Home / Preview ID: 1119448

Stock Purchase Agreement

Entities:
Date:
2002
Size:
67K
ID:
#1119448

Start of Preview


STOCK PURCHASE AGREEMENT by and among PRICESMART, INC., ISLAND FOOD AND DISTRIBUTORS, N.V. and NITHYANANDA ENT. LTD.

        This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into effective as of June 24, 2002 by and among PriceSmart, Inc., a Delaware corporation ("PriceSmart"), Island Food and Distributors, N.V., an Aruba limited liability company ("PSMT Aruba"), and Nithyananda Ent. Ltd., an Nevis company ("NEL"). For purposes of this Agreement, each of PriceSmart and NEL are referred to as a "Party," and collectively, as the "Parties."

W I T N E S S E T H:

        WHEREAS, NEL desires to sell sixty thousand (60,000) shares (the "Purchased Shares") of capital stock, without nominal or par value, of PSMT Aruba, to PriceSmart and PriceSmart desires to purchase from NEL those shares by exchanging those shares for nine thousand three hundred fifty-three (9,353) shares of PriceSmart common stock, par value $0.0001 per share ("PriceSmart Common Stock"), on the terms and conditions set forth in this Agreement;

        WHEREAS, pursuant to the Shareholders' Agreement (the "Shareholders' Agreement") dated March 1, 2000 between PriceSmart and Ashok Ramchandani, an individual and predecessor-in-interest to NEL under the Shareholders' Agreement, NEL is obligated to make capital contributions to PSMT Aruba in exchange for the shares of capital stock of PSMT Aruba held by NEL;

        WHEREAS, NEL has made loans to PSMT Aruba in the aggregate principal amount of two hundred twenty thousand two hundred forty-four United Stated Dollars (USD$220,244) represented by promissory notes dated            and            made by PSMT Aruba in favor of NEL (collectively, the "NEL Notes");

        WHEREAS, for purposes of this Agreement, the NEL Notes will be canceled and the outstanding principal amount loaned by NEL to PSMT Aruba thereunder shall be considered a capital contribution by NEL to PSMT Aruba under the Shareholders' Agreement;

        WHEREAS, for the purposes of this Agreement, the Parties have agreed that the purchase price for the Purchased Shares shall be three hundred sixty-nine thousand four hundred forty-one United States Dollars (USD$369,441), which is equal to the agreed upon value of the Purchased Shares of one million six hundred ninety-three thousand two hundred eight United States Dollars (USD$1,693,208) less the capital contributions due from NEL under the Shareholders' Agreement of one million three hundred twenty-three thousand seven hundred sixty-seven United States Dollars (USD$1,323,767) after converting the outstanding principal amount under the NEL Notes to a capital contribution, and have agreed that payment of the purchase price for the Purchased Shares shall terminate NEL's obligations to make further capital contributions to PSMT Aruba under the Shareholders' Agreement;

        WHEREAS, for the purposes of this Agreement, the Parties have agreed to value the PriceSmart Common Stock at thirty-nine dollars and fifty cents United States Dollars (USD$39.50) per share;

        WHEREAS, for purposes of this Agreement, the Parties have agreed that PriceSmart shall have the right to purchase NEL's remaining twenty thousand (20,000) shares (the "Remaining Shares") of capital stock of PSMT Aruba at any time during the two-year period beginning May 25, 2004 and ending on May 25, 2006 (the "Option Period") for an initial purchase price on May 25, 2004 of six hundred seventy-seven thousand two hundred four United Stated Dollars (USD$677,284), which will



increase thereafter at an annual, non-compounding rate of ten percent (10%), to be calculated upon the actual number of days elapsed through the date the purchase price for the Remaining Shares is received, with the method of final payment to be agreed upon by the Parties at a later date;

        WHEREAS, for purposes of this Agreement, the Parties have agreed that Ashok Ramchandani shall serve as Chairman of the Board of Directors of PSMT Aruba until the Remaining Shares have been purchased by PriceSmart; and

        WHEREAS, the Parties have agreed that PriceSmart and PSMT Aruba shall use their reasonable best efforts to obtain a release of the assets of an Aruba limited liability company N.V. Exploitatie Maatschappij "Reveillon Aruba" pledged as collateral for a loan from Caribbean Mercantile Bank NV ("CMB") to PSMT Aruba in the aggregate principal amount of seven hundred thousand United States Dollars (USD$700,000) (the "CMB Loan") as soon as reasonably practicable, but in any event within [sixty (60)] days, after the purchase and sale of the Purchased Shares.

        NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

        1.    AGREEMENT TO PURCHASE AND SELL STOCK; OPTION; LOAN CONVERSION; COLLATERAL RELEASE.    

            1.1    AGREEMENT TO PURCHASE AND SELL STOCK.    NEL agrees to sell the Purchased Shares to PriceSmart at the Closing (as defined in Section 2), and PriceSmart agrees to purchase the Purchased Shares from NEL at the Closing, for nine thousand three hundred fifty-three (9,353) newly issued shares of PriceSmart Common Stock (the "Issued Shares").

            1.2    NEL LOAN CONVERSION AND RELEASE OF CAPITAL CONTRIBUTION OBLIGATIONS.    NEL agrees to cancel the NEL Notes at the Closing and PriceSmart and PSMT Aruba agree that the aggregate principal amount of two hundred twenty thousand two hundred forty-four United Stated Dollars (USD$220,244) borrowed by PSMT Aruba under the NEL Notes shall be considered a capital contribution by NEL to PSMT Aruba under the Shareholders' Agreement. Upon the conversion of the NEL Notes into a capital contribution and the issuance of the Issued Shares as consideration for the Purchased Shares at the Closing, (1) NEL shall be released by PriceSmart and PSMT Aruba from any further obligation to make capital contributions to PSMT Aruba under the Shareholders' Agreement and (2) NEL shall have released any rights it may have to acquire additional shares of capital stock of PSMT Aruba under the Shareholders' Agreement.

            1.3    OPTION TO PURCHASE REMAINING SHARES.    

              (a)  NEL agrees that PriceSmart shall have the right (the "Purchase Option") to purchase the Remaining Shares during the Option Period. On May 25, 2004, the purchase price for the Remaining Shares shall be six hundred seventy-seven thousand two hundred eighty-four United Stated Dollars (USD$677,284), and shall increase thereafter at an annual, non-compounding rate of ten percent (10%), to be calculated upon the basis of a 360-day year and the actual number of days elapsed through the date the purchase price for the Remaining Shares is received by NEL. The form of consideration in which the purchase price is to be paid for the Remaining Shares shall be agreed upon by the Parties at a later date; PROVIDED, HOWEVER, if the Parties have not agreed to the form of consideration prior to the Option Closing (as defined in Section 2), the purchase price for the Remaining Shares shall be paid by PriceSmart to NEL by wire transfer of United States Dollars.

              (b)  PriceSmart may exercise the Purchase Option by delivery of written notice (the "Option Notice") to NEL at any time during the Option Period.

            1.4    RELEASE OF COLLATERAL.    PriceSmart and PSMT Aruba shall use their reasonable best efforts to release the assets of NEL pledged as collateral for the CMB Loan. Such

2


    release shall be completed as soon as practicable after the Closing, but in any event within [sixty (60)] days of the Closing. If the assets of NEL pledged as collateral for the CMB Loan have not been released as collateral within [sixty (60)] days of the Closing, PriceSmart and PSMT Aruba shall be required to immediately pay to CMB the outstanding principal amount and any accrued interest due under the CMB Loan.


End of Preview