Document:

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                                CREDIT AGREEMENT

          This CREDIT AGREEMENT (the "AGREEMENT'), dated as of February 25, 2000
is executed among Inmobiliaria PriceSmart Honduras, Sociedad Anonima de Capital
Variable, or simply Inmobiliaria Pricesmart, S.A. de C.V., a company organized
and existing under the laws of Honduras (the "BORROWER"), PriceSmart Honduras,
Sociedad Anonima de Capital Variable, or simply PriceSmart Honduras, S. A. De C.
V., a company organized under the laws of Honduras, (the "GUARANTOR"), PSMT
Caribe Inc., a corporation organized according to the laws of the British Virgin
Islands, (the "GUARANTOR") PriceSmart, Inc., a corporation organized according
to the laws of the State of Delaware, United States of America, (the "'GUARANTOR
AND ASSIGNOR), PSC, S.A., a company organized under the laws of the Republic of
Panama (the "GUARANTOR), Ventures Services Inc., a corporation organized
according to the laws of the State of Delaware, United States of America (the
"ASSIGNOR" and Citibank, N.A. (I.B.F.), an international banking facility
organized in accordance with the laws of the State of New York, United States of
America (the "Lender").

PRELIMINARY STATEMENTS:

          1.- INMOBILIARIA PRICESMART HONDURAS, SOCIEDAD ANONIMA DE CAPITAL
VARIABLE, or simply INMOBILLARIA PRICESMART, S. A. DE C. V. (the "Borrower) has
applied to the LENDER, for a medium term nonrevolving loan of an amount of THREE
MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS (USS3,500,000.00).

          2.- In order to provide funds to finance a completed PriceSmart
warehouse containing approximately five thousand square meters (5,000 M2) in San
Pedro Sula, Honduras, the BORROWER has requested that the LENDER enter into this
Agreement.

          3, PSMT Caribe, Inc. has complied with a capital injection of at least
THREE MILLION SEVEN HUNDRED THOUSAND Dollars (US$3,750,000.00) into the
Borrower.

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1,01. CERTAIN DEFINED TERMS. Certain capitalized terms are
used in this Agreement with the specific meanings defined below in this Section
1.01. Except as otherwise explicitly specified to the contrary or unless the
context clearly requires otherwise, (a) the capitalized term "Section" refers to
sections of this Agreement;

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(b) the capitalized term "Exhibit" refers to exhibits to this Agreement; (c)
references to a - particular Section include all subsections thereof; (d) the
word "including" shall be construed as "including without limitation"; (e)
references to a particular Person include such Person's successors and assigns
to the extent permitted by this Agreement and the other Loan Documents; and (f)
the use of the plural includes the singular and of the masculine includes the
feminine, and vice-versa. References to "the date hereof' mean the date fast set
forth above.

          "Borrower" has the meaning set forth in the preliminary statements to
     this Agreement.

          "BUSINESS DAY" means any day other than Saturday, Sunday or a day on
     which banks in New York, New York or San Pedro Sula, Honduras are
     authorized or required by law or other governmental action to close.

          "CAPITAL EXPENDITURES" means any payments which am made by a Person
     for, or in connection with, the rental, lease, purchase, construction or
     use of any real or personal property the value or cost of which, under
     Honduras GAAP, should be capitalized and appear on such Persons balance
     sheet in THE category of property, plant or equipment, without regard to
     the manner in which such payments or the instrument pursuant to which they
     are made are characterized by such Person or any other Person.

          "CITIBANK" has the meaning set forth in the preamble to this
     Agreement.

          "COLLATERAL" means all "Collateral" (as defined in any Collateral
     Documents), First Security Interest on land, building, fixtures and
     equipment owned or leased by the Borrower, Assignment of all rents, leases
     and license agreements and other assets and property that in accordance
     with the terms of the Collateral Documents is or will be subject to any
     Lien in favor of the Lenders.

          "COLLATERAL DOCUMENTS" means the Pledges of furniture, fixtures and
     equipment and the Mortgage on Real Property owned by or leased by the
     Borrower, the Assignment of all rents, of all leases and of the Licensing
     Technology Transfer, Training and Sourcing Agreement.

          "LEMPIRAS" means the lawful currency of the Republic of Honduras.

          "CONSOLIDATED" means the consolidation of accounts in accordance with
     Honduran GAAP.

          "CROSS-BORDER INSURANCE 'MEANS the insurance policy between the Leader
     and OPIC.

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          "DISBURSEMENT" means the amount of THREE MILLION FIVE HUNDRED THOUSAND
DOLLARS (US$3,500,000.00) which the Lender will deliver to the Borrower pursuant
to this Agreement on the Closing Date.

          "DOLLARS" and the sign "M " each mean the lawful currency of the
     United States of America.

          "EBITDA" means, during any period the sum (without duplication) of (i)
     the-net income of the Borrower, plus (ii) depreciation and amortizations
     plus (iii) Interest Expense, plus (iv) all other non cash expenses
     including, but limited to, unrealized losses from foreign exchange and
     monetary correction, and only to the extent that any such expense was
     deducted, plus (v) income tax expense, to the extent that any such tax was
     deducted in connection with the determination of net income, minus (vi) non
     cash gains, including, but not limited to, foreign exchange gains and
     monetary corrections, minus (vii) equity income from participation in
     subsidiaries and affiliates plus (viii) cash dividends received from
     subsidiaries and affiliates

          "Honduras" means the Republic of Honduras.

          "ENVIRONMENTAL ACTION" means any administrative, regulatory or
     judicial action, suit, demand, demand letter, claim, notice of
     non-compliance or violation, investigation, proceeding, consent order or
     consent agreement relating in any way to any Environmental Law or any
     Environmental Permit including, without limitation, (a) any claim by any
     governmental or regulatory authority for enforcement, cleanup, removal,
     response, remedial or other actions or damages pursuant to any
     Environmental Law and (b) any claim by any third party seeking damages,
     contribution, indemnification, cost recovery, compensation or injunctive
     relief resulting from Hazardous Materials or arising from alleged injury or
     threat of injury to health, safety or the environment.

          "ENVIRONMENTAL -LAW" means any Honduran national, departmental, local
     or municipal law, rule, regulation, code, order, writ judgment, injunction,
     decree or judicial or agency written interpretation, written policy or
     written guidance relating to the protection of the environment health,
     safety or Hazardous Materials or regulating the use, disposal or exposure
     to substances by reason of their effect on the health or safety of humans
     or of the environment.

          "ENVIRONMENTAL PERMIT" means any permit, approval, identification
     number, license or other authorization required under any Honduran
     Environmental Law.

          "EVENTS OF DEFAULT " has the meaning specified in Section 6.01.

          "FACILITY" means, at any time, the aggregate amount of the Lenders'
     Commitments at such time.

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          "FISCAL YEAR means a fiscal year of the Borrower ending on August 31st
     in any calendar year.

          "GUARANTEES" in connection with the full repayment of all principal
     and interest outstanding means (i) joint and several from the Borrower,
     PriceSmart Honduras, S.A.de C.V. and PSMT Caribe, Inc, (ii) from
     PriceSmart, Inc., in an amount up to but not exceeding 60% of all principal
     and interest outstanding from time to time and (iii) from PSC, S.A.", in an
     amount up to but not exceeding 40% of all principal and interest
     outstanding from time to time.

          "GUARANTEE REDUCTION PROVISION" means the Lender agrees to reduce the
     guarantees dollar for dollar with the repayment of the Loan pursuant to the
     amortization schedule; provided that the maximum reduction shall be as
     follows: (i) 50% of the loan ONE MILLION SEVEN HUNDRED FIFTY THOUSAND
     Dollars (US$1,750,000.00) at such time as the loan to value is equal to or
     less than 50% and, for the prior 12-month period, the net operating income
     for the Project covered combined debt service (interest and principal
     amortization) on the loan at a minimum 1.50: 1 ratio, and (ii) 30% of the
     loan ONE MILLION FIFTY THOUSAND Dollars (US$ 1,050,000.00) at such time as
     the loan to value is equal to or less than 30% and, for the prior 12-month
     period, the net operating income from the project covered combined debt
     service on the loan at a minimum 1.50:1 ratio.

          "INTEREST EXPENSE" means, for any period of the Borrower, the
     aggregate amount of interest paid or required to be paid in cash by the
     Borrower in respect of all Debt.

          "INTEREST PERIOD" means, the period commencing on the date of such
     Disbursement and ending on the next succeeding Payment Date and,
     thereafter, each subsequent period commencing on the last day of the
     immediately preceding Interest Period and ending on the next succeeding
     Payment Date; PROVIDED, HOWEVER that:

               (a) whenever the last day of any Interest Period would otherwise
          occur on a day other than a Business Day, the last day of such
          Interest Period shall be extended to occur on the next succeeding
          Business Day, provided, however that, if such extension would cause
          the last day of such Interest Period to occur in the next following
          calendar month, the last day of such Interest Period shall occur on
          the next preceding Business Day; and

               (b) whenever the first day of any Interest Period occurs on a day
          of an initial calendar month for which there is no numerically
          corresponding day in the calendar month that succeeds such initial

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          calendar month in such Interest Period, such Interest Period shall
          end on the last Business Day of such succeeding calendar month.

          "INTEREST Rate" will be calculated on the basis of 3-months LIBOR Rate
     + 5.125% p.a. All interest will be calculated on a 365/360 days convention.
     Interest payments shall be due and payable on a monthly basis.

          "Lien" means any lien, security interest or other charge or
     encumbrance of any kind, or any other type of preferential arrangement,
     including, without limitation, the hen or retained security title of a
     conditional vendor and any easement, right of way or other encumbrance on
     title to real property.

          "LOAN CLOSING" MEANS date on which all parties hereto have executed
     this Agreement.

          "LOAN DOCUMENTS" means this Agreement, the Recognition of Debt, the
     Collateral Documents, in each case as amended or otherwise modified from
     time to time.

          "LOAN PARTY' means each of the Borrower, PriceSmart Honduras, S.A.de
     C.V., PSMT Caribe, Inc., PriceSmart, Inc., PSC, S.A., and Ventures
     Services, Inc., any other pledgor assignor or guarantor under any
     Collateral Document and their successors and permitted assigns.

          "LOAN TERM" means five years from Loan Closing.

          "MATERIAL ADVERSE CHANGE" means any substantive alteration in (a) -the
     business condition (financial or otherwise), operations, performance,
     properties or prospects of the Borrower, PriceSmart Honduras, S.A.de C.V.,
     PSMT Caribe, Inc., PriceSmart, Inc., PSC, S.A. which significantly
     diminishes any of the parties ability to perform the obligations stated
     herein

          "MATERIAL ADVERSE EFFECT " means any variation in the financial
     condition, business, properties or prospects or results of the operations
     of the Borrower and /or PriceSmart Honduras, S.A. De C.V. Which, in the
     good faith opinion of the Lender, could reasonably be expected to
     significantly diminish THE Borrower's ability to perform its obligations
     stated herein.

          "MATERIAL CONTRACT " means, with respect to any Pawn, any written
     contract that is material to the business condition (financial or
     otherwise), operations, performance, properties or prospects of such,
     Person, including, without limitation, with respect to the Borrower, the
     Leasing Agreements, the License Agreements or other similar contract.

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          "MATURITY DATE" means March 3, 2005.

          "MORTGAGE ON REAL PROPERTY" means the mortgage entered into on the
     date hereof by the Borrower and the Lender for its benefit, substantially
     in the form of Exhibit I attached hereto.

          "NEW YORK LOAN DOCUMENTS" means this Agreement, the Assignment
     Agreement, dated as of February 25, 2000, in each case, as amended or
     otherwise modified from time to time.

          "OBLIGATION" means, with respect to any Person, any payment,
     performance or other obligation of such Person of any kind, including,
     without limitation, any liability of such Person on any claim, whether or
     not the right of any creditor to payment in respect of such claim is
     reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
     disputed, undisputed, legal, equitable, secured or unsecured, and whether
     or not such claim is discharged, stayed or otherwise affected by any
     proceeding referred to in Section 4.01 (g). Without limiting the generality
     of the foregoing, the Obligations of the Borrower under the Loan Documents
     include (a) the obligation to pay principal, interest, charges, expenses,
     fees, premiums with respect to Cross-Border Insurance, attorneys' fees and
     disbursements, indemnities and other amounts payable by the Borrower under
     any Loan Document and (b) the obligation of the Borrower to reimburse any
     amount in respect of any of the foregoing that the Lender shall pay or
     advance on behalf of the Borrower as contemplated in this Agreement.

          "OPIC": Overseas Private Investment Corporation is an agency of the
     United States Government, with the mandate of facilitating economically
     productive and environmentally sound United States private investments in
     developing countries and emerging economies.

          "OTHER TAXES" has the meaning specified in Section 2.08.

          "PAYMENT DATE" means each 3rd day of the month beginning April 3rd,
     2000 for monthly interest payments and each 2nd day of the month beginning
     June 3, 2000 for quarterly principal payments.

          "PERMITTED LIENS" means such of the following as to which no
     enforcement, collection, execution, levy or foreclosure proceeding shall
     have been commenced: (a) Liens for taxes, assessments and governmental
     charges or levies to the extent not required to be paid under Sections 5.02
     (b) and 5.03 [(a)B] hereof; (b) Liens imposed by law, such as
     materialmen's, mechanics', carriers', workmen's and repairmen's Liens and
     other similar Liens arising in the ordinary course of business securing
     obligations that are not overdue for a period of more than 30 days; (c)
     pledges or deposits to secure obligations under workers' compensation laws
     or similar legislation or to secure public or statutory

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                                                                              8

     obligations; and (d) easements, rights of way and other encumbrances
     on title to real property that do not render title to the property
     encumbered thereby unmarketable or materially adversely affect the
     use of such property for its present purposes.

          "PERSON" means an individual, partnership, corporation (including a
     business trust), limited liability company, joint stock company, trust,
     unincorporated association, joint venture or other entity, or a government
     or any political subdivision or agency thereof.

          "PLEDGES OF FURNITURE, FIXTURES AND EQUIPMENT" means the pledge
     agreements entered into on the date hereof in respect of furniture,
     fixtures and equipment and certain other movable assets owned by Pricesmart
     Honduras, S.A. de C.V. on the date hereof between the Borrower and the
     Lender for its benefit, substantially in the form of Exhibit __ attached
     hereto.

          "PROCESS AGENT" has the meaning specified in Section 7.04.

          "RECOGNITION OF DEBT" means a Loan Recognition, under Honduran law.

          "RESPONSIBLE OFFICER" means any authorized officer of the Borrower.

