THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
 
10%/12% SENIOR CONVERTIBLE PIK ELECTION NOTE
 
$ 34,312,219.62
New York, New York
 
July 16, 2009

 
FOR VALUE RECEIVED, PURE BIOFUELS CORP., a corporation incorporated under the
laws of the state of Nevada (the “Company”), hereby promises to pay to
Plainfield Peru I LLC or its registered assigns (the “Holder”), in lawful money
of the United States of America in immediately available funds, at the office of
the Holder located at Plainfield Peru I LLC, c/o Plainfield Asset Management
LLC, 55 Railroad Avenue, Greenwich, CT 06830 on September 12, 2012 the principal
sum of THIRTY FOUR MILLION THREE HUNDRED AND TWELVE THOUSAND TWO HUNDRED AND
NINETEEN DOLLARS AND SIXTY TWO CENTS ($34,312,219.62).
 
The Company promises to pay to the Holder interest on the principal amount of
this Note at a rate per annum set forth below from the date of issuance until
maturity.  The Company will pay interest on this Note semi-annually in arrears
on March 15 and September 15 of each year, commencing on September 15, 2009, or
if any such day is not a Business Day, on the next succeeding Business Day
(each, an “Interest Payment Date”).  Interest on this Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from and including July 16, 2009.  The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, and interest on overdue installments of
interest, to the extent lawful, from time to time on demand at a rate per annum
that is 2% in excess of the rate otherwise payable.  If an Event of Default has
occurred and is continuing, interest on this Note shall accrue at a rate per
annum that is 2% in excess of the rate otherwise applicable.  Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
 
The Company may, at its option, elect to pay interest on this Note (i) entirely
in cash (“Cash Interest”) or (ii) entirely by issuing additional Notes (“PIK
Interest”).  The first payment of interest on this Note shall be in PIK
Interest.  Thereafter, the Company must elect the form of interest payment with
respect to each interest period by delivering a notice to the Holder prior to
the beginning of each interest period.  In the absence of such an election for
any interest period, interest on this Note will be payable in the form of the
interest payment for the prior interest period.

 
 

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Cash Interest on this Note will accrue at the rate of 10% per annum. PIK
Interest on this Note will accrue at the rate of 12% per annum and be payable by
issuing additional Notes (“PIK Notes”) in an aggregate principal amount equal to
the amount of PIK Interest for the applicable interest period (rounded up to the
nearest whole dollar) and the Company will issue and deliver such PIK Notes to
the Holder of this Note.  Any PIK Notes will be dated as of the applicable
interest payment date and will bear interest from and after such date. All PIK
Notes issued pursuant to a PIK Payment will mature on September 12, 2012 and
will be governed by, and subject to the terms, provisions and conditions of, the
Purchase Agreement referred to below and shall have the same rights and benefits
as the Notes issued on the date hereof.
 
The Company hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.
 
 
1.
Purchase Agreement

 
This Note is one of a series of Senior Convertible PIK Election Notes issued
pursuant to a Securities Purchase Agreement, dated as of September 12, 2007 (as
from time to time amended, the “Purchase Agreement”), between the Company and
the purchaser named therein and is entitled to the benefits thereof.  Each
holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed
to the confidentiality provisions set forth in Section 13.14 of the Purchase
Agreement and (ii) to have made the representation set forth in Section 5.2 of
the Purchase Agreement.
 
 
2.
Optional Redemption

 
This Note may be redeemed, in whole or in part, by the Company at any time after
the date hereof.
 
 
3.
Registration and Transfer

 
This Note is a registered Note and, as provided in the Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
 
 
4.
Conversion

 
The Holder may convert this Note into fully paid and nonassessable shares of
Common Stock of the Company at any time from and after July 16, 2010 and on or
prior to September 12, 2012.  The initial conversion price is $0.30 per share,
subject to adjustment as provided in the Purchase Agreement.  To determine the
number of shares issuable upon conversion of this Note, divide the principal
amount and accrued but unpaid interest to be converted by the conversion price
in effect on the conversion date.  In connection with the conversion of Notes,
no fractions of shares of Common Stock shall be issued, but the Company shall,
with respect to any fractional interest:  (i) pay cash with respect to the
Market Price of such fractional share; or (ii) round up to the next whole share
of Common Stock.

 
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5.
Additional Warrants

 
In the event this Note and any PIK Notes issued in kind as interest thereon,
plus accrued and unpaid interest, are not redeemed prior to July 16, 2010, the
Company shall issue to Purchaser on July 16, 2010, duly authorized and validly
issued seven-year warrants to purchase one share of Common Stock for every $1.00
principal amount of Note outstanding, at a strike price equal to 120% of the
volume weighted average price of the Common Stock for the sixty (60) trading
days immediately preceding July 16, 2010; provided, however, that the strike
price shall not be less than $0.20 per share of Common Stock and not greater
than $0.40 per share of Common Stock.
 
 
6.
Events of Default

 
If an Event of Default, as defined in the Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner, at the price and with the effect provided in the
Purchase Agreement.
 
[Remainder of Page Intentionally Left Blank]

 
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THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
 
PURE BIOFUELS CORP.
   
By:
  
 
Name: Luis Goyzueta
 
Title: Chief Executive Officer

 
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ASSIGNMENT FORM

To assign this Note, fill in the form below:
 
I or we assign and transfer this Note to
 
 
(Insert assignee's soc. sec. or tax I.D. no.)
 
 
 
 
 
 
 
 
(Print or type assignee's name, address and zip code)
 
Your Signature:
 
 
(Sign exactly as your name appears on the Note)

Date:
 

 
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CONVERSION NOTICE

To convert this Note into Common Stock of the Company, check the box:
o
 
To convert only part of this Security, state the principal amount to be
converted:
$_____________________.
 
If you want the stock certificate made out in another person's name, fill in the
form below:
   
(Insert assignee's soc. sec. or tax I.D. no.)
 
    
 
  
 
   
 
   
(Print or type assignee's name, address and zip code)
 
Your Signature:
 
   
(Sign exactly as your name appears on the Note)

Date:
   

 
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