency, re-scheduling, moratoria on payments
or similar proceeding by or against Borrower, PriceSmart Honduras and
Guarantors.
31
(g) Changes in laws that materially affect the ability of the
Borrower to perform obligations; make Borrower's obligations under the
Loan Documentation illegal or unenforceable; failure of the
obligations under the Loan Facility to rank senior to all indebtedness
of the Borrower and PriceSmart Honduras, S.A. de C.V.;
(h) A change in ownership, management or control of Borrower
and/or PriceSmart Honduras, S.A. de C.V excepting any increase in
direct or indirect ownership by PriceSmart, Inc.;
(i) Occurrence of Material Adverse Change in the condition
(financial or otherwise) of Borrower or PriceSmart Honduras, S.A. de
C.V.;
(i) Termination, by PriceSmart, Inc., of the Licensing,
Technology Transfer, Training & Sourcing Agreement, pursuant to
Section 12 of said Licensing Agreement. In the event PriceSmart, Inc.
elects to terminate said Licensing Agreement during the term of the
Loan, it shall provide Lender with written notice of its intent
thereof, six months prior to said election;
(k) Cure Provisions: Borrower shall have a 10-day curing period
for any payment default. This provision does not require notification
and must not be exercised more than twice per year. In such case that
this provision is exercised more than twice per year, Borrower shall
be in immediate default. Borrower shall have a 30-day curing period
for any non-payment default;
(l) Failure of the Borrower (x) promptly to notify the Lender
and, if applicable, the contractor of such non-compliance; or (y) to
cure such non-compliance or cause such contractor to cure such
non-compliance, in either case to the satisfaction of OPIC, or (ii) to
terminate the contract. The Borrower and the contractors are not
responsible under this Section for the actions of the government of
Honduras.
(m) Acceleration remedy provision: The lender may declare, by
written demand for payment, any portion or all of the Loan to be due
and payable, whereupon such portion of the Loan, together with
interest accrued thereon and all other amounts due under this
Agreement, shall immediately mature and become due and payable.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. DEVALUATION HEDGE. The Lender agrees that, prior to
Loan closing, it will not require the Borrower to enter into a non-delivery
forward
32
contract in order to hedge local currency devaluation risk, based upon the
Borrower's current policies and practices regarding devaluation risk. However,
the Borrower and the Lender agree that this policy will be reviewed on a
quarterly basis, and, in the event that market conditions so dictate, the Lender
reserves the right to require that the Borrower enter into such hedge. The
Borrower acknowledges the Lender's rights in this regard and agrees to act in
good faith in order to mitigate any devaluation risk.
SECTION 7.02. LOAN PARTICIPATION. The Lender may, in its sole
discretion, participate or assign all or a portion of the Loan to one or more
lending institutions (Co-lenders or Participants). In the event the Lender
assigns all or a portion of the Loan to a Co-Lender, the Lender's responsibility
for the funding of that portion of the Loan will terminate upon the assumption
by the Co-Lender of such responsibility. Lender may, but will not be obliged to
serve as agent for the Co-Lenders with respect to the Loan.
SECTION 7.03. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed (or, in the case of the Collateral Documents, consented
to) by the Borrower and the Lender
SECTION 7.04. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered, if to the Borrower, at its address at Salida Carretera Vieja a La
Lima, San Pedro Sula, Honduras, Attention: General Manager; if to the Lender, at
its address set forth on the signature pages hereof; or, as to the Borrower, or
the Lender, at such other address as shall be designated by such party in a
written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Lender. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement is
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
SECTION 7.05. NO WAIVER; REMEDIES. No failure on the part of the
Borrower or the Lender, to exercise, and no delay in exercising, any right
hereunder or under this Agreement or Recognition of Debt shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 7.06. COSTS, EXPENSES. The Borrower agrees to pay all
incidental expenses of the Lender relating to the Loan, including but not
limited to
33
34
Loan Documents and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this subsection (c) shall have the fullest scope
permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be irrevocable for purposes of such Act.
SECTION 7.08. ENGLISH LANGUAGE. This Agreement has been negotiated
and executed in the English language. The English language version of this
Agreement and each other Loan Document shall control and be conclusive as to
the meaning of any terms and provisions hereof or thereof, except in the case
of the Recognition of Debt, the Mortgage on Real Property, the Pledges of the
Equipment and the Pledge of the Lease Agreement, where the Spanish language
version shall control and be conclusive as to the meaning of any terms and
provision thereof. Each other document to be delivered in respect of this
Agreement shall be in the English language or shall be accompanied by an
English translation certified by the Borrower as being complete and correct.
SECTION 7.09. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 7.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, PRICESMART
HONDURAS, S.A. DE C.V., THE GUARANTORS, THE ASSIGNOR AND THE LENDER IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE ACTIONS OF THE LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
INMOBILIARIA PRICESMART
HONDURAS, SOCIEDAD ANONIMA DE CAPITAL VARIABLE or simply INMOBILIARIA
PRICESMART, S.A. DE C.V.
By: /s/ JESUS ERNESTO GRIJALVA
------------------------------------
Name: Jesus Ernesto Grijalva
Title: Vice President Latin American
Legal Affairs
35
GUARANTORS:
PRICESMART HONDURAS, SOCIEDAD
ANONIMA DE CAPITAL VARIABLE, or simply PRICESMART HONDURAS, S.A. DE C.V.
By: /s/ JESUS ERNESTO GRIJALVA
------------------------------------
Name: Jesus Ernesto Grijalva
Title: Vice President Latin American
Legal Affairs
PRICESMART, INC.
By: /s/ JESUS ERNESTO GRIJALVA
------------------------------------
Name: Jesus Ernesto Grijalva
Title: Vice President Latin American
Legal Affairs
PSMT CARIBE, INC.
By: /s/ JESUS ERNESTO GRIJALVA
------------------------------------
Name: Jesus Ernesto Grijalva
Title: Vice President Latin American
Legal Affairs
PSC, S.A.
By: /s/ EDGAR ZURCHER GURDIAN
------------------------------------
Name: Edgar Zurcher Gurdian
Title: Legal Representative
VENTURES SERVICES, INC.
By: /s/ JESUS ERNESTO GRIJALVA
------------------------------------
Name: Jesus Ernesto Grijalva
Title: Vice President Latin American
Legal Affairs
LOAN CONTRACT WITH GUARANTEE OF PLEDGE WITHOUT DISPOSSESSION AND MORTGAGE
BETWEEN:
EL BANCO DOMINICANO DEL PROGRESO, S. A., banking institution
organized according to the laws of the Dominican Republic, with
business domicile at No. 3 John F. Kennedy Avenue of this city,
duly represented by its Executive Vice-President, Mr. PEDRO E.
CASTILLO L., Dominican, of legal age, married, banking officer,
bearer of personal identification and electoral card No.
001-0066343-4, domiciled and resident in this city, entity which
hereinafter shall be named "THE BANK", on one hand, and on the
other hand,
The Company PRICESMART DOMINICANA, S. A., commercial entity
organized according to the laws of the Dominican Republic, with
domicile and business domicile at No. 54 Charles Summer Avenue,
of this city, duly represented by Messrs. ALBERTO BONETTI,
Dominican, of legal age, married, bearer of personal and
electoral card No. 001-0102205-1, domiciled and resident in No.
33 Porfirio Herrera Street, Piantini, of this city, and ERIC
TORRES, US Citizen, of legal age, single, Business Manager,
bearer of US Passport No. 093904746, domiciled and resident in
this city; and the Company INMOBILIARIA PRICESMART, S. A.,
commercial entity organized according to the laws of the
Dominican Republic, with domicile and business domicile at No. 54
Charles Summer Avenue, of this city, duly represented by Messrs.
ERIC TORRES and ALBERTO BONETTI, whose data are above stated,
which hereinafter shall be named "THE SOLIDARY CO-DEBTORS".
WHEREAS: "THE SOLIDARY CO-DEBTORS" have requested a loan to "THE BANK"
for the amount of SEVEN MILLION UNITED STATES DOLLARS (US$7,000,000.00),
according to item i) ordinal 3, of the Third Resolution of the Monetary Board
dated December 11, 1992.
WHEREAS: "THE BANK" under the terms and conditions herein below
defined, has approved the request of "THE SOLIDARY CO-DEBTORS";
WHEREAS: In consideration of the amount of the loan, "THE BANK" has
requested the commercial entities PRICESMART, INC., PSC, S. A., PSMT CARIBE,
INC. and VENTURES SERVICES, INC., hereinafter "THE SOLIDARY GUARANTORS", which
are part of the economic group of "THE SOLIDARY CO-DEBTORS", to subscribe, as to
the effect, guarantee letters issued in favor of "THE BANK" in regards to all
and each of the obligations contracted by "THE SOLIDARY CO-DEBTORS" by virtue of
this contract, which are integral part of the same contract and are incorporated
as Attachment I;
THEREFORE, and in the understanding that the above paragraphs are
integral parts of this contract:
ARTICLE ONE: OBJECTIVE.- "THE BANK" hereby grants to "THE SOLIDARY
CO-DEBTORS" who accept, a loan with own funds for the amount of SEVEN MILLION
UNITED STATE DOLLARS (IS$7,000,000.00), to be destined to finance the
construction of commercial premises and the acquisition of equipment.
PARAGRAPH II: DISBURSEMENTS.- Once "THE BANK" has confirmed that it has
received from "THE SOLIDARY CO-DEBTORS" the documents which satisfy the
conditions and requirements established for the disbursement in this contract,
provided that the same have the funds available for such purposes, it shall
place the approved amount at the disposition of the "THE SOLIDARY CO-DEBTORS",
within a period of three (3) working days, through a wire transfer of funds for
the sum of the loan, in the understanding "THE SOLIDARY CO-DEBTORS" shall cover
all the expenses, of all type, in which it may incur to perform such
disbursement. Once accepted the disbursement request by "THE BANK", it will be
considered irrevocable and binding for "THE SOLIDARY CO-DEBTORS". "THE SOLIDARY
CO-DEBTORS" shall indemnify "THE BANK" against any loss or expenses incurred as
result of the fault of "THE SOLIDARY CO-DEBTORS" in satisfying or complying in
or before the date specified for the disbursement of the conditions and
requirements stipulated in this contract as conditions previous to the
disbursement. Within these faults are included, without limitation, any loss or
expense incurred due to the liquidation or reuse of the deposits to other funds
acquired by "THE BANK" to obtain the
2
funds or finance the disbursement to be made by this latter as part of the
disbursement request, when the same is not executed on the date agreed, in
consequence of the non-compliance by "THE SOLIDARY CO-DEBTORS".
ARTICLE TWO: PROMISSORY NOTES.- "THE SOLIDARY CO-DEBTORS" bind
themselves to jointly subscribe this loan contract, a promissory note in Dollars
in favor of "THE BANK", for the amount of SEVEN MILLION UNITED STATES DOLLARS
(US$7,000,000.00), which shall be waived of protest for lack of payment.
ARTICLE THREE: PREVIOUS CONDITIONS.- The previous conditions
hereinafter mentioned must have been satisfied by "THE SOLIDARY CO-DEBTORS"
before performing the disbursement under the loan:
A) DOCUMENTS PROVING THE LOAN: This loan contract and accessorial shall
be duly authorized, subscribed and executed by the respective parties and shall
be in full force and effect before it is carried out.
B) COMPLIANCE: "THE SOLIDARY CO-DEBTORS" shall have complied and
adhered to the extent each of its liabilities and obligations contained in the
contract pertaining to this transaction and whose compliance is required upon
the subscription date of the same or on the date of the disbursement. No fault
should have occurred prior or on the date of subscription of this contract or
upon the date of any disbursement and there shall be no condition or situation
that on the date of subscription of the same or the date of disbursement may
constitute non-compliance by "THE SOLIDARY CO-DEBTORS".
C) PAYMENT WITHOUT DEDUCTIONS: All payments to be made by "THE SOLIDARY
CO-DEBTORS" under this contract or any promissory note issued as consequence of
the same shall be made tax exempted and without any deduction or discount for
any duty, contribution, charge or lien, recharge, tax retention, currently
existing or which may exist in the future, in the Dominican Republic, and the
responsibility and payment of such duties shall be exclusively under the account
of "THE SOLIDARY CO-DEBTORS", in the
3
understanding that if for any cause "THE BANK" needs to pay directly such
duties, "THE SOLIDARY CO-DEBTORS" shall be bound, upon request of "THE BANK"
affected, to indemnify for such payment of duties and cover the interests at the
rate established in the contract.
ARTICLE FOUR: EXPIRATION AND PAYMENT METHOD.- "THE SOLIDARY CO-DEBTORS"
are bound to pay this debt in the period of one hundred eighty (180) days,
beginning upon the _____________________ ( ) day of the month of
_________________ of the year 2000, through the payment of one (1) sole
settlement of capital of SEVEN MILLION UNITED STATES DOLLARS (US$7,000,000.00),
due on the day of the month of of the year 2000.
PARAGRAPH I: "THE BANK" shall have the option at the expiration of the
period indicated in this article for the payment of the debt, and subject to the
existing availability, of restructuring the loan at long term, under the
conditions that will be agreed by the parties in a term of no more than 60 days
before such expiration date. In the event that "THE BANK" decides not to renew
this contract, it shall so notify "THE SOLIDARY CO-DEBTORS" thirty (30) days
prior to the expiration of the loan.
PARAGRAPH II: ANTICIPATED PAYMENTS.- "THE SOLIDARY CO-DEBTORS" shall
have the faculty to prepay or pay in advance the total or part of the debt,
provided that they do not owe any amount due to demandable interests or any
other reason, by giving anticipated notice in writing to "THE BANK" at least
thirty days before the date on which the advance payment will be made and whose
communication shall indicate the estimated date and the amount of the
prepayment.
ARTICLE FIVE: EXCHANGE RISK.- The obligations of "THE SOLIDARY
CO-DEBTORS" to pay the capital of the financing, interests earned and other
obligations owed to "THE BANK" by virtue of this contract, shall only be
considered discharged by the payment in United States Dollars, in such manner
and place specified in the provisions of this contract
4
in regards to the payments, without taking into account the existence of a
sentence or judicial decision stated in other currency.