          "ROLLING PERIOD" means for any fiscal quarter, such quarter and the
     immediately preceding fiscal quarter.

          "HONDURAN "GAAP" has the meaning specified in Section 1.03.

          "SOLVENT" means, with respect to any Person on a particular date, that
     on such date (a) the fair market value of the property of such Person is
     greater than the total amount of liabilities, including, without
     limitation, contingent liabilities, of such Person, (b) the present fair
     salable value of the assets of such Person is not less than the amount that
     will be required to pay the probable liability of such Person on its debts
     as they become absolute and matured, (c) such Person does not intend to,
     and does not believe that it will, incur debts or liabilities beyond such
     Person's ability to pay such debts and liabilities as they mature and (d)
     such Person is not engaged in business or a transaction, and is not about
     to engage in business or a transaction, for which such Person's property
     would constitute an unreasonably small capital. The amount of contingent
     liabilities at any time shall be computed as the amount that, in the light
     of all the facts and circumstances existing at such time, represents the
     amount that can reasonably be expected to become an actual or matured
     liability.

          "TAXES" has the meaning specified in Section 2.08.

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                                                                              9

          "WORKING CAPITAL" means, as of any date, the current assets of the
     Borrower, other than cash and other marketable securities, minus the
     current liabilities of the Borrower, other than the current portion of long
     term debt, in each case, in accordance with Honduran GAAP, as of such date.

     SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."

     SECTION 1.03. ACCOUNTING TERMS. All accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Citibank, N.A. hereunder shall be
prepared in accordance with Honduran generally accepted accounting principles
applied on a basis consistent with those applied in the preparation of the
latest financial statements furnished to the Lender hereunder (which, prior to
the delivery of the first financial statements under Section 5.04, shall be the
unaudited financial statements as at December 31,1999, referred to in Section
5.04 ("HONDURAN GAAP").

                                   ARTICLE II

                          AMOUNTS AND TERMS OF THE LOAN

     SECTION 2.01. (a) The Lender agrees to lend to the Borrower an amount up to
THREE MILLION FIVE HUNDRED THOUSAND Dollars (US$3,500,000.00). The loan amount
is not to exceed 80% of the direct and indirect hard and soft construction
costs, including furniture, fixtures and equipment, organization and start-up
costs, excluding land cost.

     The Borrower acknowledges that this in an IBF facility and as such,
according to the Board of Governors of the Federal Reserve System of the United
States, that extensions of credit by international banking facilities, this loan
may be used only to finance operations outside the United States of the Borrower
or of the Borrower's affiliated outside the United States. The Borrower
indicates its understanding of this provision by initialling the blank which
follows this paragraph.

          Initial: [ILLEGIBLE]
                  -------------------
     (b) To effect the Disbursement, the Lender shall transfer the amount of the
Disbursement in United States Dollars to that account in Citibank, N.A., for
the account of PriceSmart Honduras, S.A. de C.V.

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                                                                             10

     In addition to those conditions precedent to the obligation of the Lender
to make the Disbursement set forth in Sections 3.01 and 4.01 below, on or before
the Date of the Disbursement, the Borrower shall deliver to the Lender a
promissory note substantially in the form of Exhibit II hereto (the "Note")
executed by an authorized signatory of the Borrower. The Lender shall have no
obligation hereunder to effect the Disbursement if it shall not have previously
received such Note, as executed by the Borrower, at the principal offices of
Citibank, NA

     (c) Repayment of the Disbursement. The Borrower agrees that the principal
mechanism for the repayment of the Disbursement to the Lender shall be the
delivery to the Lender of the amount corresponding to the amortization schedule
determined in Section 2.03. Every payment shall be made in the same currency
that it was delivered (US dollars). If for governmental or any other reason, the
Borrower has to make payments in local currency, the amount will be calculated
based on the average dollar sales price dictated by Citibank N.A., for the day
that the payment takes place. If the Borrower were to make the payments in local
currency without any valid reason, the loan will terminate and the Lender will
have the right to ask for repayment of the full amount plus the corresponding
interest.

     The Borrower will make all principal and interest payments in Citibank,
N.A., or where the Lender designates. Payments will first cover interest due and
then principal.

     SECTION 2.02. FEES; PREMIUMS. (a) COMMITMENT FEE. THE Borrower shall pay to
the Lender a structuring fee set forth below:

     STRUCTURING FEE. The Borrower shall pay to the Lender at loan closing 0.5%
flat (SEVENTEEN THOUSAND FIVE HUNDRED DOLLARS US$17,500.00). This fee will be
deducted from the loan amount.

     SECTION 2.03. REPAYMENT OF LOAN. The Borrower shall repay to the Lender a
minimum amortization of FIVE HUNDRED SIXTY THOUSAND Dollars (US$560,000.00) per
annum. Amortization payments will be due and payable on a quarterly basis,
commencing June 3rd, 2000. The residual amount outstanding totaling
approximately EIGHT HUNDRED FORTY THOUSAND DOLLARS (US$840,000.00) shall be due
and payable at the end of the Loan Term.

     SECTION 2.04. PREPAYMENTS. With the exception of scheduled principal
amortization payments, full repayment of the Loan is not permitted for a minimum
of 24 months following Loan closing, with the exception that country devaluation
is equal to or surpasses 12% p.a. Thereafter, the Borrower agrees to notify
Lender in writing, at least 90 days prior to the date of any full repayment of
the Loan. Also partial prepayments may

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                                                                             11

only take place on the date when interest rates are adjusted, according to
3-months Libor Rate.

     SECTION 2.05. INTEREST. (a) SCHEDULED INTEREST. The Borrower shall pay
interest on the unpaid principal amount owing to the Lender from the date of
disbursement until such principal amount shall be paid in full, at a rate per
annum equal at all times during each Interest Period for such Disbursement of
the sum of 3-months LIBOR Rate for such Interest Period PLUS 5.125% p.a.,
in effect from time to time, due and payable on a monthly basis. All interest
will be calculated on a 365/360 days convention.

     (b) DEFAULT INTEREST. Upon the occurrence and during the continuance of a
Default, the Borrower shall pay interest on the unpaid principal amount the
amount owing to the Lender, payable in arrears on the dates referred to in
clause (a) above and on demand, at a rate per annum equal at all times to 5% per
annum above the prevailing rate per annum that would be required to be paid on
the Loan pursuant to clause (a) above.

     SECTION 2.06. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation after the date of this Agreement or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Lender, related specifically to this loan, (excluding for
purposes of this Section 2.06 any such increased costs resulting from (i)
Taxes or Other Taxes (as to which Section 2.08 shall govern) and (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the laws of which
the Lender is organized or any political subdivision thereof), then the
Borrower shall from time to time, upon demand by the Lender, pay to the
Lender Agent for the account of the Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the
amount of such increased cost, submitted to the Borrower and the Lender,
shall be conclusive and binding for all purposes, absent manifest error.

     (b) If the Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) not currently in effect,
increases the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender based upon the existence of
the Lender's commitment to lend hereunder and other commitments of this type
and that such increase in capital represents an additional cost to the Lender
relating to this transaction, then, upon demand by the Lender, the Borrower
shall pay to the Lender, from time to time specified by the Lender,
additional amounts sufficient to compensate the Lender or such corporation,
on a proportional basis, for such increased cost in the light of such
circumstances, to the extent that the Lender reasonably determines such
increase in capital to be allocable to the existence of the Lender's
commitment to lend to the Borrower and to result in an additional cost for
the Lender. A certificate as to the amount of such increased cost,

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                                                                             12

explaining in detail how such change in capital required entails additional cost
for the Lender, submitted to the Borrower and the Lender, shall be conclusive
and binding for all purposes, absent manifest error.

          (c) Any additional amounts payable under this Section 2.06 by the
Borrower to a Lender assignee shall not exceed the additional amounts the
Borrower would have been required to pay to the Lender assignor who assigned its
rights and obligations under this Agreement to such assignee if no such
assignment had occurred.

          (d) Before making any demand for additional amounts under this Section
2.06, the Lender agrees to use its reasonable efforts (consistent with its
internal policy and any applicable legal and regulatory restrictions) to
minimize any such amounts.

          SECTION 2.07. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall
make each payment hereunder not later than 11:00 A.M. (New York City time) on
the day when due in Dollars to the Lender at the Lender's Account in same-day
funds. In the event that the amount of funds received by the Lender are
insufficient to satisfy the payments due and payable hereunder, the Lender
shall apply such funds in the following order of priority: (i) first: ratably
to all interest due and payable hereunder, (ii) second: ratably to all
amounts due and payable under Section 2.02: ratably to all principal due and
payable with respect to the Loan and (iv) fourth: ratably to all other
amounts due and payable hereunder.

          (b) The Borrower hereby authorizes the Lender, if and to the extent
payment owed to the Lender is not made when due hereunder, to charge from time
to time against any or all of the Borrower's accounts with the Lender any amount
so due. The Lender agrees to provide prompt written notice to the Borrower as to
the occurrence of any such charges against the Borrower's accounts by the Lender
in respect of amounts due hereunder, the amount of such charges and the specific
Borrower's account so charged.

          (c) All computations of fees and interest based on the 3-months LIBOR
Rate shall be made by the Lender on the basis of a year of 360/365 days, in each
case for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is payable. Each
determination by the Lender of interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

          SECTION 2.08. TAXES. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.03, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
EXCLUDING, in the case of the Lender, taxes imposed on its income and franchise
taxes imposed on it in lieu of income taxes by

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                                                                             13

the jurisdiction under the laws of which the Lender is organized or its
principal office is located or any political subdivision thereof and, in the
case of the Lender, taxes imposed on its income or revenues and franchise and
any other taxes imposed on it in lieu of income taxes by the jurisdiction of the
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or the Recognition of Debt being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or the
Recognition of Debt to the Lender, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.08) the Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay (or shall cause to be paid)
any present or future stamp, documentary taxes, value added or any other excise
or property taxes, charges or similar levies imposed by Honduras, that arise
from any payment made hereunder or the Recognition of Debt or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any of the other Loan Documents or any other taxes as may be agreed
upon by the Borrower and the Lender (hereinafter referred to as "OTHER TAXES").

          (c) The Borrower shall indemnify the Lender for the full amount of
Taxes and Other Taxes, and for the full amount of taxes of any kind imposed on
amounts payable under this Section 2.08, paid by the Lender and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date the Lender makes written demand therefor accompanied by written
evidence of payment of such Taxes or other Taxes.

          (d) If the Lender actually and irrevocably realizes, by reason of a
refund, deduction or credit of any Taxes paid or reimbursed by the Borrower
pursuant to subsection (a) or (c) above in respect of payments under this
Agreement or the Recognition of Debt, a monetary benefit that it would otherwise
not have obtained, and that would result in the total payments under this
Section 2.08 exceeding the amount needed to make the Lender whole, the Lender
shall pay to the Borrower, with reasonable promptness following the date on
which it actually and irrevocably realizes such benefit, an amount equal to the
lesser of the amount of such benefit or the amount of such excess, (in each case
net of all out-of-pocket expenses in securing such refund, deduction or credit).

          SECTION 2.09. USE OF PROCEEDS. The proceeds of the Loan shall be
available to the Borrower for the following: to refinance a completed PriceSmart
warehouse containing approximately 5,000 M2 located in San Pedro Sula,
Honduras.

<PAGE>

                                                                             14

                                   ARTICLE III

                              CONDITIONS OF LENDING

          SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL BORROWING. The
obligation of the Lender to make a Disbursement on occasion of the Borrowing
hereunder is subject to the satisfaction of the following conditions
precedent:

               (a) The Lender shall be satisfied with the terms and conditions
          of this Agreement and the other Loan Documents and the aggregate
          amount of the Loan shall be THREE MILLION FIVE HUNDRED THOUSAND
          DOLLARS (US$3,500,000.00).

               (b) The Lender shall have a valid and perfected first-priority
          security interest in the Collateral (other than the real property of
          the Borrower, listed in Schedule A, that shall be registered and
          perfected in accordance with Section 5.02 n); all filings,
          recordations, and searches necessary or desirable in connection with
          such security interests shall have been duly made or obtained; and
          all filing and recording taxes and fees shall have been paid.

               (c) The Lender shall be satisfied with the corporate and legal
          structure and capitalization of the Borrower and each of its
          Guarantors, including, without limitation, the terms and conditions of
          the corporate organizational documents and shareholders' agreement (if
          any) of the Borrower and each such Guarantor and of each agreement or
          instrument relating thereto.

               (d) All Material Contracts shall be in full force and effect and
          delivered to the Lender prior to the date hereof with certification
          from the Borrower as to their completeness and effectiveness and (ii)
          have not been amended, modified or rescinded since such delivery,
          shall be satisfactory to the Lender.

               (e) There shall have occurred no event or circumstance that could
          reasonably be expected to (i) result in a Material Adverse Change,
          (ii) have a material adverse effect on the ability of the Borrower to
          meet its obligations under any Loan Document or Material Contract to
          which it is a party.

               (f) The Lender shall have received each of the following in form
          and substance satisfactory to the Lender: (i) three years historical
          financial statements (including Balance Sheets, profit and Loss, and
          Cash Flow Statements) of PriceSmart, Inc.; (ii) Business Plan and Cash
          Flow Projections for the Borrower and PriceSmart Honduras for the
          duration of the Loan Term; (iii) Business Plan

<PAGE>

                                                                             15

          and Cash Flow Projections for PriceSmart Inc. and PSMT Caribe Inc.
          for 2000-2001, (iv) As-Built Plans and Specifications; Environmental
          Impact Report, if required, soil reports, occupancy permits and
          required governmental approvals; (v) Leasing, Shareholder and
          Licensing Agreements including: a) Licensing, Technology Transfer,
          Training and Sourcing Agreement among PriceSmart, Inc., Venture
          Services, Inc. and PriceSmart Honduras, dated September 1, 1999, b)
          Lease Agreement between the Borrower and PriceSmart, which will be
          signed before closing of the loan and c) Shareholder Agreement
          between PriceSmart, Inc. and PSC, S.A, dated September 14, 1998;
          (vi) MAI Appraisal, in a form and from an appraisal firm acceptable
          to the Lender. Such appraisal is to result in a minimum valuation of
          FIVE MILLION DOLLARS (US$5,000,000.00) for the property on an "As-is"
          basis and (vii) such other documents as reasonably required by the
          Lender.

               (g) There shall exist no action, suit, investigation, litigation
          or proceeding pending or threatened in any court or before any
          arbitrator or governmental instrumentality that (i) could reasonably
          be expected to have a Material Adverse Effect or (ii) purports to
          affect in a manner adverse to the Lender the legality, validity or
          enforceability of any Loan Document or the consummation of the
          transactions contemplated thereby.

