Document:

EXHIBIT
      10.16

    

    Employment
      Agreement, dated March 8, 2007, between Stephen D. Staman, Executive Vice
      President and Chief Revenue Officer and Union National Financial Corporation
      and
      its subsidiary, Union National Community Bank

    

    EMPLOYMENT
      AGREEMENT

    

    THIS
      AGREEMENT
      is made
      as of the 8th day
      of
      March, 2007, between UNION
      NATIONAL FINANCIAL CORPORATION (“Corporation”),
      a Pennsylvania business corporation having a place of business at 570 Lausch
      Lane, Lancaster, Pennsylvania 17601, UNION
      NATIONAL COMMUNITY BANK (“Bank”)
      a national banking association having a place of business at 570 Lausch Lane,
      Lancaster, Pennsylvania 17601, and STEPHEN
      D. STAMAN (“Executive”),
      an individual residing at 860 Westminster Drive, Lancaster, Pennsylvania 17601.
      

    

    WITNESSETH:

    

    WHEREAS,
      the
      Corporation is a registered bank holding company; 

    

    WHEREAS,
      the Bank
      is a subsidiary of the Corporation;

    

    WHEREAS,
      Corporation and Bank desire to employ Executive to serve in the capacity of
      Executive Vice President and Chief Revenue Officer of the Bank under the terms
      and conditions set forth herein; and

    

    WHEREAS,
      Executive desires to accept employment with Corporation and Bank on the terms
      and conditions set forth herein.

    

    AGREEMENT:

    

    NOW,
      THEREFORE,
      the
      parties hereto, intending to be legally bound, agree as follows:

    

    
      	
              1.

            	
              Employment.
                Corporation and Bank hereby employ Executive, and Executive hereby
                accepts
                employment with Corporation and Bank, under the terms and conditions
                set
                forth in this Agreement.

            

    

    

    
      	2.	
              Duties
                of Employee.
                Executive shall perform and discharge well and faithfully such duties
                as
                an executive officer of Bank as may be assigned to Executive from
                time to
                time by the Board of Directors of Corporation and Bank. Executive
                shall be
                employed as Executive Vice President and Chief Revenue Officer of
                the Bank
                and shall hold such other titles as may be given to him from time
                to time
                by the Board of Directors of Corporation and Bank. Executive shall
                devote
                his full-time attention and energies to the business of Corporation
                and
                Bank during the Employment Period (as defined in Section 3 of this
                Agreement); provided, however, that this Section 2 shall not be construed
                as preventing Executive from (a) engaging in activities incident
                or
                necessary to personal investments so long as such investment does
                not
                exceed 5% of the outstanding shares of any publicly held company,
                (b)
                acting as a member of the Board of Directors of any other corporation
                or
                as a member of the Board of Trustees of any other organization, with
                the
                prior approval of the Board of Directors of Corporation and Bank,
                or (c)
                being involved in any other activity with the prior approval of the
                Board
                of Directors of Corporation and Bank. The Executive shall not engage
                in
                any business or commercial activities, duties or pursuits which compete
                with the business or commercial activities of Corporation or Bank,
                nor may
                the Executive serve as a director or officer or in any other capacity
                in a
                company which competes with Corporation or Bank. Upon written approval
                from the Corporation or Bank, the Executive may engage in voluntary
                or
                philanthropic endeavors.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	3.	
              Term
                of Agreement.

            

    

    

    
      	 	
              (a)

            	
              This
                Agreement shall be for a three (3) year period (the “Employment Period”)
                beginning on the date first written above, and if not previously
                terminated pursuant to the terms of this Agreement, the Employment
                Period
                shall end three (3) years later (the “Initial Term”). The Employment
                Period shall be extended automatically for one additional year on
                the
                third annual anniversary date of the commencement of the Initial
                Term (the
                date first above written), and then on each annual anniversary date
                of
                this Agreement thereafter, unless any of Corporation, Bank or Executive
                gives contrary written notice to the other(s) not less than 60 days
                before
                any such anniversary date so that upon the anniversary date if notice
                had
                not been previously given as provided in this Section 3(a), the Employment
                Period shall be and continue for a one-year period thereafter. References
                in the Agreement to “Employment Period” shall refer to the Initial Term of
                this Agreement and any extensions to the initial term of this
                Agreement.

            

    

    

    
      	 	
              (b)

            	
              Notwithstanding
                the provisions of Section 3(a) of this Agreement, this Agreement
                shall
                terminate automatically for Cause (as defined herein) upon written
                notice
                from the Board of Directors of each of Corporation and Bank to Executive.
                As used in this Agreement, “Cause” shall mean any of the following: (i)
                the willful failure by the Executive to substantially perform his
                duties
                hereunder (other than a failure resulting from the Executive’s incapacity
                because of physical or mental illness, as provided in Section 3(d)
                hereof), after notice from the Corporation or Bank and a failure
                to cure
                such violation within thirty (30) days of said notice; (ii) the willful
                engaging by the Executive in misconduct injurious to the Corporation
                or
                Bank; (iii) the willful violation by the Executive of the provisions
                of
                Sections 2, 8, 9 or 10 hereof, after notice from the Corporation
                or Bank
                and a failure to cure such violation within thirty (30) days of said
                notice; (iv) the dishonesty or gross negligence of the Executive
                in the
                performance of his duties; (v) the breach of Executive’s fiduciary duty
                involving personal profit; (vi) the violation of any law, rule or
                regulation governing banks or bank officers or any final cease and
                desist
                order issued by a bank regulatory authority; (vii) conduct on the
                part of
                Executive which brings public discredit to the Corporation or Bank;
                (viii)
                unlawful discrimination by the Executive, including harassment against
                Corporation’s or Bank’s employees, customers, business associates,
                contractors, or visitors; (ix) theft or abuse by Executive of the
                Corporation’s or Bank’s property or the property of Corporation’s or
                Bank’s customers, employees, contractors, vendors, or business associates;
                (x) failure of the Executive to follow the good faith lawful instructions
                of the Board of Directors of Corporation or Bank with respect to
                its
                operations, after notice from the Corporation or Bank and a failure
                to
                cure such violation within thirty (30) days of said notice; (xi)
                the
                direction or recommendation of a state or federal bank regulatory
                authority to remove the Executive’s position with Corporation and/or Bank
                as identified herein; (xii) any final removal or prohibition order
                to
                which the Executive is subject, by a federal banking agency pursuant
                to
                Sections 8(e) and 8(g) of the Federal Deposit Insurance Act; (xiii)
                the
                Executive’s conviction of or plea of guilty or nolo contendere to a
                felony, crime of falsehood or a crime involving moral turpitude,
                or the
                actual incarceration of Executive; (xiv) any act of fraud,
                misappropriation or personal dishonesty; (xv) insubordination; (xvi)
                misrepresentation of a material fact, or omission of information
                necessary
                to make the information supplied not materially misleading, in an
                application or other information provided by the Executive to the
                Corporation or any representative of the Corporation in connection
                with
                the Executive’s employment with Corporation; (xvii) the existence of any
                material conflict between the interests of Corporation and the Executive
                that is not disclosed in writing by the Executive to the Corporation
                and
                approved in writing by the Board of Directors of Corporation; or
                (xviii)
                the Executive takes action that is clearly contrary to the best interest
                of the Corporation.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If
      this
      Agreement is terminated for Cause, all of Executive’s rights under this
      Agreement shall cease as of the effective date of such termination.

    

    
      	 	
              (c)

