Independent Contractor Agreement



 EXHIBIT 10.2 
  
 INDEPENDENT CONTRACTOR AGREEMENT 
  
 This Independent Contractor Agreement (this “Agreement”) is effective as of September 1, 2003, by and between
PRICESMART, INC., a Delaware corporation (“Price”), and Allan Youngberg, an individual (“Contractor”), with respect to the following facts: 
  

Recitals 
  
 A. Price has established and operates membership warehouse clubs in the Caribbean, Central America, Mexico and Asia. 
  
 B. Contractor has been the Chief Financial Officer of Price from July, 1999
through August, 2003. 
  
 C. Price desires to have
Contractor’s assistance in connection with financial matters related to Price’s business, and Contractor desires to provide such assistance to Price. 
  

D. The Parties desire to set forth their relationship in accordance with the terms of this Agreement. 
  
 Now, therefore, in consideration of the representations set forth above, and
in this Agreement, the parties hereto covenant and agree as follows: 
  
 Agreement 
  
 1. Duties:
Price hereby engages Contractor as its nonexclusive independent contractor to assist Price during the term of this Agreement in connection with financial-related matters pertaining to the operation of Price’s business (including assisting
Price’s new Chief Financial Officer in the assumption of his or her duties, assuming that individual is retained by Price prior to the expiration of the term of this Agreement); provided, however, that at no time shall Youngberg make or delete
any entries on the books and records of Price. 
  
 Youngberg shall
perform such duties during the term of this Agreement on a full time basis. Youngberg shall cease such work at the discretion of Price, in which event Youngberg shall nonetheless be entitled to full payment under this Agreement in accordance with
Part 4, below, and in which event Youngberg shall be available for consultation (not to exceed ten (10) hours per week, at mutually convenient times) during the remaining period of the term. 
  
 2. No Control. Price shall have no right, except to the extent
required by law, to direct or limit Contractor’s activities as to hours, production, prospects, reports, sales, meetings, schedules, time-off, training, education or other similar activities. At Contractor’s request and at
Contractor’s sole discretion, Price agrees to furnish such advice, information and full cooperation as Contractor shall require. 
  

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 3. Standard of Performance. In the accomplishment of the performance of such duties and
responsibilities as are assigned to contractor under the terms of this Agreement, Contractor shall at all times conduct him/herself in a professional manner and shall conform to those standards of ethical conduct as are generally expected from those
performing such services in the business community. At all times during the term of this Agreement as defined below, the Contractor shall use personal best efforts to fulfill his duties. 
  
 4. Compensation. In consideration for the services to be performed by Contractor, Contractor will be paid the
total sum of $66,000, payable as follows: $22,000 per month, on September 30, 2003, October 31, 2003 and November 28, 2003. 
  
 5. Payment of Expenses. Contractor shall be solely responsible for the payment of all expenses associated with his activities under the
terms of this Agreement and Price shall not pay any sums to Contractor except for the payments set forth in paragraph 4. Notwithstanding the foregoing, to the extent Contractor is required to travel to fulfill Contractor’s duties hereunder,
Price will reimburse Contractor for all reasonable travel expenses, provided, however, that all such expenses are: (i) approved in advance; and (ii) subsequently confirmed by invoices and receipts delivered by Contractor to Price. 
  
 6. No Provision for Taxes. Price will not withhold any sums for
any federal, state, or local taxing authorities (hereinafter collectively “Taxing Authorities”) from fees paid by Price to Contractor pursuant to this Agreement. Contractor is responsible for paying when due all income taxes, including
estimated taxes, incurred as a result of the compensation paid by Price to Contractor for services under this Agreement. The parties acknowledge and agree that Contractor will not be treated as an employee with respect to the services provided
hereunder for federal and state tax purposes. 
  
 7. Tax
Indemnity. On request, Contractor will provide Price with proof of timely payment of all federal and state income taxes, including estimated taxes to all Taxing Authorities for fees paid under this Agreement. Contractor agrees to indemnify
Price and hold it harmless from any and all claims which may be asserted against Price by a Taxing Authority because Price has not withheld sums from Contractor. As to FICA only, such indemnity shall be up to an amount equal to Contractor’s
share of FICA and for the full amount of all sums which Price is or may be required to pay. Such obligation to reimburse shall exist regardless of whether Price is required to pay the aforementioned withholding taxes because a Taxing Authority
contends that Contractor is legally the employee of Price and/or whether Price is required to pay such taxes because of non-payment or underpayment of such taxes by Contractor. Further, Price shall have no duty to oppose any effort to pay
appropriate sums, and any such opposition by Price or claim for refund by Price shall be solely at the discretion of Price. 
  
