Document:

<PAGE>

                     THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

This Third Amendment to Employment Agreement is made and entered into as of
January 11, 2000, by and between PriceSmart, Inc., a Delaware Corporation
("Employer") and Thomas Martin ("Executive").

                                    RECITALS

         A)  On March 31, 1998 an Employment Agreement was made and entered into
             by and between Employer and Executive.

         B)  On March 31, 1999 a First Amendment to Employment Agreement was
             made and entered into by and between Employer and Executive.

         C)  On November 22, 1999, a Second Amendment to Employment Agreement
             was made and entered into by and between Employer and Executive.

         D)  Employer and Executive now desire to amend the Employment
             Agreement, as set forth hereinbelow:

                                    AGREEMENT

         1)  Section 3.1 of the Employment Agreement, which provides:

               3.1 TERM. The term of Executive's employment hereunder shall
               commence on April 1, 1998 and shall continue until March 31,
               2000 unless sooner terminated or extended as hereinafter
               provided (the "Employment Term").

               is hereby amended, effective as of January 11, 2000, to provide
               as follows:

               3.1 TERM. The term of Executive's employment hereunder shall
               commence on April 1, 1998 and shall continue until March 31,
               2001 unless sooner terminated or extended as hereinafter
               provided (the "Employment Term").

         2)  All other terms of the Employment Agreement, as amended, shall
             remain unaltered and fully effective.

<PAGE>

Executed in San Diego, California, as of the date first written above.

EXECUTIVE                                        EMPLOYER
---------                                        --------
                                                PriceSmart, INC.

Thomas Martin                                   By: /s/ Kurt May

/s/ Thomas Martin                               Name: Kurt May

                                                Its: Chief Operating Officer<PAGE>

                     THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

This Third Amendment to Employment Agreement is made and entered into as of
January 11, 2000, by and between PriceSmart, Inc., a Delaware Corporation
("Employer") and K.C. Breen ("Executive").

                                    RECITALS

A)   On March 31, 1998 an Employment Agreement was made and entered into by and
     between Employer and Executive.

B)   On March 31, 1999, a First Amendment to Employment Agreement was made and
     entered into by and between Employer and Executive.

C)   On October 1, 1999, a Second Amendment to Employment Agreement was made and
     entered into by and between Employer and Executive.

D)   Employer and Executive now desire to amend the Employment Agreement, as set
     forth hereinbelow:

                                    AGREEMENT

1.       Section 3.1 of the Agreement which provides:

         3.1 TERM. The term of Executive's employment hereunder shall commence
         on April 1, 1998 and shall continue until March 31, 2000 unless sooner
         terminated or extended as hereinafter provided.

      is hereby amended, effective January 11, 2000, to provide as follows:

         3.1 TERM. The term of Executive's employment hereunder shall commence
         on April 1, 1998 and shall continue until March 31, 2001 unless sooner
         terminated or extended as hereinafter provided.

2.   All other terms of the Employment Agreement, as amended, shall remain
     unaltered and fully effective.

Executed in San Diego, California, as of the date first written above.

<PAGE>

EXECUTIVE                                        EMPLOYER
                                                 PRICESMART, INC.

K.C. Breen                                       By: /s/ Kurt May

/s/ K. C. Breen                                      Name: Kurt May

                                                 Its: Chief Operating Officer<PAGE>

                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                (August 1, 1999)

         THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT") is made
and entered into as of August 1, 1999, among MICHAEL PETROLEUM CORPORATION, a
Texas corporation (the "BORROWER"), the entities listed on the signature pages
hereof as Lenders (collectively, the "LENDERS"), and CHRISTIANIA BANK OG
KREDITKASSE ASA ("CHRISTIANIA") as administrative agent (in such capacity, the
"AGENT").