            	
              Notwithstanding
                the provisions of Section 3(a) of this Agreement, this Agreement
                shall
                terminate automatically upon Executive’s voluntary termination of
                employment (other than in accordance with Section 5 of this Agreement)
                for
                Good Reason. The term “Good Reason” shall mean (i) the assignment of
                duties and responsibilities inconsistent with Executive’s status as
                Executive Vice President and Chief Revenue Officer of the Bank, (ii)
                a
                reassignment which requires Executive to move his principal residence
                or
                his office more than fifty (50) miles from the Bank’s principal executive
                office immediately prior to this Agreement, (iii) any removal of
                the
                Executive from office or any adverse change in the terms and conditions
                of
                the Executive’s employment, except for any termination of the Executive’s
                employment under the provisions of Section 3(b) hereof, (iv) any
                reduction
                in the Executive’s Annual Base Salary as in effect on the date hereof or
                as the same may be increased from time to time, except such reductions
                that are the result of a national financial depression or national
                or bank
                emergency when such reduction has been implemented by the Board of
                Directors for the Corporation’s and Bank’s senior management, or (v) any
                failure of Corporation and Bank to provide the Executive with benefits
                at
                least as favorable as those enjoyed by the Executive during the Employment
                Period under any of the pension, life insurance, medical, health
                and
                accident, disability or other employee plans of Corporation and Bank,
                or
                the taking of any action that would materially reduce any of such
                benefits
                unless such reduction is part of a reduction applicable to all employees
                of comparable position within Bank. If such termination occurs for
                Good
                Reason, then Corporation or Bank shall pay Executive an amount equal
                to
                two (2) times the Executive’s Annual Base Salary as defined in subsection
                (a) of Section 4, which amount shall be payable in eighteen (18)
                equal
                monthly installments and shall be subject to federal, state and local
                tax
                withholdings. In addition, if Executive and his dependents who are
                qualified beneficiaries are eligible to elect continuation of health
                insurance benefits under the Consolidated Omnibus Budget Reconciliation
                Act of 1995 (“COBRA”) and if Executive elects to purchase such COBRA
                continuation coverage for himself and/or for his qualified beneficiaries,
                then in such event the Employer shall reimburse Executive in an amount
                equal to the monthly premium paid by him to obtain such coverage,
                net of
                the amount which employees of the Employer are required to contribute
                toward the purchase of health insurance benefits under the personnel
                policies of the Employer then in effect, which reimbursement shall
                continue until the first of the following to occur: (i) the
                expiration of 18 months following the date of termination of the
                Employment Period and (ii) the qualification of Executive and his
                qualified beneficiaries for substantially equivalent coverage under
                any
                health insurance policy maintained by any future employer of Executive.
                Reimbursement as provided for herein shall be made by the Employer
                to
                Executive monthly within five (5) business days following the presentation
                by Executive to the Employer of evidence of payment by him (in the
                form of
                a copy of a cancelled check or credit card draft or other documentary
                evidence reasonably satisfactory to the Employer) of the monthly
                COBRA
                continuation coverage premium for that month. However, in the event
                the
                payment described herein, when added to all other amounts or benefits
                provided to or on behalf of the Executive in connection with his
                termination of employment, would result in the imposition of an excise
                tax
                under Internal Revenue Code of 1986, as amended (“Code”) Section 4999,
                such payments shall be retroactively (if necessary) reduced to the
                extent
                necessary to avoid such excise tax imposition. Upon written notice
                to
                Executive, together with calculations of Corporation’s independent
                auditors, Executive shall remit to Corporation the amount of the
                reduction, plus such interest, as may be necessary to avoid the imposition
                of such excise tax. Notwithstanding the foregoing or any other provision
                of this contract to the contrary, if any portion of the amount herein
                payable to the Executive is determined to be non-deductible pursuant
                to
                the regulations promulgated under Code Section 280G, the Corporation
                shall
                be required only to pay to Executive the amount determined to be
                deductible under Code Section 280G.

            

    

    
      	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    At
      the
      option of the Executive, exercisable by the Executive within ninety (90) days
      after the occurrence of the event constituting "Good Reason," the Executive
      may
      resign from employment under this Agreement by a notice in writing (the "Notice
      of Termination") delivered to Corporation and Bank and the provisions of this
      Section 3(c) hereof shall thereupon apply.

    

    
      	 	
              (d)

            	
              Notwithstanding
                the provisions of Section 3(a) of this Agreement, this Agreement
                shall
                terminate automatically upon Executive’s Disability, and Executive’s
                rights under this Agreement shall cease as of the date of such
                termination. For purposes of this Agreement, the Executive shall
                have a
                “Disability” if, as a result of physical or mental injury or impairment,
                Executive is unable to perform all of the essential job functions
                of his
                position on a full time basis, taking into account any reasonable
                accommodation required by law, and without posing a direct threat
                to
                himself and others, for a period of one hundred eighty (180) days
                or more.
                

            

    

    

    
      	 	
              (e)

            	
              Executive
                agrees that in the event his employment under this Agreement is
                terminated, Executive shall resign as a director of Corporation and
                Bank,
                or any affiliate or subsidiary thereof, if he is then serving as
                a
                director of any of such entities.

            

    

    

    
      	4.	
              Employment
                Period Compensation.

            

    

    

    
      	 	
              (a)

            	
              Annual
                Base Salary.
                For services performed by Executive under this Agreement, Corporation
                or
                Bank shall pay Executive an Annual Base Salary during the Employment
                Period at the rate of $160,425.00 per year, minus applicable withholdings
                and deductions, payable at the same times as salaries are payable
                to other
                executive employees of Corporation or Bank. Corporation or Bank may,
                from
                time to time, increase Executive’s Annual Base Salary, and any and all
                such increases shall be deemed to constitute amendments to this Section
                4(a) to reflect the increased amounts, effective as of the date
                established for such increases by the Board of Directors of Corporation
                or
                Bank or any committee of such Board in the resolutions authorizing
                such
                increases.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              Bonus.
                For services performed by Executive under this Agreement, Corporation
                or
                Bank may, from time to time, pay a bonus or bonuses to Executive
                as
                Corporation or Bank, in its sole discretion, deems appropriate. The
                payment of any such bonuses shall not reduce or otherwise affect
                any other
                obligation of Corporation or Bank to Executive provided for in this
                Agreement. As of the time of the execution of this Agreement, Executive’s
                incentive compensation is anticipated to be calculated as described
                in
                Exhibit 1 to this Agreement.

            

    

     

    
      	 	
              (c)

            	
              Vacations.
                During the term of this Agreement, Executive shall be entitled to
                paid
                annual vacation in accordance with the policies as established from
                time
                to time by the Boards of Directors of Corporation and Bank. However,
                Executive shall not be entitled to receive any additional compensation
                from Corporation and Bank for failure to take a vacation, nor shall
                Executive be able to accumulate unused vacation time from one year
                to the
                next, except to the extent authorized by the Boards of Directors
                of
                Corporation and Bank.

            

    

    

    
      	 	
              (d)

            	
              Automobile.
                Executive shall be eligible for reimbursement for business related
                automobile mileage consistent with then applicable and current guidelines
                and rates permitted by Internal Revenue
                Service.

            

    

    

    
      	 	
              (e)

            	
              Employee
                Benefit Plans.
                During the term of this Agreement, Executive shall be entitled to
                participate in or receive the benefits of any employee benefit plan
                currently in effect at Corporation and Bank, subject to the terms
                of said
                plan, until such time that the Boards of Directors of Corporation
                and Bank
                authorize a change in such benefits. Nothing paid to Executive under
                any
                plan or arrangement presently in effect or made available in the
                future
                shall be deemed to be in lieu of the salary payable to Executive
                pursuant
                to Section 4(a) hereof.

            

    

    

    
      	 	
              (f)

            	
              Business
                Expenses.
                During the term of this Agreement, Executive shall be entitled to
                receive
                prompt reimbursement for all reasonable expenses incurred by him,
                which
                are properly accounted for, in accordance with the policies and procedures
                established by the Boards of Directors of Corporation and Bank for
                their
                executive officers.

            

    

    

    
      	 	
              (g)

            	
              Club
                Membership.
                Corporation or Bank will make initiation payments to the Lancaster
                County
                Club under the terms and conditions set forth in a letter dated December
                12, 2005, which is attached as Exhibit 2 to this Agreement. However,
                notwithstanding any provisions to the contrary in the letter of December
                12, 2005, Corporation or Bank will pay membership dues and
                business-related expenses, incurred by Executive at the Lancaster
                Country
                Club.

            

    

    

    
      	5.	
              Termination
                of Employment Following Change in Control.

            

    

    

    
      	 	
              (a)

            	
              If
                a Change in Control (as defined in Section 5(b) of this Agreement)
                shall
                occur and thereafter, there shall
                be:

            

    

    

    
      	 	 	
              (i)

            	
              any
                involuntary termination of Executive’s employment (other than for the
                reasons set forth in Section 3(b) or 3(d) of this Agreement);
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              (ii)

            	
              any
                reduction in Executive’s title, responsibilities, including reporting
                responsibilities, or authority, including such title, responsibilities
                or
                authority as such may be increased from time to time during the term
                of
                this Agreement;

            

    

    

    
      	 	 	
              (iii)

            	
              the
                assignment to Executive of duties inconsistent with Executive’s office on
                the date of the Change in Control or as the same may be increased
                from
                time to time after the Change in
                Control;

            

    

    

    
      	 	 	
              (iv)

            	
              any
                reassignment of Executive to a location greater than fifty (50) miles
                from
                the location of Executive’s office on the date of the Change in
                Control;

            

    

    

    
      	 	 	
              (v)

            	
              any
                reduction in Executive’s Annual Base Salary in effect on the date of the
                Change in Control or as the same may be increased from time to time
                after
                the Change in Control;

            

    

    

    
      	 	
              (vi)

            	
              any
                failure to provide Executive with benefits at least as favorable
                as those
                enjoyed by Executive under any of Corporation’s or Bank’s retirement or
                pension, life insurance, medical, health and accident, disability
                or other
                employee plans in which Executive participated at the time of the
                Change
                in Control, or the taking of any action that would materially reduce
                any
                of such benefits in effect at the time of the Change in
                Control;

            

    

    

    
      	
            	(vii)	
              any
                requirement that Executive travel in performance of his duties on
                behalf
                of Corporation or Bank for a significantly greater period of time
                during
                any year than was required of Executive during the year preceding
                the year
                in which the Change in Control occurred;

            

    

    

    
      	
            	(viii)	
              any
                sustained pattern of interruption or disruption of Executive for
                matters
                substantially unrelated to Executive’s discharge of Executive’s duties on
                behalf of Corporation and Bank; or

            

    

    

    
      	
            	(ix)	
              a
                good faith determination by Executive that he can no longer work
                with the
                new management of Corporation and Bank, provided, however, that Executive
                cannot make such a determination during the first five (5) months
                following a Change in Control.

