STOCK PURCHASE AGREEMENT

Exhibit 10.7

STOCK PURCHASE AGREEMENT

BY AND BETWEEN

PRICESMART, INC.

and

THE SOL AND HELEN PRICE TRUST

Dated as of October 6, 2005

TABLE OF CONTENTS

i

SCHEDULE

Schedule 3.4(b)

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (including the Schedule hereto, this “ Agreement ”) is made and entered into as of October 6, 2005 by and between PriceSmart, Inc., a Delaware corporation (the “ Company ”), and the Sol and Helen Price Trust (the “ Investor ”). The Company and the Investor are referred to herein individually as a “ Party ” and together as the “ Parties .”

WITNESSETH :

WHEREAS, on or about May 10, 2004, Milton Pfeiffer commenced an action by filing a complaint (the “ Complaint ”) in the United States District Court for the District of Delaware (the “ Court ”) against Sol Price and the Company, as nominal defendant, captioned Milton Pfeiffer v. Sol Price and PriceSmart, Inc. , C.A. No. 04-296, alleging that Mr. Price violated Section 16(b) of the Securities and Exchange Act of 1934, as amended (the “ 1934 Act ”), in connection with an alleged purchase and subsequent sale of shares of the Company’s common stock, par value $0.001 per share (the “ Common Stock ”);

WHEREAS, on August 22, 2005, Messrs. Pfeiffer and Price and the Company (collectively, the “ Litigants ”) entered into a Memorandum of Understanding (the “ MOU ”), which specified certain terms of a settlement in full of all matters and controversies among the Litigants arising from all claims, known or unknown, arising under or relating to Section 16(b) of the 1934 Act or the facts and circumstances alleged in the Complaint;

WHEREAS, pursuant to the terms of the MOU, it is anticipated that the Litigants will file with the Court a Stipulation and Agreement of Settlement and Release (the “ Settlement ”), which will include the following terms: (i) within ten business days following final Court approval of the Settlement, the Investor shall purchase an aggregate of $1,500,000 of Common Stock directly from the Company at a price of $8.90 per share, which represents a per share price that is $0.50 above the closing price of the Company’s common stock on August 18, 2005, the business day immediately prior to the date the parties reached an agreement in principle to settle the facts forming the basis of the Complaint; (ii) the parties will mutually release all claims, effective upon Court approval of the Settlement; and (iii) the Company will pay attorneys’ fees to plaintiff’s counsel in an amount to be agreed upon by the Company and plaintiff (subject to Court approval) or, absent an agreement, as determined by the Court;

WHEREAS, in accordance with the terms of the Settlement, the Investor, of which Mr. Price is the trustee, desires to purchase an aggregate of 168,539 shares of Common Stock (the “ Shares ”) at a price of $8.90 per share, for an aggregate purchase price of One Million Four Hundred Ninety Nine Thousand Nine Hundred and Ninety Seven United Sates Dollars and Ten Cents ($1,499,997.10) on the terms and conditions set forth in this Agreement; and

WHEREAS, the Investor and the Company desire to complete the contemplated purchase of Common Stock prior to Court approval of the Settlement to provide needed capital

to the Company; provided that such purchase shall be subject to the Investor’s right to rescind the transaction under certain circumstances if Court approval of the Settlement is not obtained, as described below;

NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

1. AGREEMENT TO PURCHASE AND SELL STOCK . Subject to the terms and conditions of this Agreement, the Company agrees to sell to the Investor at the Closing (as defined below), and the Investor agrees to purchase from the Company at the Closing, the Shares at a price of $8.90 per share.

2. CLOSING .

2.1 Time and Place . The purchase and sale of the Shares (the “ Closing ”) will take place at the offices of PriceSmart, Inc. at 9740 Scranton Road, San Diego, CA 92121-1745 at 10:00 a.m. Pacific Time, on October 7, 2005, or at such other time and place mutually agreed upon by the Parties, or if any of the conditions set forth in Section 6 (other than conditions with respect to actions the respective Parties will take at the Closing itself) have not been satisfied, a later date selected by the Investor, which date shall be within five (5) Business Days (as defined below) following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions to occur at the Closing (other than conditions with respect to actions the respective Parties will take at the Closing itself) (such date, the “ Closing Date ”). “ Business Day ” means any day, other than a Saturday, Sunday or a day on which banking institutions in the State of California are authorized or obligated by law, regulation or executive order to close.

