8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 15, 2004

PriceSmart, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-22793	33-0628530
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

9740 Scranton Road, San Diego CA 92121

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (858) 404-8800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Material Definitive Agreement and Item 1.02 Termination of a Material Definitive Agreement

Agreements with the International Finance Corporation

As previously disclosed in PriceSmart, Inc.’s (the “Company”) Current Report on Form 8-K filed with the Securities and Exchange Commission on September 3, 2004, the Company has decided to enter into a transaction designed to improve its profitability by reducing the Company’s interest payments and eliminating its preferred stock dividend obligations (the “Proposed Transaction”). Additionally, the Proposed Transaction, if approved by stockholders, will improve the Company’s financial position, particularly the Company’s ratio of current assets to current liabilities known as the “current ratio,” a measure often used in evaluating a company’s financial health. The Company believes that these balance sheet improvements will increase its creditworthiness, enhancing its ability to obtain vendor financing and other borrowings on more favorable terms and otherwise advance the long-term goals of the Company.

In connection with the Proposed Transaction, on September 15, 2004, the Company, along with The Price Group, LLC, a California limited liability company (the “Price Group”), PSMT Caribe, Inc., a British Virgin Islands corporation and wholly owned subsidiary of the Company (“PSMT Caribe”), PSMT Trinidad/Tobago Limited, a company organized and existing under the laws of the Republic of Trinidad and Tobago and subsidiary of the Company (“PSMT Trinidad,” and collectively, with the Company and PSMT Caribe, the “PSMT Parties”), and PSMT Philippines, Inc. a Filipino corporation and subsidiary of the Company (“PSMT Philippines”), entered into a Letter of Understanding (the “Letter”) with the International Finance Corporation (the “IFC”) establishing certain waivers and concessions to be made by the IFC in consideration of (i) the Company’s entering into the Proposed Transaction, (ii) the Company’s grant to the IFC of a warrant to purchase 400,000 shares of the Company’s common stock, par value $.0001 per share (“Common Stock”), at a price of $7 per share, (iii) the Price Group’s grant to the IFC of a put option giving the IFC the right to sell 300,000 shares of Common Stock to the Price Group at a price of $12 per share, exercisable between November 30, 2005 and November 30, 2006 and (iv) the purchase by the Company of a $10.4 million loan extended by the IFC to the Company and PSMT Philippines. The Letter reflects the IFC’s waiver of all provisions in loans extended to the Company by the IFC restricting the Company’s ability to incur additional indebtedness for the purpose of allowing the Company to borrow $25.0 million pursuant to a bridge loan extended to the Company by the Price Group on August 31, 2004 (the “Bridge Loan”). If stockholder approval of the Proposed Transaction is obtained, the Company intends to convert the entire principal amount of the Bridge Loan, together with accrued and unpaid interest, into Common Stock at a price of $8 per share.

On June 27, 2002, the Company and PSMT Philippines entered into a loan agreement with the IFC in which the IFC agreed to lend up to $12.5 million to PSMT Philippines, of which $10.4 million was outstanding on September 15, 2004 (the “IFC Philippines Loan”). The IFC Philippines Loan is due in June 2012. Interest is payable semi-annually at an average fixed rate of 7.44%. On September 15, 2004, pursuant to an Assignment and Assumption Agreement between the Company and the IFC, the Company used $10.4 million in proceeds from the Bridge Loan to purchase the IFC Philippines Loan, with the IFC in turn releasing $5.2 million of cash pledged as partial collateral known as “restricted cash.” The IFC Philippines Loan will be classified as an inter-company loan between the Company and PSMT Philippines on the same terms as were applicable under the IFC Philippines Loan before its purchase.

On September 15, 2004, the PSMT Parties entered into an Amended and Restated C Loan Agreement with the IFC whereby the parties thereto amended one of the loans extended to the Company to (i) decrease its carrying costs by eliminating the IFC’s right to a percentage of the Company’s earnings before interest, taxes, depreciation and amortization, (ii) allow repayment in 12 semi-annual installments and (iii) eliminate all prepayment penalties associated with such loan.

