Document:

SECURITIES
      PURCHASE AGREEMENT

     

    BY
      AND
      BETWEEN

     

    PURE
      BIOFUELS CORP.

     

    AND

     

    PLAINFIELD
      PERU I LLC

    PLAINFIELD
      PERU II LLC

     

      
        

      

    

     

    Dated
      as
      of September 12, 2007

     

    
      
 

     

    
      
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        TABLE
          OF CONTENTS

      

       

    

    
      
        	 	
                Page

              
	 	 
	
                ARTICLE
                  I DEFINITIONS

              	
                1

              
	 	 
	
                ARTICLE
                  II SALE AND PURCHASE

              	
                12

              
	 	 
	 	
                SECTION
                  2.1. Agreement to Sell and to Purchase; Purchase Price

              	
                12

              
	 	
                SECTION
                  2.2. Closing

              	
                12

              
	 	 
	
                ARTICLE
                  III THE NOTES

              	
                12

              
	 	 
	 	
                SECTION
                  3.1. Authorization of the Notes

              	
                12

              
	 	
                SECTION
                  3.2. No Optional Prepayments

              	
                12

              
	 	
                SECTION
                  3.3. Purchase of Notes

              	
                12

              
	 	
                SECTION
                  3.4. Change of Control

              	
                13

              
	 	
                SECTION
                  3.5. Convertibility

              	
                14

              
	 	
                SECTION
                  3.6. Anti-Dilution Adjustments

              	
                15

              
	 	
                SECTION
                  3.7. Forced Conversion

              	
                18

              
	 	 
	
                ARTICLE
                  IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

              	
                19

              
	 	 
	 	
                SECTION
                  4.1. Company Status

              	
                19

              
	 	
                SECTION
                  4.2. Power and Authority

              	
                19

              
	 	
                SECTION
                  4.3. No Violation

              	
                19

              
	 	
                SECTION
                  4.4. Approvals

              	
                19

              
	 	
                SECTION
                  4.5. True and Complete Disclosure

              	
                20

              
	 	
                SECTION
                  4.6. Use of Proceeds

              	
                20

              
	 	
                SECTION
                  4.7. Capital Stock

              	
                20

              
	 	
                SECTION
                  4.8. Private Offering

              	
                21

              
	 	
                SECTION
                  4.9. Brokers and Finders

              	
                21

              
	 	
                SECTION
                  4.10. Representations and Warranties in Other Documents

              	
                21

              
	 	 
	
                ARTICLE
                  V REPRESENTATIONS AND WARRANTIES OF PURCHASER

              	
                22

              
	 	 
	 	
                SECTION
                  5.1. Organization; Authorization; Enforceability

              	
                22

              
	 	
                SECTION
                  5.2. Private Placement

              	
                22

              
	 	
                SECTION
                  5.3. Brokers or Finders

              	
                23

              
	 	
                SECTION
                  5.4. Transfer or Resale; Legends

              	
                23

              
	 	
                SECTION
                  5.5. No Violation; Consents

              	
                25

              
	 	
                SECTION
                  5.6. Short Position

              	
                25

              
	 	 
	
                ARTICLE
                  VI AFFIRMATIVE COVENANTS

              	
                25

              
	 	 
	 	
                SECTION
                  6.1. Access to Books and Records

              	
                25

              
	 	
                SECTION
                  6.2. Use of Proceeds

              	
                25

              
	 	
                SECTION
                  6.3. Periodic Information

              	
                25

              
	 	
                SECTION
                  6.4. Directors and Officers Insurance; Indemnification

              	
                26

              
	 	
                SECTION
                  6.5. Conversion Shares

              	
                26

              
	 	
                SECTION
                  6.6. Stockholders Meeting

              	
                26

              
	 	
                SECTION
                  6.7. Plainfield Director

              	
                26

              
	 	
                SECTION
                  6.8. Information Covenants

              	
                27

              
	 	
                SECTION
                  6.9. Information Covenants

              	
                30

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	
                SECTION
                  6.10. Maintenance of Property; Insurance

              	
                30

              
	 	
                SECTION
                  6.11. Maintenance of Property; Insurance

              	
                30

              
	 	
                SECTION
                  6.12. Compliance with Statutes, etc.