PARAGRAPH I: in the event that for any reason of force majeur, the
payments made in Dominican pesos, the same shall be converted from pesos to US
dollars, through the calculation of the rate of sale of dollars to the public
existing in the private market of foreign currency of Santo Domingo. If there is
no open quote for the purchase-sale of the US currency in the private market of
exchange of Santo Domingo, the conversion shall be made in such manner that the
amount paid in other currency or considered as owed by virtue of this contract
be enough in order that according to the standard banking procedures, "THE BANK"
may buy the necessary US dollars to cover the sum owed in the exchange market of
New York or any international exchange market. Is the amount so purchase is less
than the sum originally owed in the currency in which the loan has been granted,
"THE SOLIDARY CO-DEBTORS" agree to indemnify "THE BANK" against the loss and if
the amount in dollars so purchased exceeds the sum originally owed to"THE BANK",
this latter convenes to reimburse "THE SOLIDARY CO-DEBTORS" such excess.
PARAGRAPH II: WAIVER TO THE MONETARY PARITY.- The parties recognize and
accept that the value of the Peso in comparison to the US Dollar is established
by the law of the offer and demand in the free exchange market. Therefore, "THE
SOLIDARY CO-DEBTORS" waive from now on to adhere to the validity of article 1st
of Law No. 1528, dated October 9, 1947, which establishes that the parity of the
Dominican Peso with the US Dollar. Likewise, ""THE SOLIDARY CO-DEBTORS" resign
to claim any judicial or legal disposition in regards to the mentioned parity.
ARTICLE SIX: INTERESTS.- "THE SOLIDARY CO-DEBTORS" shall pay annual
interests at eleven point fifty percent (11.50%) over the basis of one year of
three hundred sixty (360) days, payable in the offices of "THE BANK" monthly and
uninterruptedly, beginning on the month of ________________ of the year 2000.
5
ARTICLE SEVEN: CLOSING COMMISSION.- "THE BORROWER" shall pay to "THE
BANK" a sole commission of cero point five percent (0.5%) of the amount
disbursed, at the moment of signing the contract, due to expedition and related
charges.
ARTICLE EIGHT: MORATORIUM.- "THE SOLIDARY CO-DEBTORS" bind themselves,
in the event of not complying upon its expiration any of the payment
obligations, to pay moratorium charges, under penal clause, the TWO PERCENT (2%)
monthly or fraction of month, over the amount past due, without judicial or
extrajudicial requirement, by previous notice to "THE SOLIDARY CO-DEBTORS" with
ten (10) days in advance.
ARTICLE NINE: CHANGE OF THE INTEREST RATE.- If during the validity of
this contract, a new law, decree or resolution of the Monetary Board would
authorize an increase in the rate of interest beyond the one convened in this
contract, or in the event of a delay in regards to the date in which the payment
should have been made, or when the conditions in the market justify a change of
such rate, "THE BANK" shall be empowered to increase in an unilateral manner the
interests convened in this contract, up to the maximum extent permitted, with
previous notice to "THE SOLIDARY CO-DEBTORS" with five days in advance.
ARTICLE TEN: ANTICIPATED PAYMENTS.- "THE SOLIDARY CO-DEBTORS" may pay
any part of the capital borrowed before its expiration provided that they do not
owe any other charge for demandable interests.
ARTICLE ELEVEN: EXPIRATION ON HOLIDAYS.- Any payment or any other act
established in this contract to be made on Saturdays or holidays according to
the law of the place where the same proceeds, it shall be validly considered
made on the first following working day without any additional charge.
PARAGRAPH I: EXIGIBILE COMPLIANCE OF THE OBLIGATIONS OF THE "THE
SOLIDARY CO-DEBTORS".- "THE SOLIDARY CO-DEBTORS" understand that "THE BANK" is
empowered to demand the compliance of all the obligations, be them herein
6
contained or in any other contract related to the same; the validity,
originality, execution or sufficiency of this contract, of the other accessorial
or any document created on them, and in the event of any fault by "THE SOLIDARY
CO-DEBTORS" or any other person in the compliance of their obligations under
this contract or in regards to the promissory note may exercise the rights and
faculties herein conferred.
PARAGRAPH II.- ADVISORS AND PROXIES OF THE BANK.- "THE BANK" shall
contract advisors, experts or other proxies to comply certain specific tasks and
shall not be responsible for the negligence or misconduct of any of the
advisors, experts or proxies, provided that the same have been selected with
reasonable care, without prejudice to any action that "THE BANK" may exercise
directly against such advisors, experts or other proxies committed by them.
Neither "THE BANK" or any of its directors, officers, employees or agents shall
be responsible of any action taken or not taken by it or by them under this
contract or in relation to the same, with exception of its own material or
serious negligence, as well as its directors, officers and employees.
ARTICLE TWELVE: ASSIGNMENT OF THE LOAN BY "THE BANK".- With exception
of what is established in this contract, "THE BANK" shall assign one or more
assignees the total or part of its rights and obligations or its participation
under this contract. "THE BANK" and the assignee shall subscribe and execute a
document or assignment of share contract duly notified through bailiff act, in
compliance to Article 1690 of the Civil Code. In the same manner, "THE BANK"
shall give any promissory note that may be part of such assignment or
participation, in the understanding that once executed the assignment, the
assignee of the same shall be considered a party of this agreement in the
measure stipulated in the Assignment Contract and shall have the rights and
obligations of "THE BANK" under this contract, remaining this latter and the
assigning bank, as established in such assignment, discharged of its obligations
related to this agreement in regards to the portion transferred, upon such
moment.
ARTICLE THIRTEEN: GUARANTEE OF PLEDGE WITHOUT DISPOSSESSION.-
PRICESMART DOMINICANA, S. A. grants if favor of "THE BANK"
7
a guarantee of PLEDGE WITHOUT DISPOSSESSION, in order to be ruled by the
dispositions of the Agriculture Incentive Law Number 6186 dated February 12,
1963, on machineries, equipment of its property described below:
<TABLE>
<CAPTION>
-------------------------------- ------------------ ----------------------------------------- ------------------
MACHINERY AND EQUIPMENT QUANTITY DESCRIPTION VALUE IN RD$
-------------------------------- ------------------ ----------------------------------------- ------------------
<S> <C> <C>
Forklifts 3 Yale, Model ESC302A 1,132,800.00
Series 2945W04420W
-----------------------------------------
Series 2945W04112W
-----------------------------------------
Series 2945W04433W
-------------------------------- ------------------ ----------------------------------------- ------------------
Battery chargers for forklifts 3 HOBBART, Model 880C3- 102,800.00
18/950
Series 399CS52671
-----------------------------------------
Series 399CS52676
-----------------------------------------
Series 399CS52669
-------------------------------- ------------------ ----------------------------------------- ------------------
Forklift batteries 6 DEKA, Model 18-P137-15 372,900.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Vehicle to transport batteries 2 DEKA, Model TCP24PP 106,000
-------------------------------- ------------------ ----------------------------------------- ------------------
Levels for shippers 2 YALE, Model CM65W-8L 123,300.00
-------------------------------- ------------------ ----------------------------------------- ------------------
GLABREATH 30/60,
Compactor 1 Model HD2200, Series GVB0194 169,700.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Manual forklifts (elevators) 10 SIG JOE, Model L50 104,600.00
FOURWAY
Series F20431-99
-----------------------------------------
Series F20436-99
-----------------------------------------
Series F20457-99
-----------------------------------------
Series F20443-99
-----------------------------------------
Series F17411-99
-----------------------------------------
Series F20435-99
-----------------------------------------
Series F17414-99
-----------------------------------------
Series F20437-99
-----------------------------------------
Series F20452-99
-------------------------------- ------------------ ----------------------------------------- ------------------
Furniture for cash registers 16 KILSON, Model KCU- 422,600.00
3500-PGT, Series 50528
-------------------------------- ------------------ ----------------------------------------- ------------------
Floor cleaner 1 MARCO, Model 680 144,800.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza refrigerator 1 CONTINENTAL, Model 51,700.00
CPT-67, Series 13347208
-------------------------------- ------------------ ----------------------------------------- ------------------
8
-------------------------------- ------------------ ----------------------------------------- ------------------
Shelves for freezers AMCO, Model CC1836E- 36,300.00
SBP
-------------------------------- ------------------ ----------------------------------------- ------------------
Continental freezer 1 CONTINENTAL, Model 36,200.00
IF, Series 13373839
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza dough press 1 DOUGH PRO, Model DP- 55,800.00
1100, Series 94B99H
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza table 1 UNIVERSAL, Model PC- 48,900.00
PDT-602-4
-------------------------------- ------------------ ----------------------------------------- ------------------
Double oven for pizza 1 M. MARSHALL, Model 374,800.00
PS22OFS-D-G, Series 187110999
-------------------------------- ------------------ ----------------------------------------- ------------------
Smoke extractor for pizza 1 LARKIN, Series 26235 52,000.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza cars 3 DOUGH PRO, Model DC- 48,100.00
63
-------------------------------- ------------------ ----------------------------------------- ------------------
Hot Dog Cooker 1 CRAIG, Model LB-7-33Sc, 130,000.00
Series 5065
-------------------------------- ------------------ ----------------------------------------- ------------------
Display furniture 1 UNIVERSAL, Model PS 80,500.00
CUSTOM
-------------------------------- ------------------ ----------------------------------------- ------------------
Churros display 1 STAR, Model HFD-3 22,100.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Beverage machine display 1 UNIVERSAL, Model P/C 43,900.00
BC-76
-------------------------------- ------------------ ----------------------------------------- ------------------
Beverage and ice machine 1 BOOTH CRYSTAL, Model 66,500.00
220205061BC-50, Series 30068
-------------------------------- ------------------ ----------------------------------------- ------------------
Ice machine 1 CRYSTAL TIPS, Model 60,000.00
802CAS251-30
-------------------------------- ------------------ ----------------------------------------- ------------------
Species machine 1 UNIVERSAL Model PC 59,100.00
CC 9624 2a
-------------------------------- ------------------ ----------------------------------------- ------------------
Water filter 1 CUNO, Model A64233, 14,500.00
Series A-65795
-------------------------------- ------------------ ----------------------------------------- ------------------
Water treatment system 1 NIMBUS, Model 2000 92,100.00
GPD
-------------------------------- ------------------ ----------------------------------------- ------------------
Roasted beef oven 6 A. BAKERY, Model MSR2 454,900.00
Series 102977
-----------------------------------------
Series 102978
-----------------------------------------
Series 102980
-----------------------------------------
Series 102981
-----------------------------------------
Series 102526
-----------------------------------------
Series 103735
-------------------------------- ------------------ ----------------------------------------- ------------------
Chicken holder display 1 A. BAKERY, Model CHT213 65,900.00
TRAY, Series 102437
-------------------------------- ------------------ ----------------------------------------- ------------------
Chicken autoservice station 1 A. BAKERY, Model SSW- 116,300.00
4, Series D030629
-------------------------------- ------------------ ----------------------------------------- ------------------
Bakery oven and 2 BAXTER, Series 241000717 206,400.00
-------------------------------- ------------------ ----------------------------------------- ------------------
9
-------------------------------- ------------------ ----------------------------------------- ------------------
pastries
-------------------------------- ------------------ ----------------------------------------- ------------------
Meat grinder 1 HOLLYMATIC, Model 131,700.00
175, Series 1752945
-------------------------------- ------------------ ----------------------------------------- ------------------
Meat cutter 1 HOLLYMATIC, Model 86,300.00
2922, Series HY-16
-------------------------------- ------------------ ----------------------------------------- ------------------
Weight scale with printer 2 DRC, Model CX20ET, 73,600.00
Series 9043249
-------------------------------- ------------------ ----------------------------------------- ------------------
Cutting machine 1 BERKEL, Model 834EPB, 240,800.00
Series 360358MD99
-------------------------------- ------------------ ----------------------------------------- ------------------
Paking machine 2 Model AC3000, Series 90027882 107,800.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Series 88327834
-------------------------------- ------------------ ----------------------------------------- ------------------
Forklift for heavy COATS, Model 5050", Series 73,600.00
vehicles 1 9903107128
-------------------------------- ------------------ ----------------------------------------- ------------------
Forklift for light vehicles 1 COATS, Model 4040", Series 47,500.00
9907155931
-------------------------------- ------------------ ----------------------------------------- ------------------
Compressor 1 INGERSOLL RAND, Model 27,400.00
2475N5, Series P990830364
-------------------------------- ------------------ ----------------------------------------- ------------------
Pneumatic system for deposits 1 AIRLINK 125,600.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Membership displays OMNI 303,200.00
Displays for photograph area
and display for travel agency 5
-------------------------------- ------------------ ----------------------------------------- ------------------
Alarm system 1 Model 01-5207 361,600.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Photograph Developing equipment 1 NORITSU, QSF-V30, 1,817,000.00
Series 18331108
-------------------------------- ------------------ ----------------------------------------- ------------------
Telephone system 1 298,300.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Area for carts 1 REHRIGH, Model 4300-15 761,600.00
-------------------------------- ------------------ ----------------------------------------- ------------------
and 400 carts for merchandise 400 REHRIGH, Model 1200-50
-------------------------------- ------------------ ----------------------------------------- ------------------
Safe box 1 SAFE & VAULT, Model 73,900.00
SVM 6030 PCD
-------------------------------- ------------------ ----------------------------------------- ------------------
TOTAL RD$9,345,470.00
</TABLE>
PARAGRAPH I: NO LIEN AND POSSESSION OF PLEDGE.- PRICESMART DOMINICANA,
S.A. declares under faith of oath, that the goods given in pledge through this
act are of its exclusive property and that the same have not been placed in
guarantee before another individual or company. Likewise, it is bound to keep
and maintain them in good conditions and take the necessary measures to avoid
such movables to tear and wear, and place
10
them under the disposition of the competent authorities in the event of
proceeding due to lack of payment of any of the obligations hereby contracted.
PARAGRAPH II. VALUE OF THE GOODS GIVEN IN GUARANTEE.- "THE SOLIDARY
CO-DEBTORS" declare that the goods given in guarantee have a total value at the
moment of the appraisal, of NINVE MILLION THREE HUNDRED FORTY FIVE THOUSAND FOUR
HUNDRED PESOS WITH 00/100, and are located at the following address: No. 54
Charles Summer Avenue, of this city.