2.2 Investor Deliveries . At the Closing, the Investor will deliver or cause to be delivered to the Company the sum One Million Four Hundred Ninety Nine Thousand Nine Hundred and Ninety Seven United Sates Dollars and Ten Cents ($1,499,997.10)

2.3 Company Deliveries . At the Closing, the Company will issue irrevocable transfer agent instructions instructing the Company’s transfer agent to issue in the name of the Investor a certificate representing the Shares.

3 . REPRESENTATIONS AND WARRANTIES OF THE COMPANY . The Company hereby represents and warrants to, and agrees with, the Investor that the statements in the following paragraphs of this Section 3 are true and correct:

3.1 Organization, Good Standing and Qualification . Each of the Company and its Subsidiaries (as defined below) is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to own or lease and operate its properties and to conduct its business as it is currently being conducted and is proposed to be conducted. Each of the Company and its Subsidiaries is duly licensed, authorized or qualified as a foreign corporation, partnership or limited liability company for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership, lease or operation

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of property or conduct of business requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the assets, liabilities, condition (financial or otherwise), results of operations, prospects or business of the Company and its Subsidiaries taken as a whole (“ Material Adverse Effect ”). The Company is not in default under or in violation of any provision of its amended and restated certificate of incorporation, as amended (the “ Certificate of Incorporation ”), or its amended and restated bylaws, as amended (the “ Bylaws ”). “ Subsidiary ” means as to any Person (as defined below), any other Person of which more than 50% of the shares of the voting stock or other voting interests are owned or controlled, or the ability to select or elect more than 50% of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries or by such first Person and one or more of its Subsidiaries. “ Person ” means any individual, corporation, company, association, partnership, limited liability company, joint venture, trust, unincorporated organization or Governmental Authority (as defined below).

3.2 Authorization . The Company has all requisite power and authority to execute and deliver this Agreement and the Settlement and to perform its obligations hereunder and thereunder. All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement and the Settlement and the performance of the obligations of the Company at the Closing, the performance of the obligations of the Company under Section 8 hereof and the issuance and delivery of the Shares has been taken, and this Agreement has been duly executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally; (ii) the effect of rules of law governing the availability of equitable remedies; and (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy or prohibited by law.

3.3 Valid Issuance of the Shares . The Shares will, as of the Closing Date, have been duly and validly authorized, reserved for issuance and, when issued, sold and delivered by the Company in accordance with the terms of this Agreement for the consideration provided for herein, will have been duly and validly issued, will be fully paid and nonassessable and will be free of any mortgage, pledge, lien, security interest, claim, voting agreement, conditional sale agreement, title retention agreement, restriction, option or encumbrance of any kind, character or description whatsoever (“ Lien ”) (other than those that may be created by the Investor) and free of any restrictions on transfer other than restrictions on transfer under applicable federal and state securities laws and, assuming the truth and correctness of the Investor’s representations and warranties in Section 4 below, will be issued in compliance with all applicable federal and state securities laws.

3.4 Capitalization .

(a) The entire authorized capital stock of the Company consists of 45,000,000 shares of Common Stock, of which 25,891,872 shares (not including 434,425 shares held by the Company as treasury shares) were issued and outstanding as of August 15, 2005, and 2,000,000 shares of preferred stock, par value $0.0001 per share, of which no shares were

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outstanding as of the date of this Agreement. Except as set forth in the SEC Documents (as defined below), there are no outstanding or authorized warrants, options, purchase rights, subscription rights, conversion rights, exchange rights or other contracts, commitments or obligations that could require the Company or any of its Subsidiaries to issue, grant, deliver or sell or otherwise cause to be issued, granted, delivered or sold or become outstanding any capital stock of the Company or any of its Subsidiaries, except for those granted in the ordinary course of business since the dates of the SEC Documents. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to the Company or any of its Subsidiaries. To the Company’s knowledge, there are no voting trusts, proxies or other agreements or understandings with respect to the voting of the capital stock of the Company.

(b) Except as set forth on Schedule 3.4(b) hereto, the registration of the Shares pursuant to Section 8 hereof will not give rise to any registration rights on behalf of any Person under any agreement or instrument applicable to the Company. Except as set forth on Schedule 3.4(b) hereto, other than pursuant to Section 8 hereof, no Person has any right to require the Company to register securities of the Company under the Securities Act of 1933, as amended (the “ 1933 Act ”).