               (h) All governmental and third party consents, approvals,
          authorizations and licenses necessary in connection with any Loan
          Document or the transactions contemplated thereby, if any, shall have
          been obtained, shall be in full force and effect and, except for the
          governmental and third party consents, approvals, authorizations and
          licenses listed in Schedule I that (i) were delivered to the Lender
          prior to the date hereof with certification from the Borrower as to
          their completeness and effectiveness and (ii) have not been amended,
          modified or rescinded since such delivery, shall be satisfactory to
          the Lender; all applicable waiting periods shall have expired without
          any action being taken by any competent authority; and no law or
          regulation shall be applicable in the judgment of the Lender that
          restrains, prevents or imposes materially adverse conditions on the
          Borrower, any Loan Document or the transactions contemplated thereby.

               (i) The Cross-Border Insurance shall be in full force and effect
          and shall be satisfactory in all respects to the Lender.

               (j) The Lender shall have received on or before the date of the
          initial Borrowing the following, each dated such day (unless otherwise
          specified), in form and substance satisfactory to the Lender (unless
          otherwise specified) and in sufficient copies for the Lender:

                    (i) Notarized declaration of the Corporate Secretary of the
               board of directors of each Loan Party establishing that all said
               parties have met all necessary corporate requirements to the
               satisfaction of the Lender,

<PAGE>

                                                                             16

               and the transactions contemplated thereby and of all documents
               evidencing other necessary corporate requirements and
               governmental and other third party approvals and consents, if
               any, with respect to such Loan Document.

                    (ii) Copies of the organizational documents of each Loan
               Party and all amendments thereto certified by the General
               Manager, a Vice President or Secretary of such Loan Party as
               being a true, correct and complete copy thereof.

                    (iii) A certificate of the Secretary or an Assistant
               Secretary of each Loan Party certifying the names and true
               signatures of the officers of such Loan Party authorized to sign
               each Loan Document to which it is or is to be a party and the
               other documents to be delivered hereunder and thereunder.

                    (iv) Certified copies of all Material Contracts of the
               Borrower listed in Schedule B (Leasing Agreement, License
               Agreement, etc.) duly executed by the parties thereto, all of
               which shall be in full force and effect.

                    (v) Each of the Mortgage on Real Property, the Pledge of
               Equipment, the Pledge of the Furniture, Pledge of the Fixtures,
               Assignment of the Leasing Agreement and of the Licensing,
               Technology Transfer, Training and Sourcing Agreement, in each
               case duly executed by the parties thereto on the date hereof and
               substantially in the form of the relevant Exhibit hereto,
               together with:

                         (A) evidence of the completion of all recordings,
                    filings, registrations and notices of or with respect to
                    each such Collateral Document (other than the registration
                    of the Mortgages on Real Property with the appropriate
                    Honduran registries that shall be completed in accordance
                    with Section 5.02 n) that the Lender may deem necessary or
                    desirable in order to perfect and protect the Liens created
                    thereby; and

                         (B) evidence that all other action that the Lender may
                    deem necessary or desirable in order to perfect and protect
                    the first priority liens and security interests created
                    under each such Collateral Document.

                    (vi) The Cross-Border Insurance, duly executed by OPIC and
               the Lender, substantially in the form of Exhibit __ hereto, which
               agreement shall be in full force and effect.
<PAGE>

                                                                            17

                    (vii) Recognition of Debt in respect of the Borrowing, duly
               executed by the Borrower, substantially in the form of Exhibit
               III hereto.

                    (viii) A certificate of the Chief Financial Officer of the
               Borrower, in form and substance satisfactory to the Lender,
               certifying as to the a) DEBT SERVICE RATIO. Debt Service Ratio
               for the San Pedro Sula store shall not fall below the level of
               1.10 for year 2000 and 2001, 1.20 for year 2002, and 1.30 for
               year 2003, and 1.5 for year 2004. Debt Service Ratio for the
               consolidated San Pedro Sula and Tegucigalpa stores shall not
               fall below the level of 1.50 for year 2001, 2.0 for year 2002,
               2.1 for year 2003, and 2.50 for year 2004. The debt service ratio
               is defined as: net income plus interest plus depreciation plus
               amortization divided by principal plus interest payment. Cash
               Coverage Ratio, defined below, for the consolidated San Pedro
               Sula and Tegucigalpa stores shall not fall below 1.4 for year
               2000. Cash Coverage Ratio is defined as: EBITDA + Cash at hand -
               US$500,000.00) / (Interest Exp. + Current Maturity of Long term
               debt). EBITDA will be calculated utilizing the past twelve
               months. (b) INTEREST COVERAGE. Interest Coverage for the San
               Pedro Sula store shall not fall below the level of 2.0 for year
               2000 and for year 2001, 2.5 for year 2002, and 3.0 thereafter.
               Interest coverage for the consolidated San Pedro Sula and
               Tegucigalpa stores shall not fall below the level of 3.0 of year
               2001, 4.0 for year 2002, and 5.0 thereafter. (c) LEVERAGE RATIO.
               Leverage Ratio for the consolidated San Pedro Sula and
               Tegucigalpa stores shall not be greater than 2.5 for the tenor of
               the loan. Leverage is defined as: the total debt divided by net
               worth. (d) TOTAL DEBT / EBITDA. Total Debt/EBITDA for the San
               Pedro Sula store shall not be greater than 6.50 for year 2000.
               Total Debt/EBITDA for the consolidated San Pedro Sula and
               Tegucigalpa stores shall not be greater than 3.5 for year 2001,
               3.0 for year 2002, 2.5 for year 2003, and 2.0 for year 2004.
               EBITDA will be calculated utilizing the past twelve months.

                    (ix) Such other approvals, opinions or documents as the
               Lender may reasonably request; PROVIDED that for the avoidance of
               doubt such corporate resolutions, certificates and documents of
               PriceSmart Honduras, S.A. de C.V., PriceSmart, Inc., PMST Caribe,
               Inc., PSC, S.A. and Ventures Services, Inc. shall relate to the
               transactions contemplated by the Loan Documents or the corporate
               existence of such Loan Parties.

               (k) The Borrower shall have paid (i) all accrued fees of the
          Lenders and (ii) as provided in Section 2.05, all accrued expenses of
          the Lender (including the reasonably accrued fees and expenses of the
          local counsel to the Lender).

          SECTION 3.02. CONDITIONS PRECEDENT TO THE BORROWING. The obligation
of the Lender to make the disbursement on the occasion of the Borrowing shall
be subject to the further conditions precedent that on the date of the Borrowing
(i) the Lender shall

<PAGE>

                                                                            18

have received the Recognition of Debt in respect of the Borrowing, duly executed
by the Borrower, substantially in the form of Exhibit III hereto, and (ii) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, and the acceptance by the Borrower of the proceeds of the
Borrowing shall constitute a representation and warranty by the Borrower that
both on the date of such notice and on the date of the Borrowing such statements
are true):

               (a) the representations and warranties contained in the Loan
          Document are correct on and as of such date, before and after giving
          effect to the Borrowing and to the application of the proceeds
          therefrom, as though made on and as of such date;

               (b) no event has occurred and is continuing, or would result from
          the Borrowing or from the application of the proceeds therefrom, that
          constitutes a Default; and

          SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01 and 3.02. For purposes
of determining compliance with the conditions specified in Sections 3.01 and
3.02, the Lender shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender by its
execution of this agreement.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

          SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:

          (a) The Borrower (i) is a corporation duly organized, validly
     existing and in good standing under the laws of the jurisdiction of its
     incorporation (San Pedro Sula, Honduras), (ii) is duly qualified and in
     good standing as a foreign corporation in each other jurisdiction in
     which it owns or leases property or in which the conduct of its business
     requires it to so qualify or be licensed except where the failure to so
     qualify or be licensed could not reasonably be expected to have a
     Material Adverse Effect and (iii) has all requisite corporate power and
     authority (including, without limitation, all governmental licenses,
     permits and other approvals) to own or lease and operate its properties
     and to carry on its business as now conducted and as proposed to be
     conducted. All of the outstanding capital stock of the Borrower has been
     validly issued, is fully paid and non-assessable. The outstanding
     capital stock of the Borrower is free and clear of all Liens.

<PAGE>

                                                                            19

          (b) The Borrower has no Subsidiaries.

          (c) The execution, delivery and performance by the Borrower of the
     Loan Document to which it is or is to be a party, and the consummation of
     the transactions contemplated hereby, are within the Borrower's corporate
     powers, have been duly authorized by all necessary corporate action, and do
     not (i) contravene the Borrower's organizational documents, (ii) violate
     any law, rule, regulation, order, writ, judgment, injunction, decree,
     determination or award, (iii) conflict with or result in the breach of, or
     constitute a default under, any contract, loan agreement, indenture,
     mortgage, deed of trust, lease or other instrument binding on or affecting
     the Borrower or any of their properties or (iv) except for the Liens
     created under the Loan Documents, result in or require the creation or
     imposition of any Lien upon or with respect to any of the properties of the
     Borrower.

          (d) No authorization or approval or other action by, and no notice to
     or filing with, any Honduran governmental authority or regulatory body or
     any other third party is required for (i) the due execution, delivery,
     recordation, filing or performance by the Borrower of any Loan Document to
     which it is or is to be a party, or for the consummation of the
     transactions contemplated hereby, (ii) the grant by the Borrower of the
     Liens granted by it pursuant to the Collateral Documents, (iii) the
     perfection or maintenance of the Liens created by the Collateral Documents
     (including the first priority nature thereof) or (iv) the exercise by the
     Lender of its rights under the Loan Documents or the remedies in respect of
     the Collateral pursuant to the Collateral Documents, except for the
     authorizations, approvals, actions, notices and filings.

          (e) This Agreement has been duly executed and delivered by the
     Borrower. This Agreement is, the legal, valid and binding obligation of the
     Borrower, enforceable against the Borrower in accordance with its terms.

          (f) The pro forma and forecasted balance sheets, income statements and
     statements of cash flows of the Borrower delivered to the Lender pursuant
     to Section 3.01 were prepared in good faith on the basis of the assumptions
     stated therein, which assumptions were fair in the light of conditions
     existing at the time of delivery of such forecasts, and represented, at the
     time of delivery, the Borrower's best estimate of its future financial
     performance.

          (g) No information, exhibit or report furnished by the Borrower to the
     Lender (including the Information Memorandum when delivered) in connection
     with the negotiation of the Loan Documents or pursuant to the terms of the
     Loan Documents contained any untrue statement of a material fact or omitted
     to state a material fact necessary to make the statements made therein not
     misleading.

<PAGE>

                                                                            20

          (h) The Lender has received and reviewed the Insurance Policies and
     has found them acceptable.

          (i) There is no action, suit, investigation, litigation or proceeding,
     including any Environmental Action, pending or threatened before any court,
     governmental agency or arbitrator that (i) could reasonably be expected to
     have a Material Adverse Effect or (ii) purports to materially affect the
     legality, validity or enforceability of this Agreement or the consummation
     of the transactions contemplated hereby.

          (j) The operations and properties of the Borrower comply in all
     material respects with all applicable Environmental Laws and Environmental
     Permits, all past material non-compliance with such Environmental Laws and
     Environmental Permits has been resolved without ongoing obligations or
     costs, and no circumstances exist that could (i) form the basis of an
     Environmental Action against such Person or any of its properties that
     could reasonably be expected to have a Material Adverse Effect or (ii)
     cause any such property to be subject to any material restrictions on
     ownership, occupancy, use or transferability under any Environmental Law.

          (k) The Borrower is not a party to any indenture, loan or credit
     agreement or any lease or other agreement or instrument or subject to any
     charter or corporate restriction that, in each case, could reasonably be
     expected to have a Material Adverse Effect.

          (l) The Collateral Documents create a valid and perfected first
     priority security interest in the Collateral, securing the payment of the
     Obligations owing to the Secured Party under the Loan Documents and all
     filings and other actions necessary or desirable to perfect and protect
     such security interest set forth therein shall have been duly taken. The
     Borrower is the legal and beneficial owner of the Collateral pledged by it
     and that the Collateral is free and clear of any Lien, except for the liens
     and security interests created or permitted under the Loan Documents.

          (m) Neither the business nor the properties of the Borrower are
     affected by any fire, explosion, accident, strike, lockout or other labor
     dispute, drought, storm, hail, earthquake, embargo, act of God or other
     casualty (whether or not covered by insurance) that could be reasonably
     likely to have a Material Adverse Effect.

          (n) Set forth on Schedule 3.01(m)(vi) hereto is a complete and
     accurate list of all Material Contracts of the Borrower, showing as of the
     date hereof the parties, subject matter and term thereof. Each Material
     Contract has been duly authorized, executed and delivered by all parties
     thereto, has not been

<PAGE>

                                                                            21

     amended or otherwise modified, is in full force and effect and is binding
     upon and enforceable against all parties thereto in accordance with its
     terms, and there exists no default under any Material Contract by any
     party thereto.

          (o) The Borrower and the Guarantors have obtained insurance with
     responsible and reputable insurance companies or associations in such
     amounts and covering such risks as is usually carried by companies engaged
     in similar businesses and owning similar properties in the same general
     areas in which the Borrower operates and as otherwise contemplated in the
     Collateral Documents.

          (p) The Borrower nor any of the Guarantors and their respective
     property has any immunity from jurisdiction of any court or from set-off or
     any legal process (whether through service or notice, attachment prior to
     judgment, attachment in aid of execution, execution or otherwise) under the
     laws of Honduras.

          (q) This Agreement, the Notes and the other Loan Documents are subject
     to the laws of the United States of America but are enforceable under the
     laws of Honduras and United States of America, and to ensure the legality,
     validity, enforceability or admissibility in evidence of this Agreement and
     the other Loan Documents in Honduras, it is not necessary that this
     Agreement, the Notes or any other Loan Documents or any other document be
     filed or recorded at this time with any court or other authority in
     Honduras with the exception of the Collateral Guarantee documented in the
     Public Deed or that any stamp or similar tax be paid on or in respect of
     this Agreement and the Notes. Them is no tax, levy, impost, deduction,
     charge or withholding imposed by Honduras or any political subdivision,
     thereof either (i) on or by virtue of the execution or delivery of the
     Agreement, the Notes, any other Loan Document or (ii) on any payment to be
     made by the Borrower pursuant to the Agreement or the other Loan Document,
     except for a withholding tax imposed on payments of interest to
     non-Honduran institutions.

          (r) Each of the Borrower and the Guarantors is, individually and
     together, Solvent.

