Exihibit 10.3

 

EXECUTION COPY

 

--------------------------------------------------------------------------------

INVESTMENT NUMBER 10296

 

Amended and Restated C Loan Agreement

 

among

 

PRICESMART, INC.,

 

PSMT CARIBE, INC.,

 

PSMT TRINIDAD/TOBAGO LIMITED,

 

and

 

INTERNATIONAL FINANCE CORPORATION

 

Dated as of January 26, 2001

As Amended and Restated on September 15, 2004

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

Article or
Section

--------------------------------------------------------------------------------

 

Item

--------------------------------------------------------------------------------

  Page No.

--------------------------------------------------------------------------------

ARTICLE I

  2

Definitions

  2    

Section 1.01. Definitions

  2    

Section 1.02. Interpretation

  2

ARTICLE II

  2

Agreement for the C Loan

  2    

Section 2.01. Amount

  2    

Section 2.02. Interest

  2    

Section 2.03. Fees

  3    

Section 2.04. Disbursement

  3    

Section 2.05. Repayment

  4    

Section 2.06. Prepayment

  4    

Section 2.07. Late Payment Charge

  5    

Section 2.08. General

  5

ARTICLE III

  5

Miscellaneous

  5    

Section 3.01. Duration

  5    

Section 3.02. Counterparts

  5

--------------------------------------------------------------------------------

C LOAN AGREEMENT

 

AGREEMENT, dated as of January 26, 2001, as AMENDED AND RESTATED on September
15, 2004, among:

 

  (1) PRICESMART INC., a company organized and existing under the laws of the
State of Delaware, U.S.A. (“PriceSmart”);

 

  (2) PSMT CARIBE, INC., a company organized and existing under the laws of the
Territory of the British Virgin Islands (“Caribe”);

 

  (3) PSMT TRINIDAD/TOBAGO LIMITED, a company organized and existing under the
laws of the Republic of Trinidad and Tobago (“PSMT Trinidad and PriceSmart,
Caribe and PSMT Trinidad are collectively referred to herein as the
“Co-Borrowers”); and

 

  (4) INTERNATIONAL FINANCE CORPORATION, an international organization
established by Articles of Agreement among its member countries (“IFC”).

 

WHEREAS:

 

(A) By a Loan Agreement dated January 26, 2001, among the Co-Borrowers and IFC,
as amended (the “Loan Agreement”), IFC has agreed, subject to the terms and
conditions thereof, to lend to the Co-Borrowers the sum of up to twenty-two
million Dollars ($22,000,000) (the “A Loan”). The Co-Borrowers hereby
acknowledge that the A Loan has been fully disbursed.

 

(B) By a C Loan Agreement dated January 26, 2001, among the Co-Borrowers and
IFC, as amended (the “Original C Loan Agreement”), IFC has agreed, subject to
the terms and conditions thereof, to lend to the Co-Borrowers the sum of up to
ten million Dollars ($10,000,000) (the “C Loan”). The Co-Borrowers hereby
acknowledge that the C Loan has been fully disbursed.

 

(C) The Co-Borrowers and IFC desire to amend and restate the Original C Loan
Agreement on the terms and conditions of this Agreement.

 

NOW THEREFORE, the parties hereto agree as follows:

--------------------------------------------------------------------------------

ARTICLE I

 

Definitions

 

Section 1.01. Definitions. Wherever used in this Agreement, unless the context
shall otherwise require, terms defined in the Loan Agreement shall have the
respective meanings therein set forth.

 

Section 1.02. Interpretation. (a) In this Agreement, unless the context
otherwise requires, words denoting the singular include the plural and vice
versa, words denoting persons include corporations and partnerships, and
references to a specified Article or Section shall be construed as a reference
to that specified Article or Section of this Agreement.

 

(b) In each part of this Agreement, the headings and the Index are inserted for
convenience of reference only and shall not be used to define, interpret or
limit any of the provisions of this Agreement.

