Document:

[BANK OF AMERICA LOGO]

                           NOTE MODIFICATION AGREEMENT

      This Note Modification Agreement dated and effective as of October 1, 2002
(this "Amendment"), is entered into by and between Cost-U-Less, Inc. (whether
one or several, "Borrower"), and BANK OF AMERICA, N.A. ("Lender").

                                    RECITALS

      A. On or about September 15, 2000 Borrower executed a Promissory Note
(including previous amendments, if any, the "Note") in favor of Lender in the
original principal amount of $8,000,000. Lender remains the owner and holder of
the Note.

      B. Borrower and Lender wish to amend the Note as set forth in this
Amendment.

                                  AGREEMENT

      Now, therefore, in consideration of the premises and the mutual agreements
contained herein, the parties agree to amend the Note as follows:

      1. AMENDMENT TO NOTE. The Note is amended as follows:

            1.1 The maturity date is changed to: April 1, 2003.

            1.2 The interest rate is changed to the Prime Rate plus (a) 0% from
the date hereof through and including January 1, 2003, (b) 1% from January 2,
2003 through and including February 2, 2003, (c) 2% from February 3, 2003
through and including March 2, 2003, and (d) 3% from March 3, 2003 and
thereafter. No Fixed Rate Loans shall be available under the Note, except that
any Fixed Rate Loans existing on the date hereof shall continue until the end of
the their respective Interest Periods and thereafter bear interest with
reference to the Prime Rate.

            1.3 The default rate of interest applicable to the Note shall be
three percent above the rate that would otherwise be applicable.

            1.4 The amount of the Note is reduced from Eight Million and no/100
Dollars ($8,000,000) to Six Million Seven Hundred Fifty Thousand and no/100
Dollars ($6,750,000).

All other terms, conditions and covenants in the Note shall be and remain in
full force and effect. When executed by Lender and Borrower, this Amendment
shall be attached to and become a part of the Note.

      2. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter into
this Amendment, Borrower hereby represents and warrants to Lender that except as
has been previously disclosed in writing by Borrower to Lender: i) all of the
representations and warranties set forth in the Note are true and correct on and
as of the date of this Amendment and are applicable to this Amendment; ii) no
default has occurred under the Note; iii) no event, which, with the giving of
notice or lapse of time or both, would cause a default under the Note has
occurred and is continuing; and iv) since the date of the Note there has been no
material adverse change in the financial condition or business operations of the
Borrower. Further, Borrower hereby represents and warrants to Lender that the
individuals signing this Amendment on behalf of Borrower are duly authorized by
Borrower to enter into this Amendment.

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<PAGE>

      3. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
date written above when:

            3.1 This Amendment has been executed by Borrower and Lender;

            3.2 All actions required to be taken by Borrower in connection with
the transactions contemplated by this Amendment have been taken in form and
substance satisfactory to Lender;

            3.3 Lender has received counterpart originals of this Amendment
executed by all parties listed on the signature page(s) hereto and originals or
certified or other copies of such other documents as Lender may reasonably
request.

            3.4 Borrower shall be in compliance with all other terms and
conditions of the Note other than as specifically provided herein.

      4. REAFFIRMATION. Except as modified hereby, all of the terms, covenants,
and conditions of the Note are ratified, reaffirmed, and confirmed and shall
continue in full force and effect. Should any term or provision of the Note
conflict with the terms or provisions contained in this Amendment the terms and
provisions of this Amendment shall be controlling. This Amendment is not
intended to be, nor shall it be construed to be, a novation or an accord and
satisfaction of any other obligation or liability of Borrower to Lender.

      5. BINDING EFFECT. This Amendment shall be binding upon Borrower, Lender,
and their respective successors and assigns, and shall inure to the benefit of
Borrower, Lender, and their respective successors and assigns; provided,
however, that Borrower may not assign this Amendment, the Note, or its rights
arising out of any agreements or instruments relating thereto without Lender's
prior written consent, and any prohibited assignment shall be null and void.

      6. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts.
Each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement.

      7. AMENDMENT AND WAIVER. No amendment or waiver of any one or more of the
provisions hereof shall be effective unless set forth in a writing and signed by
the parties hereto.

      8. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the internal laws of the state provided for in the Note without
reference to conflict of law principles.

      9. SEVERABILITY. Any provision of this Amendment that is held to be
inoperative, unenforceable, voidable, or invalid in any jurisdiction shall, as
to that jurisdiction, be ineffective, unenforceable, void, or invalid without
affecting the remaining provisions in that or any other jurisdiction, and to
this end the provisions of this Amendment are declared to be severable.