              	
                30

              
	 	
                SECTION
                  6.13. Compliance with Environmental Laws

              	
                30

              
	 	
                SECTION
                  6.14. End of Fiscal Years; Fiscal Quarters

              	
                31

              
	 	
                SECTION
                  6.15. Performance of Obligations

              	
                31

              
	 	
                SECTION
                  6.16. Payment of Taxes

              	
                31

              
	 	
                SECTION
                  6.17. Annual Business Plan

              	
                31

              
	 	
                SECTION
                  6.18. ERISA

              	
                32

              
	 	 
	
                ARTICLE
                  VII NEGATIVE COVENANTS

              	
                32

              
	 	 
	 	
                SECTION
                  7.1. Encumbrances

              	
                32

              
	 	
                SECTION
                  7.2. Consolidation, Merger, Purchase or Sale of Assets,
                  etc.

              	
                33

              
	 	
                SECTION
                  7.3. Dividends

              	
                33

              
	 	
                SECTION
                  7.4. Indebtedness

              	
                33

              
	 	
                SECTION
                  7.5. Advances, Investments and Loan

              	
                34

              
	 	
                SECTION
                  7.6. Transactions with Affiliates

              	
                34

              
	 	
                SECTION
                  7.7. Capital Expenditures

              	
                34

              
	 	
                SECTION
                  7.8. Modifications of Certificate of Incorporation, By-Laws and
                  Certain
                  Other Agreements; Limitations on Voluntary Payments, etc.

              	
                34

              
	 	
                SECTION
                  7.9. Limitation on Issuance of Capital Stock

              	
                35

              
	 	
                SECTION
                  7.10. Business; etc.

              	
                35

              
	 	 
	
                ARTICLE
                  VIII CONDITIONS PRECEDENT TO CLOSING

              	
                35

              
	 	 
	 	
                SECTION
                  8.1. Conditions to the Company’s Obligations

              	
                35

              
	 	
                SECTION
                  8.2. Conditions to Purchaser’s Obligations

              	
                36

              
	 	 
	
                ARTICLE
                  IX EVENTS OF DEFAULT. 

              	
                37

              
	 	 
	 	
                SECTION
                  9.1. Events of Default.

              	
                37

              
	 	 
	
                ARTICLE
                  X REMEDIES ON DEFAULT, ETC.

              	
                39

              
	 	 
	 	
                SECTION
                  10.1. Acceleration

              	
                39

              
	 	
                SECTION
                  10.2. Other Remedies

              	
                40

              
	 	
                SECTION
                  10.3. Rescission

              	
                40

              
	 	
                SECTION
                  10.4. No Waivers or Election of Remedies, Expenses, etc

              	
                41

              
	 	 
	
                ARTICLE
                  XI AMENDMENT AND WAIVER.

              	
                41

              
	 	 
	 	
                SECTION
                  11.1. Requirements

              	
                41

              
	 	
                SECTION
                  11.2. Solicitation of Holders of Notes

              	
                41

              
	 	
                SECTION
                  11.3. Binding Effect, etc

              	
                42

              
	 	
                SECTION
                  11.4. Notes held by Company, etc

              	
                42

              
	 	 
	
                ARTICLE
                  XII REGISTRATION; EXCHANGE; SUBSTITUTION AND PAYMENT OF
                  NOTES.

              	
                42

              
	 	 
	 	
                SECTION
                  12.1. Registration of Notes

              	
                42

              
	 	
                SECTION
                  12.2. Transfer and Exchange of Notes

              	
                42

              
	 	
                SECTION
                  12.3. Replacement of Notes

              	
                43

              
	 	 

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  XIII MISCELLANEOUS

              	
                43

              
	 	 
	 	
                SECTION
                  13.1. Indemnification

              	
                43

              
	 	
                SECTION
                  13.2. Notices

              	
                44

              
	 	
                SECTION
                  13.3. Governing Law; Submission to Jurisdictionl Venue; Waiver
                  of Jury
                  Trial

              	
                45

              
	 	
                SECTION
                  13.4. Headings Descriptive

              	
                46

              
	 	
                SECTION
                  13.5. Exhibits and Schedules

              	
                46

              
	 	
                SECTION
                  13.6. Expenses

              	
                46

              
	 	
                SECTION
                  13.7. Press Releases and Public Announcements

              	
                47

              
	 	
                SECTION
                  13.8. Assignment; No Third Party Beneficiaries

              	
                47

              
	 	
                SECTION
                  13.9. Severability

              	
                47

              
	 	
                SECTION
                  13.10. Counterparts

              	
                47

              
	 	
                SECTION
                  13.11. Further Assurances

              	
                47

              
	 	
                SECTION
                  13.12. No Waiver; Remedies Cumulative

              	
                47

              
	 	
                SECTION
                  13.13. Specific Performance

              	
                48

              
	 	
                SECTION
                  13.14. Confidentiality

              	
                48

              

      

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    SECURITIES
      PURCHASE AGREEMENT

     

    SECURITIES
      PURCHASE AGREEMENT dated as of September 12, 2007 (this “Agreement”), 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”).

