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Exhibit 10.4

TRUST, LAND PURCHASE AND RIGHT OF FIRST REFUSAL TO PURCHASE AGREEMENT

Between us,

ZONA FRANCA COYOL, SOCIEDAD ANÓNIMA (“CFZ”), corporate identification number 3- 101- 420512, domiciled in Escazú, one hundred meters South of the Multiplaza Shopping Center, Terraforte Building, duly represented by ANDRE GARNIER KRUSE, of age, married, a businessman, resident of San José, bearer of identity card number X-XXX-XXXX; and JORGE MONGE AGÜERO, of age, married, engineer, resident of Freses, Curridabat, from Pops 25 meters East, 300 north 50 east and 50 north, bearer of identity card number X-XXX-XXXX, in their capacity acting together, duly authorized under a Full Power of Attorney with no restrictions as to the amounts involved, as shown in the certificate attached hereto as Exhibit A a) ;

VOLCARICA, SOCIEDAD DE RESPONSABILIDAD LIMITADA (“VOLCANO”), corporate identification number
3- 102- 515567, domiciled in San José, Santa Ana, Forum Business Center, Building C, Office One C One, duly represented by John Dahldorf, of legal age, married, CFO, resident of Carlsbad, California, U.S.A, personal identity card number XXX-XX-XXXX, in his capacity as Manager, duly authorized under a Full Power of Attorney with no restrictions as to the amounts involved, as shown in the certificate attached hereto as Exhibit A b);

BANCO IMPROSA, SOCIEDAD ANÓNIMA (“Trustee”), corporate identification number 3- 101- 79006, domiciled in San José, duly represented by JORGE CALVO ZELEDÓN, of age, married, business administrator, resident of San José, personal identity card number X-XXX-XXXX, duly authorized under a Full Power of Attorney with no restrictions as to the amounts involved, as shown in the certificate attached hereto as Exhibit A c) ;

CFZ, VOLCANO and Trustee shall be hereinafter referred to collectively for purposes of this deed (the “Agreement”) as the “Parties”.

WHEREAS

 

 

A.

CFZ is the sole, lawful and exclusive owner of the real estate properties described below (hereinafter individually each the “Property” and jointly the “Properties”), (as described in Exhibit B), located in the Province of Alajuela with a total surface area of 57728,88 m2, registered with the Section of Condominium Property of the Costa Rican Public Registry under the registration numbers 1) 2- 68528-F- 000, 2) 2- 68529-F- 000, 3) 2- 68530-F- 000, 4) 2- 68532-F- 000, 5) 2- 68533-F- 000, and 6) 2- 68534-F- 000, and within the Coyol Free Zone and Industrial Park (the “Park”) also known as “Condominio Horizontal Industrial Comercial con fincas filiales primarias individualizadas (FFPI) Zona Franca Coyol” (the “Condominium”).

 

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B.

The Condominium shall be restructured in its entirety, and therefore the Properties shall be modified as disclosed to VOLCANO.

 

 

C.

VOLCANO is interested in establishing a manufacturing facility (the “Facility”) at the Park, and therefore VOLCANO desires to purchase a portion of the Properties for such Facility, and to maintain a right of first refusal to purchase the remaining portion for expansion purposes, and CFZ has agreed.

 

 

D.

VOLCANO also desires to contract construction services from CFZ for the construction of the Facility in its entirety.

Now therefore in consideration of the mutual considerations and promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties have agreed to execute this trust, land purchase, and right of first refusal to purchase agreement (hereinafter referred to as the “Agreement”).

I. UNDERSTANDINGS: The following is a clear understanding between the Parties concerning the Properties:

 

 

A.

Facility . VOLCANO is interested in establishing the Facility at the Condominium, where CFZ currently operates as developer and manager of the Park and also acts as owner of the Properties and other parcels.

 

 

B.

Purchase of Properties and Facility Construction Services . The following is a clear understanding between the Parties concerning the Properties, according to which CFZ and VOLCANO have agreed to modify the Properties, and sell a portion of the resulting Properties to VOLCANO (Parcel One as defined below), and provide VOLCANO a right of first refusal to purchase the remainder of the Properties (Parcel Two as defined below). Furthermore, and VOLCANO has also required from CFZ certain construction services pursuant to the Cold Shell Construction Contract entered into by CFZ and VOLCANO on this same date (the “Construction Contract”) and the Design, Architecture & Engineering and Construction Management Agreement to be entered into by CFZ and VOLCANO (the “Construction Management Agreement”), for the construction of a facility on Parcel One, the Parcel Two Construction Contract and Construction Management Contract will be executed simultaneously and the latest 90 days after VOLCANO informed CFZ it will purchase Phase Two Lot or within the right of first refusal period as long as a mutual agreement has been reached to sign the both agreements, individually the facility and collectively the “Facilities” (collectively the “Definitive Agreements”, Exhibit C to this Agreement).