                               W I T N E S S E T H

         WHEREAS, the Borrower, the Agent and the Lenders entered into that
certain Credit Agreement dated as of May 15, 1998 (the "ORIGINAL CREDIT
AGREEMENT") as modified and/or amended by (i) that certain letter agreement
dated as of June 30, 1998 (the "ALPHA WAIVER LETTER"), (ii) that certain First
Amendment to Credit Agreement dated as of March 29, 1999 (the "FIRST
AMENDMENT"), and (iii) that certain letter agreement dated March 30, 1999 (the
"MARCH 1999 LETTER" and, together with the Original Credit Agreement, the
Alpha Waiver Letter and the First Amendment, the "CREDIT AGREEMENT"); and

         WHEREAS, the Borrower, the Agent and the Lenders wish to amend the
Credit Agreement and provide for certain other matters as set forth herein;

         NOW, THEREFORE, for and in consideration of the mutual promises, the
mutual agreements contained herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
do hereby agree as follows:

         1. DEFINITIONS.

         (a) Capitalized terms used and not defined in this Amendment shall
have the meanings specified in the Credit Agreement.

         (b) The definition of "SECURITY DOCUMENTS" in ARTICLE I of the Credit
Agreement is hereby deleted in its entirety and replaced by the following
definition of such term:

                  SECURITY DOCUMENTS means the Mortgage, the Pledge Agreement,
         the Alpha Mortgage and any other agreement or writing evidencing any
         Encumbrance created in favor of Agent on behalf of Lenders in or on
         the Collateral and any other documents relevant thereto; Security
         Documents also includes the Subsidiary Guarantee and any other
         agreement in writing creating a guarantee in favor of Agent on behalf
         of the Lenders with respect to the Obligations.

<PAGE>

         (c) The following definitions are inserted in alphabetical order in
ARTICLE I of the Credit Agreement:

                  ALPHA means Michael Petroleum Alpha Corporation, a Texas
         corporation and wholly-owned subsidiary of Borrower.

                  ALPHA MORTGAGE means that certain Deed of Trust, Mortgage,
         Assignment of Production, Security Agreement, and Financing Statement
         from Alpha to the Trustee and the Agent filed on July 1, 1999 in
         Clerk's Office of Webb County, Texas, Vol. 789, Pg. 863-A, and in the
         Clerk's Office of Zapata County, Texas, Vol. 618, Pg. 348.

                  ALPHA WAIVER LETTER means that certain letter agreement dated
         July 30, 1998 entered into with respect to this Agreement.

                  ANDERMAN means Anderman Oils Texas, Inc., a former subsidiary
         of Alpha that merged into Alpha on June 3, 1999.

                   MIGUEL means Gas Naturale de Miguel, Inc., a Texas
         corporation and wholly-owned Subsidiary of Borrower.

                  MOHAN means Mohan Petroleum Texas, Inc., a former subsidiary
         of Alpha that merged into Alpha on June 3, 1999.

                  PLEDGE AGREEMENT means that certain Pledge Agreement dated as
         of June 30, 1999 between Borrower and Agent.

                  SECOND AMENDMENT means that certain Second Amendment to
         Credit Agreement dated as of August 1, 1999 amending this Agreement.

                  SUBSIDIARY GUARANTEE means that certain Subsidiary Guarantee
         dated June 30, 1999 among Borrower, Alpha, Miguel and Agent.

          (d) The definition of "PERMITTED INVESTMENTS" in ARTICLE I of the
Credit Agreement is modified by deleting current PARAGRAPHS 9 THROUGH 12
thereunder and replacing them with the following PARAGRAPH 9:

                  "Intercompany loan from Borrower to Alpha to finance the
         acquisition by Alpha of Anderman and Mohan as contemplated by the
         Alpha Waiver Letter."

         (e) The following SECTION 1.6 is added to the Credit Agreement:

                  "AMENDMENTS TO LOAN DOCUMENTS. Except as otherwise expressly
         provided herein, any reference in this Agreement to any Loan Document
         shall mean such document as amended, restated, supplemented or
         otherwise modified from time to time."