     

    W
      I T
      N E S S E T H:

     

    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 $10,000,000 aggregate principal amount
      of the 10%/12% Senior Convertible PIK Election Notes due 2012 (the “Notes”, such
      term to include any such notes issued in substitution therefor pursuant to
      Section 12 of this Agreement and any notes issued in kind as interest pursuant
      to the terms of the Notes), convertible into 16,666,667 shares of Common Stock
      (subject to adjustment) representing, in the aggregate, 10.1% of the fully
      diluted shares of Common Stock, as of the date hereof;

     

    WHEREAS,
      the Company desires, subject to the terms and conditions set forth herein,
      to
      issue to Purchaser, and Purchaser desires, subject to the terms and conditions
      set forth herein, to subscribe for, 11,000,000 shares of Common Stock (the
      “Issue Date Common Stock”) representing, in the aggregate, 6.6% of the fully
      diluted shares of Common Stock, as of the date hereof;

     

    WHEREAS,
      the Company desires, subject to the terms and conditions set forth herein,
      to
      issue to Purchaser, and Purchaser desires, subject to the terms and conditions
      set forth herein, to subscribe for, warrants to purchase shares of Common Stock
      (the “Warrants,” and together with the Notes and the Issue Date Common Stock,
      the “Securities”), which shall be exercisable into 56,938,245 shares of Common
      Stock (subject to adjustment) representing, in the aggregate, 34.4% of the
      fully
      diluted shares of Common Stock, as of the date hereof;

     

     

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

     

    ARTICLE
      I

     

    DEFINITIONS

     

    (a) As
      used
      in this Agreement, the following terms shall have the following
      meanings:

     

    “2006
      Private Placement Warrants”
means
      the aggregate 3,702,101 warrants with an exercise price of $1.50 issued to
      certain private placement investors prior to the date hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Affiliate”
means,
      with respect to any Person, any other Person (including, but not limited to,
      all
      directors and officers of such Person) directly or indirectly controlling,
      controlled by, or under direct or indirect common control with, such Person.
      A
      Person shall be deemed to control another Person if such Person possesses,
      directly or indirectly, the power (a) to vote 20% or more of the securities
      having ordinary voting power for the election of directors (or equivalent
      governing body) of such Person or (b) to direct or cause the direction of the
      management and policies of such other Person, whether through the ownership
      of
      voting securities, by contract or otherwise; provided,
      however,
      that
      none of the Purchaser, any Holder or any of their respective Affiliates shall
      be
      considered an Affiliate of the Company or its Subsidiaries.

     

    “Applicable
      Law”
means
      (a) any United States federal, state, local or foreign law, statute, rule,
      regulation, order, writ, injunction, judgment, decree or permit of any
      Governmental Authority and (b) any rule or listing requirement of any applicable
      national stock exchange or listing requirement of any national stock exchange
      or
      Commission recognized trading market on which securities issued by the Company,
      or any of the Subsidiaries are listed or quoted.

     

    “Authorized
      Representative”
means
      Luis Goyzueta or Steven Magami or any person or persons that has or have been
      authorized by the Board of Directors or the board of directors of Pure Biofuels
      del Peru S.A.C. and Palma Industrial S.A.C. and are otherwise reasonably
      acceptable to Plainfield Special Situations Master Fund Limited. 

     

    “Binding
      Letter of Intent”
means
      the binding letter of intent between Pure Biofuels del Peru S.A.C. and
      Interpacific Oil S.A.C. entered into on May 11, 2007.

     

    “Board
      of Directors”
means
      the Board of Directors of the Company. 

     

    “Business
      Day”
means
      any day except Saturday, Sunday and any day which shall be in New York,
      New York, a legal holiday or a day on which banking institutions are
      authorized or required by law or other government action to close.

     

    “Capital
      Expenditures”
means,
      with respect to any Person, all expenditures by such Person which should be
      capitalized in accordance with GAAP or International GAAP, as the case may
      be,
      and, without duplication, the amount of Capitalized Lease Obligations incurred
      by such Person.