      10. FINAL AGREEMENT. THIS WRITTEN AMENDMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN AND AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR AMONG THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

      11. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.

                                       2
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.

                                    BANK OF AMERICA, N.A.

                                    By: /s/ Thomas E. Brown
                                        -------------------
                                    Print Name: Thomas E. Brown
                                    Title: Senior Vice President

                                    COST-U-LESS, INC.

                                    By: /s/ J. Jeffrey Meder
                                        --------------------
                                    Print Name: J. Jeffrey Meder
                                    Title: President & CEO

MARS-5CYKQV

                                       3[BANK OF AMERICA LOGO]

                           AMENDMENT TO LOAN AGREEMENT

                        AMENDMENT NO. 2 TO LOAN AGREEMENT

      This Amendment dated and effective as of October 1, 2002 (this
"Amendment"), is entered into by and between Cost-U-Less, Inc. (whether one or
several, "Borrower"), and BANK OF AMERICA, N.A. ("Lender").

                                    RECITALS

      A. Borrower and Lender are parties to a certain Business Loan Agreement
dated as of September 15, 2000 (including previous amendments, if any, to such
agreement, the "Loan Agreement").

      B. Borrower and Lender wish to amend the Loan Agreement as set forth in
this Amendment.

                                    AGREEMENT

      Now, therefore, in consideration of the premises and the mutual agreements
contained herein, the parties agree to amend the Loan Agreement on the following
terms and conditions.

      1. DEFINED TERMS. Unless otherwise defined in this Amendment, all
capitalized terms used herein as defined terms shall have the meanings given to
them in the Loan Agreement.

      2. AMENDMENT TO LOAN AGREEMENT. The Loan Agreement is amended as follows:

            2.1 Modification of Definition of "Guarantor". The definition of
"Guarantor is hereby amended to read in its entirety as follows:

            "Guarantor. The word "Guarantor" means and includes without
limitation the Grantor Subsidiaries and each and all of the guarantors,
sureties, and accommodation parties in connection with any Indebtedness."

            2.2 Additional Definition of "Grantor Subsidiary". The following new
definition is hereby inserted into the definitions paragraph in the
alphabetically appropriate order:

            "Grantor Subsidiary. The words "Grantor Subsidiary" means each of
CULNEV, INC., a Nevada corporation, CULUSVI, INC., a Virgin Islands corporation,
CULSAMOA, INC., a Samoa corporation, and CULGUAM, INC., a Guam corporation."

            2.3 Reduction in Credit Facility. The revolving line of credit is
reduced, on the date of this Amendment, from $8,000,000 to $6,750,000.
Consequently, the sum "$8,000,000" appearing in the first bullet-point of
paragraph 1 and paragraph 1(c) of Exhibit A are deleted and the sum "$6,750,000"
substituted in lieu thereof.

            2.4 Extension of Maturity Date of Credit Facility. The maturity date
of the revolving line of credit is extended until April 1, 2003. Consequently,
the date "October 1, 2002" appearing in paragraphs 1(b) and (e) of Exhibit A are
deleted and the date "April 1, 2003" substituted in lieu thereof.

            2.5 Maximum Tenor for Letters of Credit. No Letter of Credit
(whether commercial or stand-by) shall have a maturity later than April 1, 2003.
Consequently, the sentence in paragraph 1(b) of

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<PAGE>

Exhibit A beginning "Each Letter of Credit..." is hereby amended in its entirety
to read as follows: "Each Letter of Credit shall not have a maturity later than
April 1, 2003."

            2.6 Cash Collateral for Letters of Credit. Upon the earlier of (a)
termination of the Loan Agreement for any reason and (b) the maturity of the
advances under the Loan Agreement (whether by lapse of time, acceleration or
otherwise), Borrower will cash collateralize any outstanding or undrawn Letters
of Credit in an amount equal to 110% of the face value of such outstanding or
undrawn Letters of Credit, immediately and without further action, notice or
demand by Lender.

            2.7 Elimination of Loan Fee. Paragraph 1(i) of Exhibit A is hereby
amended in its entirety to read as follows:

            "(i) Intentionally Omitted."

