Shareholders? Agreement

Exhibit 10.12

CERTAIN MATERIAL (INDICATED BY "[#]") HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

FUNDACIÓN TEMPUS FUGIT

AND

PRICE SMART PANAMA, S.A.

Shareholders’ Agreement

Panama, September 24, 2008

FUNDACIÓN TEMPUS FUGIT

AND

PRICE SMART PANAMA, S.A.

Shareholder Agreement

Contents

Fundación Tempus Fugit and Price Smart Panamá, S.A. Shareholder Agreement.

SHAREHOLDERS’ AGREEMENT

By and between the undersigned, namely, [#], male, Panamanian, of legal age, with Personal Identity Card No. [#], acting on behalf and in representation of FUNDACIÓN TEMPUS FUGIT, a private foundation organized and established in accordance with the laws of the Republic of Panama (hereinafter "THE FOUNDATION"), on the one hand; and, on the other, ERIC TORRES, male, US citizen, of legal age, with passport number [#], who stated to dominate the Spanish language and therefore not need an interpreter, acting on behalf and in representation of PRICESMART PANAMÁ, S.A., a corporation duly organized and established in accordance with the laws of the Republic of Panama, (hereinafter "PRICESMART" and, along with THE FOUNDATION, each of them shall hereinafter be identified as a "Party" and, collectively, as the "Parties").

WHEREAS

On the date of execution of this Shareholder Agreement (hereinafter, the "Agreement"), THE FOUNDATION and Mr. [#] (hereinafter "[#]") are the sole shareholders with equal stock in the Panamanian corporation known as GolfPark Plaza S.A. (hereinafter, the "Corporation");

On the date of the execution of this Agreement, the Corporation: (i) is the owner of property No. 281771, registered under Document 1330529 of the Property Section, Province of Panama (hereinafter the "Property"), with a surface measuring THIRTY-EIGHT THOUSAND THREE HUNDRED AND THIRTY ONE POINT THIRTY-FOUR SQUARE METERS (38,331.34 m2), whose boundaries and other details are recorded in the Public Registry, free of all liens, up-to-date on its taxes and free of every obligation, and with those easements indicated in the Registry and that are described in Annex D of this Agreement, and are an integral part of such;

PRICESMART wishes to acquire from [#], and [#] wishes to sell to PRICESMART, free of all liens and updated with regards to taxes, all the shares of the Corporation owned by [#], and PRICESMART and the FOUNDATION wish to jointly develop and operate a commercial real estate project, on the property , consisting of a shopping complex and related improvements (hereinafter, the "Project"); and

Along with the execution of this Agreement, PRICESMART shall acquire all the share capital of the Panamanian corporation known as Weinar Resources Inc. (hereinafter, "Weinar"), the sole owner of property No. 285351, registered under Document 1421021 of the Property Section, Province of Panama, (hereinafter "Property"), with a surface area of THREE THOUSAND ONE HUNDRED AND SIXTY-ONE POINT EIGHTY-ONE SQUARE METERS (13,161.81 m2), whose boundaries and other details are recorded in the Public Registry, which is located next to the Property;

NOW, THEREFORE, the Parties sign this Agreement, in accordance with the terms and conditions contained in the following

CLAUSES

FIRST : THE CORPORATION

The Parties hereby agree that the primary objective of the Corporation is the development of the Project. Nonetheless, the Corporation may, in accordance with that stated in its articles of incorporation, perform every type of licit activity in the Republic of Panama.

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SECOND : SHAREHOLDERS OF THE CORPORATION

The share capital of the Corporation is made up by FIVE HUNDRED (500) common shares without a face value, all with a voting right (hereinafter referred to as the "Shares"). The Shares are common shares of two classes and confer the same rights per share to their holders, except with regard to electing and removing the directors, as provided for in this Agreement.

2.1 SHARE OWNERSHIP:

[#] and the FOUNDATION, have subscribed and are each, respectively, the owners of TWO HUNDRED AND FIFTY (250) shares of the Corporation, free of liens, taxes and obligations.