ARTICLE FOURTEEN: MAINTENANCE OBLIGATION.- "THE SOLIDARY CO-DEBTORS"
are bound to keep the machineries and equipment given in guarantee in good
condition of operation and authorizes "THE BANK" to make inspections
periodically to prove the status of the same.
ARTICLE FIFTEEN: SUBSTITUTION OF GUARANTEE.- In the event of fire,
theft or deterioration of motor or skeleton of the machineries and equipment
given in pledge, "THE SOLIDARY CO-DEBTORS" shall be bound to substitute them in
a term of thirty (30) days, by others of the same quality, make and value. This
period may be extended at discretion of "THE BANK" in the event the manufacturer
does not have available the equipment or machineries to be substituted.
ARTICLE SIXTEEN: MORTGAGE GUARANTEE.- For the security and guarantee of
the payment of the amount owed, as well as the interests and other obligations
to the account of "THE SOLIDARY CO-DEBTORS", INMOBILIARIA PRICESMART, S. A.
grants a mortgage of FIRST DEGREE in favor of "THE BANK" over the immovable of
its property described below:
1. "A portion of land of Ten Thousand Two Hundred Square Meters
(10,200 Mts(2)) located within the area of Lot
No.110-Ref.-779-A-3-B (One Hundred Ten-Reformed-Seven Hundred
Seventy Nine-A-Three-B) of Cadastral District No. 4 (Four) of
the National District. Supported by Title Certificate
(Duplicate from the Owner) No.86-10301, issued by the
Registrar of Titles of the National District on September 12,
1997".
11
2. "A portion of land of Ten Thousand Two Hundred Square Meters
(10,200 Mts(2)) located within the area of Lot
No.110-Ref.-779-A-3-B (One Hundred Ten-Reformed-Seven Hundred
Seventy Nine-A-Three-B) of Cadastral District No. 4 (Four) of
the National District. Supported by Title Certificate
(Duplicate from the Owner) No. 84-9844, issued by the
Registrar of Titles of the National District on October 9,
1984, limited to the North, Charles Summer Avenue; to the
East, Lot No.110-Ref.-779-A-3 (remaining part); to the South,
Lot No. 102-A, of Cadastral District No. 3 of the National
District; and to the West, Area No. 7 and 4 of Block No.
2918, Area Nos. 6 and 5 of Block No. 2915."
PARAGRAPH I: PROHIBITION OF SALE, DONATION AND GUARANTEE.- It is
understood that INMOBILIARIA PRICESMART, S. A. shall not consent transfers,
assignments, donations, sales, or any other lien or any other new charges or
encumbrances over the immovable subject of this mortgage without the express
consent of "THE BANK", INMOBILIARIA PRICESMART, S. A authorizes the pertaining
Registrar of Titles to take record of this prohibition. Likewise, INMOBILIARIA
PRICESMART, S. A. authorizes "THE BANK" or the person whom this latter empowers
to pick up the Duplicate of the Owner from the Office of the Registrar of
Titles, after having registered the mortgage and keep them until the total
settlement of the loan.
PARAGRAPH II: TAX OBLIGATIONS.- "THE SOLIDARY CO-DEBTORS" are bound to
pay in a timely basis all fiscal and municipal taxes charged or which may be
subject to in the future those immovable in question, or any other duty
including income tax, which may affect the mortgage approved and the
availability of the properties herein above described. In the event of
non-compliance or demurrage of the "THE SOLIDARY CO-DEBTORS" such taxes and the
amounts given in advance by "THE BANK" shall be immediately demandable and shall
generate interests to the highest rate authorized by the monetary authorities.
PARAGRAPH III: EXCHANGE RATE FOR THE REGISTRATION OF GUARANTEE.- For
the purpose of registration of the mortgages in US Dollars, it shall be taken as
reference the exchange rate in effect for the sale at the Central Bank of the
Dominican Republic at the moment of registration of the mortgages. Nevertheless,
the parties admit that this rate shall only have application for the objectives
of such registration, for which the
12
payment obligations shall be complied according to what is established in
articles three and four of this contract.
ARTICLE SEVENTEEN: INSURANCE.- The company PRICESMART DOMINICANA, S. A.
assigns and endorse in favor of "THE BANK" which accepts in capacity of
irrevocable beneficiary, the Insurance Policy No. 121-048139, against fire and
allied lines, issued by Compania Nacional de Seguros, C. por A., located at No.
31 Maximo Gomez Avenue of this city, endorsed in favor of "THE BANK" under
policy No. 001-0182/2000, on the twenty second (22nd) day of February of the
year two thousand (2000), up to the amount of SEVEN MILLION UNITED STATES
DOLLARS (US$7,000,000.00).
PARAGRAPH: VALIDITY OF THE POLICY.- "THE SOLIDARY CO-DEBTORS" are bound
to keep in force through consecutive renewals and during the period while in
debt with "THE BANK", the insurance policy, in the understanding that if they
would not renew it, "THE BANK" shall be authorized, without liability, to make
such renewal to the account of "THE SOLIDARY CO-DEBTORS", being these latter
bound to cancel the advances paid by "THE BANK" before the next expiration of
the conventional interests established in this contract, in the understanding
the amounts that "THE BANK" gave in advance for such reason shall generate
interest at the existing rate in the market and shall be demandable at the
option of "THE BANK". The amounts anticipated by "THE BANK" for such reasons,
shall be supported by the guarantee described in this act. In the event that an
accident may occur, "THE BANK" shall apply the amount of the insurance to the
interests, capital and other expenses pertaining to the loan granted. "THE BANK"
shall reimburse "THE SOLIDARY CO-DEBTORS" any difference existing upon its
favor.
ARTICLE EIGHTEEN: The parties herein, recognize and agree that even the
obligations under this contract shall be dischargeable with the receipt from the
"THE BANK" of a sufficient amount of the original currency in which the loan was
granted, for processing and judicial purposes, in the event that "THE BANK" may
have to continue the execution of the guarantees, the demand for payment, and
processing acts and procedures of execution of the guarantees shall be performed
for a sum equivalent in pesos to the amount in dollar at that
13
moment, calculated such total based on the exchange rate for sale in force at
the Central Bank of the Dominican Republic at the time of the execution, all of
it without prejudice to the validity and effect of the dispositions of Article
Five of this Contract.
ARTICLE NINETEEN: DOCUMENTS RELATED TO THE GUARANTEES.- Before the
first disbursement, all the documents regarding the guarantees, in the extent it
may be appropriate, such as mortgages and pledges without dispossession are
granted in favor of "THE BANK" by virtue of this contract or its accessorial,
and any other document which may be necessary for the "THE BANK" to proceed, in
the manner established herein, should have been duly given, signed and made by
"THE SOLIDARY CO-DEBTORS" and shall be registered, as may applicable according
to the provisions of this contract, in all offices and branches where may be
necessary in order to execute such guarantees and all the necessary actions to
carry out such procedure shall be at the account of the "THE SOLIDARY
CO-DEBTORS", including all taxes, registrations fees and any other charge or
expenses, including legal honoraries by the attorney of "THE BANK".
ARTICLE TWENTY: VALUE OF THE GUARANTEES:- Before any disbursement, "THE
BANK" must prove that the value of the loan does not exceed the 70% of the value
of the immovable given in guarantee, determined by appraisals performed by a
firm known and accepted by "THE BANK", report which must be maintained during
the entire period of this contract. On the contrary, and with the consent of
"THE BANK", "THE SOLIDARY CO-DEBTORS" shall grant guarantees over equipment and
other movable effects until completed the aforementioned report. The value of
such goods shall also be determined by an appraisal or evaluation carried out by
a firm which satisfies all the above indicated conditions for the same, which
shall be made to the immovable granted in guarantee.
ARTICLE TWENTY FIRST: LITIGATION.- "THE SOLIDARY CO-DEBTORS hereby
declare and certify that there are no pending, or to best knowledge of "THE
SOLIDARY CO-DEBTORS", there are no sentence, action, demand, litigation or
procedure existing or possible before any Court, Governmental or Regulatory
Authority, Agency,
14
Commission, Arbitration Board or Panel against the immovable over which the
projects are being developed, or against the immovable mortgaged and/or movable
pledged in favor of "THE BANK", for the security and guarantee of the payment of
the financing.
ARTICLE TWENTY TWO: EVENT OF DISPOSSESSION.- In the event that the
total or part of the immovable granted in mortgage guarantee are hereby
dispossessed by the Dominican State or any other competent organism, the price
paid as result of the dispossession shall be given by the dispossessed party or
consignee to "THE BANK" to apply it to the payment of the value that for this
loan may owe "THE SOLIDARY CO-DEBTORS". In consequence, in the vent of such
dispossession, "THE SOLIDARY CO-DEBTORS" expressly authorize since now to the
dispossessed party consignee to directly give to "THE BANK" the values resulting
from the dispossession, in order to apply them to the amortization and/or
cancellation of owed balance by "THE SOLIDARY CO-DEBTORS". IN the event that the
payment of the price of the dispossession exceeds the balance of what is owed to
"THE BANK", this shall give the excess to "THE SOLIDARY CO-DEBTORS".
ARTICLE TWENTY THREE: COLLECTION OPTION.- It is convened that upon its
due date, "THE BANK" may require at its option the payment of the debt to "THE
SOLIDARY CO-DEBTORS" through the execution of the above mentioned promissory
note, or by other means of right rather than the pledge and mortgage execution,
without such fact implying resignation of "THE BANK" to any other rights related
to its condition of creditor.
ARTICLE TWENTY FOUR: COMPENSATION OF DEBT.- Likewise, "THE SOLIDARY
CO-DEBTORS" authorize and empower "THE BANK", at its sole option, to compensate
any moment the debt by taking possession of any amount of money of its property
found in hands of "THE BANK" to cover the payment of conventional or legal
capital, interests and accessorial past due and generated by this contract.
PARAGRAPH: CURRENCY CONVERSION.- In the event that the amounts of
monies property of "THE SOLIDARY CO-DEBTORS" but in hands of "THE BANK" were
15
in Dominican currency, "THE SOLIDARY CO-DEBTORS" formally authorize "THE BANK"
to convert such sums in United States Dollars, using for this purpose the
exchange mechanism established in article four of this contract, after which
"THE BANK" may proceed to apply the amounts converted into Dollars to the past
due and outstanding obligations by virtue of this document.
ARTICLE TWENTY FIVE: APPLICATION OF PAYMENTS.- The payments made to
"THE BANK" by "THE SOLIDARY CO-DEBTORS" or any other person for the values owed
shall apply in the following manner:
a) To payments made by "THE BANK" to third parties to the account of
"THE SOLIDARY CO-DEBTORS" or as consequence of this contract;
b) To existing moratorium interests;
c) To past due interests;
d) To instalments of capital past due by age;
e) To debts that for any reason (contracting or violating) "THE
SOLIDARY CO-DEBTORS" may have with "THE BANK".
ARTICLE TWENTY SIX: TERMINATION.- The lack of payment of an instalment
of capital and/or interests, or the non-compliance of any obligation of payment
by "THE SOLIDARY CO-DEBTORS" shall cause the expiration of the period of this
contract at discretion of "THE BANK", making demandable the totality of the
debt, and executable the guarantees, previously placed in delay "THE SOLIDARY
CO-DEBTORS", being able "THE BANK" to exercise this right even if the payment of
the past due quota is received afterwards.
PARAGRAPH I: OTHER REASONS OF TERMINATION.- Likewise, "THE BANK"
reserves the right to claim the balance owed at any moment, provided that:
a) A document issued by "THE SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY
GUARANTORS" has been object of protest by its holder;
16
b) "THE SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS" are found
in a virtual situation of ceasing of payment or subject to an alternate
agreement before the Chamber of Commerce;
c) Due to violation or non-compliance by "THE SOLIDARY CO-DEBTORS"
and/or "THE SOLIDARY GUARANTORS" of what it is stipulated in this contract and
similar agreements convened with third parties;
d) Due to significant deterioration of the financial situation of "THE
SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS", which makes difficult the
compliance of the obligations convened with third parties;
e) The violation of "THE SOLIDARY CO-DEBTORS" of what is established in
article eleven of this contract;
f) Due to the non-compliance in the payment of letters of credit and/
or credits of foreign suppliers, or of any similar agreement subscribed with
local or international banking institutions directly or by mediation of "THE
BANK";
g) Due to a change in the policy outlined for loans in Dollars by the
monetary authorities, previous notice to "THE SOLIDARY CO-DEBTORS" with ninety
(90) days in advance, binding "THE BANK" itself to make the necessary efforts to
convert such loan to Dominican pesos;
h) Because "THE SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS"
have created false representation or guarantees over any material;
i) Due to the non-compliance by "THE SOLIDARY CO-DEBTORS" of the
obligations stipulated in the letters of guarantee signed in separate and
included as integral part of this contract in Attachment I;
17
j) Due to change or property, administrative control of "THE SOLIDARY
CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS", excepting any direct or indirect
increase in the property by PriceSmart, Inc.;
k) Termination by PriceSmart, Inc. of any agreement of license (granted
directly to PSMT Caribe, Inc., and indirectly to the co-debtors);
l) Dispossession or confiscation of the properties of the co-debtors in
the Dominican Republic by any governmental authority;
ARTICLE TWENTY SEVEN: OBLIGATION OF THE "THE SOLIDARY CO-DEBTORS" AND
"THE SOLIDARY GUARANTORS". In addition to the cause of termination established
in the previous article, the non-compliance by "THE SOLIDARY CO-DEBTORS" and/or
"THE SOLIDARY GUARANTORS" of any of the following obligations shall produce the
termination of this contract at discretion of "THE BANK", being demandable the
debt, and executable the guarantees;
a) Not making changes of business or the handling o the business, or
consolidate, merge, sell or dispose of their assets and properties
b) Not selling or assigning the shares that "THE SOLIDARY GUARANTORS"
have in "THE SOLIDARY CO-DEBTORS";
c) Keeping a proper insurance and protection;
d) Complying all the laws and regulations, payment of duties;
e) Keeping the licenses granted in force;
f) Granting a reasonable right of access to "THE BANK" to the premises;
18
g) Limitation in the investments;
h) Encumbering negatively all the assets used as guarantee of this
loan;
i) Not making payments of dividends to the shareholders of "THE
SOLIDARY CO-DEBTORS" during the period of the loan, without the previous
authorization of "THE BANK";
j) Not making loans or advance payments to their shareholders or
affiliate companies during the period of the loan, without previous
authorization of "THE BANK".