                                      2

<PAGE>

         2. INTEREST AND ADVANCES.

         (a) From and after the date of this Amendment, and for purposes of
all outstanding as well as future Advances, the definitions of "ABR" and
"EURODOLLAR RATE" in ARTICLE I of the Credit Agreement will be deleted in
their entirety and replaced by the following definitions of such terms:

                  ABR means the highest of (i) the rate of interest publicly
         announced by Agent as its prime rate in effect at its principal office
         in New York City (the "PRIME RATE") PLUS 1.5%, (ii) the secondary
         market rate for three-month certificates of deposit (adjusted for
         statutory reserve requirements) PLUS 2.5% and (iii) the Federal Funds
         Rate PLUS 2.00%.

                  EURODOLLAR RATE means the rate (adjusted for statutory
         reserve requirements of eurocurrency liabilities) at which eurodollar
         deposits for one, two, three or six (or, if available and acceptable
         to Required Lenders, nine or twelve) months (as selected by Borrower)
         are offered to Agent in the Interbank eurodollar market, PLUS 3.25%.

         (b) Notwithstanding anything to the contrary in the Credit Agreement,
including, without limitation, SECTIONS 2.3 and 2.13 of the Credit Agreement,
from and after the date of this Amendment, Lender's commitment to make
Eurodollar Rate Advances is terminated and Borrower may not receive or
rollover Eurodollar Rate Advances or convert ABR Advances to Eurodollar Rate
Advances. The terms of outstanding Eurodollar Rate Advances remain unchanged
except as provided in PARAGRAPH 2(A) of this Amendment.

         3. CONVERSION OF SENIOR NOTES. If on or before September 15, 1999 a
     binding agreement has not been reached with the holders of the Senior
     Notes to convert such Senior Notes to equity, then a Default will occur on
     September 16, 1999 and will continue thereafter.

         4. GAS PURCHASE AGREEMENT WAIVER. Notwithstanding anything to the
     contrary in the Loan Documents, Borrower shall be permitted to enter into
     that certain Gas Purchase Agreement (the "PURCHASE AGREEMENT") between
     Borrower and Engage Energy US, L.P. ("SELLER"), in the form attached to
     this Amendment as EXHIBIT B with such changes as Agent may, in its sole
     discretion, permit and such changes to the conditions set forth in the
     following proviso as Agent may, in its sole discretion, require; PROVIDED
     THAT, (a) the "Prepayment Amount" Borrower receives from Seller pursuant
     to the Purchase Agreement shall be applied by Borrower (i) first, to
     prepay $900,000 of Principal Debt and (ii) thereafter, for the purposes
     stated in SECTION 2.2 of the Credit Agreement, as amended, and (b)
     Borrower hereby acknowledges that Agent's permission to enter into the
     Purchase Agreement is one-time waiver and hereby agrees that no Company
     shall sell, transfer, assign or grant (including any option for any
     Person to acquire) any of its assets (as that term is defined in
     accordance with GAAP) or take any action in furtherance thereof, except
     for the sale of production or inventory in the ordinary course of such
     Company's business. For the

                                      3

<PAGE>

     avoidance of doubt, the sale of production or inventory in the ordinary
     course of a Company's business means a contract for sale of production or
     inventory with (a) a term for ninety (90) days or less and (b) prices
     established pursuant to applicable market indices.

         5. AMENDMENT TO SECTION 2.2. SECTION 2.2 of the Credit Agreement is
     deleted in its entirety and replaced by the following SECTION 2.2:

                  "PURPOSE OF THE ADVANCES. Proceeds of the Loans shall be used
         to finance working capital needs of Borrower and for its general
         corporate purposes in the ordinary course of business; PROVIDED THAT,
         notwithstanding any other provision of this Agreement to the contrary,
         proceeds of the Loans shall not be used directly or indirectly to pay
         interest on the Senior Notes. Multiple Advances shall be permitted
         under the Loans, PROVIDED THAT all conditions precedent thereto set
         forth in ARTICLE VIII have been satisfied."