 

ARTICLE II

 

Agreement for the C Loan

 

Section 2.01. Amount. Subject to the terms and conditions of this Agreement, IFC
agrees to lend to the Co-Borrowers and the Co-Borrowers agree jointly and
severally to borrow from IFC the C Loan, that is, the amount of up to ten
million Dollars ($10,000,000).

 

Section 2.02. Interest. (a) The C Loan shall accrue interest (the “C Loan
Interest”) in respect of each Interest Period at a rate per annum which shall be
the sum of four per cent (4.0%) per annum and LIBOR, on the Interest
Determination Date for such Interest Period for six months (or, in the case of
the first Interest Period, for one month, two months, three months or six
months, whichever period is closest to the duration of the relevant Interest
Period or, if two periods are equally close to the duration of the relevant
Interest Period, the longer one) (the “C Loan Interest Rate”).

 

- 2 -

--------------------------------------------------------------------------------

(b) The C Loan Interest shall be determined on each Interest Determination Date
and shall be paid on each Interest Payment Date as provided by the terms of the
Loan Agreement, mutatis mutandis.

 

Section 2.03. Fees. (a) The Co-Borrowers shall pay to IFC in Dollars a front-end
fee of one hundred thousand Dollars ($100,000) in respect of the C Loan to be
paid within thirty (30) days after the date of this Agreement (but, in any
event, prior to the disbursement of the C Loan);

 

(b) The Co-Borrowers shall also pay to IFC a commitment fee of one-half of one
per cent ( 1/2%) per annum on that part of the C Loan which from time to time
has not been disbursed or cancelled. The commitment fee shall:

 

  (i) begin to accrue on the date of this Agreement;

 

  (ii) be pro rated on the basis of a 360-day year for the actual number of days
elapsed; and

 

  (iii) be payable semi-annually, in arrears, on the Interest Payment Dates in
each year, the first such payment to be due on March 15, 2001.

 

Section 2.04. Disbursement. (a) Subject to Section 5.01 (a)(i), (b), (c), (d)(i)
(other than with respect to the OPIC Loan) through (d)(v), (e), (f) (other than
legal opinions relating to the movable and immovable assets in jurisdictions
other than El Salvador and the Dominican Republic), (g), (h), (i), (j), (l),
(m), (n) and (o) of the Loan Agreement, the disbursement of the full amount of
the C Loan shall be made in one lump sum prior to or simultaneously with the
first disbursement of the A Loan, but in no event later than July 26, 2001, at
PriceSmart’s bank account in New York, New York for further credit to the
Co-Borrowers’ respective accounts at a bank in the Countries, or any other place
acceptable to IFC, or to the credit of the Co-Borrowers’ existing creditors, all
as specified by the Co-Borrowers in the C Loan Disbursement request.

 

(b) Notwithstanding any provision in this Agreement, each of PSMT Caribe and
PSMT Trinidad irrevocably appoints and designates PriceSmart as its agent for
the purpose of receiving any notice or request and further authorizes PriceSmart
to make the request provided in Section 2.04(a) or any other request permitted
to be made by the Co-Borrowers under this Agreement, to receive all
disbursements to be made hereunder, to sign the receipts provided for in Section
2.04(a), and to take any other action required or permitted to be taken on its
behalf under this Agreement.

 

- 3 -

--------------------------------------------------------------------------------

Section 2.05. Repayment. (a) The Co-Borrowers shall repay the C Loan on the
following dates and in the following amounts:

 

Date Payment Due

--------------------------------------------------------------------------------

   Principal Amount Due

--------------------------------------------------------------------------------

March 15, 2005

   $ 833,333

September 15, 2005

     833,333

March 15, 2006

     833,333

September 15, 2006

     833,333

March 15, 2007

     833,333

September 15, 2007

     833,333

March 15, 2008

     833,333

September 15, 2008

     833,333

March 15, 2009

     833,333

September 15, 2009

     833,333

March 15, 2010

     833,333

September 15, 2010

     833,337      $ 10,000,000     

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

(b) The dates for repayment of principal of the A Loan are intended to coincide
with the Interest Payment Dates.