     

    “Capitalized
      Lease Obligations”
means,
      with respect to any Person, all rental obligations of such Person which, under
      GAAP or International GAAP, as the case may be, are or will be required to
      be
      capitalized on the books of such Person, in each case taken at the amount
      thereof accounted for as indebtedness in accordance with such
      principles.

     

    “Capital
      Stock”
means
      (i) with respect to any Person that is a corporation, any and all shares,
      interests, participations, rights or other equivalents (however designated)
      of
      corporate stock and (ii) with respect to any other Person, any and all
      partnership or other equity interests of such Person.

     

    “Cash
      Equivalents”
means,
      as to any Person, (a) securities issued or directly and fully guaranteed or
      insured by the United States or any agency or instrumentality thereof
      (provided
      that the
      full faith and credit of the United States is pledged in support thereof) having
      maturities of not more than six months from the date of acquisition, (b)
      marketable direct obligations issued by any state of the United States or any
      political subdivision of any such state or any public instrumentality thereof
      maturing within six months from the date of acquisition thereof and, at the
      time
      of acquisition, having one of the two highest ratings obtainable from either
      S&P or Moody’s, and (c) U.S. dollar-denominated time deposits, certificates
      of deposit and bankers acceptances of any commercial bank having, or which
      is
      the principal banking subsidiary of a bank holding company having, a long-term
      unsecured debt rating of at least “A” or the equivalent thereof from S&P or
“A2” or the equivalent thereof from Moody’s with maturities of not more than six
      months from the date of acquisition by such Person.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “CERCLA”
means
      the Comprehensive Environmental Response, Compensation, and Liability Act of
      1980, as the same has been amended and may hereafter be amended from time to
      time, 42 U.S.C. § 9601 et seq.

     

    “Change
      of Control”
means
      the occurrence of any of the following: (i) any Person (including a Person’s
      Affiliates), other than a Permitted Holder, becomes the beneficial owner (as
      defined under Rule 13d-3 or any successor rule or regulation promulgated under
      the Exchange Act) of 20% or more of the total voting power of the Company’s
      Common Stock, (ii) there shall be consummated any consolidation or merger of
      the
      Company in which the Company is not the continuing or surviving corporation
      or
      pursuant to which the Common Stock of the Company would be converted into cash,
      securities or other property, other than a merger or consolidation of the
      Company in which the holders of the common stock of the Company outstanding
      immediately prior to the consolidation or merger hold, directly or indirectly,
      at least a majority of the voting power of the common stock of the surviving
      corporation immediately after such consolidation or merger, (iii) during any
      period of two consecutive years, individuals who at the beginning of such period
      constituted the Board of Directors of the Company (together with any new
      directors whose election by such Board of Directors or whose nomination for
      election by the shareholders of the Company has been approved by a majority
      of
      the directors then still in office who either were directors at the beginning
      of
      such period or whose election or recommendation for election was previously
      so
      approved) cease to constitute a majority of the Board of Directors, (iv) either
      of Pure Biofuels Del Peru S.A.C. or Palma Industrial S.A.C. ceases to be a
      wholly-owned Subsidiary of the Company, or (v) Luis Humberto Goyzueta (i)
      transfers, in one or a series of transactions, more than 10% of the Company’s
      Common Stock or (ii) ceases to control (as such term is used in clause (b)
      of
      the definition of “Affiliate”) each of the Company and its
      Subsidiaries.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the
      regulations promulgated and rulings issued thereunder. Section references to
      the
      Code are to the Code as in effect at the date of this Agreement and any
      subsequent provisions of the Code, amendatory thereof, supplemental thereto
      or
      substituted therefor.

     

    “Commission”
means
      the United States Securities and Exchange Commission.

     

    “Commission
      Filings”
means,
      with respect to any point in time, all reports, registration statements and
      other filings filed by the Company or any Subsidiary with the Commission (and
      all notes, exhibits and schedules thereto and all documents incorporated by
      reference therein) filed by the Company or any Subsidiary, prior to such point
      in time, pursuant to the Exchange Act.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Common
      Stock”
means
      the common stock, par value $.001 per share, of the Company.

     

    “Company
      Disclosure Schedule”
means
      the Company disclosure schedule delivered to the Purchaser concurrently with
      the
      date hereof.