            

    

    

    then,
      at
      the option of Executive, exercisable by Executive within one hundred eighty
      (180) days of the Change in Control or occurrence of any of the foregoing
      events, Executive may resign from employment with Corporation and Bank (or,
      if
      involuntarily terminated, give notice of intention to collect benefits under
      this Agreement) by delivering a notice in writing (the “Notice of Termination”)
      to Corporation and Bank and the provisions of Section 6 of this Agreement shall
      apply.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (b) As
      used
      in this Agreement, “Change in Control” shall mean a change in control (other
      than one occurring by reason of an acquisition of the Corporation or Bank by
      Executive) of a nature that would be required to be reported in response to
      Item
      6(e) of Schedule 14A of Regulation 14A and any successor rule or regulation
      promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) if
      Corporation or Bank were subject to the Exchange Act reporting requirements;
      provided that, without limiting the foregoing, such a change in control shall
      be
      deemed to have occurred if the Board of Directors certifies that one of the
      following has occurred: 

    

    (i) (A)
      a
      merger, consolidation or division involving Corporation or Bank, (B) a sale,
      exchange, transfer or other disposition of substantially all of the assets
      of
      Corporation or Bank, or (C) a purchase by Corporation or Bank of substantially
      all of the assets of another entity, unless such merger, consolidation,
      division, sale, exchange, transfer, purchase or disposition is approved in
      advance by seventy percent (70%) or more of the members of the Board of
      Directors of Corporation or Bank who are not interested in the transaction
      and a
      majority of the members of the Board of Directors of the legal entity resulting
      from or existing after any such transaction and of the Board of Directors of
      such entity’s parent corporation, if any, are former members of the Board of
      Directors of Corporation or Bank; or

    

    
      	 	 	
              (ii)

            	
              any
                “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
                Act, other than Corporation or Bank or any “person” who on the date hereof
                is a director or officer of Corporation or Bank is or becomes the
                “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
                directly or indirectly, of securities of Corporation or Bank representing
                fifty (50%) percent or more of the total value or combined voting
                power of
                Corporation or Bank’s then outstanding securities, or
                

            

    

    

    
      	 	 	
              (iii)

            	
              during
                any period of one (1) year during the term of Executive’s employment under
                this Agreement, individuals who at the beginning of such period constitute
                the Board of Directors of Corporation or Bank cease for any reason
                to
                constitute at least a majority thereof, unless the election of each
                director who was not a director at the beginning of such period has
                been
                approved in advance by directors representing at least two-thirds
                of the
                directors then in office who were directors at the beginning of the
                period. 

            

    

     

    
      
        
          	6.	
                  Rights
                    in Event of Termination of Employment Following Change in
                    Control.

                

        

      

    

    

    
      	 	
              (a)

            	
              In
                the event that Executive delivers a Notice of Termination (as defined
                in
                Section 5(a) of this Agreement) to Corporation and Bank, Executive
                shall
                be entitled to receive the compensation and benefits set forth
                below:

            

    

     

    If,
      at
      the time of termination of Executive’s employment, a “Change in Control” (as
      defined in Section 5(b) of this Agreement) has also occurred, Corporation and
      Bank shall pay Executive a lump sum amount equal to and no greater than two
      (2)
      times the Executive’s Agreed Compensation as defined in subsection (a) of
      Section 4, minus applicable taxes and withholdings. In addition, if Executive
      and his dependents who are qualified beneficiaries are eligible to elect
      continuation of health insurance benefits under COBRA and if Executive elects
      to
      purchase such COBRA continuation coverage for himself and/or for his qualified
      beneficiaries, then in such event the Employer shall reimburse Executive in
      an
      amount equal to the monthly premium paid by him to obtain such coverage, net
      of
      the amount which employees of the Employer are required to contribute toward
      the
      purchase of health insurance benefits under the personnel policies of the
      Employer then in effect, which reimbursement shall continue until the first
      of
      the following to occur: (i) the expiration of 18 months following the date
      of termination of the Employment Period and (ii) the qualification of
      Executive and his qualified beneficiaries for substantially equivalent coverage
      under any health insurance policy maintained by any future employer of
      Executive. Reimbursement as provided for herein shall be made by the Employer
      to
      Executive monthly within five (5) business days following the presentation
      by
      Executive to the Employer of evidence of payment by him (in the form of a copy
      of a cancelled check or credit card draft or other documentary evidence
      reasonably satisfactory to the Employer) of the monthly COBRA continuation
      coverage premium for that month. However, in the event the payment described
      herein, when added to all other amounts or benefits provided to or on behalf
      of
      the Executive in connection with his termination of employment, would result
      in
      the imposition of an excise tax under Code Section 4999, such payments shall
      be
      retroactively (if necessary) reduced to the extent necessary to avoid such
      excise tax imposition. Upon written notice to Executive, together with
      calculations of Corporation’s independent auditors, Executive shall remit to
      Corporation the amount of the reduction, plus such interest, as may be necessary
      to avoid the imposition of such excise tax. Notwithstanding the foregoing or
      any
      other provision of this contract to the contrary, if any portion of the amount
      herein payable to the Executive is determined to be non-deductible pursuant
      to
      the regulations promulgated under Code Section 280G, the Corporation shall
      be
      required only to pay to Executive the amount determined to be deductible under
      Code Section 280G.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (b)

            	
              Executive
                shall not be required to mitigate the amount of any payment provided
                for
                in this Section 6 by seeking other employment or otherwise. Unless
                otherwise agreed to in writing, the amount of payment or the benefit
                provided for in this Section 6 shall not be reduced by any compensation
                earned by Executive as the result of employment by another employer
                or by
                reason of Executive’s receipt of or right to receive any retirement or
                other benefits after the date of termination of employment or
                otherwise.

            

    

    

    
      	 	
              (c)

            	
              Notwithstanding
                any other provision, in the event that Executive is determined to
                be a key
                employee as that term is defined in Code Section 409A no payment
                shall be
                made until one day following six months from the date of separation
                of
                service as that term is defined in Code Section
                409A.

            

    

     

    
      	7.	
              Rights
                in Event of Termination of Employment Absent Change in
                Control.

            

    

    

    (a) In
      the
      event that Executive’s employment is involuntarily terminated by Corporation
      and/or Bank without Cause and no Change in Control shall have occurred at the
      date of such termination, Corporation and Bank shall pay Executive an amount
      equal to two (2) times the Executive’s Annual Base Salary as defined in
      subsection (a) of Section 4, which amount shall be payable in eighteen (18)
      equal monthly installments and shall be subject to federal, state and local
      tax
      withholdings. In addition, if Executive and his dependents who are qualified
      beneficiaries are eligible to elect continuation of health insurance benefits
      under the COBRA and if Executive elects to purchase such COBRA continuation
      coverage for himself and/or for his qualified beneficiaries, then in such event
      the Employer shall reimburse Executive in an amount equal to the monthly premium
      paid by him to obtain such coverage, net of the amount which employees of the
      Employer are required to contribute toward the purchase of health insurance
      benefits under the personnel policies of the Employer then in effect, which
      reimbursement shall continue until the first of the following to occur:
      (i) the expiration of 18 months following the date of termination of the
      Employment Period, and (ii) the qualification of Executive and his
      qualified beneficiaries for substantially equivalent coverage under any health
      insurance policy maintained by any future employer of Executive. Reimbursement
      as provided for herein shall be made by the Employer to Executive monthly within
      five (5) business days following the presentation by Executive to the Employer
      of evidence of payment by him (in the form of a copy of a cancelled check or
      credit card draft or other documentary evidence reasonably satisfactory to
      the
      Employer) of the monthly COBRA continuation coverage premium for that month.
      However, in the event the payment described herein, when added to all other
      amounts or benefits provided to or on behalf of the Executive in connection
      with
      his termination of employment, would result in the imposition of an excise
      tax
      under Code Section 4999, such payments shall be retroactively (if necessary)
      reduced to the extent necessary to avoid such excise tax imposition. Upon
      written notice to Executive, together with calculations of Corporation’s
      independent auditors, Executive shall remit to Corporation the amount of the
      reduction, plus such interest, as may be necessary to avoid the imposition
      of
      such excise tax. Notwithstanding the foregoing or any other provision of this
      contract to the contrary, if any portion of the amount herein payable to the
      Executive is determined to be non-deductible pursuant to the regulations
      promulgated under Code Section 280G, the Corporation shall be required only
      to
      pay to Executive the amount determined to be deductible under Code Section
      280G.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              Executive
                shall not be required to mitigate the amount of any payment provided
                for
                in this Section 7 by seeking other employment or otherwise. Unless
                otherwise agreed to in writing, the amount of payment or the benefit
                provided for in this Section 7 shall not be reduced by any compensation
                earned by Executive as the result of employment by another employer
                or by
                reason of Executive’s receipt of or right to receive any retirement or
                other benefits after the date of termination of employment or
                otherwise.