         6. AMENDMENT TO SECTION 2.9. SECTION 2.9 of the Credit Agreement is
     deleted in its entirety and replaced by the following SECTION 2.9:

                  "MANDATORY PREPAYMENT. If the Principal Debt (together with
         the LC Exposure) ever exceeds the Borrowing Base or the Total
         Commitment (as either may be reduced or cancelled in accordance with
         this Agreement), Borrower shall forthwith repay such excess in full."

         7. AMENDMENT TO SECTION 2.11(A). The first two sentences of SECTION
     2.11(A) of the Credit Agreement are deleted and replaced by the following
     first three sentences of SECTION 2.11(A):

                  "During the period from and after April 1, 1999, and until
         the Borrowing Base is redetermined in accordance with this SECTION
         2.11, the maximum amount of the Borrowing Base shall be $23,000,000.
         The maximum amount of the Borrowing Base shall be reduced (i) by
         $900,000 upon payment of the sum contemplated by PARAGRAPH 4 of the
         Second Amendment and (ii) on the last day of each calendar month,
         commencing October 31, 1999, and thereafter until the Borrowing Base
         is reduced to zero, by the amount (the "BB REDUCTION AMOUNT") set
         forth on SCHEDULE 2 corresponding with the last day of each calendar
         month."

         8. AMENDMENT TO SECTION 7.12. SECTION 7.12 of the Credit Agreement is
     deleted in its entirety and replaced by the following SECTION 7.12:

                  "DIVIDENDS. Borrower shall not, without the prior consent of
         Agent, declare or pay any cash dividends or distributions to its
         shareholders, or declare or make any capital distribution in cash or
         other property or return of capital, purchase or redeem any of its
         capital stock or other securities, or take any other action which
         would have an equivalent effect to any of the foregoing or issue

                                      4

<PAGE>

         additional capital stock, including stock presently authorized but
         unissued to any Person."

         9. ACKNOWLEDGEMENT AND WAIVER REGARDING NON-COMPLIANCE WITH SECTION
     7.17. The Agent and the Lenders acknowledge that they received timely
     (within the requirements of SECTION 5.4 of the Credit Agreement) notice of
     the failure by Borrower to comply with the Interest Coverage Ratio
     covenant set forth in SECTION 7.17 of the Credit Agreement as of the last
     day of March, 1999 and June, 1999 and the Lenders hereby waive any Default
     arising therefrom.

         10. ACKNOWLEDGEMENT AND WAIVER REGARDING NON-COMPLIANCE WITH SECTION
     7.18. The Agent and the Lenders acknowledge that they received timely
     (within the requirements of SECTION 5.4 of the Credit Agreement) notice of
     the failure by Borrower to comply with the Minimum Current Ratio covenant
     set forth in SECTION 7.18 of the Credit Agreement and the Lenders hereby
     waive any Default arising from such failure until September 1, 1999.

         11. AMENDMENT TO SECTION 9.1(C). SECTION 9.1(C) of the Credit
     Agreement is deleted in its entirety and replaced by the following SECTION
     9.1(C):

                  "any Company or any other obligor shall fail to comply with:

                  (i) any covenant set forth in SECTIONS 6.2, 7.1, 7.2, 7.4,
         7.5, 7.7, 7.8, 7.9, 7.12, 7.15, 7.17, 7.18 or 7.19, or

                  (ii) any item, condition, or covenant of or in any Loan
         Document other than those described in SECTION 9.1(a), SECTION 9.1(B)
         or SUBSECTION 9.1(C)(I), where such failure is not remedied by such
         Company or other obligor within 30 days after such Company or other
         obligor has knowledge thereof or receives written notice from Agent;
         PROVIDED THAT, such 30 day period shall be reduced to zero with
         respect to any breach which is not susceptible to cure or with respect
         to which such Company or obligor does not diligently pursue a cure."