ARTICLE TWENTY EIGHT: FRAUDULENT ACTIONS.- In the event of fraud,
deceit, or connivance by "THE SOLIDARY CO-DEBTORS" with third parties to
prejudice "THE BANK", this shall have the faculty to demand the immediate
cancellation of the loan and proceed to the sale at public auction of the
mortgaged immovable and goods given in pledge, independently of claiming through
the pertaining judicial way the repair of the fraudulent acts of "THE SOLIDARY
CO-DEBTORS" and their collaborators, including the penal actions that the issue
may require.
ARTICLE TWENTY NINE: DISPOSITION OF CREDIT INFORMATION.- "THE SOLIDARY
CO-DEBTORS" authorize "THE BANK" to provide the credit information centers the
necessary data with the purpose to allow the evaluation of credit by those
financial institutions subscribed to such center. "THE SOLIDARY CO-DEBTORS"
recognize and accept that the disposition of the referred information by "THE
BANK" and/or credit information centers, or any shareholder, officer or employee
of one of these, shall not constitute violation of the professional
confidentiality according to article 377 of the Penal Code. Therefore, "THE
SOLIDARY CO-DEBTORS" resign to any formal and expressly to exercise any action,
demand or claim in order to obtain compensation in damages and prejudice for the
disclosure of information or having provided inaccurate information. Likewise,
""THE SOLIDARY CO-DEBTORS" promise the adherence of their
19
representatives, shareholders and any other assignee to what has been agreed in
this article in accordance to the provisions of article 1120 of the Civil Code.
ARTICLE THIRTY: TAXES, EXPENSES AND HONORARIES.- "THE SOLIDARY
CO-DEBTORS" are bound to pay all the taxes, expenses and honorary fees which
originates this contract, as well as any other amount of money that "THE BANK"
may have to pay with charge to expenses and honoraries generated in the
execution of the guarantee granted in this contract.
ARTICLE THIRTY ONE: PRUDENTIAL STANDARDS.- "THE SOLIDARY CO-DEBTORS"
recognize and accept: a) That through the Second Resolution dated June 29, 1993
and its amendments, dictated by the Monetary Board, prudential standards were
established in regards to the loans granted by banking institutions to regulate
the conduct and capacity of payment of the debtors, the level of guarantees and
quality of the loans; b) That according to what has been stipulated in such
Resolution, "THE BANK" has the obligation to constitute provisions according to
the degree of deterioration that the granted credit may suffer; c) That the
non-compliance of the obligations at its charge by virtue of this loan contract,
may create a serious prejudice to "THE BANK" which must be compensated; and d)
That by virtue, "THE SOLIDARY CO-DEBTORS" bind themselves and are liable to pay
to "THE BANK" the cost of the amount of the provision these are obliged to do in
regards to the loan in question, calculated upon the basis of the interest rates
and commissions agreed, in the understanding that this compensation is
additional to all other financial cost expected for the loan.
ARTICLE THIRTY TWO: AUTHORIZATIONS.- At the moment of signing this
contract "THE BANK" shall have received from "THE SOLIDARY CO-DEBTORS" and from
"THE SOLIDARY GUARANTORS", a certified by its authorized officer, of each of the
documents of constitution of such companies, including their Bylaws, in the
manner or version found at the moment of signing this contract, as well as
copies duly certified by the authorized officers of all the records, shares and
corporate decisions taken to authorize the
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signature and execution of each of the contracts and other documents regarding
this transaction.
ARTICLE THIRTY THREE: SOLUTION OF CONFLICTS.- For all the purposes of
this contract, any litigation, controversy or claim resulting from this
agreement or regarding the same, its non-compliance, interpretation, resolution
or cancellation shall be submitted to arbitration. Such differences shall be
solved according to the dispositions of Law No. 50-87 dated June 4, 1987, over
Chambers of Commerce and Production and in the Regulation of the Arbitration
Court of the Chamber of Commerce and Production of the National District, Inc.
ARTICLE THIRTY FOUR: COMMON LAW.- For what has not been contemplated in
this contract, the parties adhere to the provisions of Common Law.
ARTICLE THIRTY FIVE: DOMICILE.- For the executive of this contract,
"THE SOLIDARY CO-DEBTORS" and "THE BANK" choose their respective domiciles as
indicated at the beginning of this act.
MADE, AGREED AND SIGNED IN FAITH OF WHICH, in five (5) originals of the
same tenor and effect, one for each of the contracting parties, one for the
Registrar of Titles of the National District and another for purposes of Law
6186, in the City of Santo Domingo, National District, Capital of the Dominican
Republic, on the __________ days of the month of ____________of the year two
thousand (2000).
FOR "THE SOLIDARY CO-DEBTORS"
PRICESMART DOMINICANA, S. A.
ERIC TORRES ALBERTO BONETTI
INMOBILIARIA PRICESMART, S. A.
ERIC TORRES ALBERTO BONETTI
21
FOR "THE BANK"
PEDRO E. CASTILLO L.
Executive Vice-President
I, LIC. ANA MERCEDES CROSS, Lawyer-Notary Public of the National
District, CERTIFY AND ATTEST: That the signatures that appear above have been
placed free and voluntarily in my presence by Messrs. ERIC TORRES, ALBERTO
BONETTI and PEDRO E. CASTILLO L., whose general data are provided in the
aforegoing document, to whom I know and have declared to me that these are the
same signatures they used in all their acts. in the City of Santo Domingo,
National District, Capital of the Dominican Republic, on the days of
the month of of the year two thousand (2000).
LIC. ANA MERCEDES CROSS
LAWYER-NOTARY PUBLIC
22
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of March 1, 2000, between
Club - 4U, a California corporation ("Buyer"), and PriceSmart, Inc., a Delaware
corporation ("Seller").
WHEREAS, Seller is engaged in, among other things, the travel business; and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, all of the assets, and properties of Seller used primarily in its travel
business, all on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed between Seller and Buyer as follows:
ARTICLE I
PURCHASE AND SALE
1.1 PURCHASED ASSETS. Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Seller shall sell, transfer, assign, convey and
deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all
encumbrances and liabilities (except for Assumed Liabilities) all of the assets
and properties of Seller or every kind and description, to the extent
transferable, wherever located, real, personal or mixed, tangible or intangible,
used primarily in connection with the Seller's travel business (such business
referred to herein as the "Business") (herein collectively called the "Purchased
Assets"). Seller represents and warrants that, at Closing, it will have and
transfer to Buyer good and marketable title to all Purchased Assets, free of all
liens and encumbrances.
1.2 EXCLUDED ASSETS. Notwithstanding the provisions of Section 1.1, the
Purchased Assets shall not include the following (herein referred to as the
"Excluded Assets"):
(a) All cash, bank deposits and cash equivalents;
(b) Open Bookings (as defined below) to the extent shown on the schedule
delivered at Closing in accordance with Section 5.4(a)(ii);
(c) The name "PriceSmart, Inc." or any related or similar trade names,
trademarks, service marks, URLs or logos to the extent the same incorporate the
name "PriceSmart, Inc." or "PriceSmart"; it being understood that Seller shall
license to Buyer the names "PriceSmart Vacations" or "PriceSmart Travel"
pursuant to Section 1.5 hereof;
(d) All contracts of insurance; and all corporate minute books and stock
transfer books and the corporate seal of Seller.
1.3 ASSUMED LIABILITIES. On the Closing Date, Buyer shall deliver to Seller the
Assignment and Assumption Agreement pursuant to which Buyer shall assume and
agree to discharge the following obligations and liabilities of Seller (referred
to herein as "Assumed Liabilities") in accordance with their respective terms
and subject to the respective conditions thereof: All obligations arising on and
after Closing under the contracts listed on Schedule 1.3 attached hereto.
1
1.4 SERVICE PROVIDER AGREEMENTS AND AGENCY LICENSES. Seller has informed Buyer
that there are various agreements and licenses between Seller and various
service providers and agencies that require the consent of the service providers
or agencies to the assignment thereof. Seller makes no representations or
warranties as to the transferability of these or any other agreements or
licenses. Seller, however, shall cooperate with Buyer and use its reasonable
best efforts to transfer and assign such agreements and licenses to Buyer as
soon as practicable in accordance with the terms thereof.
1.5 LICENSE. Effective upon the Closing, Seller hereby grants Buyer an
exclusive, royalty-free, license for the United States, for an unlimited period
following the Closing, to use the names "PriceSmart Vacations" and "PriceSmart
Travel" solely in connection with Buyer's operation of the Business; provided,
however, that Buyer shall be subject to the same limitations on the use of the
"PriceSmart" name to which Seller may be bound under: (i) the Agreement
Concerning Transfer of Certain Assets, entered into between PriceCostco, Inc.,
Price Enterprises, Inc. and certain of their affiliates, in November, 1996; and
(ii) the Agreement dated August 1, 1999 entered into between Seller and
Associated Wholesale Grocers, Inc.
ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE. The purchase price for the Purchased Assets (the "Purchase
Price") shall be One Million Five Hundred Thousand Dollars ($1,500,000).
ARTICLE III
CLOSING
3.1 CLOSING DATE. The Closing shall be consummated on the earlier of March 1,
2000, or a date agreed upon by Buyer and Seller (the "Closing Date"), but in no
event later than August 1, 2000, at the offices of the Seller, 4649 Morena
Blvd., San Diego, California 92117.
3.2 BUYER'S DELIVERIES. At Closing, Buyer shall pay the entire Purchase Price to
Seller and pay to Seller an amount equal to the expected commissions on the
Prepaid Open Bookings (as defined below), and Buyer shall deliver to Seller the
Assignment and Assumption Agreement, duly executed by Buyer.
3.3 SELLER'S DELIVERIES. Seller shall deliver to Buyer all the following: (a) at
Closing the Assignment and Assumption Agreement, duly executed by Seller; and
(b) at or after Closing such other bills of sale, assignments and other
instruments of transfer or conveyance as Buyer may reasonably request or as may
be otherwise necessary to evidence and effect the sale, assignment, transfer,
conveyance and delivery of the Purchased Assets to Buyer.
ARTICLE IV
ACTION PRIOR TO THE CLOSING DATE
4.1 OPERATIONS PRIOR TO THE CLOSING DATE.
(a) Prior to the Closing Date, Seller shall operate and carry on the
Business only in the ordinary course and substantially as presently operated.
2
(b) Buyer shall notify Seller within three (3) business days after each
acceptance of an offer of employment with Buyer by an employee employed in the
Business.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 DISCHARGE OF THE BUSINESS'S LIABILITIES. Seller covenants and agrees that it
will pay and discharge, and hold Buyer harmless from, each and every liability
and obligation of Seller in respect of the Business or the Purchased Assets
arising from events occurring on or prior to the Closing Date, excepting only
those liabilities and obligations expressly assumed by Buyer at the Closing
pursuant to the Assignment and Assumption Agreement delivered to Seller at the
Closing, it being understood and agreed that Buyer is assuming no liabilities or
obligations of Seller other than the Assumed Liabilities. Any sales tax, use
tax, or similar tax attributable to the sale or transfer of the Purchased Assets
and the Assumed Liabilities shall be paid by Seller.
5.2 EMPLOYEES AND EMPLOYEE RELATED AGREEMENTS.
(a) Seller shall take all actions necessary in order for both Seller and
Buyer to be in full compliance with Part 6 of Title I of ERISA and Section
49800B of the Code (regarding continuation of health benefits) and all state
laws of a similar nature with regard to all entitlements to continued health
benefits arising with respect to the Business or any other business of Seller.
(b) Seller represents and warrants that, under Seller's Severance Policy
(applicable to Seller's employees, including those employees who are members of
Teamsters Local No. 542 employed in the Business), employees of Seller are not
entitled to severance benefits where their employment has been terminated as a
result of a sale of part of Seller's business or assets but they have been
offered a comparable position by the acquiring company.
(c) Buyer shall have no obligation to offer employment to any employee of
the Seller whether or not such employee is rendering services with respect to
the Business.
(d) Buyer has offered comparable employment to all but one of the employees
of Seller who are involved in the Business. Buyer agrees that it will be solely
responsible for any severance or other payments due any and all of the employees
to which it has offered employment who ultimately accept such employment. Buyer
further agrees that Buyer will credit employees who have accepted such offers of
employment with: (i) the number of vacation day accruals currently existing for
each such employee; and (ii) the same vesting rights as such employees currently
have with respect to existing profit sharing/401(k) plan contributions.
(e) Seller shall be solely responsible for any severance or other payments
due to the one employee involved in the Business not offered employment by
Buyer.
5.3 LEASE. Subject to the consent of Seller's landlord, as promptly as
practicable following the Closing, Buyer and Seller will enter into a lease on
the terms described in Exhibit A, under which Buyer will have the right to
operate the Business in the space where it is now conducted, at 4649 Morena
Boulevard, San Diego, California, 92117.
5.4 OPEN BOOKINGS.
(a) On the Closing Date, Seller will deliver to Buyer two schedules
describing travel bookings made by Seller on behalf of customers prior to the
Closing Date ("Open Bookings"): (i) a schedule that
3
contains a list (by customer name, travel service provider, amounts paid by the
customer to the provider prior to the Closing Date, any amounts to be paid by
the customer to the provider on or after the Closing Date and any commissions to
be paid on or after the Closing Date) of Open Bookings for which Buyer will make
collections on and after the Closing Date (the "Prepaid Open Bookings") and for
which Buyer will pay to Seller on the Closing Date an amount equal to the net
present value of the expected commissions and (ii) a schedule that contains a
list (by customer name, travel service provider, amounts paid by the customer to
the provider prior to the Closing Date, any amounts to be paid by the customer
to the provider on or after the Closing Date and any commissions to be paid on
or after the Closing Date) of Open Bookings for which Seller will make
collections on and after the Closing Date.