     

    “Contingent
      Obligation”
means,
      as to any Person, any obligation of such Person as a result of such Person
      being
      a general partner of any other Person, unless the underlying obligation is
      expressly made non-recourse as to such general partner, and any obligation
      of
      such Person guaranteeing or intended to guarantee any Indebtedness, leases,
      dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
      without limitation, any obligation of such Person, whether or not contingent,
      (a) to purchase any such primary obligation or any property constituting direct
      or indirect security therefor, (b) to advance or supply funds (i) for the
      purchase or payment of any such primary obligation or (ii) to maintain working
      capital or equity capital of the primary obligor or otherwise to maintain the
      net worth or solvency of the primary obligor, (c) to purchase property,
      securities or services primarily for the purpose of assuring the owner of any
      such primary obligation of the ability of the primary obligor to make payment
      of
      such primary obligation or (d) otherwise to assure or hold harmless the holder
      of such primary obligation against loss in respect thereof; provided,
      however,
      that
      the term Contingent Obligation shall not include endorsements of instruments
      for
      deposit or collection in the ordinary course of business. The amount of any
      Contingent Obligation shall be deemed to be an amount equal to the stated or
      determinable amount of the primary obligation in respect of which such
      Contingent Obligation is made or, if not stated or determinable, the maximum
      reasonably anticipated liability in respect thereof (assuming such Person is
      required to perform thereunder) as determined by such Person in good
      faith.

     

    “Contract”
means
      any contract, lease, loan agreement, mortgage, security agree-ment, trust
      indenture, note, bond, instrument, or other agreement or arrangement (whether
      written or oral).

     

    “Conversion
      Price”
means
      $0.60, subject to adjustments set forth in Section 3.6.

     

    “Conversion
      Shares”
means
      the shares of Common Stock issuable upon the conversion of the
      Notes.

     

    “Credit
      Parties”
has
      the
      meaning ascribed to such term in the Loan Agreement.

     

    “Dividend”
means,
      with respect to any Person, that such Person has declared or paid a dividend,
      distribution or returned any equity capital to its stockholders, partners or
      members or authorized or made any other distribution, payment or delivery of
      property (other than common Capital Stock of such Person) or cash to its
      stockholders, partners or members in their capacity as such, or redeemed,
      retired, purchased or otherwise acquired, directly or indirectly, for a
      consideration any shares of any class of its capital stock or any other Capital
      Stock outstanding on or after the Closing Date (or any options or warrants
      issued by such Person with respect to its Capital Stock), or set aside any
      funds
      for any of the foregoing purposes, or shall have permitted any of its
      Subsidiaries to purchase or otherwise acquire for a consideration any shares
      of
      any class of the Capital Stock of such Person outstanding on or after the
      Closing Date (or any options or warrants issued by such Person with respect
      to
      its Capital Stock). Without limiting the foregoing, “Dividends”
with
      respect to any Person shall also include all payments made or required to be
      made by such Person with respect to any stock appreciation rights, plans, equity
      incentive or achievement plans or any similar plans or setting aside of any
      funds for the foregoing purposes.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Domestic
      Subsidiary”
means
      any Subsidiary of the Company other than a Foreign Subsidiary.

     

    “Encumbrance”
means
      any mortgage, pledge, security interest, hypothecation, assignment, deposit
      arrangement, encumbrance, lien (statutory or other), preference, priority or
      other security agreement of any kind or nature whatsoever (including, without
      limitation, any conditional sale or other title retention agreement, any
      financing or similar statement or notice filed under the UCC or any other
      similar recording or notice statute, and any lease having substantially the
      same
      effect as any of the foregoing).

     

    “Environmental
      Claims”
means
      any and all administrative, regulatory or judicial actions, suits, demands,
      demand letters, directives, claims, liens, notices of noncompliance or
      violation, investigations or proceedings relating in any way to any
      Environmental Law or any permit issued, or any approval given, under any such
      Environmental Law (hereafter, “Claims”),
      including, without limitation, (a) any and all Claims by Governmental
      Authorities for enforcement, cleanup, removal, response, remedial or other
      actions or damages pursuant to any applicable Environmental Law, and (b) any
      and
      all Claims by any third party seeking damages, contribution, indemnification,
      cost recovery, compensation or injunctive relief in connection with alleged
      injury or threat of injury to health, safety or the environment due to the
      presence of Hazardous Materials.