 

 

C.

This Agreement as the Land PSA . This Agreement is the Land Purchase and Sale Agreement (PSA) for Parcel One required as part of the Definite Agreements. As such, VOLCANO promises to buy and CFZ promises to sell Parcel One, subject to

 

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the terms and conditions herein outlined. This Agreement shall be complemented by the subsequent purchase and sale agreement to be executed upon transfer of the Properties (and/or resulting Parcels, as defined herein) to VOLCANO or to CFZ, as the case may be, all of which shall be collectively referred to as the Land PSA in its final form. The other remaining contracts and agreements included in the Definitive Agreements shall be executed by the Parties, as necessary and as the terms and conditions previously fixed in this Agreement are developed, in order to make the proposed transaction binding on the Parties, as appropriate.

III. PHASES OF THE PROJECT .

 

 

A.

Description of the Phases . The Project shall be implemented in two phases, of which:

 

 

a.

Phase One shall take place immediately upon transfer of the Properties into the Trust, giving rise to the obligation to reunite the Properties and segregate the resulting Property in two parcels, Parcel One (Lot area: 25,308 sq. m. (272,415 sq. ft.) as shown in Exhibit F(a) and Parcel Two (Lot area: 32,421 sq. m. (348,980 sq. ft.) as shown in Exhibit F(b), as it is provided and described in Section VI of this Agreement and following the instructions that CFZ and VOLCANO shall determine for the Trustee to that effect.

Parties understand that the Condominium will be restructured in its entirety, as per the plan attached hereto as Exhibit G , and its required modifications, and therefore current Properties will be modified. Therefore, Parties shall instruct Trustee to grant a letter of special power of attorney to CFZ, in order for CFZ to attend any Condominium owners meeting in representation of Trustee, in order to vote in favor of such modification, if required.

In this regard, by their agreement, VOLCANO and CFZ may instruct Trustee to grant any letters of special power of attorney so that CFZ may process, as necessary, any construction permits and proceed with any construction works pursuant to the Phases so provided in this Agreement. CFZ and VOLCANO hereby expressly exempt Trustee from any defects or problems in construction, as well as any contingencies deriving thereof, such as, but not limited to, worker’s risks insurance, social security contributions, construction permits, environmental permits or employment severance indemnities. CFZ and VOLCANO expressly exempt Trustee of any liability for future claims that may arise and that CFZ and VOLCANO shall be responsible of any eventuality with respect to the Trustee, provided such claim is not due to Trustee´s fault. Consequently, upon execution of this Agreement, the parties hereby grant their authorization to proceed with

 

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the Construction Contract, the Construction Services Agreement and the actual construction by CFZ of Parcel One building planned, described and provided for in such documents. In addition to that, once Parcel One has been segregated it shall be transferred to VOLCANO, as provided in Section IV.(H) of this Agreement;

b. Phase Two, starting on this date, and once the Properties have been subdivided and Parcel One and Parcel Two, have been registered, as it is provided and described in Section IV of this Agreement and following the instructions that CFZ and VOLCANO shall determine for the Trustee to that effect, the Parcel Two shall be transferred by Trustee back to CFZ, and VOLCANO shall have a right of first refusal to purchase and/or lease such Parcels, as per the corresponding third party offer.

 

 

B.

VOLCANO’s Right of First Refusal to Purchase Implications . CFZ grants VOLCANO the Right of First Refusal (RFR) for a period of 5 years as of this date to purchase or lease Parcel Two or its modifications, in accordance to layout attached hereto, with a current area of thirty two thousand four hundred and twenty one (32,421) square meters (approximately 348,980 square feet) including a cold shell manufacturing building of fifteen thousand nine hundred and eighty nine square meters (15,989) square meters, or its modifications. The closing and purchase price will be set at a value not to exceed $3,902,357 for the land and not to exceed $12,856,381 for the building, (price to be duly indexed accordingly to the Building Construction Index as quoted by Cámara Costarricense de la Construccion and the Exchange rate index from as quoted by the Costa Rican Central Bank) at moment of execution. During this period, if CFZ receives a bona-fide offer to purchase or lease Parcel Two, CFZ must inform VOLCANO of such offer including lot price, lot area and construction price and VOLCANO shall have thirty (30) calendar days in which to provide a RFR Response Notice to CFZ indicating if it wants to exercise its first right and match the offer or accept the RFR terms provided above, and shall execute the Definitive Agreements. VOLCANO shall comply with the conditions precedent and make payments detailed in the following paragraph within ninety (90) days as of the date of the delivery of such notice:

 

 

i.