         12. AMENDMENT TO SECTION 11.3. The first sentence of SECTION 11.3 of
     the Credit Agreement is deleted and replaced by the following first
     sentence of SECTION 11.3:

                  "Subject to the provisions of this section, any Lender may at
         any time, in the ordinary course of its commercial banking business,
         (i) without the consent of Borrower or Agent, assign all or any part
         of its Rights and obligations under the Loan Documents to any of its
         Affiliates which has sufficient resources with which to honor its
         obligations under this Agreement (each a "PURCHASER"), (ii) if no
         Default exists, upon the prior written consent of Borrower (which will
         not be unreasonably withheld) and Agent, assign to any other Person
         (each of which is also a "PURCHASER") a proportionate part (not less
         than $7,500,000 and an integral multiple of $500,000) of all or any
         part of its Rights and obligations under the Loan Documents and (iii)
         if a Default exists (including any Default that has been

                                      5

<PAGE>

         waived), assign to any other Person (each of which is also a
         "PURCHASER") a proportionate part (not less than $7,500,000 and an
         integral multiple of $500,000) of all or any part of its Rights and
         obligations under the Loan Documents; PROVIDED THAT, prior to
         assignment under SUBSECTION (III), Lender shall give notice to
         Borrower, Agent and other Lenders of such assignment (though failure
         to give such notice shall not invalidate the assignment).

         13. AMENDMENT TO SCHEDULE 2. SCHEDULE 2 of the Credit Agreement is
     deleted in its entirety and replaced by the SCHEDULE 2 attached to this
     Amendment as EXHIBIT A.

         14. ACKNOWLEDGEMENT WITH RESPECT TO BORROWING BASE AND ADDITIONAL
     ADVANCES. BORROWER ACKNOWLEDGES THAT THERE HAS BEEN NO AGREEMENT BY THE
     LENDERS TO INCREASE THE BORROWING BASE AND THAT THE LENDERS HAVE NO
     OBLIGATION (AND HAVE INDICATED THAT THEY DO NOT INTEND) TO ADVANCE
     ADDITIONAL FUNDS UNDER THE CREDIT AGREEMENT.

         15. WAIVER OF COLLATERAL. Lenders waive, for the time being, the
     delivery by Miguel of collateral to secure its obligations under the
     Subsidiary Guarantee; PROVIDED THAT, Lenders may elect at any time to
     require delivery of such collateral.

         16. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. The obligations of the
     Lenders herein and the effectiveness of the other provisions of this
     Amendment shall be subject to the fulfillment of the following conditions
     precedent in a manner satisfactory to the Agent:

         (a) The Agent shall have received all the following (each of the
following documents in form and substance satisfactory to the Agent):

                  (i) A copy of the resolutions of the Board of Directors of
         the Borrower, dated on the date hereof, certified by the Secretary of
         Assistant Secretary of the Borrower, authorizing the execution,
         delivery and performance by the Borrower of this Amendment and any
         other document to be delivered pursuant hereto (collectively, the
         "AMENDMENT DOCUMENTS");

                  (ii) A certificate of the Secretary or an Assistant Secretary
         of the Borrower, dated on the date hereof, as to the incumbency and
         signature of the officers of the Borrower authorized to sign the
         Amendment Documents, together with evidence of the incumbency of such
         Secretary or Assistant Secretary;

                  (iii) All consents, approvals, waivers, authorizations and
         orders of any courts or governmental authorities (including, without
         limitation, federal and state banking authorities) or third parties
         required in connection with the execution, delivery and performance by
         the Borrower of the Amendment Documents and the performance of the
         transactions contemplated hereby; and

                  (iv) All other documents the Agent may reasonably request
         with respect to any matter relevant to the Amendment Documents or the
         transactions contemplated hereby;