2.2 ACQUISITION OF THE PRICESMART SHARES:

The Parties hereby declare and state that, along with the signing of this Agreement, [#] and PRICESMART have subscribed a share purchase agreement through which [#] truly and effectively sells to PRICESMART, all its shares in the Corporation, that is to say, TWO HUNDRED AND FIFTY (250) shares (hereinafter, the "PRICESMART Shares") for the global, sole, final and agreed on sum of FOUR MILLION SIX HUNDRED AND FIFTEEN THOUSAND SIX HUNDRED AND NINETY-SIX DOLLARS AND SEVENTY CENTS (US$4,615,696.70) (hereinafter, the "Price of the PRICESMART Shares").

2.3 ADDITIONAL CONTRIBUTIONS OF CAPITAL:

The Parties acknowledge that the initial total value of the Shares of the Corporation equals the sum of NINE MILLION TWO HUNDRED AND THIRTY-ONE THOUSAND, THREE HUNDRED AND NINETY-THREE DOLLARS AND FORTY CENTS (US$9,231,393.40), corresponding to the sum of FOUR MILLION SIX HUNDRED AND FIFTEEN THOUSAND SIX HUNDRED AND NINETY-SIX DOLLARS AND SEVENTY CENTS (US$4,615,696.70), with regard to their respective two hundred and fifty (250) Shares of the Corporation.

The Parties are compelled to make the additional contributions of capital to the Corporation, in accordance with the detailed schedule of the additional contributions referred to in Section 6.4 of this Agreement.

In the event that the Board of Directors should consider it necessary or convenient to require the Parties to make additional contributions of capital to the Corporation (whether through cash contributions, contributions in kind, shareholder loans, external financing, or any other method), the grounds shall be stated in a resolution, , which must be approved by all the Board Members of the Corporation. Such resolution shall establish the sum of the contribution of each of the Parties (which must be proportional to its shareholding) and shall set the term that the Parties shall have to make such contribution or, in the event of the nonpayment of all or part of such contribution, the term and form in which they must notify the Corporation and the other Party of such situation.

In the event that one of the Parties (the "Defaulting Party") notifies the other Party that it will not make all or part of the contribution required by the Board of Directors, or if the Defaulting Party does not make all or part of the required contribution during the term set out for such effects by the Board of Directors, the other Party (the Non-Defaulting Party) may, as soon as possible and in every event before a term of SIXTY (60) calendar days, starting as of the date on which it receives such notice, or as of the date on which the contribution should have been made, whichever should occur first, and once it has made the corresponding contribution of capital, carry out one of the following options:

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2.4 RESTRICTIONS

No Shareholder shall pawn, mortgage, impose any charge nor in any way tax, whether directly or indirectly, and whether fully or partially, its Shares in the Corporation, its right of use on such Shares and on any rights deriving from or ascribed to such (including voting rights and the right to perceive dividends), without the specific prior and written consent of the other Shareholder.

With regard to any right or obligation by virtue of this Agreement or the Articles of Incorporation, or other right or obligation corresponding to a Shareholder of the Corporation, no Shareholder shall pawn, mortgage, impose any charge or in any way tax, whether directly or indirectly, and whether fully or partially, such rights of use on such rights or obligations, or the rights deriving from or ascribed to such, nor shall constitute or intend to constitute any trust whatsoever on such rights or obligations without the prior specific and written consent of the other Shareholder.

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THIRD : BOARD OF DIRECTORS

3.1 The Board of Directors of the Corporation shall be made up of SIX (6) persons, and each of the Parties may therefore appoint THREE (3) Board Members. The first Board Members of the Corporation shall be:

Likewise, the Corporation shall have SIX (6) Deputy Board Members that shall take the place of the Board Members upon their absence. Each of the Parties may appoint THREE (3) Deputy Board Members. The first Deputy Board Members are:

Each Party may remove and replace any of its Board Members and Deputy Board Members at any time, and may also fill any vacancy of their respective Board Members and Deputy Board Members.