Finally, on September 15, 2004, the PSMT Parties entered into Amendment No. 2 to the IFC Loan Agreement with the IFC which eliminates all prepayment penalties associated with another loan extended to the Company by the IFC.

2

Repayment of a Loan extended by the Overseas Private Investment Corporation

On August 17, 2001, the Company, PSMT Caribe, Prismar de Costa Rica, S.A., a Costa Rican corporation and wholly owned subsidiary of the Company, and Pricsmarlandco, S.A., a Costa Rican corporation and wholly owned subsidiary of the Company, entered into a loan agreement with the Overseas Private Investment Corporation which provided the Company $5.0 million and was due in August 2011 (the “OPIC Loan”). Interest was payable semi-annually at a fixed rate of 9.24%. On September 15, 2004, the Company used $4.1 million in proceeds received from the Bridge Loan to repay in full the OPIC Loan. The Company incurred a prepayment penalty of $75,000 in connection with the repayment of the OPIC Loan.

Item 9.01. Financial Statements and Exhibits.

(c) The following exhibits are filed herewith.

Exhibit No.	Description
10.1	Letter of Understanding among the Price Group, the Company, PSMT Caribe, PSMT Trinidad, PSMT Philippines and the IFC, dated September 15, 2004.
10.2	Assignment and Assumption Agreement between the Company and the IFC, dated September 15, 2004.
10.3	Amended and Restated C Loan Agreement among the Company, PSMT Caribe, PSMT Trinidad and the IFC, dated September 15, 2004.
10.4	Amendment No. 2 to the IFC Loan Agreement among the Company, PSMT Caribe, Inc., PSMT Trinidad and the IFC, dated September 15, 2004.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 20, 2004	PRICESMART, INC.
	By:	/s/ John M. Heffner
		John M. Heffner Chief Financial Officer

4

EX-10.1

Exhibit 10.1

September 15, 2004

The Price Group, LLC

7979 Ivanhoe Avenue, Suite 520

La Jolla, CA 92037

PriceSmart Inc.

9740 Scranton Road

San Diego, CA 92121

PSMT Caribe, Inc.

c/o PriceSmart Inc.

9740 Scranton Road

San Diego, CA 92121

PSMT Trinidad/Tobago Limited

c/o PriceSmart Inc.

9740 Scranton Road

San Diego, CA 92121

PSMT Philippines, Inc.

c/o PriceSmart Inc.

9740 Scranton Road

San Diego, CA 92121

Dear Sirs,

Re: IFC investments in PriceSmart, Inc. and its subsidiaries

We refer to the Loan Agreement dated January 26, 2001 (the “A Loan Agreement”), by and among PriceSmart, Inc., a company organized and existing under the laws of the State of Delaware, U.S.A. (“PriceSmart”), PSMT Caribe Inc., a company organized and existing under the laws of the Territory of the British Virgin Islands (“Caribe”), PSMT Trinidad/Tobago Limited, a company organized and existing under the laws of the Republic of Trinidad and Tobago (“PSMT Trinidad”) and International Finance Corporation, an international organization established by Articles of Agreement among its member countries (“IFC”); the C Loan Agreement dated January 26, 2001 (the “C Loan Agreement”), by and among PriceSmart, Caribe, PSMT Trinidad and IFC; and the Omnibus Agreement dated June 27, 2002 (the “Omnibus Loan Agreement” and together with the A Loan Agreement and the C Loan Agreement, the “Loan Agreements”), by and

among PSMT Philippines, Inc., a company organized and existing under the laws of the Republic of Philippines (“PSPH” and together with PriceSmart, Caribe and PSMT Trinidad, the “Co-Borrowers”), PriceSmart and IFC. We also refer to your letters, dated June 2, 2004, and July 26, 2004, respectively, pursuant to which you requested IFC to consider restructuring its investment in, and grant certain waivers and concessions to, the Co-Borrowers.

Capitalized terms not otherwise defined herein have the meanings assigned to them in the Loan Agreements.