(b) Within five (5) business days of the receipt by Seller on or after the
Closing Date of any Prepaid Open Bookings, Seller shall endorse such commission
to the order of Buyer and forward it to Buyer.
(c) Within five (5) business days of receipt by Buyer on or after the
Closing Date of commissions with respect to Open Bookings other than Prepaid
Open Bookings, Buyer shall forward to Seller the amount of the commission
received.
(d) Seller shall have no obligation to reimburse Buyer for commissions
prepaid by Buyer to Seller on Prepaid Open Bookings if Buyer does not actually
receive such commissions (other than as a result of such commissions being paid
by the providers directly to Seller).
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY SELLER.
(a) Seller agrees to indemnify and hold harmless the Buyer from and against
any and all losses and expenses incurred by Buyer in connection with or arising
from:
(i) any breach by Seller of any of its covenants, representations or
warranties in this Agreement or in any other instrument given by Seller to Buyer
pursuant to this Agreement;
(ii) the failure of Seller to comply with any applicable bulk sales
law.
(b) The indemnification provided for in this Section 6.1 shall terminate
four (4) years after the Closing Date, except that the indemnification by Seller
shall continue as to: the obligations and representations of Seller under the
Assignment and Assumption Agreement, as to which no time limitation shall apply.
(c) Seller's obligations to indemnify and hold harmless Buyer shall be
limited to an amount equal to the Purchase Price.
ARTICLE VII
GENERAL PROVISIONS
7.1 SURVIVAL OF OBLIGATIONS. All representations, warranties, covenants and
obligations contained in this Agreement shall survive the consummation of the
transactions contemplated by this Agreement.
4
7.2 NOTICES. All notices or other communications required or permitted hereunder
shall in be writing and shall be deemed given or delivered when delivered
personally or when sent by registered or certified mail or by private courier
addressed as follows:
IF TO BUYER, TO: IF TO SELLER, TO:
Club - 4U PriceSmart, Inc.
Suite 520 4649 Morena Boulevard
7979 Ivanhoe Avenue San Diego, CA 92117
La Jolla, CA 92037 Attn: President
Attn: President
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
5
7.3 ACCESS TO RECORDS AFTER CLOSING.
For a period of six (6) years after the Closing Date, Seller and its
representatives shall have reasonable access to all of the books and records of
the Business transferred to Buyer hereunder to the extent that such access may
reasonably be required by Seller in connection with matters relating to or
affected by the operations of the Business prior to the Closing Date. If Buyer
shall desire to dispose of any of such books and records prior to the expiration
of such six-year period, Buyer shall, prior to such disposition, give Seller a
reasonable opportunity, at Seller's expense, to segregate and remove such books
and records as Seller may select.
7.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Exhibits and Schedules
referred to herein and the documents delivered pursuant hereto contain the
entire understanding of the parties hereto with regard to the subject matter
contained herein or therein, and supercede all prior agreements, understandings
or letters of intent between or among any of the parties hereto. This Agreement
shall not be amended, modified or supplemented except by a written instrument
signed by an authorized representative of each of the parties hereto.
7.5 INTERPRETATION. Article titles and headings to sections herein are inserted
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
7.6 WAIVERS. Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the party or parties entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if, as to any party, it is authorized, in
writing, by an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any party hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
7.7 EXPENSES. Each party hereto will pay all costs and expenses incident to its
negotiation and preparation of this Agreement and to its performance and
compliance with all agreements and conditions contained herein on its part to be
performed or complied with, including the fees, expenses and disbursements of
its counsel and accountants.
7.8 PARTIAL INVALIDITY. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
7.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of California.
7.10 ARBITRATION. In the event of any dispute between the parties hereto with
respect to this Agreement, such dispute shall be settled by binding arbitration
by the American Arbitration Association pursuant to its Rules of Commercial
Arbitration then in effect.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the day and year first above written.
PRICESMART, INC. CLUB - 4U
BY: /s/ KURT MAY BY:. /s/ SCOTT VOAK
ITS: CHIEF OPERATING OFFICER ITS: PRESIDENT
7
EXHIBIT A
SUBLEASE BY PRICESMART, INC. (SUBLESSOR) TO CLUB 4U (SUBLESSEE)
PREMISES: Approximately 5,000 square feet located at 4649 Morena Blvd. (in the
area which has been occupied by the PriceSmart Travel Department);
additionally, Sublessee's employees who work at the premises may
park their vehicles in designated parking lot.
TERM: Through August 31, 2001; terminable upon sixty (60) days notice by
either Sublessor or Sublessee.
RENT/CAM: $1.10 per square foot (Monthly Rent/CAM of $5,500)
USE: Call center for travel services and products, and related
business/office use.
OTHER: (i) Sublease shall be subject to all of the terms, covenants and
conditions of the Lease for 4649 Morena Blvd., under which
PriceSmart is Lessee.
(ii) In the event Sublessee is occupying the subleased premises when
Sublessor accepts an offer to receive consideration in return for
Sublessor's agreement to terminate its rights under the
aforementioned Lease, Sublessee shall be entitled to a pro-rata
share of such consideration; such pro-rata share shall be based upon
the square footage leased under the Sublease as compared to the
square footage leased under the Lease.
In addition, the following services shall be provided by PriceSmart to Club 4U:
IT SUPPORT: HELP DESK $2,000 PER MONTH
----------
Technical Support
HR/PAYROLL SERVICES: $253.21 per employee
------------------- (For 39 employees, $823 per month)
8
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
(CLUB - 4U)
This BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT (the "AGREEMENT") is
made, executed and delivered on March 1, 2000, by, on the one hand, PriceSmart,
Inc., a Delaware corporation ("SELLER") and, on the other hand, Club - 4U, a
California corporation ("BUYER").
RECITALS
A. Seller and Buyer, have entered into that certain Asset Purchase Agreement,
dated as of March 1, 2000, as may be amended from time to time (the "ASSET
PURCHASE AGREEMENT"), pursuant to which, among other things, Seller has agreed
to sell, convey, assign, transfer and deliver the Purchased Assets (as such term
is defined in the Asset Purchase Agreement) to Buyer.
B. Seller and Buyer now desire to carry out the intent and purpose of the
Asset Purchase Agreement by Seller's execution and delivery to Buyer of this
Agreement evidencing (i) the sale, conveyance, assignment, transfer and
delivery to Buyer of the Purchased Assets, subject to the Assumed Liabilities
(as such terms are defined in the Asset Purchase Agreement), and (ii) the
assumption by Buyer of the Assumed Liabilities which are required to be
performed by Buyer pursuant to the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
AGREEMENT
ARTICLE I - ASSIGNMENT
SECTION 1.1. SALE AND ASSIGNMENT. Subject to the terms and conditions
of the Asset Purchase Agreement, Seller does hereby sell, convey, assign,
transfer and deliver unto Buyer, its assigns, transferees and successors,
forever, all of Seller's right, title and interest in and to the Purchased
Assets described in SECTION 1.1 of the Asset Purchase Agreement, subject to the
Assumed Liabilities that relate to the Purchased Assets.
SECTION 1.2. ACCEPTANCE. Buyer hereby accepts the foregoing sale,
conveyance, assignment, transfer and delivery of the Purchased Assets described
in SECTION 1.1 of the Asset Purchase Agreement.
ARTICLE II - ASSUMPTION
SECTION 2.1. ASSUMPTION. Buyer hereby agrees to assume, and hereby
agrees to pay, discharge and perform, as and when due, all of Assumed
Liabilities described in SECTION 1.3 of the Asset Purchase Agreement.
SECTION 2.2. SUCCESSORS AND ASSIGNS. The obligations undertaken
pursuant to this Article II shall bind and inure to the benefit of the
respective parties and their assigns, transferees and successors.
9
ARTICLE III - MISCELLANEOUS
SECTION 3.1. DEFINITIONS. Except as otherwise expressly provided
herein, capitalized terms used but not otherwise defined in this Agreement,
shall have the meanings ascribed to such terms in the Asset Purchase Agreement.
SECTION 3.2. RELATIONSHIP WITH THE ASSET PURCHASE AGREEMENT. This
Agreement is governed by and subject to all of the representations, warranties,
covenants, indemnities, and other terms and conditions of the Asset Purchase
Agreement, the terms of which are hereby incorporated into this Agreement. In
the event that any provision of this Agreement is construed to conflict with a
provision of the Asset Purchase Agreement, the provision of the Asset Purchase
Agreement shall be deemed controlling.
SECTION 3.3. GOVERNING LAW. This Agreement shall be governed by, and
construed with, the law of the State of California.
SECTION 3.4. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 3.5. SEVERABILITY. Each provision of this Agreement is
intended to be severable. If any term or provision is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the legality
or validity of the remainder of the Agreement.
SECTION 3.6. EXECUTION OF DOCUMENTS. Each party hereto agrees to
execute all documents necessary to carry out the purpose of this Agreement and
to cooperate with each other for the expeditious filing of any and all documents
and the fulfillment of the terms of this Agreement.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as
of the 1st day of March 2000.
SELLER: BUYER:
PRICESMART, INC. CLUB - 4U
By: /s/ Kurt May By: /s/ Scott Voak
Chief Operating Officer President
10
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of March 15, 2000 by and between PriceSmart, Inc., a Delaware
corporation ("PriceSmart"), Bueller's Corporation Ltd., a British Virgin
Island International Business Corporation ("Bueller's"), and Rafael E.
Barcenas, Uttam Nandwani, Morris Harari, Joseph Azrak, Raymond Dayan and
Roberto Novey (the "Shareholders").
W I T N E S S E T H:
WHEREAS, Bueller's desires to sell to PriceSmart and PriceSmart
desires to purchase from Bueller's shares of capital stock of PriceCosco de
Panama, S.A. and PB Real Estate, S.A. (together, the "Panama Corporations"),
on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. AGREEMENT TO PURCHASE AND SELL STOCK. Bueller's agrees to sell to
PriceSmart at the Closing, and PriceSmart agrees to purchase from Bueller's
at the Closing, 49,000 common shares, without par value, of PriceCostco de
Panama, S.A. and 49,000 common shares, without par value, of PB Real Estate,
S.A (collectively, the "Purchased Shares") payable by PriceSmart by issuing
to the Shareholders (as instructed by Buller's) an aggregate of 306,748
shares of PriceSmart common stock, par value $.0001 per share (the "Issued
Shares"). The Shares shall be allocated to the Shareholders in the amounts
set forth on Exhibit A to this Agreement.
2. CLOSING. The purchase and sale of the Purchased Shares will take
place at the offices of PriceSmart at 4649 Morena Boulevard, San Diego, CA
92117, no later than March 20, 2000, or at such other time and place on which
PriceSmart and Bueller's mutually agree (which time and place are referred to
in this Agreement as the "Closing"). At the Closing, Bueller's will deliver
to PriceSmart its certificates, properly endorsed to PriceSmart or its
designee, representing the Purchased Shares and PriceSmart will deliver to
the Shareholders certificates representing the Issued Shares.
3. MUTUAL REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 3, each of PriceSmart, Bueller's and the Shareholders are referred to
as a "Party," and collectively, as the "Parties." With respect to the Issued
Shares, the Shareholders hereby represent and warrant to PriceSmart, and with
respect to the Purchased Shares, PriceSmart hereby represents and warrants to
Bueller's, as follows:
3.1 PURCHASE FOR OWN ACCOUNT. The Issued Shares or the
Purchased Shares, as the case may be, to be purchased by such Party hereunder
will be acquired for investment for such Party's own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). If not an individual, such Party also represents that such
Party has not been formed for the specific purpose of acquiring the Issued
Shares or the Purchased Shares, as the case may be.
3.2 DISCLOSURE OF INFORMATION. Such Party has received or
has had full access to all the information it considers necessary or
appropriate to make an informed investment decision with respect to the
Issued Shares or the Purchased Shares, to be purchased by such Party under
this Agreement. Such Party further has had an opportunity to ask questions
and receive answers from PriceSmart or Bueller's, as the case may be,
regarding the terms and conditions of the Issued Shares or the Purchased
Shares and to obtain additional information (to the extent PriceSmart or
Bueller's possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to such
Party or to which such Party had access. The foregoing, however, does not in
any way limit or modify the representations and warranties made by such Party
in this Section 3.
3.3 INVESTMENT EXPERIENCE. Such Party understands that the
purchase of the Issued Shares or the Purchased Shares involves substantial
risk. Such Party: (i) has experience as an investor in securities of
companies in the development stage and acknowledges that such Party is able
to fend for itself, can bear the economic risk of such Party's investment in
the Issued Shares or the Purchased Shares and has such knowledge and
experience in financial or business matters that such Party is capable of
evaluating the merits and risks of this investment in the Issued Shares or
the Purchased Shares and protecting its own interests in connection with this
investment and/or (ii) has a preexisting personal or business relationship
with PriceSmart or Bueller's, as the case may be, and certain of its
officers, directors or controlling persons of a nature and duration that
enables such Party to be aware of the character, business acumen and
financial circumstances of such persons.
3.4 ACCREDITED INVESTOR STATUS. Such Party is an
"accredited investor" within the meaning of Regulation D promulgated under
the Securities Act.
3.5 RESTRICTED SECURITIES. Each of the Shareholders
understands that the Issued Shares are characterized as "restricted
securities" under the Securities Act. Each of the Shareholders further
understands that the Issued Shares will be issued in a transaction not
involving a public offering and that under the Securities Act and applicable
regulations thereunder such securities may be resold without registration
under the Securities Act only in certain limited circumstances. In this
connection, each of the Shareholders represents that he is familiar with Rule
144 of the Securities and Exchange Commission (the "Commission"), as
presently in effect, and understands the resale limitations imposed thereby
and by the Securities Act. Each of the Shareholders understands that
PriceSmart is under no obligation to register any of the securities sold
hereunder.
3.6 LEGEND. It is understood that the certificates
evidencing the Issued Shares will bear the legend set forth below:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR
2
EXEMPTION THEREFROM. THE INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED
TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS."