3.2 Notwithstanding the aforementioned, the Parties expressly agree that when the Parties do not have the same shareholding in the Corporation, they may name the Board Members and Deputy Board Members of the Corporation in accordance with the following distribution:

3.3 The Board of Directors shall exercise all its powers in the Corporation, except for those reserved for the Shareholders by law, the articles of incorporation, the bylaws or this Agreement. The Board of Directors shall meet, without requiring a prior call, at least FOUR (4) times a year, holding ONE (1) meeting per quarter, and such shall be held on the first Thursday that is simultaneously a workday in both the Republic of Panama and the United States of America, during the months of February, May, August and November, at 10:00 am at the administrative offices of the Project. The Parties agree that until such offices are built, the meetings shall be held at the place agreed on by the Parties. Notwithstanding the above stated, the Parties may agree on different dates to hold the ordinary meetings. In this event, notices must be sent to the address that each Board Member has provided to the Corporation, in writing and ten (10) workdays in advance. In the event that quorum is not obtained in any of the before mentioned dates or any Board of Directors’ meeting

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that is validly called, the Parties agree that any Board Member present may send a second call to all the Board Members to hold a meeting of the Board of Directors within five (5) and seven (7) workdays after such notice, as long as the date of the second meeting is simultaneously a workday in both Panama and the Unites States of America. Such call must be sent in writing to all the Board Members, to the address that each of the Board Members provided to the Corporation, within two (2) workdays following the unsuccessful meeting.

The duties of the Board of Directors shall include, but are not limited to, reviewing and approving the changes proposed to the Schedules, Project Master Plan, Annual Budget, Procurement of Financing Facilities, Additional Financing from the Shareholders, Approval of Agreements (including, without any limitation, building and management contracts as well as the hiring of key personnel members) and reviewing the results based on the previously established objectives.

3.4 Notwithstanding the aforementioned, the Chairman or the Secretary of the Corporation, upon prior written notice of at least ten (10) calendar days in advance, may call for an extraordinary Board meeting, indicating the date, place and matters to be considered, as long as the date is a workday, both in the Republic of Panama and in the United States of America. Notices must be sent to the address that each Member has provided to the Corporation. Extraordinary meetings may be held without requiring a call if all the Board Members or their respective Deputy Members are present or duly represented in such.

3.5 The Board of Directors may meet in person, by phone conference or video conference or by any means of electronic communication as long as all the Board Members participating in the meeting are able to listen to one another. Any agreement reached in a Board meeting that is duly constituted, may be made without requiring a meeting if the agreement is recorded in a written document and signed by all the Board Members or their respective Deputy Members. Nonetheless, the Parties hereby agree that at least ONE (1) meeting a year shall be held in person. The decisions adopted in Board of Directors meetings must be recorded in written minutes, which must be signed by the Chairman and Secretary of the Corporation.

3.6 Each Board Member shall have the right to one vote and all agreements of the Board shall be approved by half plus one of the Members who are present, except for those matters that according to this Agreement or the applicable regulations in the Republic of Panama require another type of majority.

3.7 The necessary quorum to hold a meeting and deal with the agenda in a Board of Directors meeting shall be four (4) Board Members, two (2) of which shall be designated by THE FOUNDATION and the other two (2), by PRICESMART, or their respective deputies. In the event that the shareholding should vary between the Parties, quorum shall be constituted of four (4) Board Members, and each of the Parties shall represent at least one (1) Board Member in the meeting, as long as the Party holds at least 17% of the shares making up the capital, as per that stated in Section 3.2 above. Notwithstanding the before stated, if none of the Board Members or Deputy Board Members appointed by a Party are present in a Board meeting, or in the respective second call to such meeting, at the discretion of the other Party, such lack of quorum may be taken as a blockage situation, according to that contained in Section 6.6 below.