In order to give effect to the proposed restructuring of IFC’s investment in the Co-Borrowers at the request of The Price Group, LLC (the “Sponsor”) and the Co-Borrowers, the parties agree as follows:

1. IFC hereby:

(a) waives compliance by the Co-Borrowers with the provisions of Section 6.02(c) of the Loan Agreements solely in respect of, and in order to permit PriceSmart to incur, a bridge loan of up to twenty five million Dollars ($25,000,000) (the “Bridge Loan”) from the Sponsor, so long as such loan complies with Section 2(b) below;

(b) agrees to execute and deliver to the Co-Borrowers proper instruments acknowledging the release to PriceSmart of the Escrow Account (with proceeds of approximately five million two hundred thousand Dollars ($5,200,000));

(c) agrees to amend the interest rate, repayment and prepayment provisions of the C Loan Agreement to reflect (i) a new interest rate equal to LIBOR plus four per cent (4.0%) per annum, (ii) loan repayment in twelve (12) equal semi-annual installments commencing on March 15, 2005 and (iii) the right of the Co-Borrowers identified therein to prepay the C Loan without any restriction whatsoever or prepayment penalty; and

(d) agrees to amend the prepayment provisions of the A Loan Agreement to allow prepayment of the A Loan without any restriction whatsoever or prepayment premium.

2. The waivers, concessions and amendments set forth in Section 1 above are granted and agreed and shall remain in effect subject to Section 3 below:

(a) Within seven (7) days after the signing of this Agreement, PriceSmart shall purchase the IFC Loan (as defined in the Omnibus Loan Agreement) plus all accrued interest thereon and, subject to such purchase, IFC will assign the IFC Security with respect to such IFC Loan to PriceSmart pursuant to an assignment and assumption agreement in form and substance satisfactory to the parties.

2

(b) The Sponsor shall convert the Bridge Loan, subject to shareholder approval, into the common stock of PriceSmart at a conversion price of eight Dollars ($8.00) per share by November 30, 2004. Until conversion, the Bridge Loan shall earn interest at eight per cent (8%) per annum and shall be subordinated to the IFC Loans.

(c) The Sponsor shall convert its existing loans and advances to PriceSmart, in the aggregate principal amount of twenty million Dollars ($20,000,000), into the common stock of PriceSmart, subject to shareholder approval, at a conversion price of eight Dollars ($8.00) per share by November 30, 2004.

(d) The Sponsor and its Affiliates shall, subject to shareholder approval, deliver to IFC by November 30, 2004, proper instruments (i) evidencing the conversion of the Preferred “B” Shares beneficially owned by them in the capital stock of PriceSmart, in the aggregate principal amount of twenty-two million Dollars ($22,000,000), into common stock of PriceSmart at a conversion price of ten Dollars ($10.00) per share and (ii) waiving all accrued and unpaid dividends on such preferred shares.

(e) As soon as practicable after the signing of this Agreement, subject to shareholder approval, PriceSmart shall implement a rights offering to its existing shareholders at a rate of 1.5 rights (i.e., the right to acquire 1.5 shares of common stock) for each common share. The rights offering shall have a one year exercise period and shall offer PriceSmart’s shareholders of record the option to subscribe during the first one month period at a price of seven Dollars ($7.00) per share, or subscribe at any time after such first one month period at a price of eight Dollars ($8.00) per share. Prior to the end of the offering period, the Sponsor shall purchase common stock in an amount of up to twenty-five million Dollars ($25,000,000), in immediately available funds, to the extent that the shareholders of record do not subscribe for common stock in the aggregate amount of twenty five million Dollars ($25,000,000) in the offering.

(f) The Sponsor shall grant IFC a put option by entering into a put option agreement in form and substance satisfactory to the parties pursuant to which, in consideration of the agreements contained in this letter agreement, IFC shall have the right, exercisable between November 30, 2005 and November 30, 2006, to sell the IFC Shares (as defined below) to the Sponsor at a put price of twelve Dollars ($12.00) per share. The put option agreement shall, inter alia, contain an undertaking by the Sponsor to (i) ensure that the IFC put option agreement and the implementation thereof comply with any applicable United States securities laws and regulations; and (ii) indemnify, defend and hold harmless IFC, its

3

employees, officers and directors against and in respect of any losses, claims, damages or liabilities (including legal or other fees and expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage or liability) to which IFC or any such persons may become subject under the Securities Act of 1933, as amended, as a result of the granting or exercise of the put option. For purposes of this clause, the term “IFC Shares” means (i) all of the three hundred thousand (300,000) shares of common stock of PriceSmart owned by IFC as of the date hereto, (ii) all shares of PriceSmart received by IFC as a result of stock splits on the shares identified in clause (i) above, and (iii) all shares (of any company) received by IFC in exchange, replacement or substitution of the shares identified in clauses (i) and (ii) above.