          (s) The Borrower has (i) initiated a review and assessment of all
     areas within its business and operations (including those affected by
     suppliers, vendors and customers) that could be adversely affected by the
     "Year 2000 Problem" (that is, the risk that computer applications used by
     the Borrower (or suppliers and vendors) may be unable to recognize and
     perform properly date-sensitive functions involving certain dates prior to
     and any date after December 31, 1999), (ii) developed a plan and timeline
     for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
     implemented that plan in accordance with that timetable. Based on the
     foregoing, the Borrower believes that all computer applications (including
     those of its suppliers and vendors) that are material to its
<PAGE>

                                                                            22

         business and operations are reasonably expected on a timely basis to
         be able to perform properly date-sensitive functions for all dates
         before and after January 1, 2000 (that is, be "Year 2000
         compliant"), except to the extent that a failure to do so could not
         reasonably be expected to have a Material Adverse Effect.

                                    ARTICLE V

           COVENANTS OF THE BORROWER AND PRICESMART HONDURAS, S.A. DE
                                      C.V.

          SECTION 5.01. FINANCIAL COVENANTS ON A CONSOLIDATED BASIS. So long as
any amount of the Loan shall remain unpaid, the Borrower and PriceSmart
Honduras, Sociedad Anonima de Capital Variable, or simply PriceSmart Honduras,
S. A., de C. V. on a consolidated basis, shall:

          (a) REVIEW OF COVENANTS. Permit covenants to be reviewed at the end of
     each quarter (calculated and measured using a 12 month rolling basis)
     commencing with the conclusion of the first full year of operation.

          (b) DEBT SERVICE RATIO. Debt Service Ratio for the San Pedro Sula
     store shall not fall below the level of 1.10 for year 2000 and 2001, 1.20
     for year 2002, and 1.30 for year 2003, and 1.5 for year 2004. Debt Service
     Ratio for the consolidated San Pedro Sula and Tegucigalpa stores shall not
     fall below the level of 1.50 for year 2001, 2.0 for year 2002, 2.1 for year
     2003, and 2.50 for year 2004. The debt service ratio is defined as: net
     income plus interest plus depreciation plus amortization divided by
     principal plus interest payment. Cash Coverage Ratio, defined below, for
     the consolidated San Pedro Sula and Tegucigalpa stores shall not fall below
     1.4 for year 2000. Cash Coverage Ratio is defined as: EBITDA + Cash at
     hand - (US$500,000.00) / (Interest Exp. + Current Maturity of Long term
     debt).

          (c) INTEREST COVERAGE. Interest Coverage for the San Pedro Sula store
     shall not fall below the level of 2.0 for year 2000 and for year 2001, 2.5
     for year 2002, and 3.0 thereafter. Interest coverage for the consolidated
     San Pedro Sula and Tegucigalpa stores shall not fall below the level of 3.0
     of year 2001, 4.0 for year 2002, and 5.0 thereafter.

          (d) LEVERAGE RATIO. Leverage Ratio for the consolidated San Pedro Sula
     and Tegucigalpa stores shall not be greater than 2.5 for the tenor of the
     loan. Leverage is defined as: the total debt divided by net worth.

          (e) TOTAL DEBT / EBITDA. Total Debt/EBITDA for the San Pedro Sula
     store shall not be greater than 6.50 for year 2000. Total Debt/EBITDA for

<PAGE>

                                                                            23

     the consolidated San Pedro Sula and Tegucigalpa stores shall not be
     greater than 3.5 for year 2001, 3.0 for year 2002, 2.5 for year
     2003, and 2.0 for year 2004. EBITDA will be calculated utilizing the
     past twelve months.

          SECTION 5.02. AFFIRMATIVE COVENANTS. So long as any amount of the Loan
shall remain unpaid, or the Lender shall have any Commitment hereunder, the
Borrower and PriceSmart Honduras, Sociedad Anonima de Capital Variable, or
simply PriceSmart Honduras, S. A. de C. V. shall:

          (a) COMPLIANCE WITH LAWS, ETC. (i) Comply with all applicable laws,
     rules, regulations and orders, such compliance to include, without
     limitation, all pension laws and Environmental Laws, except where the
     failure to so comply could not reasonably be expected to have a Material
     Adverse Effect and (ii) obtain and maintain all necessary permits,
     licenses, authorizations and approvals with any governmental authority
     or regulatory body or any other third party required in connection with
     the performance by the Borrower under any Loan Document or any Material
     Contract, requiring that all the transactions with its affiliates shall
     be conducted at "arms length".

          (b) PAYMENT OF TAXES, ETC. Pay and discharge before the same shall
     become delinquent and maintain appropriate reserves for (A) all taxes,
     assessments and governmental charges or levies imposed upon it or upon
     its property and (B) all lawful claims that, if unpaid, might by law
     become a Lien upon its property; PROVIDED, HOWEVER, that the Borrower
     and PriceSmart Honduras, S. A. de C. V. shall not be required to pay or
     discharge, any such tax, assessment, charge or claim that is being
     contested in good faith and by proper proceedings and as to which
     appropriate reserves are being maintained, unless and until any Lien
     resulting therefrom attaches to its property and becomes enforceable
     against its other creditors.

          (c) PAYMENT OF MATERIAL OBLIGATIONS. The Borrower and PriceSmart
     Honduras, S. A. de C. V. shall comply with all their material
     obligations.

          (d) MAINTENANCE OF INSURANCE. Maintain insurance with responsible
     and reputable insurance companies or associations in such amounts and
     covering such risks as is usually carried by companies engaged in
     similar businesses and owning similar properties in the same general
     areas in which the Borrower or PriceSmart Honduras, S. A. de C. V., as
     the case may be, operate and as otherwise contemplated in the
     Collateral Documents.

          (e) MAINTENANCE OF TITLE INSURANCE. Maintain title insurance in
     favor of the Lender from a title insurance company acceptable by the
     Lender.

<PAGE>

                                                                            24

          (f) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of
     its properties and all necessary governmental approvals, licenses and
     permits, that are used or useful in the conduct of its business in good
     working order and condition, ordinary wear and tear excepted. No changes
     in ownership are permitted without the Lender's consent.

          (g) YEARLY CAPITAL EXPENDITURES. The yearly Capital Expenditures
     should not exceed an amount of FOUR HUNDRED THOUSAND Dollars
     (US$400,000.00). The amount stated herein refers to additional CAPEX,
     incremental from the financing provided by the Lender.

          (h) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain
     its existence, legal structure, legal name, rights (charter and
     statutory), permits, licenses, approvals, privileges and franchises, to
     the extent that failure to preserve and maintain the same could produce
     a Material Adverse Effect, and conduct its business in accordance with
     prudent business practices. The Borrower and PriceSmart Honduras, S. A.
     de C. V. will not be allowed to contract any of the following without
     the Lender's prior consent: mergers, consolidations and divestitures;
     and changes in conduct of the business of either's corporate structure.

          (i) VISITATION RIGHTS. During normal business hours and from time
     to time, with reasonable notice, permit the Lender, or any of the
     insurer parties to the Political Risk Insurance or any agents or
     representatives thereof, to examine the records and books of account of,
     and visit the properties of, the Borrower PriceSmart Honduras, S. A. de
     C. V., and to discuss the affairs, finances and accounts of the Borrower
     and of PriceSmart Honduras, S. A. de C. V. with any of its officers or
     directors and with its independent certified public accountants.

          (j) KEEPING OF BOOKS. Keep appropriate and accurate books of record
     and accounts, in which full and correct entries shall be made of all
     financial transactions and the assets and business of the Borrower and
     of PriceSmart Honduras, S. A. de C. V. in accordance with Honduran GAAP.

          (k) COMPLIANCE WITH TERMS OF REAL PROPERTY LEASEHOLDS. Make all
     payments and otherwise perform all obligations in respect of all leases
     of real property to which the Borrower or PriceSmart Honduras, S. A. De
     C. V., as applicable, is a party; keep such leases in full force and
     effect and not allow such leases to lapse or be terminated or any rights
     to renew such leases to be forfeited or canceled, notify the Lender of
     any default by any party with respect to such leases and cooperate with
     the Lender in all respects to cure any such default, except where the
     failure to do so, either individually or in the aggregate, could not
     reasonably be expected to have a Material Adverse Effect.

          (l) PROPERTY AND CASUALTY INSURANCE. The Borrower shall maintain
     property and casualty insurance customary in the industry, properly

<PAGE>

                                                                            25

     endorsed in favor of the Lender from an insurance company accepted by
     the Lender.

          (m) TITLE INSURANCE. The Borrower shall maintain Lender Title
     Insurance in favor of the Lender from a title insurance company accepted
     by the Lender.

          (n) PERFECTION OF SECURITY INTERESTS. Maintain the recording,
     priority and perfection of the Liens on the Collateral created by the
     Collateral Documents and keep all Collateral free and clear of Liens
     except for the Liens created under Collateral Documents.

          (o) FURTHER ASSURANCES. From time to time, do and perform any and
     all acts and execute any and all documents as may be necessary or as
     reasonably requested by the Lender or the insurers in order to effect
     the purposes of this Agreement or to protect the rights or interests of
     the Lenders or the insurer parties to the Political Risk Insurance, in
     each case, or under the Loan Documents or as may be otherwise
     contemplated in the Political Risk Insurance.

          (p) YEAR 2000 COMPLIANT. Promptly notify the Lender in the event
     the Borrower discovers or determines that any computer application
     (including those of its suppliers and vendors) that is material to the
     Borrower's business and operations will not be Year 2000 compliant,
     except to the extent that such failure could not reasonably be expected
     to have a Material Adverse Effect.

          (q) WORKER RIGHTS. The Borrower agrees not to take any action, and
     to ensure that no action will be taken by any contractor (or any
     subcontractor) of the Borrower performing engineering, procurement and
     construction services contracted for after the date of the Loan
     Documents, or providing operating and management services contracted for
     after the date of this Agreement, for the project (each a "contractor"
     collectively the "contractors") to prevent employees of the Borrower or
     of any such contractor performing such services for the project from
     lawfully under the laws of Honduras exercising their right of
     association and their right to bargain collectively. It agrees to
     observe, and to cause each contractor to observe, with respect to its
     respective employees, applicable laws relating to acceptable conditions
     of work with respect to minimum wages, hours of work, and occupational
     health and safety. Furthermore, in connection with the project it
     agrees, and agrees to cause each contractor, (i) not to use forced
     labor, (ii) not to employ any person under age 16 for any hazardous
     activity, (iii) that all employees will have the right to remove
     themselves from hazardous situations without jeopardizing their
     continued employment and (iv) that all employees will be guaranteed a 24
     hour rest period per week.

          (r) ENVIRONMENTAL COMPLIANCE. Comply with (i) the International
     Finance Corporation's Environmental, Health and Safety Guidelines for
     Office Buildings, dated July 1, 1998, and (ii) the

<PAGE>

                                                                            26

     provisions of all applicable environmental, health and safety laws,
     codes and ordinances, and all rules and regulations promulgated
     thereunder, with respect to the project.

          (s) GOVERNMENTAL COMPLIANCE. Conduct its business in compliance
     with all applicable laws and directives of governmental bodies having
     force of law, including without limitation, corrupt practices laws and
     shall implement internal management and accounting practices and
     controls adequate to ensure compliance with applicable corrupt practices
     laws. The Borrower shall use the proceeds of its Facility Loan solely
     for the project and shall not engage in any business in connection with
     the project other than its present business activities and those related
     to its project, as each are described in the information provided to
     OPIC and other activities similar, thereto, without the prior written
     consent of OPIC.

          (t) ADDITIONAL TERMS. Comply with such additional terms and
     conditions as may be required in connection with each OPIC Approval.

          (u) NO LIABILITY FOR OPIC. Agree that OPIC shall bear no liability
     if a Facility Loan is not funded in whole or in part.

          (v) GROSS-UP OF PAYMENTS. Agree to the gross-up payments by it for
     taxes and increased costs on terms to be agreed upon between the Lender
     and OPIC.

          (w) OPIC'S OPTION TO PURCHASE. Consent to the exercise of OPIC's
     option to purchase the Facility Loan, if applicable

          (x) SELF-MONITORING QUESTIONNAIRE. The Borrower shall complete and
     annually submit the OPIC Self-Monitoring Questionnaire, which will be
     provided by the Lender, with respect to the operation of the related
     project Unless waived in writing by OPIC, the Borrower shall, upon
     request of OPIC, give access to OPIC representatives during normal
     business hours to permit them to inspect their facilities and properties.

          The Borrower acknowledges that the Lender is required to (i) notify
     OPIC upon becoming aware of any violation of the covenants in this
     Section letters (r), (s), (t), (u), (v), (w), (x) and (y) by the
     Borrower, (ii) consult with OPIC concerning appropriate actions to be
     taken with respect to such violations, and (iii) if OPIC so directs,
     accelerate, or cause the applicable Branch to accelerate the related
     Loan, provided it or the applicable Branch has the power to do so under
     applicable law.

          SECTION 5.03. NEGATIVE COVENANTS. So long as any amount of the Loan
shall remain unpaid, or the Lender shall have any Commitment hereunder, the
Borrower shall not, and, except as set forth below, at any time:
<PAGE>
                                                                             27

               (a) LIENS, ETC. Create, incur, assume or suffer to exist, any
          Lien on or with respect to any of its properties of any character now
          owned, or assign any right to receive income EXCLUDING:

                   (A) Liens created under the Loan Documents;

                   (B) Permitted Liens; and

               (b) MERGERS, ETC. Contract any of the following without the
          Lender's prior written consent: mergers, consolidations and
          divestitures; and changes in conduct of the business or corporate
          structure.

               (c) SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise
          dispose of any Collateral or any part of its assets other than
          Collateral, or grant any option or other right to purchase, lease or
          otherwise acquire any Collateral or any part of its assets other than
          Collateral, other than (i) in the case of the Borrower inventory to be
          sold in the ordinary course of its business, (ii) assets no longer
          used or useful in its operations.

               (d) INVESTMENTS IN OTHER PERSONS. Contract any of the following
          without the Lender's prior written consent: investments in
          subsidiaries, affiliates and/or third parties; and guarantees to third
          parties. Invest in the capital stock or securities of any subsidiary
          or affiliated corporations except in the ordinary course of business.

               (e) CHANGE IN NATURE OF BUSINESS. Make any material change in the
          nature of its business as carried on at the date hereof.

               (f) ACCOUNTING CHANGES. Make or permit any change in accounting
          policies or reporting practices, except as required to comply with
          Salvadoran GAAP.

               (g) PREPAYMENTS, ETC. OF DEBT. Prepay, redeem, purchase, defease
          or otherwise satisfy prior to the scheduled maturity thereof in any
          manner, or make any payment in violation of this Agreement, other
          than, prepayment of (A) the Loan in accordance with the terms of
          this Agreement and (B) trade account payables incurred in the
          ordinary course of business.