FOURTH : DIRECTORS AND LEGAL REPRESENTATION

4.1 The Corporation shall have SIX (6) directors and each Party shall therefore designate THREE (3) directors. THE FOUNDATION shall designate the individuals who will hold the positions of Chairman, Treasurer and one Regular Board Member and PRICESMART shall designate the individuals who will hold the positions of Vice Chairman, Secretary and one Regular Board Member. The first Directors of the Corporation shall be the following:

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Each Party may remove and replace its Directors at any time, as well as fill the vacancies of their Directors. Notwithstanding the aforementioned, the Parties expressly agree that when the Parties do not have the same shareholding in the Corporation, they may appoint the Directors of the Corporation in accordance with the following distribution:

4.2 The Parties hereby agree that the articles of incorporation of the Corporation shall establish that Legal Representation of the Corporation shall be held by the Chairman, in the absence of such, by the Vice Chairman, in the absence of both, by the Secretary, in the absence of all three of them, by the Treasurer, and in the absence of them all, Legal Representation shall be held by that person designated for such purposes by the Board of Directors.

FIFTH : MEETING OF SHAREHOLDERS

The Shareholder Meeting of the Corporation shall be called once it is considered to be necessary by one of the shareholders and with the frequency set out in the Articles of Incorporation and at least once (1) a year.

The call must be made in writing and delivered to all the shareholders of the Corporation, a minimum of ten (10) and a maximum of twenty (20) calendar days prior to the proposed date for the meeting, except if the shareholders waiver such right in writing. Quorum for a Shareholders Meeting shall be constituted by the physical presence or representation of the shareholders with half plus one of the voting, issued and outstanding shares. In the event that a quorum is not reached in a validly called Meeting of Shareholders, the Parties agree that the shareholder present in such first call must issue a second call to hold the Shareholders Meeting. The second call must comply with the same formalities of the first call, and must occur within two (2) calendar days following the date of the first call. The Shareholders Meeting must be held between five (5) and seven (7) workdays after the second call, as long as the date is a workday both in the Republic of Panama and in the United States of America.

Notwithstanding the aforementioned, if one of the shareholders does not attend a Shareholders Meeting nor the respective second call to such meeting, in such way that the quorum is not reached, at the discretion of the other shareholder, such lack of quorum may be considered as a blockage situation, in accordance with that stated in Section 6.6 below.

The resolutions adopted at the Shareholders Meeting must be recorded in written minutes , which must be signed by the Chairman and Secretary of the Corporation.

Decisions made by the Shareholders Meeting of the Corporation must be approved by the vote cast by the holders of half plus one of the voting, issued and outstanding shares that are present or duly represented in the Meeting.

Any agreement that may be reached in a Shareholders Meeting that is duly constituted may be reached without requiring a meeting, if such agreement is recorded in a written document and signed by all the shareholders of the Corporation.

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SIXTH : ADMINISTRATION

6.1 Except for that provided in the Third Clause, PRICESMART shall be in charge of the daily administration of the operations of the Corporation with regard to the negotiation and signing of lease agreements in accordance with the operative budget, as well as the construction and property administration, lease of storefronts and, lastly, the operation of the Project. Such administration shall be carried out in accordance with the parameters and authorizations that have been set out and granted for such purpose by the Board of Directors. PRICESMART (and/or staff hired by PriceSmart Inc., or by a subsidiary of PriceSmart Inc. or its subsidiary) shall be in charge of: (i) directing and managing the design, development and construction of the Project (including matters related to the drawing up, engineering, architecture and tender of building contracts (hereinafter collectively referred to as the "Building Administration Services"); (ii) identify possible leaseholders, as well as negotiate and write up the respective lease contracts (hereinafter collectively referred to as the "Lease Services"); and (iii) in general, supervise the operation and administration of the Project, once it is in operation.

While this Agreement is in effect, PRICESMART is compelled to submit quarterly reports on its management for the consideration of the Board of Directors of the Corporation, in its four (4) ordinary meetings. The Board of Directors of the Corporation may approve or disapprove such reports, make recommendations or take those measures it considers necessary regarding PRICESMART and the carrying out of its responsibilities as Building Administration Service and Leasing Service suppliers of the Corporation.