      3. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter into
this Amendment, Borrower hereby represents and warrants to Lender that except as
has been previously disclosed in writing by Borrower to Lender: i) all of the
representations and warranties set forth in the Loan Agreement are true and
correct on and as of the date of this Amendment and are applicable to this
Amendment; ii) no default has occurred under the Loan Agreement; iii) no event,
which, with the giving of notice or lapse of time or both, would cause a default
under the Loan Agreement has occurred and is continuing; and iv) since the date
of the Loan Agreement there has been no material adverse change in the financial
condition or business operations of the Borrower. Further, Borrower hereby
represents and warrants to Lender that the individuals signing this Amendment on
behalf of Borrower are duly authorized by Borrower to enter into this Amendment.

      4. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
date written above when:

            4.1 This Amendment has been executed by Borrower and Lender;

            4.2 All actions required to be taken by Borrower in connection with
the transactions contemplated by this Amendment have been taken in form and
substance satisfactory to Lender;

            4.3 Lender has received counterpart originals of this Amendment
executed by all parties listed on the signature pages(s) hereto and originals or
certified or other copies of such other documents as Lender may reasonably
request.

            4.4 Borrower shall have provided Lender with evidence satisfactory
to Lender in Lender's sole discretion that the execution, delivery, and
performance by Borrower of this Amendment and any agreement or instrument
required by this Amendment have been duly authorized;

            4.6 Borrower shall have paid to Lender all of Lender's costs,
expenses, and attorneys' fees incurred by Lender in connection with this
Amendment; and

            4.7 Borrower, or such other party as may be designated by Lender,
shall have executed in favor of Lender, in form and substance satisfactory to
Lender in Lender's sole discretion, the following documents and/or instruments:

            (a) Note Modification Agreement between Borrower and Lender dated as
of even date herewith; and

            (b) Note Modification Agreements between CULNEV, Inc. and each of
the other Grantor subsidiaries dated as of even date herewith, in form and
substance satisfactory to Lender.

      5. CONFIRMATION OF COLLATERAL/FURTHER ASSURANCES. Borrower hereby: i)
confirms to Lender all security interests and liens heretofore granted by
Borrower and each Grantor Subsidiary to Lender securing the obligations of
Borrower to Lender arising out of the Loan Agreement;

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<PAGE>

ii) acknowledges and agrees that all such obligations shall continue to be
secured by any and all such security interests and liens except as expressly
provided herein; and iii) agrees to execute and deliver, and to cause any
Subsidiary to execute and deliver, to Lender any and all agreements and other
documentation and to take any and all actions reasonably requested by Lender at
any time to assure the perfection, protection, and enforcement of Lender's
rights under the Loan Agreement as amended hereby with respect to all such
security interests and liens, all at Borrower's sole expense.

      6. REAFFIRMATION. Except as modified hereby, all of the terms, covenants,
and conditions of the Loan Agreement are ratified, reaffirmed, and confirmed and
shall continue in full force and effect. Should any term or provision of the
Loan Agreement conflict with the terms or provisions contained in this Amendment
the terms and provisions of this Amendment shall be controlling. This Amendment
is not intended to be, nor shall it be construed to be, a novation or an accord
and satisfaction of any other obligation or liability of Borrower to Lender.

      7. BINDING EFFECT. This Amendment shall be binding upon Borrower, Lender,
and their respective successors and assigns, and shall inure to the benefit of
Borrower, Lender, and their respective successors and assigns; provided,
however, that Borrower may not assign this Amendment, the Loan Agreement, or its
rights arising out of any agreements or instruments relating thereto without
Lender's prior written consent, and any prohibited assignment shall be null and
void.

      8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts.
Each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement.

      9. AMENDMENT AND WAIVER. No amendment or waiver of any one or more of the
provisions hereof shall be effective unless set forth in a writing and signed by
the parties hereto.

      10. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the internal laws of the state provided for in the Loan
Agreement without reference to conflict of law principles.

      11. SEVERABILITY. Any provision of this Amendment that is held to be
inoperative, unenforceable, voidable, or invalid in any jurisdiction shall, as
to that jurisdiction, be ineffective, unenforceable, void, or invalid without
affecting the remaining provisions in that or any other jurisdiction, and to
this end the provisions of this Amendment are declared to be severable.