 8. Term. The Term of this Agreement commences on September 1, 2003 and concludes on November 28, 2003. This Agreement will terminate
automatically on the occurrence of any of the following events: (1) Bankruptcy or insolvency of either party; (2) Death of Contractor; (3) Contractor’s failure to provide the services hereunder during the term of this Agreement (unless such
services are ceased at the direction of Price); (4) Contractor’s violation of the United States Foreign Corrupt Practices Act, 15 U.S.C. Section 78dd- 
  

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 1(“FCPA”); or (5) Dissolution of Price. Upon termination of this Agreement, Price’s obligation to pay any
compensation, except for services or expenses already accrued or incurred, shall forthwith cease and terminate. 
  
 9. Non-Disclosure. Contractor acknowledges that Price holds as confidential, and Contractor may have access to during the Term of this
Agreement, certain information and knowledge respecting the intimate and confidential affairs of Price in the various phases of its business, including, but not limited to, trade secrets, data and know-how, improvements, inventions, techniques,
marketing plans, strategies, forecasts, pricing information and customer lists. During the Term of this Agreement and thereafter, Contractor shall not directly or indirectly disclose such information to any person or use any such information, except
as required in the course of the Term of this Agreement. All records, files, keys, documents and the like relating to Price’s business, which Contractor shall use, or come into contact with, shall be and remain Price’s sole property, and
shall be returned to Price upon the termination of this Agreement. 
  
 The parties hereby stipulate and agree that the foregoing matters are important, material and confidential and gravely affect the effective and successful conduct of the business of Price, and its goodwill, and that any breach of the terms
of this paragraph is a material breach of this Agreement. 
  
 This
paragraph 9 shall survive the termination of this Agreement. Price shall have the right, in addition to any other remedies available, to injunctive relief in the event Contractor breaches any of the provisions of this paragraph 9, it being
acknowledged that other available remedies are inadequate. 
  
 10.
Price Property. Contractor agrees that, upon termination of this Agreement for any reason or cause whatsoever, Contractor will immediately deliver and return to Price all of Price’ property including, without limitation, all lists
of customers, vendors, samples, price lists, forms, handbooks, printouts, surveys, and other materials and property belonging to Price, whether issued to Contractor, loaned to customers or prospects by Price or otherwise. 
  
 11. Indemnification. In addition to the indemnification in part
7 above, Contractor shall indemnify and hold Price harmless from and against any and all loss, damage, liability, costs, and expenses, including reasonable attorneys’ fees, from any cause whatsoever, incurred by reason of, or arising out of or
in connection with: (a) Contractor’s failure to perform any obligation hereunder; (b) any breach of this Agreement by Contractor and/or any agent or employee of Contractor; (c) any act or omission of Contractor or any agent or employee of
Contractor; or (d) Contractors’ violation of the FCPA. 
  
 12. Independent Contractor. The parties to this Agreement desire to create a relationship of independent contractor, and in no way intend to create a relationship of employer and employee and in conformity therewith,
Contractor retains sole and absolute discretion and judgment in the manner and means of carrying out Contractor’s activities hereunder. In the performance of the respective obligations under this Agreement, the parties and their officers,
employees and agents are at all times acting and performing as independent contractors. Nothing in this Agreement shall be construed to make or render either party or 
  

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 any of its officers, employees or agents, an agent, servant or employee of or joint venture of or with the other.

  
 13. No Apparent Authority. Contractor neither
shall have nor shall represent himself to any party as having any right, power or authority to create any obligation or contract, express or implied, on behalf of, in the name of or binding upon Price in any manner and for any purpose whatsoever.

  
 14. Compliance with Laws and Regulations.
Contractor covenants and agrees that he will: (1) not make, offer or agree to offer anything of value to any government official, political party or candidate for government office in violation of the FCPA; and (2) comply with all laws and
regulations of the United States, including, without limitation, the FCPA. Contractor represents and warrants that he is familiar with the FCPA and its purposes and that there is and will be no employment of the Contractor by any government or
political officials. 
  
 15. Miscellaneous
Provisions 
  
 15.1 Right of Offset. Price
shall have the right to set off against all compensation payable to Contractor under this Agreement, the amount of any damages, liabilities, losses, costs and/or expenses suffered or incurred by Price by reason of any breach or default by Contractor
and/or the agents or employees of Contractor in the performance of any of Contractor’s duties or obligations under this Agreement. 
  
 15.2 Governing Law; Arbitration. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
All disputes, controversies or claims between Contractor and Price arising, directly or indirectly, out of or relating to this Agreement shall be resolved by binding arbitration conducted in accordance with the rules of the American Arbitration
Association, as then in effect, except as provided herein. Unless the parties otherwise agree, any arbitration shall be held in San Diego County, California. The parties shall be entitled to discovery sufficient to adequately arbitrate the claims
and defenses, including access to essential documents and witnesses, as determined by the arbitrator. Costs and fees of the arbitrator shall be borne by the non-prevailing party. The award of the arbitrator, which may include equitable relief, shall
be final, and judgment may be entered upon it in accordance with the applicable law in any court having jurisdiction thereof. Any demand for arbitration shall be in writing and must be made within a reasonable time after the claim, dispute or other
matter in question has arisen. In no event shall the demand for arbitration be made after the date that institution of legal or equitable proceedings based upon such claim dispute or other matter would be barred by the applicable statue of
limitations. 
  