     

    “Environmental
      Law”
means
      any statute, law, treaty, convention, rule, regulation, ordinance, code,
      guideline, policy or principal of law now or hereafter in effect and in each
      case as amended, and any judicial or administrative interpretation thereof,
      including any order or consent decree or any agreement entered into with any
      Governmental Authority (“Law”),
      relating to the environment, employee health and safety or Hazardous Materials,
      applicable to the Company or any of its Subsidiaries or their respective
      operations or assets or Real Property owned, leased, or operated by the Company
      or any of its Subsidiaries , including, without limitation, any state,
      provincial, regional or local Law of Peru, and any federal, state or local
      law
      of the United States, relating to the environment, employee health and safety
      or
      Hazardous Materials.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and the regulations promulgated and rulings issued thereunder. Section
      references to ERISA are to ERISA, as in effect at the date of this Agreement
      and
      any subsequent provisions of ERISA, amendatory thereof, supplemental thereto
      or
      substituted therefor.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “ERISA
      Affiliate”
means
      each person (as defined in Section 3(9) of ERISA) which together with any of
      the
      Company or its Subsidiaries or would be deemed to be a “single employer” (i)
      within the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as
      a
      result of any of the Company or its Subsidiaries being or having been a general
      partner of such person.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, and the rules and regulations of the
      Commission promulgated thereunder.

     

    “Excluded
      Stock”
means
      (i) shares of Common Stock issued upon conversion of the Notes; (ii) shares
      of
      Common Stock issued by the Company in transactions that are described in Section
      3.6(a) hereof; (iii) any shares of Common or warrants Stock issued by the
      Company in connection with the Binding Letter of Intent (iv) all options,
      warrants, and any other type of securities and any securities to be issued
      upon
      exercise or conversion thereof issued by the Company and outstanding as of
      the
      date hereof and listed on Schedule 4.7; and (v) shares of Common Stock issued
      upon exercise of the Warrants.

     

    “Existing
      Indebtedness”
has
      the
      meaning ascribed to such term in the Loan Agreement.

     

    “Fair
      Market Value”
means,
      with respect to any asset (including any Capital Stock of any Person), the
      price
      at which a willing buyer, not an Affiliate of the seller, and a willing seller
      who does not have to sell, would agree to purchase and sell such asset, as
      determined in good faith by the board of directors or other governing body
      or,
      pursuant to a specific delegation of authority by such board of directors or
      governing body, an Authorized Representative, of the Person selling such
      asset.

     

    “Final
      Maturity Date”
means
      September 12, 2012.

     

    “Foreign
      Subsidiary”
means
      any Subsidiary of the Company that is not organized under the laws of the United
      States of America or any State thereof or the District of Columbia.

     

    “GAAP”
means
      generally accepted accounting principles in the United States as in effect
      from
      time to time.

     

    “Governmental
      Authority”
means
      the government of the United States, Peru, any other nation or any political
      subdivision thereof, whether state, provincial or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government.

     

    “Hazardous
      Materials”
means
      (a) any petroleum or petroleum products, radioactive materials, asbestos in
      any
      form that is or could become friable, urea formaldehyde foam insulation,
      dielectric fluid containing levels of polychlorinated biphenyls, and radon
      gas;
      (b) any chemicals, materials or substances defined as or included in the
      definition of “hazardous substances,” “hazardous waste,” “hazardous materials,”
“extremely hazardous substances,” “restricted hazardous waste,” “toxic
      substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of
      similar import, under any applicable Environmental Law; and (c) any chemical,
      material or substance, the use of, exposure to, or Release of which is
      prohibited, limited or regulated by any applicable Governmental Authority or
      could give rise to an Environmental Claim.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Holder”
means,
      with respect to any Note, the Person in whose name such Note is registered
      in
      the register maintained by the Company pursuant to Section 12.1.

     

    “Indebtedness”
means,
      as to any Person, without duplication, (a) all indebtedness of such Person
      for
      borrowed money or for the deferred purchase price of property or services,
      (b)
      the maximum amount available to be drawn or paid under all letters of credit,
      bankers’ acceptances, bank guaranties, surety and appeal bonds and similar
      obligations issued for the account of such Person and all unpaid drawings and
      unreimbursed payments in respect of such letters of credit, bankers’
acceptances, bank guaranties, surety and appeal bonds and similar obligations,
      (c) all indebtedness of the types described in clause (a), (b) and (d) of this
      definition secured by any Encumbrance on any property owned by such Person,
      whether or not such indebtedness has been assumed by such Person (provided
      that, if
      the Person has not assumed or otherwise become liable in respect of such
      indebtedness, such indebtedness shall be deemed to be in an amount equal to
      the
      lesser of the Fair Market Value of the property to which such Encumbrance
      relates and the stated amount of such Indebtedness), (d) all obligations of
      such
      Person to pay a specified purchase price for goods or services, whether or
      not
      delivered or accepted, i.e.,
      take-or-pay and similar obligations and (e) all Contingent Obligations of such
      Person. The Indebtedness of any Person shall include the Indebtedness of any
      other entity (including any partnership in which such Person is a general
      partner) to the extent such Person is directly liable therefor as a result
      of
      such Person’s ownership interest in or other relationship with such entity,
      except to the extent the terms of such Indebtedness provide that such Person
      is
      not liable therefor. Notwithstanding the foregoing, Indebtedness shall not
      include trade payables, accrued expenses and deferred tax and other credits
      incurred by any Person in accordance with customary practices and in the
      ordinary course of business of such Person.