The legend set forth above shall be removed by PriceSmart from any
certificate evidencing the Issued Shares upon (i) a sale by the holder
pursuant to Rule 144 or an effective registration statement and in either
case in accordance with Section 6.1 hereof or (ii) delivery to PriceSmart,
following the one-year period described at Section 6.1, of an opinion by
counsel, reasonably satisfactory to PriceSmart, that a registration statement
under the Securities Act is at that time in effect with respect to the
legended security or that such security can be freely transferred in a public
sale without such a registration statement being in effect and that such
transfer will not jeopardize the exemption or exemptions from registration
pursuant to which PriceSmart issued the Issued Shares.
4. REPRESENTATIONS AND WARRANTIES OF PRICESMART. PriceSmart hereby
represents and warrants to Bueller's and the Shareholders as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
PriceSmart is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now conducted and
as proposed to be conducted. PriceSmart is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so
to qualify would have a material adverse effect on its business or properties.
4.2 VALID ISSUANCE OF STOCK. The Issued Shares, when
issued, sold and delivered in accordance with the terms of this Agreement for
the consideration provided herein, will be duly and validly issued, fully
paid and nonassessable.
4.3 AUTHORIZATION. All corporate action on the part of
PriceSmart and its officers, directors and stockholders, necessary for the
authorization, execution and delivery of this Agreement and the performance
of all obligations of PriceSmart hereunder have been taken or will be taken
prior to the Closing, and this Agreement has been duly executed and delivered
by PriceSmart and constitutes a valid and legally binding obligation of
PriceSmart, enforceable in accordance with its terms, except as may be
limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies.
4.4 NO CONFLICTS WITH OTHER AGREEMENTS. The execution,
delivery and performance by PriceSmart of this Agreement will not violate or
be in conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under (i) any provision of
PriceSmart's certificate of incorporation or bylaws as they shall be in
effect; (ii) any provision of any judgment, decree or order to which
PriceSmart is a party or by which it is
3
bound; (iii) any material contract, obligation or commitment to which
PriceSmart is a party or by which it is bound; or (iv) any statute, rule or
governmental regulation applicable to PriceSmart.
5. REPRESENTATIONS AND WARRANTIES OF BUELLER'S AND THE SHAREHOLDERS.
Bueller's and the Shareholders hereby represent and warrant to PriceSmart as
follows:
5.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
Bueller's is a corporation duly organized, validly existing and in good
standing under the laws of the British Virgin Islands and has all requisite
corporate power and authority to carry on its business as now conducted and
as proposed to be conducted. Bueller's is duly qualified to transact business
and is in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse effect on its business or properties.
The Shareholders are the only shareholders in Bueller's.
5.2 AUTHORIZATION. All action on the part of Bueller's and
its shareholders, necessary for the authorization, execution and delivery of
this Agreement and the performance of all obligations of Bueller's hereunder
have been taken or will be taken prior to the Closing. This Agreement has
been duly executed and delivered by Bueller's and each of the Shareholders
and constitutes a valid and legally binding obligation of Bueller's and each
of the Shareholders, enforceable against each of them in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting
the enforcement of creditors' rights generally and (ii) the effect of rules
of law governing the availability of equitable remedies.
5.3 NO CONFLICTS WITH OTHER AGREEMENTS. The execution,
delivery and performance by Bueller's and the Shareholders of this Agreement
will not violate or be in conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under (i) any
provision of Bueller's' certificate of incorporation, bylaws or other
governing documents as they shall be in effect; (ii) any provision of any
judgment, decree or order to which Bueller's or any of the Shareholders is a
party or by which it is bound; (iii) any material contract, obligation or
commitment to which Bueller's or any of the Shareholders is a party or by
which it is bound; or (iv) any statute, rule or governmental regulation
applicable to Bueller's or any of the Shareholders.
5.4 TITLE TO PURCHASED SHARES. Bueller's owns exactly
49,000 common shares of PriceCostco de Panama, S.A. and exactly 49,000 common
shares of PB Real Estate, S.A., free and clear of all liens, encumbrances and
any liabilities, except as may be created hereby. Other than the Purchased
Shares, Bueller's owns no shares of capital stock of, or any other interest
in, either of the Panama Corporations. In addition, Bueller's has no options,
warrants or other rights to acquire shares of capital stock of, or any other
interest in, the Panama Corporations. Following the Closing, Bueller's will
have transferred all of its right, title and interest in the Panama
Corporations to PriceSmart.
6. ADDITIONAL PROVISIONS REGARDING THE ISSUED SHARES.
4
6.1 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, each of the Shareholders
further agrees not to make any disposition of all or any portion of the
Issued Shares prior to the one-year anniversary of the Closing and thereafter
shall not make any disposition of any portion of the Issued Shares unless and
until:
(a) There is then in effect a registration
statement under the Securities Act covering such proposed disposition and
such disposition is made in accordance with such registration statement; or
(b) Such Shareholder shall have notified
PriceSmart of the proposed disposition and shall have furnished PriceSmart
with a statement of the circumstances surrounding the proposed disposition,
and (ii) such Shareholder shall have furnished PriceSmart, at such
Shareholder's expense, with an opinion of counsel, reasonably satisfactory to
PriceSmart, that such disposition will not require registration of such
securities under the Securities Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no
such registration statement or opinion of counsel shall be required: (i) for
any transfer of any Issued Shares in compliance with Rule 144 of the
Securities Act, or (ii) for any transfer of any Issued Shares by a Party that
is a Shareholdership or a corporation to (A) a Shareholder of such
Shareholdership or shareholder of such corporation, (B) a retired Shareholder
of such Shareholdership who retires after the date hereof, (C) the estate of
any such Shareholder or shareholder, or (iii) for the transfer by gift, will
or intestate succession by any Party to his or her spouse or lineal
descendants or ancestors or any trust for any of the foregoing; PROVIDED that
in each of the foregoing cases the transferee agrees in writing to be subject
to the terms of this Section 6.1 to the same extent as if the transferee were
an original Party hereunder.
7. CONDITIONS TO CLOSING.
7.1 CONDITIONS TO OBLIGATIONS OF PRICESMART AT CLOSING.
PriceSmart's obligation to purchase the Purchased Shares at the Closing is
subject to the fulfillment to PriceSmart's satisfaction, on or prior to the
Closing, of all of the following conditions, any of which may be waived by
PriceSmart:
(a) REPRESENTATIONS AND WARRANTIES TRUE;
PERFORMANCE OF OBLIGATIONS. The representations and warranties made by
Bueller's and the Shareholders in Sections 3 and 5 hereof shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of said date and Bueller's and the
Shareholders shall have performed and complied in all material respect with
all obligations and conditions herein required to be performed or complied
with by them on or prior to the Closing and a certificate duly executed by an
officer of Bueller's, to the effect of the foregoing, shall be delivered to
the PriceSmart.
(b) QUALIFICATIONS, LEGAL INVESTMENT. All
authorizations, approvals, or permits, if any, of any governmental authority or
regulatory body of the United States or of any state or country that are
required in connection with the lawful sale and issuance of the Purchased
5
Shares and the Issued Shares shall have been duly obtained and shall be
effective on and as of the Closing. At the time of the Closing, the sale and
issuance of the Purchased Shares and the Issued Shares shall be legally
permitted by all laws and regulations to which PriceSmart and Bueller's are
subject.
(c) OPINION OF COUNSEL. PriceSmart shall have
received an opinion of counsel reasonably satisfactory to PriceSmart to the
effect that (a) all documents have been executed and all other acts and
formalities have been properly complied with, pursuant to any applicable
British Virgin Islands or Panama (or other) law or regulation, to effectuate
the sale of Bueller's' right, title and interest in the Panama corporations
to PriceSmart and (b) 100% ownership of the Panama Corporations by PriceSmart
does not violate any law or regulation of Panama.
7.2 CONDITIONS TO OBLIGATIONS OF BUELLER'S AND THE
SHAREHOLDERS AT CLOSING. The obligations of Bueller's and the Shareholders to
issue and sell the Purchased Shares to be sold at the Closing is subject to
the fulfillment to Bueller's' satisfaction, on or prior to the Closing of the
following conditions, any of which may be waived by Bueller's:
(a) REPRESENTATIONS AND WARRANTIES TRUE;
PERFORMANCE OF OBLIGATIONS. The representations and warranties made by
PriceSmart in Sections 3 and 4 hereof shall be true and correct in all
material respects at the date of the Closing with the same force and effect
as if they had been made on and as of the date hereof. PriceSmart shall have
performed and complied with all agreements and conditions herein required to
be performed or complied with by it on or before the Closing and a
certificate duly executed by an officer of PriceSmart, to the effect of the
foregoing, shall be delivered to Bueller's.
(b) QUALIFICATIONS, LEGAL INVESTMENT. All
authorizations, approvals, or permits, if any, of any governmental authority
or regulatory body of the United States or of any state or country that are
required in connection with the lawful sale and issuance of the Purchased
Shares and the Issued Shares shall have been duly obtained and shall be
effective on and as of the Closing. At the time of the Closing the sale and
issuance of the Purchased Shares and the Issued Shares shall be legally
permitted by all laws and regulations to which PriceSmart, Bueller's and the
Shareholders are subject.
8. OPTIONAL REDEMPTION.
8.1 REDEMPTION. At the written request delivered to
PriceSmart by Bueller's on behalf of the Shareholders within five days
following the one-year anniversary of the Closing, PriceSmart shall redeem
(unless otherwise prevented by law) at a redemption price (the "Redemption
Price"), payable in cash, equal to $46.86 per share any or all of the Issued
Shares. The written request shall specify the number of Issued Shares to be
redeemed and shall indicate the holders of the Issued Shares to be redeemed
and the number of Issued Shares each such holder is seeking to have redeemed.
8.2 PROCEDURE FOR REDEMPTION.
6
(a) A request for redemption shall be sent by
Bueller's to PriceSmart at its principal executive offices by overnight
courier or by first class mail, postage prepaid, and must be received by
PriceSmart during the period described in Section 8.1.
(b) Promptly after receipt of the written notice
contemplated by Section 8.1, PriceSmart shall send a response to Bueller's
specifying a date (the "Redemption Date"), which shall not be less than 5 nor
more than 10 days after PriceSmart's receipt of the written request from
Bueller's, for the closing of the redemption (the "Redemption Closing"). At
the Redemption Closing, each of the Shareholders shall tender his Issued
Shares to PriceSmart in exchange for cash, payable by check or wire transfer,
in an amount equal to the number of Issued Shares tendered by such
Shareholder multiplied by the Redemption Price.
(c) From and after PriceSmart's receipt of the
written notice provided by Bueller's to PriceSmart pursuant to Section 8.1,
unless there shall have been a default in payment of the applicable
Redemption Price, all rights of a Shareholder (except the right to receive
the applicable Redemption Price upon presentation and surrender of their
certificate or certificates) shall cease with respect to that number of
Issued Shares he is seeking to have redeemed, and such shares shall not
thereafter be transferred on the books of PriceSmart or be deemed to be
outstanding for any purpose whatsoever.
9. MISCELLANEOUS.
9.1 SURVIVAL OF WARRANTIES. The representations, warranties
and covenants of the Parties contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing
and shall in no way be affected by any investigation of the subject matter
thereof made by or on behalf of PriceSmart, Bueller's or the Shareholders, as
the case may be.
9.2 SUCCESSORS AND ASSIGNS. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.
9.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the internal laws of the State of California as applied to
agreements among California residents entered into and to be performed
entirely within California, without reference to principles of conflict of
laws or choice of law.
9.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.5 HEADINGS. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. All references in this Agreement
to sections, paragraphs, exhibits and schedules shall, unless otherwise
provided, refer to sections and paragraphs hereof and exhibits and schedules
attached hereto, all of which exhibits and schedules are incorporated herein
by this reference.
7
9.6 NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be
deemed effectively given upon personal delivery to the party to be notified
or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at
the address indicated for such party at the address specified on the
signature page, or at such other address as any party or the Company may
designate by giving ten (10) days advance written notice to all other parties.
9.7 NO FINDER'S FEES. PriceSmart, Bueller's and each of the
Shareholders represent that they neither are nor will be obligated for any
finder's or broker's fee or commission in connection with this transaction.
Bueller's and the Shareholders agree to indemnify and to hold harmless
PriceSmart from any liability for any commission or compensation in the
nature of a finders' or broker's fee (and any asserted liability) for which
Bueller's or any of the Shareholders is responsible. PriceSmart agrees to
indemnify and hold harmless Bueller's from any liability for any commission
or compensation in the nature of a finder's or broker's fee (and any asserted
liability) for which PriceSmart or any of its officers, employees or
representatives is responsible.
9.8 AMENDMENTS AND WAIVERS. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of PriceSmart, Bueller's and
the holders of a majority of the Issued Shares. Any amendment or waiver
effected in accordance with this Section shall be binding upon each holder of
any Issued Shares at the time outstanding, each future holder of such
securities, and PriceSmart.
9.9 EXPENSES. Each of the Parties shall pay its own fees
and expenses incurred in entering into this Agreement. If any action at law
or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled.
9.10 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such
provision(s) shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision(s) were so excluded and
shall be enforceable in accordance with its terms.
9.11 ENTIRE AGREEMENT. This Agreement, together with all
exhibits and schedules hereto, constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with respect to the
subject matter hereof.
9.12 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of any of the Parties, the other Parties shall
execute and deliver such instruments, documents or other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
8
9.13 ARBITRATION. All disputes and claims concerning the
validity, interpretation, performance, termination and/or breach of this
Agreement ("Dispute(s)") shall be referred for final resolution to
arbitration in Miami, Florida, USA under the UNCITRAL Rules ("Rules") as
administered by the American Arbitration Association. The parties hereby
agree that arbitration hereunder shall be the parties' exclusive remedy and
that the arbitration decision and award, if any, shall be final, binding
upon, and enforceable against, the parties, and may be confirmed by the
judgment of a court of competent jurisdiction. In the event of any conflict
between the Rules and this Section, the provisions of this Section shall
govern.
