Exhibit 10.33(b)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made as March
15, 2000, by and among PriceSmart, Inc., a Delaware corporation (the "COMPANY"),
and the shareholders listed on EXHIBIT A hereto, each of which is herein
referred to as a "SHAREHOLDER."
RECITALS
The Company and the Shareholders have entered into a Stock Purchase
Agreement (the "Purchase Agreement") of even date herewith pursuant to which the
Company will purchase all of the shares of PriceCostco de Panama, S.A. and P.B.
Real Estate, S.A. held by Bueller's Corporation Ltd., a British Virgin Islands
international business corporation ("Bueller's"), by issuing shares of the
Company's common stock, par value $.0001 per share (the "Common Stock"), to the
Shareholders. The Shareholders are all of the shareholders of Bueller's. A
condition to Bueller's and the Shareholders' obligations under the Purchase
Agreement is that the Company and the Shareholders enter into this Agreement in
order to provide the Shareholders with certain rights to register the shares of
the Company's Common Stock issued to the Shareholders pursuant to the Purchase
Agreement.
AGREEMENT
The parties hereby agree as follows:
1. REGISTRATION RIGHTS. The Company and the Shareholders covenant and agree
as follows:
1.1. DEFINITIONS. For purposes of this Section 1:
a. The terms "REGISTER," "REGISTERED," and "REGISTRATION"
refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and
the declaration or ordering of effectiveness of such registration
statement or document;
b. The term "REGISTRABLE SECURITIES" means (i) the shares of
Common Stock issued to the Shareholders pursuant to the Purchase
Agreement, and (ii) any other shares of Common Stock of the
Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange
for or in replacement of, the shares listed in (i); PROVIDED,
HOWEVER, that the foregoing definition shall exclude in all cases
any Registrable Securities sold by a person in a transaction in
which his or her rights under this Agreement are not assigned.
Notwithstanding the foregoing, Common Stock or other securities
shall only be treated as Registrable Securities if and so long as
they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities
transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer
restrictions, and restrictive legends with respect thereto, if
any, are removed upon the consummation of such sale;
c. The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of
Common Stock issuable pursuant to then exercisable or convertible
securities which are, Registrable Securities;
d. The term "HOLDER" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof
in accordance with Section 1.9 of this Agreement; and
e. The term "SEC" means the Securities and Exchange
Commission.
1.2. COMPANY REGISTRATION. If the Company proposes to register any shares
of its Common Stock under the Securities Act for resale by persons
receiving such shares thirty (30) days or more after the date hereof
as consideration for the Company's purchase of their direct or
indirect interests in shares of the capital stock of any of the
Company's subsidiaries, the Company shall, at such time, promptly give
each Holder written notice of such registration (each, a "Demand
Registration"). Upon the written request of each Holder given within
twenty (20) days after mailing of such notice by the Company in
accordance with Section 2.3, the Company shall, subject to the
provisions of Section 1.4, cause to be registered under the Securities
Act all of the Registrable Securities that each such Holder has
requested to be registered, which shall be referred to herein as a
"Piggyback Registration." Notwithstanding the foregoing, the Company
shall have no obligation to include any Registrable Securities in any
registration relating solely to the sale of securities to participants
in a Company stock plan or a transaction covered by Rule 145 under the
Securities Act, a registration in which the only stock being
registered is Common Stock issuable upon conversion of debt securities
which are also being registered, or any registration on any form which
does not include substantially the same information as would be
required to be included in a registration statement covering the sale
of the Registrable Securities. In addition, the Company shall have no
obligation to effect a Piggyback Registration pursuant to this Section
1.2 if the Company does not proceed with Demand Registration.
1.2(a)In the event that the Registrable Securities have not been
registered, under the terms of this agreement within one year
from the date of issuance of the Registrable Securities, then
upon written notice within ten days after the expiration of said
one year period, the Company shall promptly take all action
necessary to register said Registrable Securities as otherwise
provided herein.
1.3. OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
a. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and,
upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days.
b. Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus
used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement for up to one hundred twenty (120) days.
c. Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
d. Use its best efforts to register and qualify the securities
covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, PROVIDED that the Company
shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
e. Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing, such obligation to
continue for one hundred twenty (120) days.
f. Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
g. Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the
effective date of such registration.
1.4. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section
1 with respect to the Registrable Securities of any selling Holder
that such Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be required
to effect the registration of such Holder's Registrable Securities.
1.5. EXPENSES OF REGISTRATION. The Company will bear the following expenses
in
connection with registrations, filings or qualifications of
Registrable Securities pursuant to Section 1.2 for each Holder: all
registration, filing, and qualification fees, printers' and accounting
fees and fees and disbursements of counsel for the Company. Each
Holder shall be responsible for the following expenses in connection
with registrations, filings or qualification of Registrable Securities
pursuant to Section 1.2: underwriting discounts and commissions, if
any, relating to the shares of Common Stock sold by such Holder and
the fees and expenses of counsel to the Holder.