               (h) AMENDMENT, ETC. OF CERTAIN CONTRACTS. Amend, modify or change
          in any manner any material term or condition of, or cancel or
          terminate, or consent to or accept any cancellation or termination of,
          or give any consent, waiver or approval under, or waive any default
          under or breach of any material term or condition of, the Lease and
          License Agreement, without the prior written consent of the Lender.

<PAGE>
                                                                             28

               (i) PARTNERSHIPS. Become a general partner in any general or
          limited partnership.

               (j) ACQUISITIONS. Contract any of the following without the
          Lender's prior consent if they should exceed the amount of
          US$250,000.00 per year (excluding capital expenditures);
          acquisitions, sales or transfers of assets; leases or sale /
          leasebacks of assets, repurchases or redemptions of outstanding
          stock (including options or warrants); exchanges defeasances,
          amendments or repurchases of long term indebtedness; and capital
          lease and operating lease obligations.

               (k) CHARTER AMENDMENTS. Make any amendment or modification of its
          corporate organizational documents in a manner that could reasonably
          be expected to be materially adverse to the rights, remedies or
          interests of the Lender or the ability of the Borrower or any other
          Loan Party to perform under any Loan Document, or impair the value of
          the Collateral.

               (l) NEGATIVE PLEDGE. Enter into or suffer to exist any agreement
          on all assets which are the subject of this loan.

               SECTION 5.04. ADDITIONAL GUARANTOR CONVENANTS. So long as any
amount of the Loan shall remain unpaid, or the Lender shall have any Commitment
hereunder, the Guarantors shall:

               (a) MINIMUM NET WORTH. PriceSmart, Inc. shall maintain a minimum
          net worth of US$55,000,000.00, at all times.

               (b) EXISTING OWNERSHIP. PriceSmart, Inc., shall not diminish
          existing ownership in PSMT Caribe, Inc.

               (c) MINIMUM NET WORTH. PSC, S.A. shall maintain a minimum net
          worth of US$10,000,000.00.

               (d) EXISTING OWNERSHIP. PSC, S.A. shall maintain existing
          ownership in PSMT Caribe, Inc.

               (e) MINIMUM NET WORTH. PSMT Caribe, Inc. Shall maintain a minimum
          net worth of US$25,000,000.00.

               (f) VARIANCE FROM COVENANTS. In the event that the Guarantors
          anticipate a variance from any of the above covenants, except wherein
          PriceSmart, Inc. obtains greater percentage interest in PSMT Caribe,
          Inc., the Borrower, and/or PriceSmart Honduras, S. A. de C.V., the
          Guarantors must obtain the Lender's consent thereto with an advance 60
          days notice, which consent may be withheld at the Lender's sole
          discretion.

<PAGE>
                                                                             29

               SECTION 5.05.- REPORTING REQUIREMENTS. So long as the Loan or any
part of the Loan shall remain unpaid, the Borrower will furnish to the Lender:

               (a) DEFAULT NOTICE. As soon as possible and in any event no later
          than five Business Days, (i) after the General Manager or the Chief
          Financial Officer of the Borrower obtains knowledge of the occurrence
          of each Default, a statement of a senior officer of the Borrower
          setting forth details of such Default, other "default" or Material
          Adverse Change and the action that the Borrower has taken and proposes
          to take with respect thereto; (ii) In the event that non-compliance or
          potential non-compliance with covenants in Sections 5.02(q) and 5.03
          (m), with respect to the employees of the Borrower or any contractor
          comes to the attention of the Borrower, it shall give prompt notice
          thereof to the Lender and OPIC and, if applicable, to such contractor.
          It (i) shall (a) cure such non-compliance or (b) cause such contractor
          to cure such non-compliance, in either case to the satisfaction of
          OPIC, and (ii) shall terminate that contract with such contractor (the
          "contract") unless such non-compliance is cured to the satisfaction of
          OPIC within 90 days of such notice thereof from the Lender of OPIC to
          it, whichever occurs first.

               (b) QUARTERLY FINANCIALS. As soon as available and in any event
          within 45 days after the end of each of the quarters of each Fiscal
          Year, a Consolidated and consolidating balance sheet of the Borrower,
          PriceSmart Honduras, S.A. de C.V, and the Guarantors as of the end of
          such quarter. All financial statements shall include a certificate
          from the management detailing compliance of the Financial Covenants
          and certifying that no Default or Event of Default has occurred.

               (c) ANNUAL AUDITED FINANCIALS. As soon as available and in any
          event within 90 days after the end of each Fiscal Year, a consolidated
          and consolidating audited balance sheet of the Borrower, PriceSmart,
          S. A. de C.V. and the Guarantors. All financial statements shall
          include a certificate from the management detailing compliance of the
          Financial Covenants and certifying that no Default or Event of Default
          has occurred.

               (d) LITIGATION. (i) Promptly after the commencement thereof,
          notice of all actions, suits, investigations, litigation and
          proceedings before any court or governmental department, commission,
          board, bureau, agency or instrumentality, domestic or foreign, (A)
          which could have a Material Adverse Effect on the Borrower or any
          other Loan Party, (B) or which could reasonably be expected to have a
          material adverse effect on the business, condition (financial or
          otherwise), operations, performance, properties or prospects of the
          Borrower and (ii) as soon as possible and in any event no later than
          five Business Days after the General Manager or the Chief Financial
          Officer of the Borrower obtains knowledge of the commencement thereof,
          notice of all actions, suits, investigations, litigation and
          proceedings before any court or governmental department, commission,
          board,

<PAGE>
                                                                             30

          bureau, agency or instrumentality, domestic or foreign, which could
          reasonably be expected to have a material adverse effect on the
          business, condition (financial or otherwise), operations,
          performance, properties or prospect of the Borrower.

               (e) OTHER INFORMATION. Within fifteen days of a written request
          by the Lender, such other information respecting the business,
          condition (financial or otherwise), operations, performance,
          properties or prospects of the Borrower as the Lender may from time to
          time reasonably request.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

               SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:

               (a) (i) the Borrower and PriceSmart Honduras, S. A. de C.V. shall
          fail to pay any principal or interest of the Loan when the same shall
          become due and payable or (ii) the Borrower and PriceSmart Honduras,
          S. A. de C.V. shall fail to pay any other amounts to any party due and
          payable, where such failure shall continue unremedied for 30 days
          after due date. Payments due to PriceSmart, Inc. are exempt from this
          provision.

               (b) any Guarantor shall fail to honor the obligations under the
          Loan Documents.

               (c) any representation or warranty made by the Borrower,
          PriceSmart Honduras, S.A. de C.V. and any of the Guarantors (or any of
          its officers) in the Loan Document or any certificate or other
          document delivered in connection with the Loan Documents shall prove
          to have been incorrect in any material respect when made or confirmed;
          or

               (d) the Borrower, PriceSmart Honduras, S. A. de C.V. or any of
          the Guarantors shall fail to perform or observe any term, covenant or
          agreement contained in Sections 5.01, 5.02, 5.03, 5.04, and 5.05;

               (e) Material Breach: any representation or warranty by Borrower,
          PriceSmart Honduras and Guarantors proves to be incorrect in any
          material aspect, or any other covenants are not complied with;

               (f) Bankruptcy, insolvency, re-scheduling, moratoria on payments
          or similar proceeding by or against Borrower, PriceSmart Honduras and
          Guarantors.
<PAGE>

                                                                              31

               (g) Changes in laws that materially affect the ability of the
          Borrower to perform obligations; make Borrower's obligations under the
          Loan Documentation illegal or unenforceable; failure of the
          obligations under the Loan Facility to rank senior to all indebtedness
          of the Borrower and PriceSmart Honduras, S.A. de C.V.;

               (h) A change in ownership, management or control of Borrower
          and/or PriceSmart Honduras, S.A. de C.V excepting any increase in
          direct or indirect ownership by PriceSmart, Inc.;

               (i) Occurrence of Material Adverse Change in the condition
          (financial or otherwise) of Borrower or PriceSmart Honduras, S.A. de
          C.V.;

               (i) Termination, by PriceSmart, Inc., of the Licensing,
          Technology Transfer, Training & Sourcing Agreement, pursuant to
          Section 12 of said Licensing Agreement. In the event PriceSmart, Inc.
          elects to terminate said Licensing Agreement during the term of the
          Loan, it shall provide Lender with written notice of its intent
          thereof, six months prior to said election;

               (k) Cure Provisions: Borrower shall have a 10-day curing period
          for any payment default. This provision does not require notification
          and must not be exercised more than twice per year. In such case that
          this provision is exercised more than twice per year, Borrower shall
          be in immediate default. Borrower shall have a 30-day curing period
          for any non-payment default;

               (l) Failure of the Borrower (x) promptly to notify the Lender
          and, if applicable, the contractor of such non-compliance; or (y) to
          cure such non-compliance or cause such contractor to cure such
          non-compliance, in either case to the satisfaction of OPIC, or (ii) to
          terminate the contract. The Borrower and the contractors are not
          responsible under this Section for the actions of the government of
          Honduras.

               (m) Acceleration remedy provision: The lender may declare, by
          written demand for payment, any portion or all of the Loan to be due
          and payable, whereupon such portion of the Loan, together with
          interest accrued thereon and all other amounts due under this
          Agreement, shall immediately mature and become due and payable.

                                   ARTICLE VII

                                 MISCELLANEOUS

               SECTION 7.01. DEVALUATION HEDGE. The Lender agrees that, prior to
Loan closing, it will not require the Borrower to enter into a non-delivery
forward

<PAGE>

                                                                              32

contract in order to hedge local currency devaluation risk, based upon the
Borrower's current policies and practices regarding devaluation risk. However,
the Borrower and the Lender agree that this policy will be reviewed on a
quarterly basis, and, in the event that market conditions so dictate, the Lender
reserves the right to require that the Borrower enter into such hedge. The
Borrower acknowledges the Lender's rights in this regard and agrees to act in
good faith in order to mitigate any devaluation risk.

          SECTION 7.02. LOAN PARTICIPATION. The Lender may, in its sole
discretion, participate or assign all or a portion of the Loan to one or more
lending institutions (Co-lenders or Participants). In the event the Lender
assigns all or a portion of the Loan to a Co-Lender, the Lender's responsibility
for the funding of that portion of the Loan will terminate upon the assumption
by the Co-Lender of such responsibility. Lender may, but will not be obliged to
serve as agent for the Co-Lenders with respect to the Loan.

          SECTION 7.03. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed (or, in the case of the Collateral Documents, consented
to) by the Borrower and the Lender

          SECTION 7.04. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered, if to the Borrower, at its address at Salida Carretera Vieja a La
Lima, San Pedro Sula, Honduras, Attention: General Manager; if to the Lender, at
its address set forth on the signature pages hereof; or, as to the Borrower, or
the Lender, at such other address as shall be designated by such party in a
written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Lender. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement is
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.

          SECTION 7.05. NO WAIVER; REMEDIES. No failure on the part of the
Borrower or the Lender, to exercise, and no delay in exercising, any right
hereunder or under this Agreement or Recognition of Debt shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

          SECTION 7.06. COSTS, EXPENSES. The Borrower agrees to pay all
incidental expenses of the Lender relating to the Loan, including but not
limited to

<PAGE>

                                                                              33

<PAGE>

                                                                              34

Loan Documents and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this subsection (c) shall have the fullest scope
permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be irrevocable for purposes of such Act.

          SECTION 7.08. ENGLISH LANGUAGE. This Agreement has been negotiated
and executed in the English language. The English language version of this
Agreement and each other Loan Document shall control and be conclusive as to
the meaning of any terms and provisions hereof or thereof, except in the case
of the Recognition of Debt, the Mortgage on Real Property, the Pledges of the
Equipment and the Pledge of the Lease Agreement, where the Spanish language
version shall control and be conclusive as to the meaning of any terms and
provision thereof. Each other document to be delivered in respect of this
Agreement shall be in the English language or shall be accompanied by an
English translation certified by the Borrower as being complete and correct.

          SECTION 7.09. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

          SECTION 7.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, PRICESMART
HONDURAS, S.A. DE C.V., THE GUARANTORS, THE ASSIGNOR AND THE LENDER IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE ACTIONS OF THE LENDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

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

                            BORROWER:

                            INMOBILIARIA                            PRICESMART

HONDURAS, SOCIEDAD ANONIMA DE CAPITAL VARIABLE or simply INMOBILIARIA
PRICESMART, S.A. DE C.V.

                            By:  /s/ JESUS ERNESTO GRIJALVA
                                ------------------------------------
                                Name: Jesus Ernesto Grijalva
                                Title: Vice President Latin American
                                Legal Affairs

<PAGE>

                                                                              35

                           GUARANTORS:
                           PRICESMART HONDURAS, SOCIEDAD
ANONIMA DE CAPITAL VARIABLE, or simply PRICESMART HONDURAS, S.A. DE C.V.

                            By:  /s/ JESUS ERNESTO GRIJALVA
                                ------------------------------------
                                Name: Jesus Ernesto Grijalva
                                Title: Vice President Latin American
                                Legal Affairs

                            PRICESMART, INC.

                            By:  /s/ JESUS ERNESTO GRIJALVA
                                ------------------------------------
                                Name: Jesus Ernesto Grijalva
                                Title: Vice President Latin American
                                Legal Affairs

                            PSMT CARIBE, INC.

                            By:  /s/ JESUS ERNESTO GRIJALVA
                                ------------------------------------
                                Name: Jesus Ernesto Grijalva
                                Title: Vice President Latin American
                                Legal Affairs

                            PSC, S.A.

                            By:  /s/ EDGAR ZURCHER GURDIAN
                                ------------------------------------
                                Name: Edgar Zurcher Gurdian
                                Title: Legal Representative

                            VENTURES SERVICES, INC.