6.2 Notwithstanding the aforestated, the Parties hereby agree that the Corporation shall hold PRICESMART and its directors, employees and agents, harmless and free of any responsibility in which it may incur in exercising its powers of administration conferred by this Agreement, except if such responsibility is a result of fraud or serious fault by PRICESMART.

6.3 PRICESMART (and/or its affiliate companies referred to in Section 6.1) shall be compensated by the Leasing Services, as of the date established by the Board of Directors, as follows. For the first year, the rate for the Lease Services shall be equal to the sum of fifty-four thousand and two hundred US dollars (US$54,200.00). For each following year, PRICESMART must submit the rate for the Lease Services proposed for the following year to the Board of Directors, at least ninety (90) days before the beginning of the next fiscal year, for the approval of the Board. The Parties agree that: (i) such rate shall not include possible third party costs (such as broker fees, if applicable), and all such possible costs must be previously approved by the Board of Directors, and, if this is the case, must be paid by the Corporation; and (ii) this rate, once it is previously approved, shall not be subject to review or modification without the unanimous approval of the Board Members of the Corporation. The total sum of payments made to PRICESMART for this service shall be covered with funds from the common area maintenance ("CAM") fees charged to the leaseholders of the Project storefronts, unless the Board of Directors approves otherwise. Until the construction of the Project concludes, charges by PRICESMART for this service shall be capitalized.

PRICESMART (and/or its affiliate companies referred to in Section 6.1) shall be compensated for the Building Administration Services as follows. Each portion of the Project that is built by the Corporation shall be presented to the Board of Directors for its prior approval. Such presentation will include the estimated costs and expenses for the construction (including the expected costs of engineers, surveyors, architects and construction costs themselves), which, if disapproved by the Board of Directors, must be paid by the Corporation. The charges corresponding to Building Administration Services shall also be paid by the Corporation and shall equal three point five percent (3.5%) of the direct cost of construction that has been approved.

6.4 The Parties agree to make contributions of capital and pay for all the necessary costs to execute the Project, in accordance with the general budget, the preliminary schedule, the financing program and the

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detailed schedule of the contributions of capital, which are based on the preliminary plans, projections and estimates prepared during stages prior to the execution of this Agreement. Such general budget, preliminary schedule, financing program and detailed contribution of capital schedule are attached as Annex A and are an integral part of this Agreement. If one Party does not make the required contributions, the provisions contained in Section 2.3 of this Agreement shall apply.

It is understood that the Parties may modify these requirements as necessary.

During the effectiveness of this Agreement, forty-five (45) days before the end of each fiscal year, PRICESMART shall prepare the annual budget of the Corporation for the following fiscal year, which shall be subject to the consideration and approval of the Board of Directors. The annual Budget shall be effective only if fully approved by the Board Members of the Corporation. If the Board should for any reason disapprove the annual budget for the following fiscal year, at least fifteen (15) days before the end of the ongoing fiscal year, (excluding the Building Administration Services and Lease Services) such shall be automatically approved for each month of the following fiscal year, until the new annual budget is definitively approved by the Board of Directors.

6.5 The Parties hereby agree that the Corporation shall prepare and keep its accounting records and financial statements through the employees of the Corporation or a qualified accounting firm (with monthly financial statements for the Parties), in accordance with the generally accepted accounting principles and that such shall be audited each year by an internationally renowned accounting firm, which shall be approved by the Board of Directors. Every expense related to these matters shall be paid for by the Corporation. The end of the fiscal year for the Corporation shall be August thirty-first (31). The audited statements of the Corporation that have been reviewed and approved by the Board of Directors shall be final and only subject to review if so required by a competent government authority or if the Board of Directors considers it appropriate by majority decision.

6.6 If it is not possible to reach one or more agreements at least during two (2) Board of Directors Meetings or two (2) Shareholders Meetings, or if a Board Meeting or Shareholder Meeting has not been able to be held due to lack of quorum in the first and second calls, blockage will be deemed to have occurred if as a consequence of such blockage, according to the reasonable opinion of any of the shareholders, one of the following situations should occur:

If blockage is generated in accordance with the above paragraphs, the Parties must immediately start a mandatory conciliation process before