 15.3 Cost and Fees. In the event
that any of the parties hereto institutes any action, arbitration, suit or proceeding to enforce the provisions of this Agreement, or for breach thereof, or to declare the right of the parties with respect thereto, the prevailing party shall be
entitled to recover, in addition to damages, injunctive or other relief, reasonable costs and expenses including, without limitation, costs and reasonable attorney’s fees incurred in the furtherance of such action, arbitration, suit or
proceeding. 
  

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 15.4 Amendment and Modification. No term or provision of this Agreement may be amended or
modified in any respect except in writing signed by the parties. 
  
 15.5 Notices. All notices or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given when delivered in person or when postmarked, if mailed by certified or registered
mail, return receipt requested, postage prepaid, and addressed as follows: 
  

	 If to Contractor:
	 	 
	 	 	Allan Youngberg
	 	 	  

  

	 If to Price:
	 	 PriceSmart, Inc.
 4649 Morena
Blvd.
 San Diego, CA. 92117
 Attn: Robert M. Gans
 Executive Vice President/General Counsel


  
 or such other address as may be
specified by a party hereto pursuant to notice given to the other parties in accordance with the provisions of this Section. 
  
 15.6 Binding Effect. This Agreement will be binding upon and inure to the benefit of Price, Contractor, and their respective successors,
assigns, executors, legal administrators, heirs, devisees, and beneficiaries. 
  
 15.7 Consents and Waiver. No delay by any party in exercising any right under, or in taking any action to enforce any right under, this Agreement will operate as a waiver of any such right or in any
manner affect the rights of any party thereunder. No consent by any party under this Agreement or waiver by any party of any representation, warranty, or other term or condition of this Agreement will be effective unless made in writing. Any such
waiver will not be construed as a waiver of any other representation, warranty, or other term and condition of this Agreement. Failure by any party to insist upon strict conformance with or strict conformance of, any representation, warranty, or
other term or condition in this Agreement in any one or more instances will not be a waiver by any party of his right to insist and enforce thereafter strict conformance with, and strict conformance of, (i) such representation, warranty, or other
term or condition or (ii) any other representation, warranty or other term or condition in this Agreement. 
  
 15.8 Savings Provision. If any term or provision of this Agreement, or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the reminder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 
  

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 15.9 Cumulative Rights and Remedies. No right or remedy herein conferred upon the parties
hereto is intended to be exclusive of any other right or remedy contained in this Agreement or in any instrument or document delivered in connection with or pursuant to this Agreement, and every such right or remedy shall be cumulative and shall be
in addition to every other such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by stature, or otherwise. 
  
 15.10 Entire Agreement. This Agreement contains the entire agreement between the parties and supersedes any prior written or oral agreement
between said parties concerning the subject matter contained herein. There are no representations, agreements, arrangements or understandings, oral or written, between or among the parties relating to the subject matter contained in this Agreement,
which are not fully expressed herein. 
  
 15.11
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but such counterparts, when taken together, shall constitute but one (1) agreement. 
  
 15.12 Gender. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity or entities may require. 
  
 15.13 Caption Headings. Captions at the beginning of each numbered paragraph of this Agreement are solely for the convenience of the parties
and shall not be deemed to be an integral part of the context of this Agreement. 
  
 15.14 Negotiated Transaction. The provisions of this Agreement were negotiated by both of the parties hereto, and said Agreement shall be deemed to have been drafted by both parties. 
  
 15.15 Further Assurances. Each party hereby agrees to promptly
sign any additional instruments or documents which are necessary or appropriate to carry out the purpose of this Agreement. 
  
 15.16 Assignment. This Agreement and the respective rights and obligations hereunder may not be assigned by Contractor. 
  
 15. 17 Non-Competition. Contractor agrees that he will not, at
any time during the term of this Agreement, directly or indirectly, whether or not for compensation, engage in, enter into any agreement to engage in, or have any interest in any person, firm, corporation, or business (whether as an employee,
officer, director, agent, shareholder, security holder, creditor, partner, consultant, holder of any beneficial interest or otherwise) that operates a membership warehouse club, hypermarket or discount store in those markets which are served by
Price’s membership clubs. 
  
 Further, during the term
of this Agreement, Contractor agrees that he shall not solicit nor induce, or attempt to solicit or induce, any other Price employee to cease his or her employment with Price. 
  

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 Contractor acknowledges and agrees that this paragraph 15.17 is an essential term of the Agreement
and that Price would not have entered into this Agreement but for its inclusion. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. 
  

	PRICE:	 	CONTRACTOR:
		
	 PRICESMART, INC., a Delaware corporation
	 	 /s/ ALLAN C. YOUNGBERG


  
  
 By: /s/ ROBERT M. GANS 
  
 Title: Executive Vice President and General Counsel 
  

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