                            By:  /s/ JESUS ERNESTO GRIJALVA
                                ------------------------------------
                                Name: Jesus Ernesto Grijalva
                                Title: Vice President Latin American
                                Legal Affairs<PAGE>

    LOAN CONTRACT WITH GUARANTEE OF PLEDGE WITHOUT DISPOSSESSION AND MORTGAGE

BETWEEN:

               EL BANCO DOMINICANO DEL PROGRESO, S. A., banking institution
               organized according to the laws of the Dominican Republic, with
               business domicile at No. 3 John F. Kennedy Avenue of this city,
               duly represented by its Executive Vice-President, Mr. PEDRO E.
               CASTILLO L., Dominican, of legal age, married, banking officer,
               bearer of personal identification and electoral card No.
               001-0066343-4, domiciled and resident in this city, entity which
               hereinafter shall be named "THE BANK", on one hand, and on the
               other hand,

               The Company PRICESMART DOMINICANA, S. A., commercial entity
               organized according to the laws of the Dominican Republic, with
               domicile and business domicile at No. 54 Charles Summer Avenue,
               of this city, duly represented by Messrs. ALBERTO BONETTI,
               Dominican, of legal age, married, bearer of personal and
               electoral card No. 001-0102205-1, domiciled and resident in No.
               33 Porfirio Herrera Street, Piantini, of this city, and ERIC
               TORRES, US Citizen, of legal age, single, Business Manager,
               bearer of US Passport No. 093904746, domiciled and resident in
               this city; and the Company INMOBILIARIA PRICESMART, S. A.,
               commercial entity organized according to the laws of the
               Dominican Republic, with domicile and business domicile at No. 54
               Charles Summer Avenue, of this city, duly represented by Messrs.
               ERIC TORRES and ALBERTO BONETTI, whose data are above stated,
               which hereinafter shall be named "THE SOLIDARY CO-DEBTORS".

         WHEREAS: "THE SOLIDARY CO-DEBTORS" have requested a loan to "THE BANK"
for the amount of SEVEN MILLION UNITED STATES DOLLARS (US$7,000,000.00),
according to item i) ordinal 3, of the Third Resolution of the Monetary Board
dated December 11, 1992.

         WHEREAS: "THE BANK" under the terms and conditions herein below
defined, has approved the request of "THE SOLIDARY CO-DEBTORS";

<PAGE>

         WHEREAS: In consideration of the amount of the loan, "THE BANK" has
requested the commercial entities PRICESMART, INC., PSC, S. A., PSMT CARIBE,
INC. and VENTURES SERVICES, INC., hereinafter "THE SOLIDARY GUARANTORS", which
are part of the economic group of "THE SOLIDARY CO-DEBTORS", to subscribe, as to
the effect, guarantee letters issued in favor of "THE BANK" in regards to all
and each of the obligations contracted by "THE SOLIDARY CO-DEBTORS" by virtue of
this contract, which are integral part of the same contract and are incorporated
as Attachment I;

         THEREFORE, and in the understanding that the above paragraphs are
integral parts of this contract:

         ARTICLE ONE: OBJECTIVE.- "THE BANK" hereby grants to "THE SOLIDARY
CO-DEBTORS" who accept, a loan with own funds for the amount of SEVEN MILLION
UNITED STATE DOLLARS (IS$7,000,000.00), to be destined to finance the
construction of commercial premises and the acquisition of equipment.

         PARAGRAPH II: DISBURSEMENTS.- Once "THE BANK" has confirmed that it has
received from "THE SOLIDARY CO-DEBTORS" the documents which satisfy the
conditions and requirements established for the disbursement in this contract,
provided that the same have the funds available for such purposes, it shall
place the approved amount at the disposition of the "THE SOLIDARY CO-DEBTORS",
within a period of three (3) working days, through a wire transfer of funds for
the sum of the loan, in the understanding "THE SOLIDARY CO-DEBTORS" shall cover
all the expenses, of all type, in which it may incur to perform such
disbursement. Once accepted the disbursement request by "THE BANK", it will be
considered irrevocable and binding for "THE SOLIDARY CO-DEBTORS". "THE SOLIDARY
CO-DEBTORS" shall indemnify "THE BANK" against any loss or expenses incurred as
result of the fault of "THE SOLIDARY CO-DEBTORS" in satisfying or complying in
or before the date specified for the disbursement of the conditions and
requirements stipulated in this contract as conditions previous to the
disbursement. Within these faults are included, without limitation, any loss or
expense incurred due to the liquidation or reuse of the deposits to other funds
acquired by "THE BANK" to obtain the

                                       2
<PAGE>

funds or finance the disbursement to be made by this latter as part of the
disbursement request, when the same is not executed on the date agreed, in
consequence of the non-compliance by "THE SOLIDARY CO-DEBTORS".

         ARTICLE TWO: PROMISSORY NOTES.- "THE SOLIDARY CO-DEBTORS" bind
themselves to jointly subscribe this loan contract, a promissory note in Dollars
in favor of "THE BANK", for the amount of SEVEN MILLION UNITED STATES DOLLARS
(US$7,000,000.00), which shall be waived of protest for lack of payment.

         ARTICLE THREE: PREVIOUS CONDITIONS.- The previous conditions
hereinafter mentioned must have been satisfied by "THE SOLIDARY CO-DEBTORS"
before performing the disbursement under the loan:

         A) DOCUMENTS PROVING THE LOAN: This loan contract and accessorial shall
be duly authorized, subscribed and executed by the respective parties and shall
be in full force and effect before it is carried out.

         B) COMPLIANCE: "THE SOLIDARY CO-DEBTORS" shall have complied and
adhered to the extent each of its liabilities and obligations contained in the
contract pertaining to this transaction and whose compliance is required upon
the subscription date of the same or on the date of the disbursement. No fault
should have occurred prior or on the date of subscription of this contract or
upon the date of any disbursement and there shall be no condition or situation
that on the date of subscription of the same or the date of disbursement may
constitute non-compliance by "THE SOLIDARY CO-DEBTORS".

         C) PAYMENT WITHOUT DEDUCTIONS: All payments to be made by "THE SOLIDARY
CO-DEBTORS" under this contract or any promissory note issued as consequence of
the same shall be made tax exempted and without any deduction or discount for
any duty, contribution, charge or lien, recharge, tax retention, currently
existing or which may exist in the future, in the Dominican Republic, and the
responsibility and payment of such duties shall be exclusively under the account
of "THE SOLIDARY CO-DEBTORS", in the

                                       3
<PAGE>

understanding that if for any cause "THE BANK" needs to pay directly such
duties, "THE SOLIDARY CO-DEBTORS" shall be bound, upon request of "THE BANK"
affected, to indemnify for such payment of duties and cover the interests at the
rate established in the contract.

         ARTICLE FOUR: EXPIRATION AND PAYMENT METHOD.- "THE SOLIDARY CO-DEBTORS"
are bound to pay this debt in the period of one hundred eighty (180) days,
beginning upon the _____________________ ( ) day of the month of
_________________ of the year 2000, through the payment of one (1) sole
settlement of capital of SEVEN MILLION UNITED STATES DOLLARS (US$7,000,000.00),
due on the day of the month of of the year 2000.

         PARAGRAPH I: "THE BANK" shall have the option at the expiration of the
period indicated in this article for the payment of the debt, and subject to the
existing availability, of restructuring the loan at long term, under the
conditions that will be agreed by the parties in a term of no more than 60 days
before such expiration date. In the event that "THE BANK" decides not to renew
this contract, it shall so notify "THE SOLIDARY CO-DEBTORS" thirty (30) days
prior to the expiration of the loan.

         PARAGRAPH II: ANTICIPATED PAYMENTS.- "THE SOLIDARY CO-DEBTORS" shall
have the faculty to prepay or pay in advance the total or part of the debt,
provided that they do not owe any amount due to demandable interests or any
other reason, by giving anticipated notice in writing to "THE BANK" at least
thirty days before the date on which the advance payment will be made and whose
communication shall indicate the estimated date and the amount of the
prepayment.

         ARTICLE FIVE: EXCHANGE RISK.- The obligations of "THE SOLIDARY
CO-DEBTORS" to pay the capital of the financing, interests earned and other
obligations owed to "THE BANK" by virtue of this contract, shall only be
considered discharged by the payment in United States Dollars, in such manner
and place specified in the provisions of this contract

                                       4
<PAGE>

in regards to the payments, without taking into account the existence of a
sentence or judicial decision stated in other currency.

         PARAGRAPH I: in the event that for any reason of force majeur, the
payments made in Dominican pesos, the same shall be converted from pesos to US
dollars, through the calculation of the rate of sale of dollars to the public
existing in the private market of foreign currency of Santo Domingo. If there is
no open quote for the purchase-sale of the US currency in the private market of
exchange of Santo Domingo, the conversion shall be made in such manner that the
amount paid in other currency or considered as owed by virtue of this contract
be enough in order that according to the standard banking procedures, "THE BANK"
may buy the necessary US dollars to cover the sum owed in the exchange market of
New York or any international exchange market. Is the amount so purchase is less
than the sum originally owed in the currency in which the loan has been granted,
"THE SOLIDARY CO-DEBTORS" agree to indemnify "THE BANK" against the loss and if
the amount in dollars so purchased exceeds the sum originally owed to"THE BANK",
this latter convenes to reimburse "THE SOLIDARY CO-DEBTORS" such excess.

         PARAGRAPH II: WAIVER TO THE MONETARY PARITY.- The parties recognize and
accept that the value of the Peso in comparison to the US Dollar is established
by the law of the offer and demand in the free exchange market. Therefore, "THE
SOLIDARY CO-DEBTORS" waive from now on to adhere to the validity of article 1st
of Law No. 1528, dated October 9, 1947, which establishes that the parity of the
Dominican Peso with the US Dollar. Likewise, ""THE SOLIDARY CO-DEBTORS" resign
to claim any judicial or legal disposition in regards to the mentioned parity.

         ARTICLE SIX: INTERESTS.- "THE SOLIDARY CO-DEBTORS" shall pay annual
interests at eleven point fifty percent (11.50%) over the basis of one year of
three hundred sixty (360) days, payable in the offices of "THE BANK" monthly and
uninterruptedly, beginning on the month of ________________ of the year 2000.

                                       5
<PAGE>

         ARTICLE SEVEN: CLOSING COMMISSION.- "THE BORROWER" shall pay to "THE
BANK" a sole commission of cero point five percent (0.5%) of the amount
disbursed, at the moment of signing the contract, due to expedition and related
charges.

         ARTICLE EIGHT: MORATORIUM.- "THE SOLIDARY CO-DEBTORS" bind themselves,
in the event of not complying upon its expiration any of the payment
obligations, to pay moratorium charges, under penal clause, the TWO PERCENT (2%)
monthly or fraction of month, over the amount past due, without judicial or
extrajudicial requirement, by previous notice to "THE SOLIDARY CO-DEBTORS" with
ten (10) days in advance.

         ARTICLE NINE: CHANGE OF THE INTEREST RATE.- If during the validity of
this contract, a new law, decree or resolution of the Monetary Board would
authorize an increase in the rate of interest beyond the one convened in this
contract, or in the event of a delay in regards to the date in which the payment
should have been made, or when the conditions in the market justify a change of
such rate, "THE BANK" shall be empowered to increase in an unilateral manner the
interests convened in this contract, up to the maximum extent permitted, with
previous notice to "THE SOLIDARY CO-DEBTORS" with five days in advance.

         ARTICLE TEN: ANTICIPATED PAYMENTS.- "THE SOLIDARY CO-DEBTORS" may pay
any part of the capital borrowed before its expiration provided that they do not
owe any other charge for demandable interests.

         ARTICLE ELEVEN: EXPIRATION ON HOLIDAYS.- Any payment or any other act
established in this contract to be made on Saturdays or holidays according to
the law of the place where the same proceeds, it shall be validly considered
made on the first following working day without any additional charge.

         PARAGRAPH I: EXIGIBILE COMPLIANCE OF THE OBLIGATIONS OF THE "THE
SOLIDARY CO-DEBTORS".- "THE SOLIDARY CO-DEBTORS" understand that "THE BANK" is
empowered to demand the compliance of all the obligations, be them herein

                                       6
<PAGE>

contained or in any other contract related to the same; the validity,
originality, execution or sufficiency of this contract, of the other accessorial
or any document created on them, and in the event of any fault by "THE SOLIDARY
CO-DEBTORS" or any other person in the compliance of their obligations under
this contract or in regards to the promissory note may exercise the rights and
faculties herein conferred.

         PARAGRAPH II.- ADVISORS AND PROXIES OF THE BANK.- "THE BANK" shall
contract advisors, experts or other proxies to comply certain specific tasks and
shall not be responsible for the negligence or misconduct of any of the
advisors, experts or proxies, provided that the same have been selected with
reasonable care, without prejudice to any action that "THE BANK" may exercise
directly against such advisors, experts or other proxies committed by them.
Neither "THE BANK" or any of its directors, officers, employees or agents shall
be responsible of any action taken or not taken by it or by them under this
contract or in relation to the same, with exception of its own material or
serious negligence, as well as its directors, officers and employees.

         ARTICLE TWELVE: ASSIGNMENT OF THE LOAN BY "THE BANK".- With exception
of what is established in this contract, "THE BANK" shall assign one or more
assignees the total or part of its rights and obligations or its participation
under this contract. "THE BANK" and the assignee shall subscribe and execute a
document or assignment of share contract duly notified through bailiff act, in
compliance to Article 1690 of the Civil Code. In the same manner, "THE BANK"
shall give any promissory note that may be part of such assignment or
participation, in the understanding that once executed the assignment, the
assignee of the same shall be considered a party of this agreement in the
measure stipulated in the Assignment Contract and shall have the rights and
obligations of "THE BANK" under this contract, remaining this latter and the
assigning bank, as established in such assignment, discharged of its obligations
related to this agreement in regards to the portion transferred, upon such
moment.