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
<TABLE>
<CAPTION>
PRICESMART: BB&M:
<S> <C>
PriceSmart, Inc., Bueller's Corporation Ltd.
a Delaware corporation a British Virgin Island company
By: /s/GILBERT A. PARTIDA By: /s/ RAFAEL E. BARCENAS
--------------------------------- ---------------------------------
Name: GILBERT A. PARTIDA Name: RAFAEL E. BARCENAS
Title: PRESIDENT AND CEO Title:
Address for Notice: Address for Notice:
4649 Morena Boulevard ---------------------------
San Diego, CA 92117 ---------------------------
Attn: -----------------------
THE SHAREHOLDERS:
/s/ RAFAEL E. BARCENAS /s/ UTTAM NANDWANI
--------------------------------- ---------------------------------
Rafael E. Barcenas Uttam Nandwani
Address for Notice: Address for Notice
------------------------- -------------------------
------------------------- -------------------------
/s/ MORRIS HARARI /s/ ROBERTO NOVEY
--------------------------------- ---------------------------------
Morris Harari Roberto Novey
Address for Notice: Address for Notice
------------------------- -------------------------
------------------------- -------------------------
/s/ JOSEPH AZRAK /s/ RAYMOND DAYAN
--------------------------------- ---------------------------------
Joseph Azrak Raymond Dayan
Address for Notice: Address for Notice:
------------------------- -------------------------
------------------------- -------------------------
</TABLE>
10
EXHIBIT A
SHAREHOLDERS ALLOCATION
The Issued Shares shall be allocated among the Shareholders as follows:
1. Roberto Novey: 19,276
2. Rafael E. Barcena Perez: 64,442
3. Uttan Nandwani: 104,380
4. Joseph Azrak: 26,215
5. Raymond Dayan: 15,337
6. Morris Harari: 77,098
11
Exhibit 10.13
PROMISSORY NOTE
(Demand/Term)
(Base Rate / LIBOR / Fixed Rate)
USD 3,750,000 MAY 27, 1999
FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises to
pay to BANCO BILBAO VIZCAYA, S.A. (the "Bank") at Elizabethan Square George
Town, Grand Cayman, Cayman Islands, B.W.I., the principal sum of US THREE
MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS in lawful
money of UNITED STATES OF AMERICA and in immediately available funds:
[ ] on demand,
[ ] _______days from date
[X] on 31.MAY.2002
[maturity date]
The Borrower promises also to pay interest on the unpaid principal hereof
in like money and like funds at said office from the date hereof until paid:
[ ] at the rate of_____% per annum
[ ] at the rate of_____% per annum
above the Bank's floating Base Lending Rate
[X] 0.25% per annum above 3 MONTH LIBOR THEN 14% AS
OF THE END OF THE FIRST PERIOD AND THEREAFTER.
provided that, on and after maturity (by acceleration or otherwise), such
rate per annum shall be 2% in excess of that which would otherwise be
applicable and provided further that the interest rate applicable hereunder
shall at all times be the lesser of (a) the rate specified herein or (b) the
maximum permitted by law. "Base Lending Rate" shall mean the rate announced
by the Bank from time to time at its Grand Cayman Office as base lending rate
for domestic commercial loans, such rate to change on the effective date of
each change in the Base Lending Rate so announced by the Bank. Interest shall
be computed on the number of days actually elapsed on the basis of a 360-day
year. "LIBOR" shall mean the interest rate per annum quoted to the Bank in
the London interbank borrowing market for deposits of U.S. dollars in such
amount and for such duration as corresponds to the loan in question.
1
Such interest shall be payable:
[ ] monthly
[ ] bimonthly
[X] quarterly
[ ] semiannually
[ ] annually
[ ] at maturity only
in arrears, commencing on the date of disbursement of the funds, upon any
prepayment hereon (to the extent accrued on the amount thereof); at maturity
(whether by acceleration or otherwise) or, if the principal hereof is due on
demand, on demand; and after maturity on demand.
All payments by the Borrower under this Note are to be made without any
withholding or deduction for any and all present or future taxes, duties,
levies, fees or other charges and without any set-off or counter-claim
whatsoever. If any deduction or withholding is required in respect of any sum
payable under this Note, the Borrower shall increase the sum so that the net
amount received by the Bank after the deduction of withholding (and after the
payment of any tax or additional tax which is due as a consequence of the
increase) shall be equal to the amount which the Bank would have been
entitled to receive in the absence of any requirement to make a deduction or
withholding.
If in connection with any loan to which the LIBOR-based interest rate
applies there shall occur any event (including but not limited to an increase
in reserve requirements) which the Bank in its sole discretion determines
would result in the Bank not receiving interest effective at the rate
specified herein, the Borrower shall pay to the Bank, on demand, such
additional amounts as may be necessary to compensate the Bank for any such
deficiency.
Without prejudice to the Bank's right hereunder, if for any reason it
becomes unlawful or impossible for the Bank to make, maintain or fund this
Note or give effect to its obligations as contemplated by this Note, or any
of the obligations expressed as being assumed by the Borrower under this
Note is not or ceases to be valid, legal, binding and enforceable against the
Borrower in accordance with its terms, the the Bank's obligations hereunder
shall terminate and the Bank may, by written notice to the Borrower,
terminate this Note forthwith and demand immediate payment of, and the
Borrower will forthwith pay the Bank, all sums outstanding hereunder.
2
Upon the occurrence of any of the following specified events of default -
(a) the Borrower shall default in the due and punctual payment of any
interest on this Note; or (b) any representation, warranty or statement made
by the Borrower herein or in writing in connection herewith, or in any
certificate or financial or other statement furnished in connection herewith,
shall be breached or shall prove to be untrue in any material respect on the
date as of which made, or shall omit to state a material fact necessary to
make such representations, warranties or statements not misleading; or (c)
the Borrower shall default in the due payment of any indebtedness (direct or
contingent) for borrowed money or evidenced by a bond, debenture, note or
other security or by an agreement of guarantee or any holder of any such
indebtedness of the Borrower (or a person acting on their behalf) shall
become entitled to cause any such indebtedness to become, or any such
indebtedness shall become, due prior to its stated maturity; or (d) the
Borrower shall suspend or discontinue its business, or shall make an
assignment for the benefit of, or composition with, creditors, or shall
become insolvent or unable or generally fail to pay its debts when due; or
the Borrower shall become a party or subject to any liquidation or
dissolution action or proceeding with respect to the Borrower or any
bankruptcy, reorganization, insolvency or other proceeding for the relief of
financially distressed debtors with respect to the Borrower, or a receiver,
liquidator, custodian or trustee shall be appointed for the Borrower or a
substantial part of its assets and, if any of the same shall occur
involuntarily as to the Borrower, it shall not be dismissed, stayed or
discharged within 60 days; or if any order for relief shall be entered
against the Borrower under Chapter 11 of the United States Code entitled
"Bankruptcy"; or the Borrower shall take any action to effect, or which
indicates its aquiescence in any of the foregoing; - THEN, and in any such
event, and at any time thereafter if any such event of default shall then be
continuing, the Bank may, by written notice to the Borrower, declare the
principal of, and interest on, this Note to be due, whereupon the same shall
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind.
The Borrower represents and warrants that (i) all acts, filings,
conditions and things required to be done and performed and to have happened
(including, without limitation, the obtaining of necessary governmental
approvals) precedent to the issuance of this Note to constitute this Note the
duly authorized, legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms have been done, performed and have
happened in due and strict compliance with all applicable laws; (ii) the
issuance and performance of this Note will not violate any law, rule,
regulation, order, decree,
3
permit, agreement or instrument to which the Borrower is a party or is
subject, or result in the imposition of any lien upon any of the Borrower's
assets; and (iii) the Borrower's financial statements delivered to the Bank
in connection herewith, if any, fairly present the financial condition and
the results of operations of the Borrower as at the end of and for the
periods covered thereby and there has been no material adverse change in the
condition (financial or otherwise) of the Borrower since the date of the last
financial statement delivered by the Borrower to the Bank.
This Note is secured :
[ ] time deposits, securities and current accounts held with
the Bank.
[ ] pursuant to a Security Agreement between the Bank and the
Borrower, dated _______________.
[ ] a guaranty of __________________________________________,
dated ______________.
[X] other security, described as follows:
COLLATERAL DEPOSIT
(together the 'collateral')
If the value of the collateral falls below [the usual or agreed upon margin]
[100% of the aggregate principal amount of this Note] or if for any other
reason the Bank considers that the collateral provided is no longer
sufficient to cover its claims, the Borrower shall on first demand from the
Bank, reduce the amount of indebtedness hereunder or provide additional
security to the Bank in order to reinstate the margin within the limit
required by the Bank. If the Borrower fails to comply with the Bank's request
to either reduce the indebtedness or provide additional security within a
reasonable required time limit or, due to practical or legal grounds, it is
impossible for the Bank to contact the Borrower, all of the Borrower's
obligations under this Note shall immediately become due and payable in
their entirety.
In addition to any general lien, right of set-off or similar right to which
the Bank, as bankers, may be entitled by law, the Bank may at any time
[after demand has been made hereunder] and without notice to the Borrower,
debit any of the Borrower's accounts with the Bank with all or any part of
the aggregate principal amount of all sums then outstanding under this Note
and
4
all other amounts payable by the Borrower to the Bank hereunder,
notwithstanding that such debit may cause any such account to become
overdrawn or cause an existing overdraft to be increased, and/or set off or
transfer any sum or sums standing to the credit of any of the Borrower's
accounts with the Bank, whether or not the same may result in the breaking of
any fixture or notice period in relation to a credit or deposit balance, in
or towards satisfaction of the Borrower's liabilities to the Bank on any
other account (whether such liability is actual or contigient, primary or
collateral, present or future, several or joint) or in any other respect; and
if such liability or any part thereof is in different currency from any
credit balance against which the Bank seeks to set it off, the Bank shall be
entitled to use the currency of such credit balance for the purchase of an
amount in the currency of the liability not exceeding the amount of such
liability and also to pay out of such credit balance any additional sum which
the Bank may be required to pay for such currency and any costs in connection
with such purchase.
This Note is subject to prepayment in whole or in part without premium
or penalty except in the case of a LIBOR-based loan, prepayment of which may
be subject to premium or penalty. The Borrower (i) waives presentment,
demand, protest or notice of any kind in connection with this Note and (ii)
agrees to pay to the holder hereof, on demand, all costs and expenses
(including reasonable legal fees) incurred in connection with the enforcement
and collection of this Note. This Note shall be construed in accordance with
and governed by laws of the Cayman Islands.
The Borrower agrees that any legal action or proceeding with respect to
this Note against the Borrower may be brought in the courts of the Cayman
Islands located in the City of George Town, Grand Cayman and that process
out of said courts may be served by mail and that such service shall be
deemed effected 10 days after mailing. Nothing herein shall affect the right
of the Bank to serve process in any other manner permitted by law or to
commence legal proceedings in any other jurisdiction.
Name of Borrower:
By (signature)/s/ EDGAR ZURCHER
----------------------------
Print
EDGAR ZURCHER
Name of Borrower: PRICSMARLANDCO,S.A.
Title: 1. PRESIDENT
Address: SAN JOSE. COSTA RICA
------------------------------------------
jurisdiction of Incorporation/
Organization (if not an individual): COSTA RICA
----------------
5
BANCO BILBAO VIZCAYA, S.A.
P.O. BOX 1115 GT -- ELIZABETHAN SQUARE
GRAND CAYMAN, CAYMAN ISLANDS, B.W.I.
THIRD PARTY DEED OF CHARGE AND PLEDGE
-------------------------------------
1. I/We the undersigned PSMT CARIBE, INC. charge and/or pledge by way of
first fixed charge in favor of BANCO BILBAO VIZCAYA, S.A., Grand Cayman
Branch, (hereafter referred to as "the Bank") as security for all present
and future claims arising out of my/our business relationships with the
Bank, that the Bank has or might assert against PRICSMARLANDCO, S.A. all
the securities, negotiable instruments, savings books, time deposits,
deposit books, insurance policies, other valuables and assets which are
now or which might be, directly or indirectly, in possession of the Bank,
whether deposited against it or whatever nature, sight and term deposits
in whatever currency, metal accounts, claims arising out of fiduciary
placements or fiduciary loans, interest in joint deposits of the Bank
(together, the "collateral"). This charge and pledge in favor of the Bank
also covers all rights and claims which it holds or shall hold in a
fiduciary capacity towards third parties.
2. This charge and pledge encompasses all subordinated rights attached to
the collateral, including, without limitation to the foregoing, interest,
dividends, subscription rights, appreciation, accruals, bonuses,
privileges, both present and future.
3. The charge over and pledge of the collateral covers all the Bank's claims
including, without limitation to the foregoing, principal, accrued and
current interest, commissions, as well as all custody fees, sales
expenses and legal expenditures.
If there is more than one claim, the Bank is entitled to determine, at
its own discretion, against which claim the collateral or the proceeds
collected from its sale shall apply.
4. If the value of the collateral falls below the usual or agreed upon
margin, or if for other reasons the Bank considers that the security
provided is no longer sufficient to cover its claims, I/we will have the
obligation on first demand from the Bank, to reduce the amount of the
indebtedness or to supply additional security in order to reinstate the
margin within
1
the prescribed time limit.
If this deadline is not met or, due to practical or legal grounds, it is
impossible for the Bank to reach me/us, the Banks's claims will
immediately become due and payable in their entirety.
5. Upon nonpayment of any claim when due, or in case the Bank deems itself
unsecured, or if a material adverse change shall occur in the financial
condition of the undersigned, or upon any proceedings being commenced by
or against the undersigned (or any of them) under any bankruptcy,
reorganization, insolvency or similar proceeding, then the Bank shall
have the right to sell, resell, assign, transfer and deliver the
collateral and shall have all of the rights and remedies of a secured
party.
6. The Bank shall not incur any liability if it does not exercise the rights
conferred upon it by this Deed or it uses them only partially.
7. All notices from the Bank shall be deemed validity given if sent to the
address last indicated by the undersigned.
8. The rights and obligations of the parties hereunder shall be governed by,
and construed in accordance with, the laws of the Cayman Islands. Any
legal proceeding with respect to this Deed may be brought in the courts of
the Cayman Islands, as the Bank may elect, and the undersigned consents
to the service of process out of any of the aforementioned courts in any
such action or proceeding by mailing a copy thereof by registered mail,
postage prepaid, to the undersigned at the address set forth below,
such notice to become effective thirty days after mailing thereof.
