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
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A.
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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.
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The Condominium
shall be restructured in its entirety, and therefore the Properties
shall be modified as disclosed to VOLCANO.
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C.
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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.
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D.
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VOLCANO also
desires to contract construction services from CFZ for the
construction of the Facility in its entirety.
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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:
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A.
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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.
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B.
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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).
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C.
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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.
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III. PHASES OF THE PROJECT
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A.
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Description
of the Phases . The
Project shall be implemented in two phases, of which:
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a.
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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.
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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.
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B.
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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:
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i.
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Payment to CFZ
of the corresponding Purchase Price, as provided in Section VII
below;
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ii.
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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.
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VOLCANO being a
beneficiary of the Free Trade Zone regime, as provided in Section
IV.(H) of this Agreement; and,
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iv.
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Transfer free
and clear title to VOLCANO of the corresponding Parcel, at
VOLCANO’s cost.
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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:
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A.
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Creation
of the Trust . In
consideration of the mutual covenants and agreements herein
contained, the Parties hereby agree as follows:
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a.
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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;
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b.
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CFZ has
transferred in trust to Trustee the Entrusted
Properties;
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c.
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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;
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d.
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The Trustee
shall hold the Promissory Note in custody until the transfer of the
Properties takes place, as per Section J below.
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e.
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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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