(g) By October 15, 2004, PriceSmart and IFC shall enter into a warrant agreement, in form and substance satisfactory to IFC pursuant to which, in consideration of the agreements contained in this letter agreement, PriceSmart shall grant to IFC four hundred thousand (400,000) warrants convertible into the common stock of PriceSmart at a price of seven Dollars ($7.00) per share. Fifty per cent (50%) of the warrants shall be exercised by IFC upon receipt by IFC of proper agreements and instruments, duly executed and in full force and effect, evidencing the (i) conversion of the Bridge Loan as contemplated in Section 2(b) above, (ii) conversion of the Sponsor’s other loans as contemplated in Section 2(c) above, (iii) conversion of the preferred shares as contemplated in Section 2(d) above, and (iv) commencement of the exercise period of the rights offering as contemplated in Section 2(e) above. The balance of the warrants shall, at the option of IFC, be exercised by November 30, 2005. The exercise price shall be paid by a reduction of the IFC Loan then outstanding to the extent of the aggregate exercise price.

(h) PriceSmart shall cause to deliver to IFC a legal opinion, in form and substance acceptable to IFC, from the law firm of Latham & Watkins with respect to the transactions contemplated hereby.

(i) The Co-Borrowers agree to pay the fees and expenses of IFC’s counsel retained for the purposes of the transactions contemplated hereby.

3. For the avoidance of doubt, and notwithstanding anything to the contrary in this letter agreement, failure by the Co-Borrowers and the Sponsor to comply with any of the provisions of this letter agreement shall constitute an Event of Default under the Loan Agreements and shall relieve IFC of any further obligation in respect of any remaining unexecuted instruments, agreements and amendments hereunder.

4. The parties hereto agree to shall take any and all necessary steps (including the exercise of their voting rights, if any, and the execution and delivery of instruments, agreements and amendments) to achieve prompt and effective implementation of all of the provisions of this Agreement.

4

5. This waiver does not operate as a waiver of any provision of the Loan Agreements other than those specified above. It does not in any way waive or impair IFC’s rights under the Loan Agreements or any agreement to which IFC is a party.

6. This letter Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America.

If the foregoing is acceptable to you, please sign below and return a copy to us.

Sincerely,

INTERNATIONAL FINANCE CORPORATION

By: /s/ Stanley Greig

Accepted and Agreed:

THE PRICE GROUP, LLC

/s/ James Cahill

Name: James Cahill

Title: Manager

PRICESMART, INC.

/s/ John Heffner

Name: John Heffner

Title: Executive V.P./CFO

PSMT CARIBE INC.

/s/ Atul Patel

Name: Atul Patel

Title: Director/Treasurer

5

PSMT TRINIDAD/TOBAGO LIMITED

/s/ Ernesto Grijalva

Name: Ernesto Grijalva

Title: Director/Secretary

PSMT PHILIPPINES, INC.

/s/ John Heffner

Name: John Heffner

Title: Director

6

EX-10.2

Exhibit 10.2

EXECUTION COPY

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Assignment Agreement”) is made this September 15, 2004 between PRICESMART, INC., a company organized and existing under the laws of the State of Delaware (“PriceSmart”) and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries (“IFC”).

RECITALS:

A. Pursuant to the Omnibus Agreement dated June 27, 2002 (the “Omnibus Loan Agreement”), by and among PriceSmart, PSMT Philippines, Inc., a company organized and existing under the laws of the Philippines (the “PSMT Philippines” and together with PriceSmart, the “Co-Borrowers”) and IFC, IFC has agreed, subject to the terms and conditions thereof, to lend to the Company the sum of twelve million five hundred thousand Dollars ($12,500,000) of which ten million two hundred thousand Dollars ($10,200,000) have been fully disbursed and remain outstanding (the “2002 Loan”).