      12. RELEASE. As a material part of the consideration for Lender entering
into this Amendment, Borrower and, if any, each Guarantor or owner of collateral
signing this Amendment (collectively "Releasor") agree as follows (the "Release
Provision"):

            12.1 Releasor hereby releases and forever discharges Lender and
Lender's predecessors, successors, assigns, officers, managers, directors,
shareholders, employees, agents, attorneys, representatives, parent
corporations, subsidiaries, and affiliates (hereinafter all of the above
collectively referred to as "Lender Group"), jointly and severally from any and
all claims, counterclaims, demands, damages, debts, agreements, covenants,
suits, contracts, obligations, liabilities, accounts, offsets, rights, actions
and causes of action of any nature whatsoever, including, without limitation,
all claims, demands, and causes of action for contribution and indemnity,
whether arising at law or in equity, whether presently possessed or possessed in
the future, whether known or unknown, whether liability be direct or indirect,
liquidated or unliquidated, whether presently accrued or to accrue hereafter,
whether absolute or contingent, foreseen or unforeseen, and whether or not
heretofore asserted, which Releasor may have or claim to have against any of
Lender Group; provided, however, that Lender shall not be released hereby from
any obligation to pay to Releasor any amounts that Releasor may have on deposit
with Lender, in accordance with applicable law and the terms of the documents
establishing any such deposit relationship.

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<PAGE>

            12.2 Releasor agrees not to sue any of Lender Group or in any way
assist any other person or entity in suing Lender Group with respect to any
claim released herein. The Release Provision may be pleaded as a full and
complete defense to, and may be used as the basis for an injunction against, any
action, suit, or other proceeding which may be instituted, prosecuted, or
attempted in breach of the release contained herein.

            12.3 Releasor acknowledges, warrants, and represents to Lender Group
that:

                  12.3.1 Releasor has read and understands the effect of the
Release Provision. Releasor has had the assistance of independent counsel of its
own choice, or has had the opportunity to retain such independent counsel, in
reviewing, discussing, and considering all the terms of the Release Provision;
and if counsel was retained, counsel for Releasor has read and considered the
Release Provision and advised Releasor to execute the same. Before execution of
this Amendment, Releasor has had adequate opportunity to make whatever
investigation or inquiry it may deem necessary or desirable in connection with
the subject matter of the Release Provision.

                  12.3.2 Releasor is not acting in reliance on any
representation, understanding, or agreement not expressly set forth herein.
Releasor acknowledges that Lender Group has not made any representation with
respect to the Release Provision except as expressly set forth herein.

                  12.3.3 Releasor has executed this Amendment and the Release
Provision thereof as its free and voluntary act, without any duress, coercion,
or undue influence exerted by or on behalf of any person.

                  12.3.4 Releasor is the sole owner of the claims released by
the Release Provision, and Releasor has not heretofore conveyed or assigned any
interest in any such claims to any other person or entity.

            12.4 Releasor understands that the Release Provision was a material
consideration in the agreement of Lender to enter into this Amendment.

            12.5 It is the express intent of Releasor that the release and
discharge set forth in the Release Provision be construed as broadly as possible
in favor of Lender so as to foreclose forever the assertion by Releasor of any
claims released hereby against Lender.

            12.6 If any term, provision, covenant, or condition of the Release
Provision is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable, the remainder of the provisions shall remain in full force and
effect.

      13. FINAL AGREEMENT. THIS WRITTEN AMENDMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN AND AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR AMONG THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

      14. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.

                                       4
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.

                                    BANK OF AMERICA, N.A.

                                       By: /s/ Thomas E. Brown
                                           -------------------
                                       Print Name: Thomas E. Brown
                                       Title: Senior Vice President

                                    COST-U-LESS, INC.

                                       By: /s/ J. Jeffrey Meder
                                           --------------------
                                       Print Name: J. Jeffrey Meder
                                       Title: President & CEO

Each of the undersigned Guarantors/owners of Collateral: i) consents to the
above Amendment and the other documents executed in connection with this
Amendment; ii) warrants and covenants to Lender that, except to the extent
previously disclosed to Lender in writing, all representations and warranties
previously made by it to Lender are true, complete, and accurate as of the date
of this Amendment; iii) confirms to Lender all security interests and liens
heretofore granted by it to Lender or CULNEV, Inc, as applicable; and (iv) joins
in each of the agreements in this Amendment applicable to it, including but not
limited to Section 12 hereof.

      CULNEV, INC.                          CULUSVI, INC.
      By: /s/ David Enger                   By: /s/ David Enger
          ---------------                       ---------------
      Print Name: David Enger               Print Name: David Enger
      Title: Director                       Title: Director

      CULSAMOA, INC.                        CULGUAM, INC.
      By: /s/ David Enger                   By: /s/ David Enger
          ---------------                       ---------------
      Print Name: David Enger               Print Name: David Enger
      Title: Director                       Title: Director

MARS-5CYKQV

                                       5

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