            

    

    

    
      	8.	
              Covenant
                Not to Compete.

            

    

    

    
      	 	
              (a)

            	
              Executive
                hereby acknowledges and recognizes the highly competitive nature
                of the
                business of Corporation and Bank and accordingly agrees that, during
                and
                for the applicable period set forth in Section 8(c) hereof, Executive
                shall not, except as otherwise permitted in writing by the Corporation
                and
                the Bank:

            

    

    

    
      	 	 	
              (i)

            	
              be
                engaged, directly or indirectly, either for his own account or as
                agent,
                consultant, employee, partner, officer, director, proprietor, investor
                (except as an investor owning less than 5% of the stock of a publicly
                owned company) or otherwise of any person, firm, corporation or enterprise
                engaged in (1) the banking (including bank holding company) or financial
                services industry, or (2) any other activity in which Corporation
                or Bank
                or any of their subsidiaries are engaged during the Employment Period,
                and
                remain so engaged at the end of the Employment Period, in any county
                and
                contiguous county in which, at the date of termination of the Executive’s
                employment, a branch location, office, loan production office, or
                trust or
                asset and wealth management office of Corporation, Bank or any of
                their
                subsidiaries is located, whether inside or outside of the Commonwealth
                of
                Pennsylvania, (the “Non-Competition Area”); or

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              (ii)

            	
              provide
                financial or other assistance to any person, firm, corporation, or
                enterprise engaged in (1) the banking (including bank holding company)
                or
                financial services industry, or (2) any other activity in which
                Corporation or Bank or any of their subsidiaries are engaged during
                the
                Employment Period, in the Non-Competition Area;
                or

            

    

    

    
      	 	 	
              (iii)

            	
              directly
                or indirectly solicit persons or entities who were customers or referral
                sources of Corporation, Bank or their subsidiaries within one year
                of
                Executive’s termination of employment, to a become customer or referral
                source of a person or entity other than Corporation, Bank or their
                subsidiaries; or

            

    

    

    
      	
            	(iv)	
              directly
                or indirectly solicit employees of Corporation, Bank or their subsidiaries
                who were employed within one year of Executive’s termination of employment
                to work for anyone other than Corporation, Bank or their
                subsidiaries.

            

    

    

    
      	 	
              (b)

            	
              It
                is expressly understood and agreed that, although Executive and
                Corporation and Bank consider the restrictions contained in Section
                8(a)
                hereof reasonable for the purpose of preserving for Corporation and
                Bank
                and their subsidiaries their good will and other proprietary rights,
                if a
                final judicial determination is made by a court having jurisdiction
                that
                the time or territory or any other restriction contained in Section
                8(a)
                hereof is an unreasonable or otherwise unenforceable restriction
                against
                Executive, the provisions of Section 8(a) hereof shall not be rendered
                void but shall be deemed amended to apply as to such maximum time
                and
                territory and to such other extent as such court may judicially determine
                or indicate to be reasonable.

            

    

    

    
      	 	
              (c)

            	
              The
                provisions of this Section 8 shall be applicable commencing on the
                date of
                this Agreement and ending on one of the following dates, as
                applicable:

            

    

     

    (i) if
      Executive’s employment terminates in accordance with the non-renewal provisions
      of Section 3, the first anniversary date of the effective date of termination
      of
      employment; or

    

    
      	 	 	
              (ii)

            	
              if
                Executive’s employment terminates in accordance with the provisions of
                Section 3(c) of this Agreement (relating to termination for Good
                Reason),
                eighteen (18) months following the effective date of termination
                of
                employment; or 

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii) if
      the
      Executive voluntarily terminates his employment without Good Reason, eighteen
      (18) months following the effective date of termination of employment;
      or

    

    (iv) if
      the
      Executive’s employment is involuntarily terminated without Cause or under
      Section 5(a) of this Agreement (relating to termination for Change of Control),
      eighteen (18) months following the effective date of termination of employment;
      or

    

    (v) if
      the
      Executive’s employment is terminated for Cause as defined in Sections
      3(b)(i)-(v), Section 3(b)(ix), Section 3(b)(x), or Section 3(b)(xiv)-(xviii)
      of
      this Agreement, the second anniversary date of the effective date of termination
      of employment; or

    

    (vi) if
      the
      Executive’s employment is terminated for Cause as defined in Sections
      3(b)(vi)-(viii) or Sections 3(b)(xi)-(xiii) of this Agreement, the first
      anniversary date of the effective date of termination of employment.

    

    
      	
              9.

            	
              Unauthorized
                Disclosure.
                During the term of his employment hereunder, or at any later time,
                the
                Executive shall not, without the written consent of the Boards of
                Directors of Corporation and Bank or a person authorized thereby,
                knowingly disclose to any person, other than an employee of Corporation
                or
                Bank or a person to whom disclosure is reasonably necessary or appropriate
                in connection with the performance by the Executive of his duties
                as an
                executive of Corporation and Bank, any material confidential information
                obtained by him while in the employ of Corporation and Bank with
                respect
                to any of Corporation’s and Bank’s services, products, improvements,
                formulas, designs or styles, processes, customers, methods of business
                or
                any business practices, the disclosure of which could be or will
                be
                damaging to Corporation or Bank; provided, however, that confidential
                information shall not include any information known generally to
                the
                public (other than as a result of unauthorized disclosure by the
                Executive
                or any person with the assistance, consent or direction of the Executive)
                or any information of a type not otherwise considered confidential
                by
                persons engaged in the same business or a business similar to that
                conducted by Corporation and Bank or any information that must be
                disclosed as required by law.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	10.	
              Work
                Made for Hire. Any
                work performed by the Executive under this Agreement  should
                be considered a “Work Made for Hire” as the phrase is defined by the U.S.
                patent laws and shall be owned by and for the express benefit of
                Corporation, Bank and their subsidiaries and affiliates. In the event
                it
                should be established that such work does not qualify as a Work Made
                for
                Hire, the Executive agrees to and does hereby assign to Corporation,
                Bank,
                and their affiliates and subsidiaries, all of his rights, title,
                and/or
                interest in such work product, including, but not limited to, all
                copyrights, patents, trademarks, and propriety
                rights.

            

    

     

    
      	
              11.

            	
              Return
                of Company Property and Documents.
                The Executive agrees that, at the time of termination of his employment,
                regardless of the reason for termination, he will deliver to Corporation,
                Bank and their subsidiaries and affiliates, any and all company property,
                including, but not limited to, automobile, keys, security codes or
                passes,
                mobile telephones, records, data, notes, reports, proposals, lists,
                correspondence, specifications, drawings, blueprints, sketches, software
                programs, equipment, other documents or property, or reproductions
                of any
                of the aforementioned items developed or obtained by the Executive
                during
                the course of his employment. 

            

    

    

    
      	
              12.

            	
              Liability
                Insurance.
                Corporation and Bank shall use their best efforts to obtain insurance
                coverage for the Executive under an insurance policy covering officers
                and
                directors of Corporation and Bank against lawsuits, arbitrations
                or other
                legal or regulatory proceedings; however, nothing herein shall be
                construed to require Corporation and/or Bank to obtain such insurance,
                if
                the Board of Directors of the Corporation and/or Bank determine that
                such
                coverage cannot be obtained at a reasonable price. In the event that
                the
                Corporation and Bank are unable to procure insurance coverage for
                the
                Executive, Executive may terminate this contract upon sixty (60)
                days
                notice and the provisions of Paragraph 8 shall not
                apply.

            

    

    

    
      	
              13.

            	
              Notices.
                Except as otherwise provided in this Agreement, any notice required
                or
                permitted to be given under this Agreement shall be deemed properly
                given
                if in writing and if mailed by registered or certified mail, postage
                prepaid with return receipt requested, to Executive’s residence, in the
                case of notices to Executive, and to the principal executive offices
                of
                Corporation and Bank, in the case of notices to Corporation and
                Bank.

            

    

    

    
      	
              14.

            	
              Waiver.
                No
                provision of this Agreement may be modified, waived or discharged
                unless
                such waiver, modification or discharge is agreed to in writing and
                signed
                by Executive and an executive officer specifically designated by
                the
                Boards of Directors of Corporation and Bank. No waiver by either
                party
                hereto at any time of any breach by the other party hereto of, or
                compliance with, any condition or provision of this Agreement to
                be
                performed by such other party shall be deemed a waiver of similar
                or
                dissimilar provisions or conditions at the same or at any prior or
                subsequent time. 

            

    

    

    
      	
              15.

            	
              Assignment.
                This Agreement shall not be assignable by any party, except by Corporation
                and Bank to any successor in interest to their respective
                businesses.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              16.