B. IFC has other existing debt and equity investments in PriceSmart and its affiliates.

C. Pursuant to letters, dated June 2, 2004 and July 26, 2004, respectively, PriceSmart and The Price Group, LLC, a company organized and existing under the laws of the State of California and an affiliate of PriceSmart, have requested IFC to consider restructuring IFC’s investment in, and grant certain waivers and concessions to, PriceSmart and its subsidiaries (including PSMT Philippines) (the “Restructuring”).

D. PriceSmart desires to purchase, and IFC desires to sell, the 2002 Loan as part of the Restructuring.

E. It is a condition of the Restructuring that the parties hereto shall have entered into this Agreement.

NOW, the parties agree:

1. Effective only upon written confirmation from IFC to PriceSmart that IFC has received from PriceSmart US$ 10,393,785.22 at Citibank N.A., 111 Wall Street, New York, N.Y. 10043, USA, for credit to account no. 36085579, ABA: 021000089, International Finance Corporation, Washington, D.C., Loan reference number PRJ 11213 PHL, on or before September 15, 2004 in consideration of this assignment and release and free of any withholding tax or deduction whatsoever:

(i) IFC hereby ASSIGNS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY OF ANY KIND (except as stated in paragraph 6 below), to PriceSmart, all of its rights, title and interest in, to and under the Omnibus Loan Agreement and the 2002 Loan, and all other benefits relating to the 2002 Loan accruing to IFC under the Omnibus Loan Agreement, including all rights to any outstanding principal and accrued but unpaid interest in respect of the 2002 Loan, and all rights it might have under any security therefor (including any pledges and mortgages); and

(ii) PriceSmart hereby accepts such assignment of the Omnibus Loan Agreement. Subject to paragraph 4 below, IFC releases each of the Co-Borrowers from all its obligations under the Omnibus Loan Agreement.

2. Subject to IFC’s receipt of payment as set forth in paragraph 1 hereof, PriceSmart hereby assumes and agrees to pay, perform and discharge all debts, liabilities and obligations of any kind of IFC under the Omnibus Loan Agreement whether now existing or hereafter arising, known or unknown, absolute or contingent, determined or speculative or otherwise, including without limitation in respect of any and all suits, claims, causes of action, damages or rights that any party to or beneficiary of the Omnibus Loan Agreement (including their respective successors and assigns) may have had, now has or in the future may have against IFC under, arising out of or in any way relating to the Omnibus Loan Agreement.

3. Subject to IFC’s receipt of payment as set forth in paragraph 1 hereof, PriceSmart hereby agrees to indemnify and hold harmless IFC, its officers, directors, agents and employees in their capacity as such, and their respective successors and assigns, from any and all obligations, claims, causes of action, suits, damages or liabilities of any kind, known or unknown, absolute or contingent, determined or speculative or otherwise, which either of the Co-Borrowers, its successors or assigns may have had, have now or in the future may have against IFC or any such person under, arising out of or relating in any way to this Assignment and Assumption Agreement.

4. Subject to IFC’s receipt of payment as set forth in paragraph 1 hereof, each of the parties hereto will execute such further documents, transfers, assignments or assurances as any party may reasonably request, to give effect to this assignment and assumption and to fully vest in PriceSmart all of the rights relating to the 2002 Loan accruing to IFC under the Omnibus Loan Agreement and will notify the Co-Borrowers of such assignment and assumption in the form set out in Schedule A.

5. PriceSmart agrees to pay all charges, costs and expenses (including stamp duties, taxes or fees of a notary or IFC’s legal counsel) on or in connection with this Assignment and Assumption Agreement.

6. IFC represents and warrants to PriceSmart that it has not previously assigned its rights to or interests in the 2002 Loan.