EXECUTED as a deed.
place: SAN JOSE, COSTA RICA
-------------------------------------------------------------------
Date: JUNE 9th, 1999
-------------------------------------------------------------------
Signature(s): /S/ KAREN RATCLIFF /S/ KURT MAY
-------------------------- --------------------------
KAREN RATCLIFF KURT MAY
(TREASURER/CFO) (PRESIDENT)
PSMT CARIBE INC.
-------------------------------------------------------------
2
CONTINUING ASSIGNMENT OF DEPOSIT ACCOUNT
DEPOSIT ACCOUNT AT BANCO BILBAO VIZCAYA
FOR VALUE RECEIVED, and in consideration of any loan or other financial
accommodation heretofore or hereafter at any time made or granted to
PRICSMARLANDCO, S.A. (hereinafter called the "Borrower") or to the undersigned
(or to any of them) by BANCO BILBAO VIZCAYA, GRAND CAYMAN, a Spanish banking
corporation (herinafter together with its successors and assigns called the
"Bank") the undersigned (hereinafter, whether one or more, called the
"Assignor") agree(s) with the Bank that to secure the timely payment of all
obligations of the Borrower or the Assignor (or any of them) to the Bank,
howsoever created, arising or evidenced, whether direct or indirect, absolute
or contingent, now existing or hereafter created or arising, or now due or to
become due, including any costs and expenses incurred by Bank related to the
collection of any of the foregoing, and including reasonable attorney's fees
incurred as a result of the enforcement of this agreement or of any other
agreement between Bank and Assignor or the Borrower, inclusive of appellate
proceedings (hereinafter called the "Liabilities"), Assignor hereby assigns,
pledges, hypothecates and transfer to Bank and agrees that Bank shall have a
lien upon and a security interest in Deposit Account
No._______________________________________________ and any subsequent
renewals thereof, and in any and all deposits of the Assignor or in which the
Assignor may have an interest including any deposits or other property which
may from time to time be aquired directly or indirectly using the proceeds of
such deposits or other property (all herinafter called the "Collateral").
This Continuing Assignment of Deposit Account constitutes an assignment of
all principal and interest in the above described account and Collateral.
The Assignor consents, without affecting the Assignor's liability to the
Bank hereunder, that the Bank may, without notice to or consent of the
Assignor, with or without consideration and upon such terms as it may deem
advisable: (a) extend, in whole or in part, by renewal or otherwise, and for
any period or periods, the time of payment of any indebtedness owing by the
Borrower or Assignor to the Bank; (b) release, surrender, exchange, modify,
impair, or extend the period of duration, or the time for performance or
payment of any collateral securing any obligation of the Borrower or Assignor
to the Bank or held by the Bank as security for any such obligation; (c)
settle or compromise any claim of the Bank against the Borrower or Assignor,
or against any other person, firm or corporation, whose obligation is held by
the Bank as collateral security for any obligation of the Borrower or
Assignor to the Bank; and (d) release, in whole or in part, any person
primarily or secondarily liable for any indebtedness of Borrower or Assignor
to Bank.
The Assignor hereby ratifies and confirms any such extension, renewal,
release, surrender, exchange, modification, impairment, settlement, or
compromise; and all such action shall be binding upon the Assignor, who
hereby waives all defenses, counterclaims, or offsets which the Assignor
might have by reason thereof.
The Assignor hereby waives: (a) notice of acceptance of this Assignment
by the Bank; (b) notice of presentment, notice of dishonor, demand for
payment, or protest of any of the Borrower or Assignor's obligations, or the
obligation of any person, firm, or corporation, held by the Bank as
collateral security for the Borrower or Assignor's obligations; (c) notice of
the failure of any person, firm, or corporation to pay to the Bank any
indebtedness held by the Bank as collateral security for any obligation of
the Borrower or Assignor; (d) all defenses, offsets and counterclaims which
the Assignors may at any time have to any claim of the Bank against the
Borrower or Assignor; and (e) notice of the existence or creation of all or
any of the Liabilities, including any Liabilities arising after the date
hereof.
The Assignor agrees that no action of the Bank permitted hereunder shall
impair or affect the rights of the Bank in and to the Collateral.
This agreement has been delivered in the Cayman Islands shall be
governed by the laws of the Cayman Islands.
IN WITNESS WHEREOF, the Assignor has executed this Continuing Assignment
of Deposit Account this 9th day of June, 1999.
Signed, sealed and delivered in the presence of:
/S/ ATUL. C. PATEL /S/ KAREN RATCLIFF /s/ KURT A. MAY
---------------------- -------------------------------------
ATUL. C. PATEL PSMT CARIBE INC.
---------------------- -------------------------
Sworn and subscribed before me this_________day of__________,19________.
1
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of San Diego
On June 9, 1999 before me, Denise M. Wiedman, Notary Public,
------------ ---------------------------------
Date Name and Title of Officer (e.g., "Jane Doe, Notary Public")
personally appeared Kurt A. May and Karen Ratcliff,
-------------------------------
Name(s) of Signer(s)
/X/ personally known to me-OR-to be the person(s) whose name(s) are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacity(ies), and that by their signature(s) on
the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Denise M. Wiedman, Notary Public
--------------------------------
Signature of Notary Public
[Seal]
DENISE M. WIEDMAN
Commission # 1094003
Notary Public - California
San Diego County
My Comm. Expires Apr 7, 2000
___________________________________OPTIONAL____________________________________
Though the information below is not required by law, it may prove valuable to
persons relying on the document and could prevent fraudulent removal and
reattachment of this form to another document.
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document: Continuing Assignment of Deposit Account
Document Date: June 9, 1999 Number of Pages: 1
Signer(s) Other Than Named Above: none
CAPACITY(IES) CLAIMED BY SIGNER(S)
Signer's Name: Kurt A. May
/ / Individual
/X/ Corporate Officer
Title(s): Chief Operating Officer and President of PSMT Caribe, Inc.
/ / Partner - / / Limited / / General
/ / Attorney-in-Fact
/ / Trustee
/ / Guardian or Conservator
/ / Other:_______________
Signer Is Representing:
PriceSmart, Inc. and PSMT Caribe, Inc.
RIGHT THUMBPRINT OF SIGNER
Top of thumb here
Signer's Name: Karen Ratcliff
/ / Individual
/X/ Corporate Officer
Title(s): Chief Financial Officer
/ / Partner - / / Limited / / General
/ / Attorney-in-Fact
/ / Trustee
/ / Guardian or Conservator
/ / Other:_______________
Signer Is Representing:
PriceSmart, Inc. and PSMT Caribe, Inc.
RIGHT THUMBPRINT OF SIGNER
Top of thumb here
2
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement is made and entered into as of
January 7, 2000, by and between PriceSmart, Inc., a Delaware Corporation
("Employer") and Gilbert A. Partida ("Executive").
RECITALS
A) On December 15, 1997, an Employment Agreement was made and entered
into by and between Employer and Executive.
B) Effective as of January 12, 1999 said Employment Agreement was
amended, to provide that the base salary under said Employment
Agreement is increased, from $225,000 to $275,000.
C) Employer and Executive now desire to further amend the Employment
Agreement, as set forth hereinbelow:
AGREEMENT
1. Section 3.1 of the Agreement, which currently provides:
3.1 TERM. The term of Executive's employment hereunder
shall commence on January 12, 1998 and shall continue until January
11, 2000 unless sooner terminated or extended as hereinafter
provided (the "Employment Term").
is hereby amended, effective as of January 10, 2000, to provide as
follows:
3.1 TERM. The term of Executive's employment hereunder
shall commence on January 12, 1998 and shall continue until January
11, 2003 unless sooner terminated or extended as hereinafter
provided (the "Employment Term").
2. Section 4.1 of the Employment Agreement, which currently provides:
4.1 BENEFITS UPON TERMINATION. Upon termination of this
Agreement under Section 3.3 (Early Termination by Executive),
Section 3.4 (Termination for Cause) or Section 3.5 (Termination Due
to Death or Disability), all salary and benefits of Executive
hereunder shall cease immediately. Upon termination of this
Agreement by Employer for any reason other than those set forth in
Section 3.4 or Section 3.5, Executive shall be entitled to
continuation of Executive's base salary for one (1) year, payable
in equal installments in conformity with Employer's normal payroll
period. If this Agreement is not terminated, then, upon expiration
of the
Employment Term, and if Executive's employment by Employer
does not thereafter continue upon mutually agreeable terms,
Executive shall be entitled to continuation of Executive's base
salary for one (1) year, payable in equal installments in
conformity with Employer's normal payroll period; provided,
however, that Employer's obligation to pay such installments after
expiration of the Employment Term shall cease concurrently with
Executive having commenced comparable employment with, or Executive
receiving comparable compensation from, another employer. During
the period of this severance pay, Executive shall cooperate with
Employer in providing for the orderly transition of Executive's
duties and responsibilities to other individuals, as reasonably
requested by Employer.
is hereby amended, effective as of January 10, 2000, to provide as
follows:
4.1 BENEFITS UPON TERMINATION. Upon termination of this
Agreement under Section 3.3 (Early Termination by Executive),
Section 3.4 (Termination for Cause) or Section 3.5 (Termination Due
to Death or Disability), all salary and benefits of Executive
hereunder shall cease immediately. Upon termination of this
Agreement by Employer for any reason other than those set forth in
Section 3.4 or Section 3.5, Executive shall thereafter be entitled
to continuation of Executive's base salary through the period
ending January 11, 2003, payable in equal installments in
conformity with Employer's normal payroll schedule; provided,
however, that Employer's obligation to pay such installments after
such termination shall be reduced by the amount of the employment
compensation (if any) received by Executive from a subsequent
employer of Executive during said period. During the period of this
severance pay, Executive shall cooperate with Employer in providing
for the orderly transition of Executive's duties and
responsibilities to other individuals, as reasonably requested by
Employer.
3. All other terms of the Employment Agreement (as amended as of
January 12, 1999) shall remain unaltered and fully effective.
Executed in San Diego, California, as of the date first written above.
EXECUTIVE EMPLOYER
PriceSmart, Inc.
Gilbert A. Partida By: /s/ Robert M. Gans
/s/ Gilbert A. Partida Name: Robert M. Gans
Its: Executive Vice President
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to Employment Agreement is made and entered into as of
January 11, 2000, by and between PriceSmart, Inc., a Delaware Corporation
("Employer") and Thomas Martin ("Executive").
RECITALS
A) On March 31, 1998 an Employment Agreement was made and entered into
by and between Employer and Executive.
B) On March 31, 1999 a First Amendment to Employment Agreement was
made and entered into by and between Employer and Executive.
C) On November 22, 1999, a Second Amendment to Employment Agreement
was made and entered into by and between Employer and Executive.
D) Employer and Executive now desire to amend the Employment
Agreement, as set forth hereinbelow:
AGREEMENT
1) Section 3.1 of the Employment Agreement, which provides:
3.1 TERM. The term of Executive's employment hereunder shall
commence on April 1, 1998 and shall continue until March 31,
2000 unless sooner terminated or extended as hereinafter
provided (the "Employment Term").
is hereby amended, effective as of January 11, 2000, to provide
as follows:
3.1 TERM. The term of Executive's employment hereunder shall
commence on April 1, 1998 and shall continue until March 31,
2001 unless sooner terminated or extended as hereinafter
provided (the "Employment Term").
2) All other terms of the Employment Agreement, as amended, shall
remain unaltered and fully effective.
Executed in San Diego, California, as of the date first written above.
EXECUTIVE EMPLOYER
--------- --------
PriceSmart, INC.
Thomas Martin By: /s/ Kurt May
/s/ Thomas Martin Name: Kurt May
Its: Chief Operating Officer
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to Employment Agreement is made and entered into as of
January 11, 2000, by and between PriceSmart, Inc., a Delaware Corporation
("Employer") and K.C. Breen ("Executive").
RECITALS
A) On March 31, 1998 an Employment Agreement was made and entered into by and
between Employer and Executive.
B) On March 31, 1999, a First Amendment to Employment Agreement was made and
entered into by and between Employer and Executive.
C) On October 1, 1999, a Second Amendment to Employment Agreement was made and
entered into by and between Employer and Executive.
D) Employer and Executive now desire to amend the Employment Agreement, as set
forth hereinbelow:
AGREEMENT
1. Section 3.1 of the Agreement which provides:
3.1 TERM. The term of Executive's employment hereunder shall commence
on April 1, 1998 and shall continue until March 31, 2000 unless sooner
terminated or extended as hereinafter provided.
is hereby amended, effective January 11, 2000, to provide as follows:
3.1 TERM. The term of Executive's employment hereunder shall commence
on April 1, 1998 and shall continue until March 31, 2001 unless sooner
terminated or extended as hereinafter provided.
2. All other terms of the Employment Agreement, as amended, shall remain
unaltered and fully effective.
Executed in San Diego, California, as of the date first written above.
EXECUTIVE EMPLOYER
PRICESMART, INC.
K.C. Breen By: /s/ Kurt May
/s/ K. C. Breen Name: Kurt May
Its: Chief Operating Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AS OF AND FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AS INCLUDED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, EXHIBIT 13.1.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> FEB-29-2000
<EXCHANGE-RATE> 1
<CASH> 17,659
<SECURITIES> 5,471
<RECEIVABLES> 2,608
<ALLOWANCES> 361
<INVENTORY> 34,946
<CURRENT-ASSETS> 66,677
<PP&E> 94,519
<DEPRECIATION> 6,411
<TOTAL-ASSETS> 179,552
<CURRENT-LIABILITIES> 40,836
<BONDS> 0
<PREFERRED-MANDATORY> 0
<PREFERRED> 0
<COMMON> 1
<OTHER-SE> 93,041
<TOTAL-LIABILITY-AND-EQUITY> 179,552
<SALES> 126,361
<TOTAL-REVENUES> 134,101
<CGS> 110,575
<TOTAL-COSTS> 137,992
<OTHER-EXPENSES> 293
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,123)
<INCOME-PRETAX> (2,475)
<INCOME-TAX> 87
<INCOME-CONTINUING> (2,562)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,562)
<EPS-BASIC> (0.50)
<EPS-DILUTED> (0.50)
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