EXHIBIT 10.1
PROMISSORY NOTE
$________________ San Diego, California
August 7, 1998
FOR VALUE RECEIVED, the undersigned, _______________ (the
"Borrower") promises to pay to PriceSmart, Inc., a Delaware corporation, (the
"Company"), or order, the principal amount of __________________________
dollars ($____________) with interest from the date hereof on the unpaid
principal balance under this Note at the rate of six percent (6%) per annum
(on the basis of a 360-day year and the actual number of days elapsed). The
principal amount of this Note shall be due and payable on or before the
earlier of six years from the date of this Note, or the date on which the
indebtedness under this Note is accelerated as provided for under this Note
or the Pledge Agreement (as defined below). The interest payable under this
Note shall be payable in bi-monthly installments throughout the term of this
Note. Any accrued and unpaid interest under this Note shall be due and
payable concurrently with principal.
Xxxxxxxx agrees that, while Xxxxxxxx is employed by the Company,
all bi-monthly interest payments under this Note shall be made to the Company
or its order in regular bi-monthly payroll deductions, beginning
_____________________. All payments under this Note shall be made to the
Company or its order in lawful money of the United States of America at the
offices of the Company at its then principal place of business or at such
other place as the Company or any holder hereof shall designate for such
purpose from time to time.
Each payment under this Note shall be applied in the following
order: (i) to the payment of costs and expenses provided for under this Note
or the Pledge Agreement; (ii) to the payment of accrued and unpaid interest;
and (iii) to the payment of outstanding principal. The
Company and each holder hereof shall have the continuing and exclusive right
to apply or reverse and reapply any and all payments under this Note.
This Note may be prepaid in whole or in part at any time, after
five (5) days written notice of Xxxxxxxx's intention to make any such
prepayment, which notice shall specify the date and amount of such
prepayment. Any prepayment shall be without penalty except that interest
shall be paid to the date of payment on the principal amount prepaid. After
any partial prepayment hereunder, interest shall be computed on the principal
balance due after deducting the principal portion of such prepayment. Any
such partial prepayment shall be applied against the principal due at
maturity.
Upon the occurrence of a default under this Note or the Pledge
Agreement, including, without limitation, failure to make any principal or
interest payment by the stated maturity date (whether by acceleration, notice
of prepayment or otherwise), interest shall thereafter accrue on the entire
unpaid principal balance under this Note, including without limitation any
delinquent interest which has been added to the principal amount due under
this Note pursuant to the terms hereof, at the rate set forth herein. In
addition, upon the occurrence of a default under this Note or the Pledge
Agreement the holder of this Note may, at its option, without notice to or
demand upon Borrower or any other party, declare immediately due and payable
the entire principal balance hereof together with all accrued and unpaid
interest thereon, plus any other amounts then owing pursuant to this Note or
the Pledge Agreement, whereupon the same shall be immediately due and
payable. On each anniversary of the date of any default under this Note and
while such default is continuing, all interest which has become payable and
is then delinquent shall, without curing the default under this Note by
reason of such delinquency, be added to the principal amount due under this
Note, and shall thereafter bear
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interest at the same rate as is applicable to principal, with interest on
overdue interest to bear interest, in each case to the fullest extent
permitted by applicable law, both before and after default, maturity,
foreclosure, judgment and the filing of any petition in a bankruptcy
proceeding. Notwithstanding anything in this Note to the contrary, in no
event shall interest be charged under this Note which would violate any
applicable law, and if the interest set forth in this Note would violate any
law it shall be reduced to an amount which would not violate any law.
This Note is secured under that certain Pledge Agreement, dated as
of August 7, 1998, by and between Borrower and the Company (as amended,
modified or supplemented from time to time, the "PLEDGE AGREEMENT").
Reference is hereby made to the Pledge Agreement for a description of the
nature and extent of the security for this Note and the rights with respect
to such security of the holder of this Note. Nothing herein shall be deemed
to limit the rights of the Company under this Note or the Pledge Agreement,
all of which rights and remedies are cumulative.
No waiver or modification of any of the terms of this Note shall be
valid or binding unless set forth in a writing specifically referring to this
Note and signed by a duly authorized officer of the Company or any holder of
this Note, and then only to the extent specifically set forth therein.
If any default occurs in any payment due under this Note, Borrower
and all guarantors and endorsers hereof, and their successors and assigns,
promise to pay any expenses, including attorneys' fees, incurred by each
holder hereof in collecting or attempting to collect the indebtedness under
this Note, whether or not any action or proceeding is commenced. None of the
provisions hereof and none of the holder's rights or remedies under this Note
on account of
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any past or future defaults shall be deemed to have been waived by the
holder's acceptance of any past due payments or by any indulgence granted by
the holder to Borrower.
Notwithstanding anything to the contrary herein, if Xxxxxxxx's
employment with the Company shall be terminated for any reason, the
outstanding principal and accrued but unpaid interest under this Note shall
become immediately due and payable.
Borrower and all guarantors and endorsers hereof, and their
successors and assigns, hereby waive presentment, demand, diligence, protest
and notice of every kind (except such notices as may be required under the
Pledge Agreement), and agree that they shall remain liable for all amounts
due under this Note notwithstanding any extension of time or change in the
terms of payment of this Note granted by any holder hereof, any change,
alteration or release of any property now or hereafter securing the payment
hereof or any delay or failure by the holder hereof to exercise any rights
under this Note or the Pledge Agreement. Borrower and all guarantors and
endorsers hereof, and their successors and assigns, hereby waive the right to
plead any and all statutes of limitation as a defense to a demand under this
Note to the full extent permitted by law.
This Note shall inure to the benefit of the Company, its successors
and assigns and shall bind the heirs, executors, administrators, successors
and assigns of Borrower. Each reference herein to powers or rights of the
Company shall also be deemed a reference to the same power or right of such
assignees, to the extent of the interest assigned to them.
Notwithstanding any other provision of this Note or the Pledge
Agreement, there shall be no recourse against the Borrower for any liability
to the Company arising in connection with any breach or default under this
Note or the Pledge Agreement except to the extent the same is enforced
against the Collateral (as defined in the Pledge Agreement), and the Company
shall
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look solely to the Collateral in enforcing rights and obligations under and
in connection with the Note and the Pledge Agreement.
In the event that any one or more provisions of this Note shall be
held to be illegal, invalid or otherwise unenforceable, the same shall not
affect any other provision of this Note and the remaining provisions of this
Note shall remain in full force and effect.
This Note shall be governed by and construed in accordance with the
laws of the State of California, without giving effect to the principles
thereof relating to conflicts of law.
IN WITNESS WHEREOF, Xxxxxxxx has caused this Note to be duly
executed as of the day and year first written above.
________________________________________
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PROMISSORY NOTE
DATE OF PLEDGE
BORROWER DATE AMOUNT AGREEMENT
---------- ------ ----------- --------------
Xxxxxx X. Xxxx 8/7/98 $ 94,937.50 8/7/98
Xxxxx X. Xxxxxxxx 8/7/98 $ 94,937.50 8/7/98
Xxxxxx X. Xxxxxx 8/7/98 $108,500.00 8/7/98
Xxxx X. May 10/19/98 $ 86,516.00 10/19/98