- 2 -

7. This Assignment Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of New York, United States of America.

PRICESMART, INC.
By:	/s/ John Heffner
Name:	John Heffner
Title:	Executive V.P./CFO
INTERNATIONAL FINANCE CORPORATION
By:	/s/ Stanley Greig
Name:	Stanley Greig
Title:	Manager, Latin America and Caribbean Credit and Portfolio Division, Global Manufacturing Services Department

- 3 -

SCHEDULE A

NOTICE OF ASSIGNMENT

To: [                        ]

Reference is made to the Omnibus Agreement dated June 27, 2002 (the “Omnibus Loan Agreement”), by and among PSMT Philippines, Inc., PriceSmart, Inc. (“PriceSmart”) and International Finance Corporation (“IFC”);

IFC HEREBY GIVES YOU NOTICE that, by an Assignment and Assumption Agreement dated September 15, 2004 and made between IFC and PriceSmart, IFC has assigned absolutely to PriceSmart (with effect from September 15, 2004) all its rights to and interests in its Loan (as defined in the Omnibus Loan Agreement) and all other benefits relating to such Loan accruing to IFC under the Omnibus Loan Agreement including all rights they might have under any security therefor (including any pledges and mortgages).

Accordingly, you are now required to recognize PriceSmart, or such person appointed by PriceSmart, as holder of such rights, interests and benefits as have been assigned to it by IFC.

DATED this 15th day of September, 2004.

INTERNATIONAL FINANCE CORPORATION
By
	Authorized Representative

- 4 -

EX-10.3

Exihibit 10.3

EXECUTION COPY

INVESTMENT NUMBER 10296

Amended and Restated C Loan Agreement

among

PRICESMART, INC.,

PSMT CARIBE, INC.,

PSMT TRINIDAD/TOBAGO LIMITED,

and

INTERNATIONAL FINANCE CORPORATION

Dated as of January 26, 2001

As Amended and Restated on September 15, 2004

TABLE OF CONTENTS

Article or Section	Item	Page No.
ARTICLE I		2
Definitions		2
	Section 1.01. Definitions	2
	Section 1.02. Interpretation	2
ARTICLE II		2
Agreement for the C Loan		2
	Section 2.01. Amount	2
	Section 2.02. Interest	2
	Section 2.03. Fees	3
	Section 2.04. Disbursement	3
	Section 2.05. Repayment	4
	Section 2.06. Prepayment	4
	Section 2.07. Late Payment Charge	5
	Section 2.08. General	5
ARTICLE III		5
Miscellaneous		5
	Section 3.01. Duration	5
	Section 3.02. Counterparts	5

C LOAN AGREEMENT

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

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

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

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

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

WHEREAS:

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

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

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

NOW THEREFORE, the parties hereto agree as follows:

ARTICLE I

Definitions

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

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

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

ARTICLE II

Agreement for the C Loan

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

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

- 2 -

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

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

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

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

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

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

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

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

- 3 -

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

Date Payment Due	Principal Amount Due
March 15, 2005	$	833,333
September 15, 2005		833,333
March 15, 2006		833,333
September 15, 2006		833,333
March 15, 2007		833,333
September 15, 2007		833,333
March 15, 2008		833,333
September 15, 2008		833,333
March 15, 2009		833,333
September 15, 2009		833,333
March 15, 2010		833,333
September 15, 2010		833,337
	$	10,000,000

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

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

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

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

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

- 4 -

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

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

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

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

ARTICLE III

Miscellaneous

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

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

- 5 -

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

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

PRICESMART INC.
By:	/s/ John Heffner
Name:	John Heffner
Title:	Executive V.P./CFO
PSMT CARIBE, INC.
By:	/s/ Atul Patel
Name:	Atul Patel
Title:	Director/Treasurer
PSMT TRINIDAD/TOBAGO LIMITED
By:	/s/ Ernesto Grijalva
Name:	Ernesto Grijalva
Title:	Director/Secretary
INTERNATIONAL FINANCE CORPORATION
By:	/s/ Stanley Greig
Name:	Stanley Greig
Title:	Manager, Latin America and Caribbean Credit and Portfolio Division, Global Manufacturing Services Department

