Unassociated Document


    PROMISSORY
NOTE

     

    
      	
              $1,000,000.00

            	
              December
      4, 2008

            


    

     

    FOR VALUE
RECEIVED AND ACKNOWLEDGED, the undersigned, PURE BIOFUELS CORP., a corporation
incorporated under the laws of the state of Nevada (“Payor”), hereby
unconditionally promises to pay to the order of FDS Corporation S.A (“FDS”), a
Panama corporation or its permitted assigns (“Payee”) with an
address at Via España 122 piso 14, Edificio Banco de Boston, Ciudad de Panamá,
Republica de Panamá, in lawful money of the United States of America and in
immediately available funds, the principal amount of ONE MILLION DOLLARS
($1,000,000.00).  Payor shall pay the principal amount to Payee in one
(1) installment of $1,000,000.00 on the earlier of (a) January 15, 2009 and (b)
the date Payor enters into an agreement with Banco Internacional del Perú -
Interbank (“Interbank Peru”) pursuant to which Interbank Peru will provide term
loan financing for Payor and/or one or more of its existing majority-owned
subsidiaries (Pure Biofuels del Peru S.A.C., Palma Industrial S.A.C., Ecopalma
S.A.C., Aceite Pucallpa S.A.C., Palmas Tropicales S.A.C. Palmas De Oriente
S.A.C. and Pucapalma S.A.C.), as borrower(s), in a principal amount of not less
than $40,330,000 (January 15, 2009 or such earlier date, the “Maturity
Date”).

     

    1.
Payments.  All payments hereunder shall be made at the address of
Payee set forth herein or at such other place as Payee may, from time to time,
designate.

     

    This Note
may be prepaid, in whole or in part, at any time by Payor without premium or
penalty.

     

    2. Events
of Default; Acceleration.  If any one or more of the following events
(each hereinafter referred to as an “Event of Default”)
shall have occurred and be continuing and shall not have been cured or
waived:

     

    (a) if
payment of the principal amount of or any other sums due under this Note
(whether at the Maturity Date or by acceleration or otherwise) is not made when
due;

     

    (b) if
default shall be made in the performance or observance of any covenant,
agreement or provision to be performed or observed by Payor under this
Note;

     

    (c) if
Payor or any of its subsidiaries shall (i) admit in writing its inability to, or
generally becomes unable to, pay its debts as they become due; (ii) file a
petition in bankruptcy or for reorganization or for the adoption of an
arrangement under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, or an answer or other pleading admitting or
failing to deny the material allegations of such a petition or seeking,
consenting to or acquiescing in the relief therein provided; (iii) make a
general assignment for the benefit of its creditors; (iv) consent to the
appointment of a receiver, trustee, custodian or other similar official for all
or any substantial part of its property or to the filing of a petition against
it under said bankruptcy law; (v) be adjudicated insolvent or bankrupt; (vi)
have entered against it a court order appointing a receiver, trustee, custodian
or other similar official for all or any substantial part of its property, or
approving a filing in good faith of a petition filed against it under said
bankruptcy law (in both cases without its consent); (vii) allow the assumption
of custody or sequestration by a court of competent jurisdiction of all or any
substantially part of its property; or (viii) permit an attachment to be made on
any substantial part of its property or assets; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) if
any indebtedness (other than this Note) of Payor or any its subsidiaries shall
be declared to be (or shall become) due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof, provided that it shall not be an Event of Default under this
Section 2(d) unless the aggregate principal amount of all such indebtedness is
at least $100,000;

     

    then, and in each and
every such case, Payee may declare the principal amount to be immediately due
and payable and thereupon, if such Event of Default is not remedied or cured
within (i) five (5) days with respect to an Event of Default under subsections
(a) and (d) above, and (ii) thirty (30) days with respect to an Event of Default
under subsection (b) above, in each case after notice thereof to Payor by Payee,
such amounts shall become so due and payable without presentation, protest or
further demand or notice of any kind, all of which are hereby expressly waived,
and Payee shall be entitled to receive, to the extent lawful, reasonable
attorneys’ fees for the collection of such amounts; provided that if an
Event of Default under subsection (c) above shall occur with respect to Payor or
any of its subsidiaries, this Note shall automatically become immediately due
and payable without the giving of any such notice.

     

    3. Special Provisions.

     

    (a) Warrants Issued Upon Issuance of
this Note.  In partial consideration for Payee purchasing this Note
from Payor, Payor hereby agrees to issue to Payee on the date hereof duly
authorized and validly issued seven-year warrants to purchase 6,666,666 shares
of the common stock, par value $.001 per share, of Payor (the “Common Stock”) at
an exercise price of $0.30 per share of Common Stock (the
“Warrants”).  The Warrants shall be substantially in the form set
forth in Exhibit A.

     

    (b) Additional Warrants to be
Issued.  If an Event of Default under Section 2(a) above occurs and is
continuing, then Payor shall issue to Payee on the date of such Event of Default
duly authorized and validly issued seven-year warrants to purchase 26,666,666
shares of Common Stock at an exercise price of $0.30 per share of Common Stock.
The Additional Warrants shall be substantially in the form set forth in Exhibit
A.

     

    (c)  Conversion of this
Note.  If an Event of Default under Section 2(a) above occurs and is
continuing, then in addition to the issuance of the Additional Warrants pursuant
to subsection (b) above, this Note shall be converted at Payee’s option into,
and Payor shall issue to Payee on the date of such Event of Default either (i) a
note evidencing a three-month term loan bearing an interest rate of 15% per
annum to be paid in debt securities having identical terms and conditions to
such three-month term loan or (ii) the number of duly authorized and validly
issued shares of Common Stock equal to the total amount of principal outstanding
on this Note divided by a conversion price of $0.30, such amount of principal
outstanding to be measured on the date of such Event of Default.