3.5 Noncontravention .

(a) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, ordinance, code, injunction, judgment, order, decree, ruling, charge, writ, determination or other restriction (“ Law ”) of any government or political subdivision or department thereof, any governmental regulatory body, commission, board, agency or instrumentality, or any court or arbitrator or alternative dispute resolution body, in each case whether federal, state, local or foreign (“ Governmental Authority ”) to which the Company or any of its Subsidiaries is subject or any provision of the Certificate of Incorporation or the Bylaws or the certificate of incorporation or bylaws or similar constituent documents of the Company’s Subsidiaries or (ii) conflict with, result in a breach or violation of, constitute a default (with or without notice or the passage of time) under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or give rise to a right to put or to compel a tender offer for outstanding securities of the Company or any of its Subsidiaries or require any notice, consent, waiver or approval under any agreement, contract, lease, license, loan, debt instrument, note, bond, indenture, mortgage, deed of trust, joint venture agreement, approval of a Governmental Authority or other arrangement to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the Company’s or its Subsidiaries’ assets is subject (or result in the imposition of any mortgage, pledge, Lien, encumbrance, charge or other security interest upon any of such assets or properties), except in either case, where such violation, conflict or default would not have a Material Adverse Effect.

(b) Except for (i) the filing of a Form D with the Securities and Exchange Commission (the “ SEC ”) and (ii) filings which may be required under state securities laws, for which filings the Company shall be responsible, neither the Company nor any of its Subsidiaries is required to give any notice to, make any filing or registration with, or obtain any authorization, consent or approval of any Governmental Authority in connection with the

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execution, delivery and performance by the Company of this Agreement and the transactions contemplated hereby.

(c) No consent or approval of the Company’s stockholders is required by Law, the Certificate of Incorporation, the Bylaws, the rules and regulations of the Nasdaq Stock Market, or otherwise, for the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby.

3.6 Absence of Certain Changes . Except as disclosed in the reports required to be filed by the Company under the 1934 Act, in the preceding twelve (12) months (the “ SEC Documents ”) or otherwise disclosed in public announcements or press releases, since August 31, 2004, the Company and its Subsidiaries have conducted their consolidated business in the ordinary and usual course and there has been no change to the business, properties, assets, operations, prospects, results of operations or condition (financial or otherwise) of the Company or its Subsidiaries (taken as a whole), except for such changes which could not be reasonably expected to have a Material Adverse Effect.

3.7 No General Solicitation . Neither the Company, nor any of its Affiliates (as defined below), nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D (“ Regulation D ”) promulgated under the 1933 Act) in connection with the offer or sale of the Shares. “ Affiliate ” has the meaning set forth in Rule 12b-2 promulgated under the 1934 as in effect on the date hereof. The term “ Affiliated ” has a correlative meaning.

3.8 Reports Filed Under the Securities Exchange Act of 1934; Financial Statements . The Company has timely filed all reports required to be filed by the Company under the 1934 Act. The SEC Documents contain all statements required to be stated therein in accordance with the 1934 Act and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of their respective dates (except as they have been correctly amended), the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Securities and Exchange Commission (the “ SEC ”) with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR . The Investor represents and warrants to the Company that the statements in the following paragraphs of this Section 4 are true and correct:

4.1 Organization and Qualification . The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The Investor

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has all requisite power and authority to enter into and perform this Agreement and to carry out the transactions contemplated by this Agreement.

4.2 Authorization . All action on the part of the Investor and Mr. Price necessary for the authorization, execution and delivery of this Agreement and the Settlement, respectively, and the performance of all obligations of the Investor and Mr. Price hereunder and thereunder, as the case may be, have been taken, and this Agreement and the Settlement have been duly executed and delivered by the Investor and Mr. Price, respectively, and constitute valid and legally binding obligations of the Investor and Mr. Price, respectively, enforceable in accordance with their terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally; (b) the effect of rules of law governing the availability of equitable remedies; and (c) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy or prohibited by law.

4.3 Purchase for Own Account . Except as permitted pursuant to Section 10.3 hereof, the Shares to be acquired by the Investor hereunder will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the 1933 Act, and the Investor has no present intention of selling or otherwise distributing the same. The Investor does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to the Shares. The Investor also represents that it has not been formed for the specific purpose of acquiring the Shares.