- 6 -

EX-10.4

Exhibit 10.4

EXECUTION COPY

INVESTMENT NUMBER 10296

Amendment No. 2 to the

IFC Loan Agreement

among

PRICESMART, INC.

and

PSMT CARIBE, INC.

and

PSMT TRINIDAD/TOBAGO LIMITED

and

INTERNATIONAL FINANCE CORPORATION

Dated September 15, 2004

AMENDMENT No. 2 TO THE IFC LOAN AGREEMENT

AMENDMENT No. 2 TO THE IFC LOAN AGREEMENT (the “Amendment No. 2”) dated September 15, 2004, entered into by and among PRICESMART, INC., PSMT CARIBE, INC., PSMT TRINIDAD/TOBAGO LIMITED (collectively, the “Co-Borrowers”), and INTERNATIONAL FINANCE CORPORATION, an international organization established by the Articles of Agreement among its member countries (“IFC”).

WHEREAS:

(A) The Co-Borrowers and IFC entered into the IFC Loan Agreement dated January 26, 2001 (the “IFC Loan Agreement”), setting forth the terms and conditions therein set forth, as amended by Amendment No. 1 to the IFC Loan Agreement dated October 2, 2002;

(B) The parties hereto have agreed to amend Section 3.06 of the IFC Loan Agreement and intend to set forth herein the aforesaid changes.

NOW THEREFORE, the parties hereto hereby agree as follows:

1. Definitions. Wherever used in this Amendment N. 2, unless the context otherwise requires, or the terms are individually defined herein, terms defined in the IFC Loan Agreement shall have the same meanings herein.

2. Amendments. (a) Section 3.06 of the IFC Loan Agreement is hereby deleted in its entirety and replaced with the following provision:

“Section 3.06. Prepayment. Subject to Section 6.04(c),

(a) the Co-Borrowers may prepay on any Interest Payment Date all or any part of the A Loan, on not less than forty-five (45) days’ prior notice to IFC, but only if:

(i) the Co-Borrowers simultaneously pay all accrued interest and Increased Costs (if any) on the amount of the A Loan to be prepaid, together with all other amounts then due and payable under this Agreement, including the amount payable under Section 3.11 (Unwinding Costs), if the prepayment is not made on an Interest Payment Date;

(ii) the Co-Borrowers simultaneously prepay a pro rata portion of the OPIC Loan;

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

(iv) if requested by IFC, the Co-Borrowers deliver to IFC, prior to the date of prepayment, evidence satisfactory to IFC that all necessary Authorizations with respect to the prepayment have been obtained.

(b) Amounts of principal prepaid under this Section shall be applied by IFC to all the respective outstanding installments of principal of the A Loan on a pro-rata basis.

(c) Upon delivery of a notice in accordance with Section 3.06(a), the Co-Borrowers shall make the prepayment in accordance with the terms of that notice.

(d) Any principal amount of the A Loan prepaid under this Agreement may not be re-borrowed.”

3. Ratification. Except for the changes to the IFC Loan Agreement contemplated by this Amendment No. 2, no other change and/or amendment is made to the remaining provisions of the IFC Loan Agreement, which remain in full force and effect.

4. Effectiveness. This Amendment No. 2 is effective on the date hereof.

5. Governing Law. This Amendment No. 2 shall be governed by, and construed in accordance with the laws of the State of New York, United States of America, without giving effect to its conflict of laws rules which might render applicable on a general basis the laws of any other jurisdiction.

6. Counterparts. This Amendment No. 2 may be executed in several counterparts, each of which is an original, but all of which together constitute one and the same agreement.

- 2 -

IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Amendment No. 2 to be signed in their respective names as of the date first above written.

PRICESMART, INC.
By	/s/ John Heffner
Name:	John Heffner
Title:	Executive V.P./CFO
PSMT CARIBE, INC.
By	/s/ Atul Patel
Name:	Atul Patel
Title:	Director/Treasurer
PSMT TRINIDAD/TOBAGO LIMITED
By	/s/ Ernesto Grijalva
Name:	Ernesto Grijalva
Title:	Director/Secretary
INTERNATIONAL FINANCE CORPORATION
By	/s/ Stanley Greig
	Authorized Representative

- 3 -