     

    
      
        
        

      

      
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    4.
Waivers. No course of dealing between Payor and Payee or any delay on the part
of Payee in exercising any rights hereunder shall operate as a waiver of any
rights of Payee, except to the extent expressly waived in writing by
Payee.  No delay or omission by Payee to exercise any right hereunder
shall impair any such right or operate as a waiver thereof or of default
hereunder nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right.  The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law or in equity.  Payor hereby waives, unless otherwise
provided for in this Note, demand, notice of presentment, protest, notice of
dishonor and protest, rights of extension and any defense by reason of extension
of time or other indulgences granted by Payee.

     

    5.
Notices. All notices, demands, requests, consents, approvals or other
communications (collectively, “Notices”) required or
permitted to be given hereunder or which are given with respect to this Note
shall be in writing and shall be personally served, delivered by reputable air
courier service with charges prepaid, or transmitted by hand delivery, telegram,
telex or facsimile, addressed as set forth below, or to such other address as
such party shall have specified most recently by written
notice.  Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or
facsimile.  Notice otherwise sent as provided herein shall be deemed
given on the next business day following delivery of such notice to a reputable
air courier service.  Notices shall be delivered as
follows:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      If
      to Payor:

                                    	
                                      Pure
      Biofuels Corp.

                                    
	 
      	
                                      Av.
      Canaval y Moreyra 380 of 402

                                    
	 
      	
                                      San
      Isidro, Lima

                                    
	 
      	
                                      Peru

                                    
	 
      	
                                      Attention:

                                    	
                                      Luis
      Goyzueta

                                    
	 
      	
                                      Telephone:

                                    	
                                      +511-221-7365

                                    
	 
      	
                                      Facsimile:

                                    	
                                      +511-221-7347

                                    
	 	 	 
	
                                      with
      a copy to:

                                    	
                                      Pure
      Biofuels Corp.

                                    
	 
      	
                                      1250
      Connecticut Avenue, Suite 200

                                    
	 
      	
                                      Washington
      DC, 20036

                                    
	 
      	
                                      Attention:
      

                                    	Brian Alperstein
	 
      	
                                      Telephone:

                                    	
                                      202-261-3520

                                    
	 
      	
                                      Facsimile:

                                    	
                                      202-261-3523

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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                                    And
      to:

                                  	
                                    DLA
      Piper LLP (US)

                                  
	 
      	
                                    1251
      Avenue of the Americas

                                  
	 
      	
                                    New
      York, NY 10020-1104

                                  
	 
      	
                                    Attn:

                                  	
                                    Daniel
      I. Goldberg, Esq.

                                  
	 
      	
                                    Telephone:

                                  	
                                    212-335-4966

                                  
	 
      	
                                    Facsimile:

                                  	
                                    212-884-8466

                                  
	 	 	 
	
                                    if
      to Payee:

                                  	
                                    to
      its most recent address as set forth in the books and records of
      Payor

                                  
	 	 	 
	
                                    with
      a copy to:

                                  	
                                    FDS
      Corporation S.A.

                                  
	 
      	
                                    Via
      España 122 piso 14,

                                  
	 
      	
                                    Edificio
      Banco de Boston

                                  
	 
      	
                                    Ciudad
      de Panamá, Republica de Panamá.

                                  
	 
      	
                                    Telephone:

                                  	
                                    786-866-8858

                                  
	 
      	
                                    Facsímile:

                                  	
                                    240-536-6079

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    6.
Modifications. No
modification or waiver of any of the provisions of this Note shall be effective
unless in writing and signed by Payee, and then only to the extent set forth in
said writing, nor shall any such modification or waiver be applicable except in
the specific instance for which it is given.

     

    7.
Replacement of Note.  Upon receipt by Payor of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and (in the case of loss, theft or destruction) of indemnity
satisfactory to it, and upon surrender and cancellation of such Note, if
mutilated, Payor will make and deliver in lieu or such Note a new Note of like
tenor and unpaid principal amount and dated as of the original date of this
Note.

     

    8.
Further Assurances. Payor agrees to execute such further instruments and to take
such further action as may be reasonably necessary to carry out the intent of
this Note.

     

    9.
Assignment.  This Note shall bind Payor and its successors and
assigns, and shall inure to the benefit of Payee and its successors and
assigns.

     

    10. Governing Law; Submission to
Jurisdiction; Venue; Waiver of Jury Trial.  (a)  THIS NOTE
AND THE RIGHTS OF THE HOLDER AND THE OBLIGATIONS OF PAYOR HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEVADA
(WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT WITHIN
THE COUNTY OF CLARK, STATE OF NEVADA, AND, BY EXECUTION AND DELIVERY OF THIS
NOTE, PAYOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS.  PAYOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY
SUCH COURTS LACK PERSONAL JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE BROUGHT IN
ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION
OVER IT.  PAYOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT ITS ADDRESS SET FORTH IN SECTION 5, SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING. PAYOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE HOLDER OF THIS NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
PAYOR IN ANY OTHER JURISDICTION.

     

    
      
         

      

      
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    (b) PAYOR
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS NOTE BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     

    (c)  PAYOR
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE.

     

    11.
Miscellaneous.  The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.

     

    [Remainder
of page intentionally left blank.]

      
        
           


        

        
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    IN
WITNESS WHEREOF, Payor has duly executed this Note on the day and year first
above written.

     

    
      
        
          
            	 
      	
                    PURE
      BIOFUELS CORP.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	              
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  


          

        

      

    

    


    
      
        
        

      

      
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    EXHIBIT
A

     

    
      	
               
      

            	
              [FORM
      OF WARRANTS AND ADDITIONAL
WARRANTS]

            


    

     

    
      
        
        

      

      
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