 

(c) Upon each Disbursement, the amount disbursed shall be allocated for
repayment on each of the respective dates for repayment of principal set out in
the table in Section 2.05(a) in amounts which are pro rata to the amounts of the
respective installments shown opposite those dates in that table (with IFC
adjusting those allocations as necessary so as to achieve whole numbers in each
case).

 

Section 2.06. Prepayment. (a) The C Loan may be prepaid on any Interest Payment
Date on not less than forty-five (45) days’ prior notice to IFC, subject to the
following terms and conditions:

 

  (i) for a partial prepayment, such prepayment is in an amount not less than
three million Dollars ($3,000,000);

 

  (ii) the Co-Borrowers simultaneously pay all accrued interest on the amount of
the C Loan to be prepaid together with all other amounts then payable under this
Agreement; and

 

- 4 -

--------------------------------------------------------------------------------

  (iii) if IFC so requires, the Co-Borrowers deliver to IFC, prior to the date
of prepayment, evidence satisfactory to IFC that all governmental approvals
necessary in respect of the prepayment have been obtained.

 

Section 2.07. Late Payment Charge. If the Co-Borrowers fail to make any payment
under this Agreement when due, the Co-Borrowers shall pay to IFC a late payment
charge determined in accordance with Section 3.04 of the Loan Agreement, mutatis
mutandis, at the rates of (i) two per cent (2%) above the relevant C Loan
Interest Rate, in effect from time to time in respect of any amount overdue
(other than principal) relating to the C Loan, and (ii) two per cent (2%) on any
overdue amount of principal of the C Loan or, in each case, such higher rate
(not to exceed five per cent (5%) above the relevant C Loan Interest Rate in
effect from time to time) of default interest as is charged to the Co-Borrowers
by other lenders.

 

Section 2.08. General. (a) Except as otherwise expressly provided in this
Agreement, all the provisions of Sections 3.08, 3.09, 3.10, 3.11(a)(ii) and (b),
3.14 and 3.15 of the Loan Agreement and Articles IV, V (to the extent set forth
in Section 2.04 hereof), VI, VII and VIII of the Loan Agreement shall apply
mutatis mutandis to the C Loan as if each reference therein to the A Loan and
Loan Agreement is a reference as well to the C Loan and this Agreement,
respectively, unless the context otherwise requires; accordingly, such
provisions are incorporated herein by reference and this Agreement shall be
construed and interpreted accordingly.

 

(b) For the avoidance of doubt, any Event of Default or Potential Event of
Default in respect of the A Loan shall constitute an Event of Default or
Potential Event of Default in respect of the C Loan.

 

ARTICLE III

 

Miscellaneous

 

Section 3.01. Duration. This Agreement shall continue in force until all monies
payable hereunder shall have been fully paid in accordance with the provisions
hereof.

 

Section 3.02. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together

 

- 5 -

--------------------------------------------------------------------------------

shall constitute one and the same Agreement. In seeking proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart signed by each of the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.

 

PRICESMART INC. By:  

/s/ John Heffner

--------------------------------------------------------------------------------

Name:   John Heffner Title:   Executive V.P./CFO PSMT CARIBE, INC. By:  

/s/ Atul Patel

--------------------------------------------------------------------------------

Name:   Atul Patel Title:   Director/Treasurer PSMT TRINIDAD/TOBAGO LIMITED By:
 

/s/ Ernesto Grijalva

--------------------------------------------------------------------------------

Name:   Ernesto Grijalva Title:   Director/Secretary INTERNATIONAL FINANCE
CORPORATION By:  

/s/ Stanley Greig

--------------------------------------------------------------------------------

Name:  

Stanley Greig

Title:  

Manager, Latin America and

Caribbean Credit and Portfolio

Division, Global Manufacturing

Services Department

 

- 6 -