            	
              Entire
                Agreement.
                This Agreement supersedes any and all agreements, either oral or
                in
                writing, between the parties with respect to the employment of the
                Executive by the Bank and/or Corporation and this Agreement contains
                all
                the covenants and agreements between the parties with respect to
                employment. 

            

    

    

    
      	
              17.

            	
              Binding
                Agreement.
                

            

    

    

    This
      Agreement shall inure to the benefit of and be enforceable by Executive’s
      personal or legal representatives, executors, administrators, heirs,
      distributees, devisees and legatees. If Executive should die after a Notice
      of
      Termination is delivered by Executive, or following termination of Executive’s
      employment without Cause, and any amounts would be payable to Executive under
      this Agreement if Executive had continued to live, all such amounts shall be
      paid in accordance with the terms of this Agreement to Executive’s devisee,
      legatee, or other designee, or, if there is no such designee, to Executive’s
      estate.

    

    
      	
              18.

            	
              Arbitration.
                Corporation, Bank and Executive recognize that in the event a dispute
                should arise between them concerning the interpretation or implementation
                of this Agreement, lengthy and expensive litigation will not afford
                a
                practical resolution of the issues within a reasonable period of
                time.
                Consequently, each party agrees that all disputes, disagreements
                and
                questions of interpretation concerning this Agreement (except for
                any
                enforcement sought with respect to Sections 8, 9, 10 or 11 which
                may be
                litigated in court, including an action for injunction or other relief)
                are to be submitted for resolution, in Philadelphia, Pennsylvania,
                to the
                American Arbitration Association (the “Association”) in accordance with
                the Association’s National Rules for the Resolution of Employment Disputes
                or other applicable rules then in effect (“Rules”). Corporation, Bank or
                Executive may initiate an arbitration proceeding at any time by giving
                notice to the other in accordance with the Rules. Corporation and
                Bank and
                Executive may, as a matter of right, mutually agree on the appointment
                of
                a particular arbitrator from the Association’s pool. The arbitrator shall
                not be bound by the rules of evidence and procedure of the courts
                of the
                Commonwealth of Pennsylvania but shall be bound by the substantive
                law
                applicable to this Agreement. The decision of the arbitrator, absent
                fraud, duress, incompetence or gross and obvious error of fact, shall
                be
                final and binding upon the parties and shall be enforceable in courts
                of
                proper jurisdiction. Following written notice of a request for
                arbitration, Corporation, Bank and Executive shall be entitled to
                an
                injunction restraining all further proceedings in any pending or
                subsequently filed litigation concerning this Agreement, except as
                otherwise provided herein or any enforcement sought with respect
                to
                Sections 8, 9, 10 or 11 of this Agreement, including an action for
                injunction or other relief.

            

    

    

    
      	
              19.

            	
              Validity.
                The invalidity or unenforceability of any provision of this Agreement
                shall not affect the validity or enforceability of any other provision
                of
                this Agreement, which shall remain in full force and
                effect.

            

    

    

    
      	
              20.

            	
              Applicable
                Law.
                This
                Agreement shall be governed by and construed in accordance with the
                domestic, internal laws of the Commonwealth of Pennsylvania, without
                regard to its conflicts of laws principles provided that this Agreement
                shall also be interpreted as is minimally required to qualify any
                payment
                hereunder as not triggering any penalty on the Executive or the
                Corporation or Bank pursuant to Code Section
                409A.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              21.

            	
              Headings.
                The section headings of this Agreement are for convenience only and
                shall
                not control or affect the meaning or construction or limit the scope
                or
                intent of any of the provisions of this
                Agreement.

            

    

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement as of the date first above
      written.

     

    
      	 	 	 
	ATTEST:	
              UNION
                NATIONAL FINANCIAL 

              
                CORPORATION

              

            
	 
 	 
 	 
 
	/s/
              Donna J. Stoudt	By:  	/s/
              Mark
              D. Gainer
	 	
              
                

              

              Mark
                D. Gainer

              Chairman
&
CEO

            

    

     

    
      
        	 	 	 
	 	
                UNION
                  NATIONAL COMMUNITY BANK

              
	 
 	 
 	 
 
	/s/
                Donna J. Stoudt	By:  	 /s/
                Mark D.
                Gainer
	 	
                
                  

                

                Mark D. Gainer

                Chairman
&
CEO

              

      

       

    

    
      
        
          	 	 	 
	WITNESS:	EXECUTIVE
	 
 	 
 	 
 
	/s/
                  R.
                  Michael Mohn	By:  	/s/
                  Stephen D. Staman
	 	
                  
                    

                  

                  Stephen D. StamanFIRST
      AMENDMENT TO 

    

    SECURITIES
      PURCHASE AGREEMENT

    

    

    BY
      AND
      BETWEEN

    

    

    PURE
      BIOFUELS CORP.

    

    

    AND

    

    

    PLAINFIELD
      PERU I LLC

    PLAINFIELD
      PERU II LLC

    

    

    

    ______________________________

     

     

    Dated
      as
      of March 26, 2008

     

    ______________________________

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      TABLE
        OF CONTENTS

       

    

    
      	 	
              Page

            
	 	 
	
              ARTICLE
                I AMENDMENTS TO THE AGREEMENT

            	
              1

            
	 	 
	
              SECTION
                1.1. Definitions

            	
              1

            
	
              SECTION
                1.2. Sale and Purchase.

            	
              2

            
	
              SECTION
                1.3. The Notes.

            	
              3

            
	
              SECTION
                1.4. Affirmative Covenants

            	
              3

            
	
              SECTION
                1.5. Negative Covenants

            	
              4

            
	 	
               

            
	
              ARTICLE
                II REPRESENTATIONS AND WARRANTIES OF THE COMPANY

            	
              5

            
	 	
               

            
	
              SECTION
                2.1. Incorporation of Representations and Warranties from the
                Agreement

            	
              5

            
	
              SECTION
                2.2. Use of Proceeds

            	
              5

            
	
              SECTION
                2.3. No Adjustment to Conversion Price

            	
              5

            
	
              SECTION
                2.4. Capital Stock

            	
              5

            
	
              SECTION
                2.5. Brokers and Finders .

            	
              6

            
	
              SECTION
                2.6. Financial Statements; Undisclosed Liabilities

            	
              6

            
	 	
               

            
	
              ARTICLE
                III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

            	
              7

            
	 	
               

            
	
              SECTION
                3.1. Incorporation of Representations and Warranties from the
                Agreement

            	
              7

            
	 	
               

            
	
              ARTICLE
                IV CONDITIONS PRECEDENT TO ADDITIONAL NOTES CLOSING

            	
              7

            
	 	
               

            
	
              SECTION
                4.1. Conditions to the Company’s Obligations

            	
              7

            
	
              SECTION
                4.2. Conditions to Purchaser’s Obligations

            	
              7

            
	 	
               

            
	
              ARTICLE
                V MISCELLANEOUS

            	
              9

            
	 	
               

            
	
              SECTION
                5.1. Reference to and Effect on the Agreement and the Initial
                Notes

            	
              9

            
	
              SECTION
                5.2. Registration Rights Agreement

            	
              9

            
	
              SECTION
                5.3. Stock Purchase Warrant

            	
              9

            
	
              SECTION
                5.4. Governing Law

            	
              10

            
	
              SECTION
                5.5. Expenses

            	
              10

            
	
              SECTION
                5.6. Headings Descriptive

            	
              10

            
	
              SECTION
                5.7. Counterparts

            	
              10

            

    

    

    

    
      
        
        

      

      
        (i)

        
          

        

      

      
        
        

      

    

     

    FIRST
      AMENDMENT TO SECURITIES PURCHASE AGREEMENT

     

    FIRST
      AMENDMENT TO SECURITIES PURCHASE AGREEMENT dated as of March 26, 2008 (this
      “First Amendment”), by and between PURE BIOFUELS CORP., a Nevada corporation
      (the “Company”), and PLAINFIELD PERU I LLC, a Delaware limited liability company
      (“LLC1”), and PLAINFIELD PERU II LLC, a Delaware limited liability company
      (“LLC2” and together with LLC1, the “Purchaser”). Capitalized terms used herein
      without definition shall have the same meanings herein as set forth in the
      Agreement (as defined below).

     

    WITNESSETH:

     

    WHEREAS,
      the Company entered into a Securities Purchase Agreement, dated as of September
      12, 2007 (the “Agreement”), by and between the Company, LLC 1 and LLC 2 for the
      purchase of $10,000,000 aggregate principal amount of 10%/12% Senior Convertible
      PIK Election Notes due 2012, Common Stock and warrants to purchase shares of
      Common Stock;

     

    WHEREAS,
      the Company desires, subject to the terms and conditions set forth herein,
      to
      issue and sell to Purchaser, and Purchaser desires, subject to the terms and
      conditions set forth herein, to purchase an additional $5,000,000 aggregate
      principal amount of 10%/12% Senior Convertible PIK Election Notes due 2012,
      convertible into 16,666,667 shares of Common Stock (subject to
      adjustment);

     

    WHEREAS,
      Section 11.1 of the Agreement provides that the Company and the Required Holders
      may, with certain exceptions, amend the Agreement with the written consent
      of
      the Company and the Required Holders;

     

     

    NOW,
      THEREFORE, the parties hereto, intending to be legally bound, hereby agree
      as
      follows.