4.4 Accredited Investor Status . The Investor is an “accredited investor” within the meaning of Regulation D. By reason of its business and financial experience, sophistication and knowledge, the Investor is capable of evaluating the risks and merits of the investment made pursuant to this Agreement. The Investor confirms that it is able (a) to bear the economic risk of this investment, as well as other risk factors as more fully set forth herein and in the SEC Documents, (b) to hold the Shares for an indefinite period of time and (c) to bear a complete loss of the Investor’s investment; and the Investor represents that it has sufficient liquid assets so that the illiquidity associated with this investment will not cause any undue financial difficulties or affect the Investor’s ability to provide for its current needs and possible financial contingencies.

4.5 Restricted Securities . The Investor understands that the Shares are characterized as “restricted securities” under the 1933 Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under the 1933 Act and applicable regulations thereunder such securities may be resold without registration under the 1933 Act only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 promulgated under the 1933 Act (“ Rule 144 ”), as presently in effect, and understands the resale limitations imposed thereby and by the 1933 Act. The Investor understands that the Company is under no obligation to register any of the securities sold hereunder except as provided in Section 8 hereof.

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4.6 Due Diligence and No Solicitation . The Investor has had a reasonable opportunity to ask questions of and receive answers from the Company and its officers, and all such questions have been answered to the full satisfaction of the Investor. At no time was the Investor presented with or solicited by any leaflet, public promotional meeting, circular, newspaper or magazine article, radio or television advertisement or any other form of general advertising.

4.7 Further Limitations on Disposition . Without in any way limiting the representations set forth above, the Investor further agrees not to make any disposition of all or any portion of the Shares unless and until:

(a) there is then in effect a registration statement under the 1933 Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

(b) (i) the Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and (ii) the Investor shall have furnished the Company at the Investor’s expense an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such securities under the 1933 Act; provided that the Company shall not require an opinion of counsel for routine sales of shares pursuant to Rule 144.

4.8 Legends . It is understood that the certificates evidencing the Shares will bear the legends set forth below:

(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

(b) The legend referred to in Section 4.8(a) above shall be removed from a certificate representing such Shares if the securities represented thereby are sold pursuant to an effective registration statement under the 1933 Act, or there is delivered to the Company such satisfactory evidence, which may include an opinion of independent counsel, as reasonably may be requested by the Company, to confirm that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers of such securities will not violate the registration requirements of the 1933 Act.

5. PRE-CLOSING COVENANTS OF THE PARTIES . The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing:

5.1 General . Each of the Parties will use its reasonable best efforts to take all action and to do all things necessary, proper or advisable in order to consummate and make

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effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Sections 6 and 7 below).

5.2 Notice of Developments . The Company and the Investor will give prompt written notice to the other of any material adverse development causing a breach of any of its own representations and warranties in Section 3 or 4 above. No disclosure by the Company or the Investor pursuant to this Section 5.2, however, shall be deemed to cure any misrepresentation, breach of warranty or breach of covenant.

6. CONDITIONS TO THE INVESTOR’S OBLIGATIONS AT CLOSING . The obligations of the Investor under Section 2 of this Agreement with respect to the Closing are subject to the fulfillment or waiver, on the Closing Date, of each of the following conditions:

6.1 Representations and Warranties True . The representations and warranties of the Company contained in Section 3 qualified as to materiality shall be true and correct in all respects, and those not so qualified shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date (except where such representation and warranty speaks by its terms as of a different date, in which case it shall be true and correct as of such date). The Company shall have delivered to the Investor at the Closing a certificate in form and substance reasonably satisfactory to the Investor dated the Closing Date and signed by the Chief Executive Officer or an Executive Vice President and the Chief Financial Officer or Senior Vice President of Accounting of the Company to the effect that the condition set forth in this Section 6.1 has been satisfied.

6.2 Compliance with Covenants . The Company shall have performed all of its obligations hereunder in all material respects and complied with all agreements, undertakings, covenants and conditions required hereunder to be performed by it at or prior to the Closing. The Company shall have delivered to the Investor at the Closing a certificate in form and substance reasonably satisfactory to the Investor dated the Closing Date and signed by the Chief Executive Officer or an Executive Vice President and the Chief Financial Officer or Senior Vice President of Accounting of the Company to the effect that the condition set forth in this Section 6.2 has been satisfied.

6.3 No Litigation .

(a) No Law shall have been promulgated, enacted or entered that restrains, enjoins, prevents, materially delays, prohibits or otherwise makes illegal the performance of this Agreement or the transactions contemplated hereby.

(b) No action, suit or proceeding sh