     

    “International
      GAAP”
shall
      mean generally accepted accounting principles outside the United States as
      in
      effect from time to time.

     

    “Leaseholds”
of
      any
      Person means all the right, title and interest of such Person as lessee or
      licensee in, to and under leases or licenses of land, improvements and/or
      fixtures.

     

    “Loan
      Agreement”
means
      the loan agreement, dated September 12, 2007, among Pure Biofuels del Peru
      S.A.C. and Palma Industrial S.A.C., as Borrowers, the Company, as Guarantor,
      the
      lenders from time to time party thereto and Plainfield Special Situations Master
      Fund Limited, as administrative agent.

     

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

     

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

     

    “Margin
      Stock”
has
      the
      meaning provided in Regulation U.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Market
      Price”
as
      of
      any date (the “Reference Date”) means the price determined by the first of the
      following clauses that applies: (a) if the Common Stock is then listed or quoted
      on the American Stock Exchange, the New York Stock Exchange, the NASDAQ Global
      Select Market, the NASDAQ Global Market or the NASDAQ Capital Market, whichever
      is at the time the principal trading exchange or market for the Common Stock
      (a
“Principal Market”), the volume weighted average price of the Common Stock on
      the Principal Market on which the Common Stock is then listed or quoted for
      the
      10 Trading Days immediately preceding the Reference Date ; (b) if the Common
      Stock is not then listed or quoted on a Principal Market and if prices for
      the
      Common Stock are then quoted on the Over-The-Counter Bulletin Board, the volume
      weighted average price of the Common Stock on the Over-The-Counter Bulletin
      Board for the 10 Trading Days immediately preceding the Reference Date; (c)
      if
      the Common Stock is not then listed or quoted on the Over-The-Counter Bulletin
      Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets LLC (or a similar organization or agency succeeding
      to
      its functions of reporting prices), the average of the closing bid and ask
      price
      per share of the Common Stock so reported for the 10 Trading Days immediately
      preceding the Reference Date; or (d) in all other cases, the fair market value
      of a share of Common Stock as determined by the Company’s Board of Directors
      acting reasonably and in good faith and evidenced by a resolution of such Board
      of Directors.

     

    “Material
      Adverse Effect”
means
      (a) a
      material adverse effect on the business, operations, property, assets,
      liabilities, condition (financial or otherwise) or prospects of
      the
      Company and its Subsidiaries, taken as a whole, or (b) a material adverse effect
      (i) on the rights or remedies of the Holders or Purchaser hereunder or under
      any
      other Transaction Document, or (ii) on the ability of the Company to perform
      its
      obligations to the Holders or Purchaser hereunder or under any other Transaction
      Document.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. or any successor thereto.

     

    “Net
      Insurance Proceeds”
means,
      with respect to any Recovery Event, the cash proceeds received by the respective
      Person in connection with such Recovery Event (net of (a) reasonable costs
      and
      taxes incurred in connection with such Recovery Event and (b) required payments
      of any Indebtedness which is secured by the respective assets the subject of
      such Recovery Event).

     

    “NGCL”
means
      Chapters 78 and 92A of the Nevada Revised Statutes. 

     

    “Note
      Documents”
means
      this Agreement and the Notes.

     

    “Officer”
means
      the Chairman, any Vice Chairman, the Chief Executive Officer, the President,
      the
      Chief Operating Officer, any Vice President, the Chief Financial Officer, the
      Treasurer, or the Secretary of the Company.

     

    “Officers’
      Certificate”
means
      a
      written certificate signed in the name of the Company by any two Officers,
      and
      delivered to the Holders.