Payment to CFZ of the corresponding Purchase Price, as provided in Section VII below;

 

 

ii.

Simultaneous execution of the corresponding construction contract and construction services agreement for such Phase, using the same terms and conditions of the Construction Contract, and the Construction Services Agreement for Phase One, and as per Section VII below;

 

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iii.

VOLCANO being a beneficiary of the Free Trade Zone regime, as provided in Section IV.(H) of this Agreement; and,

 

 

iv.

Transfer free and clear title to VOLCANO of the corresponding Parcel, at VOLCANO’s cost.

Failure to respond shall be deemed a rejection to purchase by VOLCANO, and CFZ shall be able to sell or lease Parcel Two, to such third party.

III. ESTABLISHMENT OF TRUST AND TRANSFER OF PROPERTIES TO TRUSTEE . CFZ transfers on this same date the Properties and a Promissory Note (pagaré) in an amount equal to the sum of Phase One Lot Purchase Price (US$3,046,200), executed in favor of VOLCANO by CFZ and personally guaranteed by Andre Garnier and Alvaro Carballo (Guarantee) as entrusted Properties into the Trust under the name of the Trustee (the “Entrusted Properties”), in the amount of one thousand colones. Transfer is made free and clear of any encumbrances, liens or easements for construction or operation of VOLCANO, except for the easement, at the Public Registry as follows: book 285, entry 09370, consecutive number 01, sequence 002, subsequence 001 that does not affect the construction or operation of VOLCANO, besides from said encumbrance the Properties are free of all other encumbrances, including but not limited to mortgages, annotations and restrictions, and condominium-related or otherwise, pursuant the Construction Contract and Construction Services Agreement. COYOL guarantees the Shell can be constructed as as per the Construction Contract and Construction Services Agreement with the required setback/drawback and density restrictions applicable pursuant to Costa Rican law. The Properties are transferred being current as to payment of municipal fees, municipal licenses ( patentes ) and Properties taxes, condominium dues, maintenance fees and any applicable contributions, and subject only to the following: (a) routine covenants and restrictions of the free trade zone industrial parks and condominiums, as applicable to CFZ, and set forth in the following documents: (i) PROCOMER´s Executive Resolution number 252-2996, of the 6 th , day of November, 2006, copy of which is attached hereto as Exhibit D ; (ii) the Condominium Regulations, copy of which is attached hereto as Exhibit E , the “Condominium Regulations”) and as modified from time to time; and (iii) the Internal Operation Park Regulations, as published in the Official Diary “La Gaceta” number ninety, of May twelfth, of the year two thousand and eight (the “Operations Regulations”), copies of which are attached hereto as Exhibit E , and are also delivered to the Trustee; (b) the information on each of the Parcels to be recorded with the Public Registry which are attached hereto as Exhibit F , (“Parcel Land Plans”); and (c) the terms and conditions of the Trust Agreement herein executed by and between the Parties. Trustee expressly accepts the transfer of the Properties as Entrusted Properties, subject to the respective Trust provisions. Costs and expenses of the transfer are covered by VOLCANO, and such transfer shall be performed by two Notaries acting jointly (co-notariado). One Notary will be appointed by VOLCANO and the other by CFZ; each party will cover the fees corresponding to their appointed Notary.

 

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IV. GENERAL PURPOSES OF THE TRUST . This Trust (the “Trust”) has been designed to implement the two Phases of the Project already established. Therefore, by virtue of the Trust, the Properties shall be transferred to VOLCANO or back to CFZ, under the following TRUST PROVISIONS:

 

 

A.

Creation of the Trust . In consideration of the mutual covenants and agreements herein contained, the Parties hereby agree as follows:

 

 

a.

VOLCANO and CFZ have hereby agree to the creation of the Trust to hold title to the Properties (the “Entrusted Properties”) in order to have Trustee grant CFZ all letters of special power of attorney required, in order for CFZ to represent Trustee in all condominium owners meeting’s and ratifications required to vote in favor of the condominium reform that will reallocate the land within the Condominium and result in the creation of the two the Parcels required for the development of the Phases herein defined;

 

 

b.

CFZ has transferred in trust to Trustee the Entrusted Properties;

 

 

c.

Trustee has accepted the transfer of the Entrusted Properties to the Trust, and agreed to hold such Entrusted Properties subject to the terms of this Trust Agreement;

 

 

d.

The Trustee shall hold the Promissory Note in custody until the transfer of the Properties takes place, as per Section J below.

 

 

e.

The creation of this Trust by the Parties shall be irrevocable and this Trust Agreement may be terminated only according to the


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