                                      6

<PAGE>

         (b) The representations and warranties contained in the Credit
Agreement, as amended hereby, shall be true and correct in all material
respects on and as of the date hereof and on and as of the date of actual
execution and delivery hereof by the Borrower; and

         (c) All corporate and legal proceedings and all documents required to
be completed and executed by the provisions of, and all instruments to be
executed in connection with the transactions contemplated by the Amendment
Documents and any related agreements shall be satisfactory in form and
substance to the Agent, and the Agent shall have received all information and
copies of all documents, including records of corporate proceedings, required
by the Amendment Documents and any related agreements to be executed or which
the Agent may reasonably have requested in connection therewith, such
documents, where appropriate, to be certified by proper corporate or
governmental authorities.

         17. DEFAULTS AND POTENTIAL DEFAULTS. The Borrower represents and
     warrants that after giving effect to this Amendment no Default or
     Potential Default exists under the Credit Agreement; PROVIDED THAT,
     Borrower acknowledges the possibility that it might continue to be in
     Default with respect to the Minimum Current Ratio covenant set forth in
     SECTION 7.18 of the Credit Agreement after September 1, 1999.

         18. EXPENSES. The Borrower shall pay all out-of-pocket expenses of the
     Agent arising in connection with the Loans and the preparation, execution,
     delivery and administration of this Amendment, including, but not limited
     to, all reasonable legal fees and expenses incurred by the Agent.

                                      7

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers, to be effective as of the date first
above written.

                                      MICHAEL PETROLEUM CORPORATION,
                                      as the Borrower

                                      By:    /S/ MICHAEL G. FARMAR
                                         -------------------------------
                                      Name:  MICHAEL G. FARMAR
                                           -----------------------------
                                      Title: PRESIDENT
                                            ----------------------------

                                      CHRISTIANIA BANK OG KREDITKASSE ASA,
                                      as the Agent and the sole Lender

                                      By:    /S/ PETER DODGE
                                         -------------------------------
                                      Name:  PETER DODGE
                                           -----------------------------
                                      Title: SENIOR VICE PRESIDENT
                                            ----------------------------

                                      By:    /S/ WILLIAM S. PHILLIPS
                                         -------------------------------
                                      Name:  WILLIAM S. PHILLIPS
                                           -----------------------------
                                      Title: FIRST VICE PRESIDENT
                                            ----------------------------

<PAGE>

                                    EXHIBIT A

                            SEE ATTACHED SCHEDULE 2.

                                   Exhibit A-1

<PAGE>

                                   SCHEDULE 2

                        BORROWING BASE REDUCTION SCHEDULE

<TABLE>
<CAPTION>

     DATE                         AMOUNT OF REDUCTION             NEW BORROWING BASE*
     ----                         -------------------             -------------------
<S>                               <C>                             <C>
October 31, 1999                      $1,500,000                     $20,600,000
November 30, 1999                     $1,500,000                     $19,100,000
December 31, 1999                     $1,500,000                     $17,600,000
January 31, 2000                      $1,500,000                     $16,100,000
February 29, 2000                     $1,500,000                     $14,600,000
March 31, 2000                        $1,500,000                     $13,100,000
April 30, 2000                        $1,500,000                     $11,600,000
May 31, 2000                          $1,500,000                     $10,100,000
June 30, 2000                         $1,500,000                      $8,600,000
July 31, 2000                         $1,500,000                      $7,100,000
August 31, 2000                       $1,500,000                      $5,600,000
September 30, 2000                    $1,500,000                      $4,100,000
October 31, 2000                      $1,500,000                      $2,600,000
November 30, 2000                     $1,500,000                      $1,100,000
December 31, 2000                     $1,100,000                              $0

</TABLE>

* The figures in this column assume that the Borrowing Base has been reduced
by $900,000 pursuant to SECTION 2.11(a)(i) of this Agreement.

                                     Schedule 2 - 1

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