     

    ARTICLE
      I

     

    AMENDMENTS
      TO THE AGREEMENT

     

    SECTION
      1.1.   Definitions.
      Clause
      (a) of Article I of the Agreement is hereby amended by inserting the following
      definitions in appropriate alphabetical order:

     

    “Additional
      Notes”
means
      the 10%/12% Senior Convertible PIK Election Notes due 2012 issued by the Company
      on the Additional Notes Closing Date (such term to include any such notes issued
      in substitution therefor pursuant to Section 12 of the Agreement and any notes
      issued in kind as interest pursuant to the terms of the Additional
      Notes).

     

    “Additional
      Notes Closing”
has
      the
      meaning set forth in Section 2.4 of the Agreement.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Additional
      Notes Closing Date”
has
      the
      meaning set forth in Section 2.4 of the Agreement.

     

    “Amended
      and Restated Stockholders Agreement”
means
      the agreement, dated March 26, 2008, among LLC1, LLC2, the Company and the
      other
      stockholders party thereto. 

     

    “Employment
      Agreements”
has
      the
      meaning ascribed to such term in the Loan Agreement.

     

    “Initial
      Notes”
means
      the 10%/12% Senior Convertible PIK Election Notes due 2012 issued by the Company
      on the Closing Date (such term to include any such notes issued in substitution
      therefor pursuant to Section 12 of the Agreement and any notes issued in kind
      as
      interest pursuant to the terms of the Initial Notes). 

     

    “Material
      Agreements”
has
      the
      meaning ascribed to such term in Section 8.23 of the Loan Agreement and as
      set
      forth on Schedule 8.23 of the Loan Agreement, as Schedule 8.23 of the Loan
      Agreement is updated by Schedule 2.1 to this First Amendment.

     

    “Merger
      Warrants”
means
      the warrants to purchase 2,166,667 shares of Common Stock with an exercise
      price
      of $0.60 per share issued to LLC II on January 24, 2008 in connection with
      the
      Binding Letter of Intent and Section 3.6(m) of the Agreement.

     

    “Notes”
means
      the Initial Notes, the Additional Notes and any
      notes
      issued in substitution therefor pursuant to Section 12 of the Agreement and
      any
      notes issued in kind as interest pursuant to the terms of the Notes.
      

     

    In
      addition, the definition of “Conversion Price” in clause (a) of Article I of the
      Agreement is replaced with the following definition:

     

    “Conversion
      Price”
means
      $0.30 for the Notes, subject to adjustments set forth in Section
      3.6.

     

    SECTION
      1.2.   Sale
      and Purchase. 

     

    Article
      II of the Agreement is hereby amended by inserting a new Section 2.3 and 2.4
      as
      follows:

    

     

    SECTION
      2.3. Additional
      Notes; Agreement to Sell and to Purchase; Purchase Price.
      Subject
      to the terms and conditions set forth in this Agreement, the Company agrees
      to
      issue and sell to Purchaser, and Purchaser agrees to purchase from the Company,
      on the Additional Notes Closing Date, $5,000,000 in aggregate principal amount
      of the Additional Notes for a purchase price of $5,000,000 (the “Additional
      Notes Purchase Price”).

     

    SECTION
      2.4. Additional
      Notes Closing.
      Subject
      to the satisfaction or waiver of the conditions set forth in this Agreement,
      the
      purchase and sale of the Additional Notes hereunder (the “Additional Notes
      Closing”) shall take place at 10:00 a.m. at the offices of White & Case LLP,
      counsel to Purchaser, at 1155 Avenue of the Americas, New York, New York, on
      March 26, 2008 or on such other date as the parties shall mutually agree upon
      (the “Additional Notes Closing Date”).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    At
      the
      Additional Notes Closing:

     

    (i) Purchaser
      shall deliver an amount equal to the Purchase Price (net of a funding fee in
      the
      amount of $100,000) via wire transfer of immediately available funds to such
      bank account as the Company shall have designated not later than one Business
      Day prior to the Additional Notes Closing Date.

     

    (ii) The
      Company shall deliver to Purchaser against payment of the Purchase Price, a
      certificate or certificates representing the Additional Notes being purchased
      by
      Purchaser pursuant to Section 2.3, which shall be in definitive form and
      registered in the name of Purchaser or its nominee or designee and in a single
      certificate or in such other denominations as Purchaser shall have requested
      not
      later than one Business Day prior to the Additional Notes Closing
      Date;

     

    SECTION
      1.3.   The
      Notes. 

     

    Section
      3.1 of the Agreement is hereby amended by inserting a new paragraph at the
      end
      thereof as follows:

    

    The
      Company will authorize the issuance of $5,000,000 aggregate principal amount
      of
      the Additional Notes to be issued on the Additional Notes Closing Date and
      any
      Notes to be issued in kind as interest. The Additional Notes shall be
      substantially in the form set forth in Exhibit A.

     

    SECTION
      1.4.   Affirmative
      Covenants.
      Article
      VI of the Agreement is hereby amended by replacing Section 6.7 in its entirety
      and by inserting a new Section 6.19 and 6.20, as set forth below:

     

    SECTION
      6.7. Plainfield
      Director.
      (a)
      From and after the Additional Notes Closing Date, Purchaser or its Affiliates
      (or any transferee of more than 50% of the Notes held by Purchaser) shall have
      the right to designate up to a total of three Directors (each a “Plainfield
      Director”). As promptly as practicable after the Additional Notes Closing Date,
      the Board of Directors shall elect the persons so designated to the Board of
      Directors. In connection with any annual or special meeting of stockholders
      of
      the Company where Directors are to be elected, the persons designated by the
      Purchaser to be Plainfield Directors shall be nominated by the Board of
      Directors or any nominating committee thereof.

     

    (b)
      Purchaser or its Affiliates shall have the right to designate any replacement
      for a Plainfield Director designated for nomination or nominated in accordance
      with this Section 6.7 upon the death, resignation, retirement, disqualification
      or removal from office for other cause of such Director. The Board of Directors
      of the Company shall elect each person so designated.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (c)
      The
      Company shall use its best efforts to solicit from the stockholders of the
      Company eligible to vote for the election of Directors proxies in favor of
      the
      nominees selected in accordance with this Section 6.7.

     

    (d)
      If at
      any time Purchaser has the right to nominate Directors pursuant to this Section
      6.7 but fails to exercise this right, then Purchaser or its Affiliates shall
      have the right to appoint one (1) representative for each director not so
      nominated (each an “Observer”). The Observer(s) shall have the right to attend
      meetings of the Board of Directors in a nonvoting observer capacity, to receive
      notice of such meetings and to receive the information provided by the Company
      to the Board of Directors.

     

    (e)
      Purchaser will have a right to effectuate their rights pursuant to this Section
      6.7 so long as any Notes remain outstanding or Purchaser holds at least 5%
      of
      the Company’s outstanding Common Shares.

     

    (f)
      A
      quorum of the Board of Directors shall require the presence of the  Plainfield
      Director(s).

     

    (g)
      The
      Company will not increase the number of Directors above six.

     

    SECTION
      6.19 Amendment
      of Bylaws.
      The
      Company agrees to cause the bylaws of the Company to be amended by the
      Additional Notes Closing Date to include the provisions set forth in Section
      6.7
      (a) and (f) above; provided that such provisions shall only be in force so
      long
      as any Notes remain outstanding or Purchaser holds at least 5% of the Company’s
      outstanding Common Shares. 

     

    SECTION
      6.20 Post-Closing
      Actions.
      Notwithstanding anything to the contrary contained in this Agreement or the
      other Transaction Documents, each of the Company and each of its Subsidiaries
      hereby covenants and agrees to take all actions set forth on Schedule 6.20
      to
      this First Amendment to guarantee and/or secure the Notes within the time period
      set forth therein and the parties hereto acknowledge and agree that the failure
      to take any of the actions required on Schedule 6.20 to this First Amendment,
      within the relevant time periods required, shall give rise to an immediate
      Event
      of Default pursuant to this Agreement. 