1.6. DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Section 1.
1.7. INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 1:
a. To the extent permitted by law, the Company will indemnify
and hold harmless each Holder and each person, if any, who
controls such Holder within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a
"VIOLATION"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein not misleading, or (iii) any violation or
alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any
state securities law; and the Company will pay to each such
Holder or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability, or action; PROVIDED, HOWEVER, that the indemnity
agreement contained in this subsection 1.7(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable to any Holder or
controlling person for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection
with such registration by any such Holder or controlling person.
b. To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning
of the Securities Act, and any other Holder selling securities in
such registration statement against any losses, claims, damages,
or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will pay,
as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection
1.7(b), in connection with investigating or defending any such
loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the indemnity agreement contained in this subsection 1.7(b)
shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be
unreasonably withheld; PROVIDED, that in no event shall any
indemnity under this subsection 1.7(b) exceed the net proceeds
from the offering received by such Holder, except in the case of
willful fraud by such Holder.
c. Promptly after receipt by an indemnified party under this
Section 1.7 of notice of the commencement of any action
(including any governmental action), such indemnified party will,
if a claim in respect thereof is to be made against any
indemnifying party under this Section 1.7, deliver to the
indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the
parties; PROVIDED, HOWEVER, that an indemnified party (together
with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain
one separate counsel, with the reasonable fees and expenses to be
paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party
under this Section 1.7, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise
than under this Section 1.7.
d. If the indemnification provided for in this Section 1.7 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim,
damage or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim,
damage, or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with
the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant
equitable considerations; PROVIDED, that in no event shall any
contribution by a Holder under this Subsection 1.7(d) exceed the
net proceeds from the offering received by such Holder, except in
the case of willful fraud by such Holder. The
relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement
or omission.
e. Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
f. The obligations of the Company and Holders under this
Section 1.7 shall survive the completion of any offering of
Registrable Securities in a registration statement under this
Section 1, and otherwise.
1.8. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under
the Securities Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to
the public without registration, the Company agrees to:
a. make and keep public information available, as those terms
are understood and defined in SEC Rule 144, so long as the
Company remains subject to the periodic reporting requirements
under Sections 13 or 15(d) of the Exchange Act;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and
the Exchange Act; and
c. furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting
requirements of SEC Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without
registration or pursuant to such form.
1.9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a
transferee or assignee of at least 25,000 shares of such Registrable
Securities, PROVIDED the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address
of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and PROVIDED,
FURTHER, that such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by
the transferee or assignee is restricted under the Securities Act. For
the purposes of determining the number of shares of Registrable
Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or
retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or
spouses who acquire Registrable Securities by gift, will or
intestate succession) shall be aggregated together and with the
partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration rights
shall have a single attorney-in-fact for the purpose of exercising
any rights, receiving notices or taking any action under Section 1.
1.10.TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled to
exercise any right provided for in this Section 1 after Rule 144 or
another similar exemption under the Securities Act is available for
the sale of all of such Holder's shares during a three (3)-month
period without registration.
1.11.TERMINATION OF REDEMPTION RIGHTS. Upon the exercise by any Shareholder
of its rights under Section 1.2, such Shareholder's rights to require
the Company to redeem such Shareholder's shares of Common Stock
pursuant to Section 8 of the Purchase Agreement shall immediately
terminate.
2. MISCELLANEOUS
2.1. SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective permitted successors
and assigns of the parties (including transferees of any of the Common
Stock issued pursuant to the Purchase Agreement). Nothing in this
Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this
Agreement.
2.2. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended or
waived only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this paragraph shall
be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities,
and the Company.
2.3. NOTICES. Unless otherwise provided, any notice required or permitted
by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or
sent by telegram or fax, or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed to the party to be notified at such
party's address or fax number as set forth below or on EXHIBIT A
hereto or as subsequently modified by written notice.
2.4 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the
parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (a) such provision shall be
excluded from this Agreement, (b) the
balance of the Agreement shall be interpreted as if such provision
were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms.
2.4. GOVERNING LAW. This Agreement and all acts and transactions pursuant
hereto shall be governed, construed and interpreted in accordance with
the laws of the State of California, without giving effect to
principles of conflicts of laws.
2.5. 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.
2.6. TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
[Signature Page Follows]
The parties have executed this Registration Rights Agreement as of the
date first above written.
COMPANY:
PRICESMART, INC.
By: /s/ Gilbert A. Partida
----------------------------------------
Gilbert A. Partida, President
Address:
Fax:
THE SHAREHOLDERS:
/s/ Rafael E. Barcenas
- ----------------------
Rafael E. Barcenas
Address for Notice:
Fax:
/s/ Uttam Nandwani
- ------------------
Uttam Nandwani
Address for Notice:
Fax:
First Federal Financial Corp:
By: /s/ Hildaura de Salado
------------------------
Hildaura de Salado, President
Address for Notice:
Fax:
/s/ Robert Novey
- ----------------
Robert Novey
Address for Notice:
Fax:
/s/ Joseph Azrak
- ----------------
Joseph Azrak
Address for Notice:
Fax:
/s/ Raymond Dayan
- -----------------
Raymond Dayan
Address for Notice:
Fax:
EXHIBIT A
SHAREHOLDERS
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. First Federal Financial Corp.: 77,098