         ARTICLE THIRTEEN: GUARANTEE OF PLEDGE WITHOUT DISPOSSESSION.-
PRICESMART DOMINICANA, S. A. grants if favor of "THE BANK"

                                       7
<PAGE>

a guarantee of PLEDGE WITHOUT DISPOSSESSION, in order to be ruled by the
dispositions of the Agriculture Incentive Law Number 6186 dated February 12,
1963, on machineries, equipment of its property described below:

<TABLE>
<CAPTION>

-------------------------------- ------------------ ----------------------------------------- ------------------
    MACHINERY AND EQUIPMENT          QUANTITY                     DESCRIPTION                   VALUE IN RD$
-------------------------------- ------------------ ----------------------------------------- ------------------
<S>                                                 <C>                                       <C>
Forklifts                        3                  Yale, Model ESC302A                       1,132,800.00
                                                    Series 2945W04420W
                                                    -----------------------------------------
                                                    Series 2945W04112W
                                                    -----------------------------------------
                                                    Series 2945W04433W
-------------------------------- ------------------ ----------------------------------------- ------------------
Battery chargers for forklifts   3                  HOBBART, Model 880C3-                     102,800.00
                                                    18/950
                                                    Series 399CS52671
                                                    -----------------------------------------
                                                    Series 399CS52676
                                                    -----------------------------------------
                                                    Series 399CS52669
-------------------------------- ------------------ ----------------------------------------- ------------------
Forklift batteries               6                  DEKA, Model 18-P137-15                    372,900.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Vehicle to transport batteries   2                  DEKA, Model TCP24PP                       106,000
-------------------------------- ------------------ ----------------------------------------- ------------------
Levels for shippers              2                  YALE, Model CM65W-8L                      123,300.00
-------------------------------- ------------------ ----------------------------------------- ------------------
                                                    GLABREATH 30/60,
Compactor                        1                  Model HD2200, Series GVB0194              169,700.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Manual forklifts (elevators)     10                 SIG JOE, Model L50                        104,600.00
                                                    FOURWAY
                                                    Series F20431-99
                                                    -----------------------------------------
                                                    Series F20436-99
                                                    -----------------------------------------
                                                    Series F20457-99
                                                    -----------------------------------------
                                                    Series F20443-99
                                                    -----------------------------------------
                                                    Series F17411-99
                                                    -----------------------------------------
                                                    Series F20435-99
                                                    -----------------------------------------
                                                    Series F17414-99
                                                    -----------------------------------------
                                                    Series F20437-99
                                                    -----------------------------------------
                                                    Series F20452-99
-------------------------------- ------------------ ----------------------------------------- ------------------
Furniture for cash registers     16                 KILSON, Model KCU-                        422,600.00
                                                    3500-PGT, Series 50528
-------------------------------- ------------------ ----------------------------------------- ------------------
Floor cleaner                    1                  MARCO, Model 680                          144,800.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza refrigerator               1                  CONTINENTAL, Model                        51,700.00
                                                    CPT-67, Series 13347208
-------------------------------- ------------------ ----------------------------------------- ------------------

                                       8

<PAGE>

-------------------------------- ------------------ ----------------------------------------- ------------------
Shelves for freezers                                AMCO, Model CC1836E-                      36,300.00
                                                    SBP
-------------------------------- ------------------ ----------------------------------------- ------------------
Continental freezer              1                  CONTINENTAL, Model                        36,200.00
                                                    IF, Series 13373839
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza dough press                1                  DOUGH PRO, Model DP-                      55,800.00
                                                    1100, Series 94B99H
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza table                      1                  UNIVERSAL, Model PC-                      48,900.00
                                                    PDT-602-4
-------------------------------- ------------------ ----------------------------------------- ------------------
Double oven for pizza            1                  M. MARSHALL, Model                        374,800.00
                                                    PS22OFS-D-G, Series 187110999
-------------------------------- ------------------ ----------------------------------------- ------------------
Smoke extractor for pizza        1                  LARKIN, Series 26235                      52,000.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Pizza cars                       3                  DOUGH PRO, Model DC-                      48,100.00
                                                    63
-------------------------------- ------------------ ----------------------------------------- ------------------
Hot Dog Cooker                   1                  CRAIG, Model LB-7-33Sc,                   130,000.00
                                                    Series 5065
-------------------------------- ------------------ ----------------------------------------- ------------------
Display furniture                1                  UNIVERSAL, Model PS                       80,500.00
                                                    CUSTOM
-------------------------------- ------------------ ----------------------------------------- ------------------
Churros display                  1                  STAR, Model HFD-3                         22,100.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Beverage machine display         1                  UNIVERSAL, Model P/C                      43,900.00
                                                    BC-76
-------------------------------- ------------------ ----------------------------------------- ------------------
Beverage and ice machine         1                  BOOTH CRYSTAL, Model                      66,500.00
                                                    220205061BC-50, Series 30068
-------------------------------- ------------------ ----------------------------------------- ------------------
Ice machine                      1                  CRYSTAL TIPS, Model                       60,000.00
                                                    802CAS251-30
-------------------------------- ------------------ ----------------------------------------- ------------------
Species machine                  1                  UNIVERSAL Model PC                        59,100.00
                                                    CC 9624 2a
-------------------------------- ------------------ ----------------------------------------- ------------------
Water filter                     1                  CUNO, Model A64233,                       14,500.00
                                                    Series A-65795
-------------------------------- ------------------ ----------------------------------------- ------------------
Water treatment system           1                  NIMBUS, Model 2000                        92,100.00
                                                    GPD
-------------------------------- ------------------ ----------------------------------------- ------------------
Roasted beef oven                6                  A. BAKERY, Model MSR2                     454,900.00
                                                    Series 102977
                                                    -----------------------------------------
                                                    Series 102978
                                                    -----------------------------------------
                                                    Series 102980
                                                    -----------------------------------------
                                                    Series 102981
                                                    -----------------------------------------
                                                    Series 102526
                                                    -----------------------------------------
                                                    Series 103735
-------------------------------- ------------------ ----------------------------------------- ------------------
Chicken holder display           1                  A. BAKERY, Model CHT213                   65,900.00
                                                    TRAY, Series 102437
-------------------------------- ------------------ ----------------------------------------- ------------------
Chicken autoservice station      1                  A. BAKERY, Model SSW-                     116,300.00
                                                    4, Series D030629
-------------------------------- ------------------ ----------------------------------------- ------------------
Bakery oven and                  2                  BAXTER, Series 241000717                  206,400.00
-------------------------------- ------------------ ----------------------------------------- ------------------

                                       9
<PAGE>

-------------------------------- ------------------ ----------------------------------------- ------------------
pastries
-------------------------------- ------------------ ----------------------------------------- ------------------
Meat grinder                     1                  HOLLYMATIC, Model                         131,700.00
                                                    175, Series 1752945
-------------------------------- ------------------ ----------------------------------------- ------------------
Meat cutter                      1                  HOLLYMATIC, Model                         86,300.00
                                                    2922, Series HY-16
-------------------------------- ------------------ ----------------------------------------- ------------------
Weight scale with printer        2                  DRC, Model CX20ET,                        73,600.00
                                                    Series 9043249
-------------------------------- ------------------ ----------------------------------------- ------------------
Cutting machine                  1                  BERKEL, Model 834EPB,                     240,800.00
                                                    Series 360358MD99
-------------------------------- ------------------ ----------------------------------------- ------------------
Paking machine                   2                  Model AC3000, Series 90027882             107,800.00
-------------------------------- ------------------ ----------------------------------------- ------------------
                                                    Series 88327834
-------------------------------- ------------------ ----------------------------------------- ------------------
Forklift for heavy                                  COATS, Model 5050", Series                73,600.00
vehicles                         1                  9903107128
-------------------------------- ------------------ ----------------------------------------- ------------------
Forklift for light vehicles      1                  COATS, Model 4040", Series                47,500.00
                                                    9907155931
-------------------------------- ------------------ ----------------------------------------- ------------------
Compressor                       1                  INGERSOLL RAND, Model                     27,400.00
                                                    2475N5, Series P990830364
-------------------------------- ------------------ ----------------------------------------- ------------------
Pneumatic system for deposits    1                  AIRLINK                                   125,600.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Membership displays                                 OMNI                                      303,200.00
Displays  for  photograph  area
and display for travel agency    5
-------------------------------- ------------------ ----------------------------------------- ------------------
Alarm system                     1                  Model 01-5207                             361,600.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Photograph Developing equipment  1                  NORITSU, QSF-V30,                         1,817,000.00
                                                    Series 18331108
-------------------------------- ------------------ ----------------------------------------- ------------------
Telephone system                 1                                                            298,300.00
-------------------------------- ------------------ ----------------------------------------- ------------------
Area for carts                   1                  REHRIGH, Model 4300-15                    761,600.00
-------------------------------- ------------------ ----------------------------------------- ------------------
and 400 carts for merchandise    400                REHRIGH, Model 1200-50
-------------------------------- ------------------ ----------------------------------------- ------------------
Safe box                         1                  SAFE & VAULT, Model                       73,900.00
                                                    SVM 6030 PCD
-------------------------------- ------------------ ----------------------------------------- ------------------
TOTAL                                                                                         RD$9,345,470.00

</TABLE>

         PARAGRAPH I: NO LIEN AND POSSESSION OF PLEDGE.- PRICESMART DOMINICANA,
S.A. declares under faith of oath, that the goods given in pledge through this
act are of its exclusive property and that the same have not been placed in
guarantee before another individual or company. Likewise, it is bound to keep
and maintain them in good conditions and take the necessary measures to avoid
such movables to tear and wear, and place

                                       10
<PAGE>

them under the disposition of the competent authorities in the event of
proceeding due to lack of payment of any of the obligations hereby contracted.

         PARAGRAPH II. VALUE OF THE GOODS GIVEN IN GUARANTEE.- "THE SOLIDARY
CO-DEBTORS" declare that the goods given in guarantee have a total value at the
moment of the appraisal, of NINVE MILLION THREE HUNDRED FORTY FIVE THOUSAND FOUR
HUNDRED PESOS WITH 00/100, and are located at the following address: No. 54
Charles Summer Avenue, of this city.

         ARTICLE FOURTEEN: MAINTENANCE OBLIGATION.- "THE SOLIDARY CO-DEBTORS"
are bound to keep the machineries and equipment given in guarantee in good
condition of operation and authorizes "THE BANK" to make inspections
periodically to prove the status of the same.

         ARTICLE FIFTEEN: SUBSTITUTION OF GUARANTEE.- In the event of fire,
theft or deterioration of motor or skeleton of the machineries and equipment
given in pledge, "THE SOLIDARY CO-DEBTORS" shall be bound to substitute them in
a term of thirty (30) days, by others of the same quality, make and value. This
period may be extended at discretion of "THE BANK" in the event the manufacturer
does not have available the equipment or machineries to be substituted.

         ARTICLE SIXTEEN: MORTGAGE GUARANTEE.- For the security and guarantee of
the payment of the amount owed, as well as the interests and other obligations
to the account of "THE SOLIDARY CO-DEBTORS", INMOBILIARIA PRICESMART, S. A.
grants a mortgage of FIRST DEGREE in favor of "THE BANK" over the immovable of
its property described below:

              1.   "A portion of land of Ten Thousand Two Hundred Square Meters
                   (10,200 Mts(2)) located within the area of Lot
                   No.110-Ref.-779-A-3-B (One Hundred Ten-Reformed-Seven Hundred
                   Seventy Nine-A-Three-B) of Cadastral District No. 4 (Four) of
                   the National District. Supported by Title Certificate
                   (Duplicate from the Owner) No.86-10301, issued by the
                   Registrar of Titles of the National District on September 12,
                   1997".

                                       11
<PAGE>

              2.   "A portion of land of Ten Thousand Two Hundred Square Meters
                   (10,200 Mts(2)) located within the area of Lot
                   No.110-Ref.-779-A-3-B (One Hundred Ten-Reformed-Seven Hundred
                   Seventy Nine-A-Three-B) of Cadastral District No. 4 (Four) of
                   the National District. Supported by Title Certificate
                   (Duplicate from the Owner) No. 84-9844, issued by the
                   Registrar of Titles of the National District on October 9,
                   1984, limited to the North, Charles Summer Avenue; to the
                   East, Lot No.110-Ref.-779-A-3 (remaining part); to the South,
                   Lot No. 102-A, of Cadastral District No. 3 of the National
                   District; and to the West, Area No. 7 and 4 of Block No.
                   2918, Area Nos. 6 and 5 of Block No. 2915."

         PARAGRAPH I: PROHIBITION OF SALE, DONATION AND GUARANTEE.- It is
understood that INMOBILIARIA PRICESMART, S. A. shall not consent transfers,
assignments, donations, sales, or any other lien or any other new charges or
encumbrances over the immovable subject of this mortgage without the express
consent of "THE BANK", INMOBILIARIA PRICESMART, S. A authorizes the pertaining
Registrar of Titles to take record of this prohibition. Likewise, INMOBILIARIA
PRICESMART, S. A. authorizes "THE BANK" or the person whom this latter empowers
to pick up the Duplicate of the Owner from the Office of the Registrar of
Titles, after having registered the mortgage and keep them until the total
settlement of the loan.

         PARAGRAPH II: TAX OBLIGATIONS.- "THE SOLIDARY CO-DEBTORS" are bound to
pay in a timely basis all fiscal and municipal taxes charged or which may be
subject to in the future those immovable in question, or any other duty
including income tax, which may affect the mortgage approved and the
availability of the properties herein above described. In the event of
non-compliance or demurrage of the "THE SOLIDARY CO-DEBTORS" such taxes and the
amounts given in advance by "THE BANK" shall be immediately demandable and shall
generate interests to the highest rate authorized by the monetary authorities.

         PARAGRAPH III: EXCHANGE RATE FOR THE REGISTRATION OF GUARANTEE.- For
the purpose of registration of the mortgages in US Dollars, it shall be taken as
reference the exchange rate in effect for the sale at the Central Bank of the
Dominican Republic at the moment of registration of the mortgages. Nevertheless,
the parties admit that this rate shall only have application for the objectives
of such registration, for which the

                                       12
<PAGE>

payment obligations shall be complied according to what is established in
articles three and four of this contract.

         ARTICLE SEVENTEEN: INSURANCE.- The company PRICESMART DOMINICANA, S. A.
assigns and endorse in favor of "THE BANK" which accepts in capacity of
irrevocable beneficiary, the Insurance Policy No. 121-048139, against fire and
allied lines, issued by Compania Nacional de Seguros, C. por A., located at No.
31 Maximo Gomez Avenue of this city, endorsed in favor of "THE BANK" under
policy No. 001-0182/2000, on the twenty second (22nd) day of February of the
year two thousand (2000), up to the amount of SEVEN MILLION UNITED STATES
DOLLARS (US$7,000,000.00).

         PARAGRAPH: VALIDITY OF THE POLICY.- "THE SOLIDARY CO-DEBTORS" are bound
to keep in force through consecutive renewals and during the period while in
debt with "THE BANK", the insurance policy, in the understanding that if they
would not renew it, "THE BANK" shall be authorized, without liability, to make
such renewal to the account of "THE SOLIDARY CO-DEBTORS", being these latter
bound to cancel the advances paid by "THE BANK" before the next expiration of
the conventional interests established in this contract, in the understanding
the amounts that "THE BANK" gave in advance for such reason shall generate
interest at the existing rate in the market and shall be demandable at the
option of "THE BANK". The amounts anticipated by "THE BANK" for such reasons,
shall be supported by the guarantee described in this act. In the event that an
accident may occur, "THE BANK" shall apply the amount of the insurance to the
interests, capital and other expenses pertaining to the loan granted. "THE BANK"
shall reimburse "THE SOLIDARY CO-DEBTORS" any difference existing upon its
favor.