     

    SECTION
      1.5.   Negative
      Covenants.
      Article
      VII of the Agreement is hereby amended by inserting a new Section 7.11, as
      follows:

     

     SECTION
      7.11 Management Agreements, Employment Agreements, Material Agreements. Enter
      into any agreements of, or with respect to, the management of the Company or
      any
      of its Subsidiaries (collectively, the “New Management Agreements”), any
      material employment agreement entered into by the Company of any of its
      Subsidiaries (collectively, the “New Employment Agreements”) or any agreement or
      series of related agreements involving aggregate consideration payable to or
      by
      the Company or its Subsidiaries in excess of U.S. $100,000, or amend, modify
      or
      change any provision of any existing Management Agreement, Employment Agreement
      or Material Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

     

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE
      COMPANY

     

    In
      order
      to induce the Purchaser to enter into this First Amendment and to purchase
      the
      Additional Notes, the Company hereby represents and warrants to and agrees
      with
      the Purchaser that on the date hereof, after giving effect to the consummation
      of the transactions contemplated hereby that:

     

    SECTION
      2.1.   Incorporation
      of Representations and Warranties from the Agreement.
      The
      representations and warranties contained in Article IV of the Agreement and
      in
      Section 8 of the Loan Agreement, other than Sections 8.05(b) and 8.10, are
      true
      and correct in all material respects with the same effect as though such
      representations and warranties had been made on the date hereof (it being
      understood and agreed that any representation or warranty which by its terms
      is
      made as of a specified date shall be required to be true and correct in all
      material respects only as of such specified date); provided that Schedule 2.1
      to
      this First Amendment updates Schedule 8.23 of the Loan Agreement as of the
      date
      hereof.

     

    SECTION
      2.2.   Use
      of
      Proceeds.
      (a) All
      proceeds from the sale of the Additional Notes shall be used solely for the
      purposes set forth on Schedule 2.2 of this First Amendment. 

     

    (b)
      No
      part of the proceeds from the sale of the Additional Notes will be used to
      purchase or carry any Margin Stock or to extend credit for the purpose of
      purchasing or carrying any Margin Stock; provided,
      however,
      that
      the Company may use the proceeds thereof to repurchase Common Stock in such
      manner as the Board of Directors (including the Plainfield Directors (as defined
      in the Amended and Restated Stockholders Agreement) may approve. Neither the
      sale of the Additional Notes nor the use of the proceeds thereof will violate
      or
      be inconsistent with the provisions of Regulation T, U or X.

     

    SECTION
      2.3.   No
      Adjustment to Conversion Price.
      Except
      as set forth on Schedule 2.3 hereto, nothing has occurred since the Closing
      Date
      that has resulted, or would result, in an adjustment to the Conversion Price
      pursuant to Section 3.6 of the Agreement. 

     

    SECTION
      2.4.   Capital
      Stock.
      (a) As
      of the Additional Notes Closing Date, the authorized Capital Stock of the
      Company will consist solely of 250,000,000 shares of Common Stock and 1,000,000
      shares of preferred stock, of which 77,687,871 shares of Common Stock (assuming
      no additional exercises of existing stock options) and no shares of preferred
      stock are issued and outstanding, no shares are held in treasury and 93,259,520
      shares of Common Stock (such amount does not include any shares or warrants
      that
      may be issued pursuant to the Binding Letter of Intent or Section 3.6(m) of
      the
      Agreement) are reserved for issuance upon the exercise of outstanding warrants,
      options and other convertible or exchangeable securities (other than the
      Additional Notes). Schedule
      4.7
      to this
      First Amendment sets forth the capitalization of the Company as of the
      Additional Notes Closing Date.

     

    (b) Except
      as
      set forth on Schedule
      4.7
      to this
      First Amendment, there are (i) no outstanding options, warrants, agreements,
      conversion rights, exchange rights, preemptive rights or other rights (whether
      contingent or not) to subscribe for, purchase or acquire any issued or unissued
      shares of Capital Stock of the Company or any Subsidiary, and (ii) no
      restrictions upon, or Contracts or understandings of the Company or any
      Subsidiary, or, to the knowledge of the Company, Contracts or understandings
      of
      any other Person, with respect to, the voting or transfer of any shares of
      Capital Stock of the Company or any Subsidiary.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (c) The
      Conversion Shares are duly authorized and validly reserved for issuance in
      contemplation of the conversion of the Additional Notes and, when issued and
      delivered in accordance with the terms of the Notes, will have been validly
      issued and will be fully paid and nonassessable, and the issuance thereof will
      not have been subject to any preemptive rights or made in violation of any
      Applicable Law.

     

    (d) The
      holders of the Additional Notes will, upon issuance thereof, have the rights
      set
      forth in the Form of Note (subject to the limitations and qualifications set
      forth therein).

     

    SECTION
      2.5.   Brokers
      and Finders.
      Except
      as set forth on Schedule 2.5 to this First Amendment, no agent, broker, Person
      or firm acting on behalf of the Company or its Affiliates is, or will be,
      entitled to any fee, commission or broker’s or finder’s fees from any of the
      parties hereto, or from any Person controlling, controlled by, or under common
      control with any of the parties hereto, in connection with this First Amendment
      or any of the transactions contemplated hereby.

     

    SECTION
      2.6.   Financial
      Statements; Undisclosed Liabilities.
      

     

    (a)  The
      unaudited balance sheet of the Company as of September 30, 2007 and the related
      statements of income and cash flows of Holdings for the three-month and
      nine-month periods ended as of such dates, copies of which in each case were
      furnished or made available to the Purchaser prior to the date hereof, present
      fairly in all material respects the consolidated financial condition of the
      Company and its subsidiaries at the date of said financial statements and the
      consolidated results of operations for the period covered thereby. All of the
      foregoing historical financial statements have been prepared in accordance
      with
      GAAP consistently applied except to the extent provided in the notes to said
      financial statements and subject, to normal year-end audit adjustments (all
      of
      which are of a recurring nature and none of which, individually or in the
      aggregate, would be material) and the absence of footnotes.

     

    (b)  Except
      as
      fully disclosed in the financial statements previously delivered to the
      Purchaser, and except for the Indebtedness incurred under the Agreement and
      the
      Loan Agreement, there are as of the date hereof no liabilities or obligations
      with respect to the Company or any of its subsidiaries of any nature whatsoever
      (whether absolute, accrued, contingent or otherwise and whether or not due)
      which, either individually or in the aggregate, could reason-ably be expected
      to
      be material to the Company or any of its subsidiaries. Except as set forth
      on
Schedule
      5.07
      to the
      Loan Agreement, as of the date hereof, neither the Company nor any of its
      subsidiaries knows of any basis for the assertion against it of any liability
      or
      obligation of any nature whatsoever that is not fully disclosed in the financial
      statements previously delivered to the Purchaser or referred to in the
      immediately preceding sentence which, either individually or in the aggregate,
      could reasonably be expected to be material to the Company or any of its
      subsidiaries.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (c)  After
      giving effect to the transaction contemplated hereby, nothing has occurred
      that
      has had, or could reasonably be expected to have, either individually or in
      the
      aggregate, a Material Adverse Effect.

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE
      PURCHASER

     

    Purchaser
      hereby represents and warrants to the Company as follows:

    

    SECTION
      3.1.   Incorporation
      of Representations and Warranties from the Agreement.
      The
      representations and warranties contained in Article V of the Agreement are
      true
      and correct in all material respects with the same effect as though such
      representations and warranties had been made on the date hereof (it being
      understood and agreed that any representation or warranty which by its terms
      is
      made as of a specified date shall be required to be true and correct in all
      material respects only as of such specified date).

     

    ARTICLE
      IV

     

    CONDITIONS
      PRECEDENT TO ADDITIONAL NOTES CLOSING

     

    SECTION
      4.1.   Conditions
      to the Company’s Obligations.
      The
      issuance of the Additional Notes by the Company shall be subject to the
      satisfaction, at or prior to the Additional Notes Closing, of the following
      conditions:

     

    (a) Purchaser
      shall have performed in all material respects all obligations and agreements,
      and complied in all material respects with all covenants, contained in this
      First Amendment to be performed and complied with by Purchaser at or prior
      to
      the Additional Notes Closing Date.

     

    (b) No
      provision of any Applicable Law, injunction, order or decree of any Governmental
      Authority shall be in effect which has the effect of making the transactions
      contemplated hereby illegal or shall otherwise restrain or prohibit the
      consummation of the transactions contemplated hereby.

     

    SECTION
      4.2.   Conditions
      to Purchaser’s Obligations.
      The
      obligations of Purchaser to purchase the Additional Notes contemplated by this
      First Amendment shall be subject to the satisfaction, at or prior to the
      Additional Notes Closing, of the following conditions:

     

    (a)  On
      the
      Additional Notes Closing Date and also after giving effect to the sale of the
      Additional Notes on such date there shall exist no Default or Event of
      Default.

     

    (b)  Purchaser
      shall have received a certificate, dated the Additional Notes Closing Date
      and
      signed on behalf of the Company by an Authorized Representative, certifying
      on
      behalf of the Company that on the Additional Notes Closing Date and also after
      giving effect to the sale of the Additional Notes on such date (i) there shall
      exist no Default or Event of Default and (ii) all representations and warranties
      contained or incorporated by reference in this First Amendment shall be true
      and
      correct in all material respects with the same effect as though such
      representations and warranties had been made on the Additional Notes Closing
      Date (it being understood and agreed that any representation or warranty which
      by its terms is made as of a specified date shall be required to be true and
      correct in all material respects only as of such specified date).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (c)  Purchaser
      shall have received from each of DLA Piper US LLP and Lewis
      and
      Roca LLP, special counsel to the Company and Muniz, Ramirez, Perez-Taiman &
Luna-Victoria,
      special
      counsel to the Subsidiaries, an opinion addressed to Purchaser and dated the
      Additional Notes Closing Date covering such matters incident to the transactions
      contemplated herein as the Purchaser may reasonably request.

     

    (d)  Purchaser
      shall have received a certificate from the Company, dated the Additional Notes
      Closing Date, signed by an Authorized Representative, and attested to by another
      Authorized Representative, in the form of Exhibit A, with appropriate
      insertions, together with copies of the articles of incorporation and by-laws
      of
      the Company and the resolutions of the Company referred to in such certificate
      and the foregoing shall be in form and substance reasonably acceptable to
      Purchaser.

     

    (e)  On
      the
      Additional Notes Closing Date, all corporate and legal proceedings and all
      instruments and agreements in connection with the transactions contemplated
      by
      this First Amendment shall be reasonably satisfactory in form and substance
      to
      Purchaser, and Purchaser shall have received all information and copies of
      all
      documents and papers, including records of corporate proceedings, governmental
      approvals, good standing certificates and bring-down telegrams or facsimiles,
      if
      any, which Purchaser reasonably may have requested in connection therewith,
      such
      documents and papers where appropriate to be certified by proper corporate
      officials or Governmental Authorities.

     

    (f)  Nothing
      shall have occurred since September 30, 2007 (and Purchaser shall have not
      have
      become aware of any facts or conditions not previously known) which Purchaser
      shall determine has had, or could reasonably be expected to have, (i) a Material
      Adverse Effect or (ii) a material adverse effect on the transactions
      contemplated hereby.

     

    (g)  All
      necessary governmental and third party approvals and/or consents in connection
      with the Transactions shall have been obtained and remain in effect, and all
      applicable waiting periods with respect thereto shall have expired without
      any
      action being taken by any competent authority which restrains, prevents or
      imposes materially adverse conditions upon the consummation of the transactions
      contemplated hereby. On the Additional Notes Closing Date, there shall not
      exist
      any judgment, order, injunction or other restraint issued or filed or a hearing
      seeking injunctive relief or other restraint pending or notified prohibiting
      or
      imposing materially adverse conditions upon transactions contemplated
      hereby.

     

    (h)  Except
      as
      set forth in Schedule
      5.07
      to the
      Loan Agreement, on the Additional Notes Closing Date, there shall be no actions,
      suits or proceedings pending or threatened (a) with respect to the transactions
      contemplated hereby, this First Amendment or any other Transaction Document,
      or
      (b) which Purchaser shall determine has had, or could reasonably be expected
      to
      have, a Material Adverse Effect.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (i)  The
      Company and the stockholders party thereto shall have executed and delivered
      the
      Amended and Restated Stockholders Agreement.

     

    (j)  The
      bylaws of the Company shall have been amended to include the provisions set
      forth in Section 6.7 (a) and (f).

     

    (k)  Purchaser
      shall have received certificates representing the Additional Notes purchased
      by
      Purchaser.

     

    (l)  Purchaser
      shall have received such other documents and evidence as are customary for
      transactions of this type or as Purchaser may reasonably request in order to
      evidence the satisfaction of the other conditions set forth above.

     

    ARTICLE
      V

     

    MISCELLANEOUS

     

    SECTION
      5.1.   Reference
      to and Effect on the Agreement and the Initial Notes

     

    (i)  Upon
      the
      execution of this First Amendment by the parties hereto, each reference in
      the
      Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
      import referring to the Agreement and each reference in the other Transaction
      Documents to the “Securities Purchase Agreement”, “thereunder”, “thereof” or
      words of like import referring to the Agreement shall mean and be a reference
      to
      the Agreement as amended hereby.

     

    (ii)  Except
      as
      specifically amended by this First Amendment, the Agreement and the other
      Transaction Documents shall remain in full force and effect and are hereby
      ratified and confirmed.

     

    (iii)  This
      First Amendment and the Amended and Restated Stockholders Agreement shall each
      constitute a “Transaction Document” and this First Amendment shall constitute a
“Note Document” for all purposes of the Agreement and the other Transaction
      Documents.

     

    SECTION
      5.2.   Registration
      Rights Agreement.
      The
      parties hereto agree that the shares of Common Stock issuable upon conversion
      of
      the Additional Notes shall constitute “Registrable Securities” under the
      Registration Rights Agreement.

     

    SECTION
      5.3.   Stock
      Purchase Warrant.
      The
      parties hereto agree that the definition of the term “Exercise Price” in Section
      5(e) of the Warrants and the Merger Warrants, shall be replaced with the
      following definition: 

     

    “Exercise
      Price” means $0.30, as adjusted in accordance with Section 2 hereof.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    SECTION
      5.4.   Governing
      Law.
      THIS
      FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
      THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
      OF
      THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW
      PRINCIPLES).

     

    SECTION
      5.5.   Expenses.
      The
      Company shall reimburse the Purchaser for all reasonable disbursements and
      out-of-pocket expenses incurred by the Purchaser in connection with the
      transactions contemplated hereby, including, without limitation, the fees and
      disbursements of White & Case LLP, counsel to the Purchaser. On the
      Additional Notes Closing Date, Purchaser shall provide the Company with
      documentation reasonably satisfactory to the Company for such disbursements
      and
      out-of-pocket expenses. 

     

    SECTION
      5.6.   Headings
      Descriptive.
      The
      headings of the several sections and subsections of this First Amendment are
      inserted for convenience only and shall not in any way affect the meaning or
      construction of any provision of this First Amendment.

     

    SECTION
      5.7.   Counterparts.
      This
      First Amendment may be executed in any number of counterparts and by the
      different parties hereto on separate counterparts, each of which when so
      executed and delivered shall be an original, but all of which shall together
      constitute one and the same instrument. Delivery of an executed counterpart
      hereof by facsimile or electronic transmission shall be as effective as delivery
      of any original executed counterpart hereof.

     

    

     

    [SIGNATURE
      PAGES TO FOLLOW]

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
      the
      date first above written.

     

    PURE
      BIOFUELS CORP.

    

    

    By                 
      /s/
      Luis
      Goyzueta            
           

    Name:
      Luis Goyzueta

    Title:
      Chief Executive Officer and Director

     

    Each
      of
      the undersigned agrees that all references to the “Convertible Note Documents”
in the Loan Agreement shall mean as the Convertible Note Documents are amended
      by this First Amendment and by the Amended and Restated Stockholders Agreement
      and by any amendments in connection with Section 6.20 of this First Amendment.
      

     

    
      	
              Address:
                 

               

              Av.
                Canaval y Moreyra 380 of 402 

              San
                Isidro, Lima

              Peru

              Attention: Luis
                Goyzueta

              Telephone: +511-221-7365

              Facsimile: +511-221-7347

            	
               

               

                     
                PURE BIOFUELS DEL PERU S.A.C. 

               

               

              By:                
                /s/
                Luis
                Goyzueta                       
                

                      Name:
                Luis Goyzueta

                      Title:
                Authorized Signatory

            
	 	 
	 	 
	
              Address:
                 

               

              Av.
                Canaval y Moreyra 380 of 402 

              San
                Isidro, Lima

              Peru

              Attention: Luis
                Goyzueta

              Telephone: +511-221-7365

              Facsimile: +511-221-7347

            	
               

               

              PALMA
                INDUSTRIAL S.A.C.

               

               

              By:                
                /s/
                Luis
                Goyzueta                       
                

                      Name:
                Luis Goyzueta

                      Title:
                Auhtorized Signatory

            
	 	 
	 	 
	
              Address:

               

              9440
                Little Santa Monica Blvd. 

              Suite
                401

              Beverly
                Hills, Ca 90210

              Attention: Steven
                Magami

              Telephone:  (310)
                402-5901

              Facsimile: (310)
                402-5947

            	
               

               

              PURE
                BIOFUELS CORP.

               

               

              By:                
                /s/
                Luis
                Goyzueta                       
                

                      Name:
                Luis Goyzueta

                      Title:
                Chief Executive Officer and
                Director

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    PLAINFIELD
      PERU I LLC

    

    

    

    By                   
      /s/
      Steven
      Segaloff                             

    Name:
      Steven
      Segaloff

    Title:
      Authorized Signatory

     

    

     

    

     

    PLAINFIELD
      PERU II LLC

    

    

    

    By                   
      /s/
      Steven
      Segaloff                             

    Name:
      Steven Segaloff

    Title:
      Authorized Signatory

     

    The
      undersigned agrees that the Company’s issuance of Additional Notes and the use
      of the proceeds thereof for the purposes set forth on Schedule 2.2 hereto will
      not violate the terms of the Loan Agreement.

    

    PLAINFIELD
      SPECIAL SITUATIONS MASTER FUND LIMITED

    

    

    

    By                   
      /s/
      Steven
      Segaloff                             

    Name:
      Steven Segaloff

    Title:
      Authorized Signatory

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