         ARTICLE EIGHTEEN: The parties herein, recognize and agree that even the
obligations under this contract shall be dischargeable with the receipt from the
"THE BANK" of a sufficient amount of the original currency in which the loan was
granted, for processing and judicial purposes, in the event that "THE BANK" may
have to continue the execution of the guarantees, the demand for payment, and
processing acts and procedures of execution of the guarantees shall be performed
for a sum equivalent in pesos to the amount in dollar at that

                                       13
<PAGE>

moment, calculated such total based on the exchange rate for sale in force at
the Central Bank of the Dominican Republic at the time of the execution, all of
it without prejudice to the validity and effect of the dispositions of Article
Five of this Contract.

         ARTICLE NINETEEN: DOCUMENTS RELATED TO THE GUARANTEES.- Before the
first disbursement, all the documents regarding the guarantees, in the extent it
may be appropriate, such as mortgages and pledges without dispossession are
granted in favor of "THE BANK" by virtue of this contract or its accessorial,
and any other document which may be necessary for the "THE BANK" to proceed, in
the manner established herein, should have been duly given, signed and made by
"THE SOLIDARY CO-DEBTORS" and shall be registered, as may applicable according
to the provisions of this contract, in all offices and branches where may be
necessary in order to execute such guarantees and all the necessary actions to
carry out such procedure shall be at the account of the "THE SOLIDARY
CO-DEBTORS", including all taxes, registrations fees and any other charge or
expenses, including legal honoraries by the attorney of "THE BANK".

         ARTICLE TWENTY: VALUE OF THE GUARANTEES:- Before any disbursement, "THE
BANK" must prove that the value of the loan does not exceed the 70% of the value
of the immovable given in guarantee, determined by appraisals performed by a
firm known and accepted by "THE BANK", report which must be maintained during
the entire period of this contract. On the contrary, and with the consent of
"THE BANK", "THE SOLIDARY CO-DEBTORS" shall grant guarantees over equipment and
other movable effects until completed the aforementioned report. The value of
such goods shall also be determined by an appraisal or evaluation carried out by
a firm which satisfies all the above indicated conditions for the same, which
shall be made to the immovable granted in guarantee.

         ARTICLE TWENTY FIRST: LITIGATION.- "THE SOLIDARY CO-DEBTORS hereby
declare and certify that there are no pending, or to best knowledge of "THE
SOLIDARY CO-DEBTORS", there are no sentence, action, demand, litigation or
procedure existing or possible before any Court, Governmental or Regulatory
Authority, Agency,

                                       14
<PAGE>

Commission, Arbitration Board or Panel against the immovable over which the
projects are being developed, or against the immovable mortgaged and/or movable
pledged in favor of "THE BANK", for the security and guarantee of the payment of
the financing.

         ARTICLE TWENTY TWO: EVENT OF DISPOSSESSION.- In the event that the
total or part of the immovable granted in mortgage guarantee are hereby
dispossessed by the Dominican State or any other competent organism, the price
paid as result of the dispossession shall be given by the dispossessed party or
consignee to "THE BANK" to apply it to the payment of the value that for this
loan may owe "THE SOLIDARY CO-DEBTORS". In consequence, in the vent of such
dispossession, "THE SOLIDARY CO-DEBTORS" expressly authorize since now to the
dispossessed party consignee to directly give to "THE BANK" the values resulting
from the dispossession, in order to apply them to the amortization and/or
cancellation of owed balance by "THE SOLIDARY CO-DEBTORS". IN the event that the
payment of the price of the dispossession exceeds the balance of what is owed to
"THE BANK", this shall give the excess to "THE SOLIDARY CO-DEBTORS".

         ARTICLE TWENTY THREE: COLLECTION OPTION.- It is convened that upon its
due date, "THE BANK" may require at its option the payment of the debt to "THE
SOLIDARY CO-DEBTORS" through the execution of the above mentioned promissory
note, or by other means of right rather than the pledge and mortgage execution,
without such fact implying resignation of "THE BANK" to any other rights related
to its condition of creditor.

         ARTICLE TWENTY FOUR: COMPENSATION OF DEBT.- Likewise, "THE SOLIDARY
CO-DEBTORS" authorize and empower "THE BANK", at its sole option, to compensate
any moment the debt by taking possession of any amount of money of its property
found in hands of "THE BANK" to cover the payment of conventional or legal
capital, interests and accessorial past due and generated by this contract.

         PARAGRAPH: CURRENCY CONVERSION.- In the event that the amounts of
monies property of "THE SOLIDARY CO-DEBTORS" but in hands of "THE BANK" were

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in Dominican currency, "THE SOLIDARY CO-DEBTORS" formally authorize "THE BANK"
to convert such sums in United States Dollars, using for this purpose the
exchange mechanism established in article four of this contract, after which
"THE BANK" may proceed to apply the amounts converted into Dollars to the past
due and outstanding obligations by virtue of this document.

         ARTICLE TWENTY FIVE: APPLICATION OF PAYMENTS.- The payments made to
"THE BANK" by "THE SOLIDARY CO-DEBTORS" or any other person for the values owed
shall apply in the following manner:

         a) To payments made by "THE BANK" to third parties to the account of
"THE SOLIDARY CO-DEBTORS" or as consequence of this contract;

         b) To existing moratorium interests;

         c) To past due interests;

         d) To instalments of capital past due by age;

         e) To debts that for any reason (contracting or violating) "THE
SOLIDARY CO-DEBTORS" may have with "THE BANK".

         ARTICLE TWENTY SIX: TERMINATION.- The lack of payment of an instalment
of capital and/or interests, or the non-compliance of any obligation of payment
by "THE SOLIDARY CO-DEBTORS" shall cause the expiration of the period of this
contract at discretion of "THE BANK", making demandable the totality of the
debt, and executable the guarantees, previously placed in delay "THE SOLIDARY
CO-DEBTORS", being able "THE BANK" to exercise this right even if the payment of
the past due quota is received afterwards.

         PARAGRAPH I: OTHER REASONS OF TERMINATION.- Likewise, "THE BANK"
reserves the right to claim the balance owed at any moment, provided that:

         a) A document issued by "THE SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY
GUARANTORS" has been object of protest by its holder;

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<PAGE>

         b) "THE SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS" are found
in a virtual situation of ceasing of payment or subject to an alternate
agreement before the Chamber of Commerce;

         c) Due to violation or non-compliance by "THE SOLIDARY CO-DEBTORS"
and/or "THE SOLIDARY GUARANTORS" of what it is stipulated in this contract and
similar agreements convened with third parties;

         d) Due to significant deterioration of the financial situation of "THE
SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS", which makes difficult the
compliance of the obligations convened with third parties;

         e) The violation of "THE SOLIDARY CO-DEBTORS" of what is established in
article eleven of this contract;

         f) Due to the non-compliance in the payment of letters of credit and/
or credits of foreign suppliers, or of any similar agreement subscribed with
local or international banking institutions directly or by mediation of "THE
BANK";

         g) Due to a change in the policy outlined for loans in Dollars by the
monetary authorities, previous notice to "THE SOLIDARY CO-DEBTORS" with ninety
(90) days in advance, binding "THE BANK" itself to make the necessary efforts to
convert such loan to Dominican pesos;

         h) Because "THE SOLIDARY CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS"
have created false representation or guarantees over any material;

         i) Due to the non-compliance by "THE SOLIDARY CO-DEBTORS" of the
obligations stipulated in the letters of guarantee signed in separate and
included as integral part of this contract in Attachment I;

                                       17
<PAGE>

         j) Due to change or property, administrative control of "THE SOLIDARY
CO-DEBTORS" and/or "THE SOLIDARY GUARANTORS", excepting any direct or indirect
increase in the property by PriceSmart, Inc.;

         k) Termination by PriceSmart, Inc. of any agreement of license (granted
directly to PSMT Caribe, Inc., and indirectly to the co-debtors);

         l) Dispossession or confiscation of the properties of the co-debtors in
the Dominican Republic by any governmental authority;

         ARTICLE TWENTY SEVEN: OBLIGATION OF THE "THE SOLIDARY CO-DEBTORS" AND
"THE SOLIDARY GUARANTORS". In addition to the cause of termination established
in the previous article, the non-compliance by "THE SOLIDARY CO-DEBTORS" and/or
"THE SOLIDARY GUARANTORS" of any of the following obligations shall produce the
termination of this contract at discretion of "THE BANK", being demandable the
debt, and executable the guarantees;

         a) Not making changes of business or the handling o the business, or
consolidate, merge, sell or dispose of their assets and properties

         b) Not selling or assigning the shares that "THE SOLIDARY GUARANTORS"
have in "THE SOLIDARY CO-DEBTORS";

         c) Keeping a proper insurance and protection;

         d) Complying all the laws and regulations, payment of duties;

         e) Keeping the licenses granted in force;

         f) Granting a reasonable right of access to "THE BANK" to the premises;

                                       18
<PAGE>

         g) Limitation in the investments;

         h) Encumbering negatively all the assets used as guarantee of this
loan;

         i) Not making payments of dividends to the shareholders of "THE
SOLIDARY CO-DEBTORS" during the period of the loan, without the previous
authorization of "THE BANK";

         j) Not making loans or advance payments to their shareholders or
affiliate companies during the period of the loan, without previous
authorization of "THE BANK".

         ARTICLE TWENTY EIGHT: FRAUDULENT ACTIONS.- In the event of fraud,
deceit, or connivance by "THE SOLIDARY CO-DEBTORS" with third parties to
prejudice "THE BANK", this shall have the faculty to demand the immediate
cancellation of the loan and proceed to the sale at public auction of the
mortgaged immovable and goods given in pledge, independently of claiming through
the pertaining judicial way the repair of the fraudulent acts of "THE SOLIDARY
CO-DEBTORS" and their collaborators, including the penal actions that the issue
may require.

         ARTICLE TWENTY NINE: DISPOSITION OF CREDIT INFORMATION.- "THE SOLIDARY
CO-DEBTORS" authorize "THE BANK" to provide the credit information centers the
necessary data with the purpose to allow the evaluation of credit by those
financial institutions subscribed to such center. "THE SOLIDARY CO-DEBTORS"
recognize and accept that the disposition of the referred information by "THE
BANK" and/or credit information centers, or any shareholder, officer or employee
of one of these, shall not constitute violation of the professional
confidentiality according to article 377 of the Penal Code. Therefore, "THE
SOLIDARY CO-DEBTORS" resign to any formal and expressly to exercise any action,
demand or claim in order to obtain compensation in damages and prejudice for the
disclosure of information or having provided inaccurate information. Likewise,
""THE SOLIDARY CO-DEBTORS" promise the adherence of their

                                       19
<PAGE>

representatives, shareholders and any other assignee to what has been agreed in
this article in accordance to the provisions of article 1120 of the Civil Code.

         ARTICLE THIRTY: TAXES, EXPENSES AND HONORARIES.- "THE SOLIDARY
CO-DEBTORS" are bound to pay all the taxes, expenses and honorary fees which
originates this contract, as well as any other amount of money that "THE BANK"
may have to pay with charge to expenses and honoraries generated in the
execution of the guarantee granted in this contract.

         ARTICLE THIRTY ONE: PRUDENTIAL STANDARDS.- "THE SOLIDARY CO-DEBTORS"
recognize and accept: a) That through the Second Resolution dated June 29, 1993
and its amendments, dictated by the Monetary Board, prudential standards were
established in regards to the loans granted by banking institutions to regulate
the conduct and capacity of payment of the debtors, the level of guarantees and
quality of the loans; b) That according to what has been stipulated in such
Resolution, "THE BANK" has the obligation to constitute provisions according to
the degree of deterioration that the granted credit may suffer; c) That the
non-compliance of the obligations at its charge by virtue of this loan contract,
may create a serious prejudice to "THE BANK" which must be compensated; and d)
That by virtue, "THE SOLIDARY CO-DEBTORS" bind themselves and are liable to pay
to "THE BANK" the cost of the amount of the provision these are obliged to do in
regards to the loan in question, calculated upon the basis of the interest rates
and commissions agreed, in the understanding that this compensation is
additional to all other financial cost expected for the loan.

         ARTICLE THIRTY TWO: AUTHORIZATIONS.- At the moment of signing this
contract "THE BANK" shall have received from "THE SOLIDARY CO-DEBTORS" and from
"THE SOLIDARY GUARANTORS", a certified by its authorized officer, of each of the
documents of constitution of such companies, including their Bylaws, in the
manner or version found at the moment of signing this contract, as well as
copies duly certified by the authorized officers of all the records, shares and
corporate decisions taken to authorize the

                                       20
<PAGE>

signature and execution of each of the contracts and other documents regarding
this transaction.

         ARTICLE THIRTY THREE: SOLUTION OF CONFLICTS.- For all the purposes of
this contract, any litigation, controversy or claim resulting from this
agreement or regarding the same, its non-compliance, interpretation, resolution
or cancellation shall be submitted to arbitration. Such differences shall be
solved according to the dispositions of Law No. 50-87 dated June 4, 1987, over
Chambers of Commerce and Production and in the Regulation of the Arbitration
Court of the Chamber of Commerce and Production of the National District, Inc.

         ARTICLE THIRTY FOUR: COMMON LAW.- For what has not been contemplated in
this contract, the parties adhere to the provisions of Common Law.

         ARTICLE THIRTY FIVE: DOMICILE.- For the executive of this contract,
"THE SOLIDARY CO-DEBTORS" and "THE BANK" choose their respective domiciles as
indicated at the beginning of this act.

         MADE, AGREED AND SIGNED IN FAITH OF WHICH, in five (5) originals of the
same tenor and effect, one for each of the contracting parties, one for the
Registrar of Titles of the National District and another for purposes of Law
6186, in the City of Santo Domingo, National District, Capital of the Dominican
Republic, on the __________ days of the month of ____________of the year two
thousand (2000).

                          FOR "THE SOLIDARY CO-DEBTORS"

                          PRICESMART DOMINICANA, S. A.

ERIC TORRES                                                    ALBERTO BONETTI

                         INMOBILIARIA PRICESMART, S. A.

ERIC TORRES                                                    ALBERTO BONETTI

                                       21
<PAGE>

                                 FOR "THE BANK"

                              PEDRO E. CASTILLO L.
                            Executive Vice-President

         I, LIC. ANA MERCEDES CROSS, Lawyer-Notary Public of the National
District, CERTIFY AND ATTEST: That the signatures that appear above have been
placed free and voluntarily in my presence by Messrs. ERIC TORRES, ALBERTO
BONETTI and PEDRO E. CASTILLO L., whose general data are provided in the
aforegoing document, to whom I know and have declared to me that these are the
same signatures they used in all their acts. in the City of Santo Domingo,
National District, Capital of the Dominican Republic, on the         days of
the month of           of the year two thousand (2000).

                             LIC. ANA MERCEDES CROSS
                              LAWYER-NOTARY PUBLIC

                                       22

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