     

    “Permitted
      Holders”
means
      Luis
      Humberto Goyzueta
      or
      Plainfield Asset Management LLC, its Affiliates and their successors or
      assigns.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Person”
means
      any individual, partnership, joint venture, firm, corporation, association,
      limited liability company, trust or other enterprise or any Governmental
      Authority.

     

    “Plan”
means
      any “employee benefit plan” as defined in Section 3(3) of ERISA or any “plan”
subject to Section 4975 of the Code.

     

    “Purchaser
      Affiliate”
means
      (a) any direct or indirect holder of any equity interests or securities in
      Purchaser (whether limited or general partners, members, stockholders or
      other-wise), (b) any Affiliate of Purchaser, (c) any director, officer,
      employee, representative or agent of (i) Purchaser, (ii) any Affiliate of
      Purchaser or (iii) any holder of equity interests or securities referred to
      in
      clause (a) above or (d) any person who is a “control person” of Purchaser, as
      defined under Section 15 of the Securities Act or Section 20 of the Exchange
      Act.

     

    “Real
      Property”
of
      any
      Person means all the right, title and interest of such Person in and to land,
      improvements and fixtures, including Leaseholds.

     

    “Recovery
      Event”
means
      the receipt by the Company or any of its Subsidiaries of any cash insurance
      proceeds or condemnation awards payable (a) by reason of theft, loss, physical
      destruction, damage, taking or any other similar event with respect to any
      property or assets of such Person or (b) under any policy of insurance
      maintained by any of them.

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, to be dated as of the Closing Date, to be
      entered into by and between the Company and Purchaser, in the form attached
      hereto as Exhibit
      B.

     

    “Regulation
      T”
means
      Regulation T of the Board of Governors of the Federal Reserve System of the
      United States as from time to time in effect and any successor to all or a
      portion thereof.

     

    “Regulation
      U”
means
      Regulation U of the Board of Governors of the Federal Reserve System of the
      United States as from time to time in effect and any successor to all or a
      portion thereof.

     

    “Regulation
      X”
means
      Regulation X of the Board of Governors of the Federal Reserve System of the
      United States as from time to time in effect and any successor to all or a
      portion thereof.

     

    “Release”
means
      actively or passively disposing, discharging, injecting, spilling, pumping,
      leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping,
      migrating or the like, into or upon any land or water or air, or otherwise
      entering into the environment.

     

    “Required
      Holders”
means,
      at any time, the Holders of at least a majority in aggregate principal amount
      of
      the Notes at the time outstanding (exclusive of Notes then owned by the Company,
      any Subsidiary or any of their respective Affiliates).

     

    “Responsible
      Officer”
means
      as to any Person, the Chief Executive Officer, the President, the Chief
      Financial Officer, the Chief Operating Officer or any Vice President of such
      Person. Unless otherwise specified, all references to a Responsible Officer
      herein means a Responsible Officer of the Company.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “S&P”
means
      Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies,
      Inc., or any successor thereto.

     

    “Securities
      Act”
means
      the Securities Act of 1933, and the rules and regulations of the Commission
      promulgated thereunder.

     

    “Stockholders
      Agreement”
means
      the agreement, dated September 12, 2007, among LLC1, LLC2, the Company and
      the
      other stockholders party thereto. 

     

    “Subsidiary”
means,
      as to any Person, (i) any corporation more than 50% of whose stock of any class
      or classes having by the terms thereof ordinary voting power to elect a majority
      of the directors of such corporation (irrespective of whether or not at the
      time
      stock of any class or classes of such corporation shall have or might have
      voting power by reason of the happening of any contingency) is at the time
      owned
      by such Person and/or one or more Subsidiaries of such Person and (ii) any
      partnership, limited liability company, association, joint venture or other
      entity in which such Person and/or one or more Subsidiaries of such Person
      has
      more than a 50% equity interest at the time. Unless otherwise qualified, all
      references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
      to a Subsidiary or Subsidiaries of the Company.

     

    “Trading
      Day”
means
      a
      day on which the Common Stock traded on the Company’s principal national
      securities exchange or quotation system or in the over-the-counter market and
      was not suspended from trading on any national securities exchange or quotation
      system or over-the-counter market at the close of business on such
      day.

     

    “Transaction
      Documents”
means
      this Agreement, the Notes, the Registration Rights Agreement, the Stockholders
      Agreement, the Voting Agreement and the Warrants.

     

    “Transactions”
means
      the transactions contemplated by this Agreement and the other Transaction
      Documents.

     

    “Transfer
      Agent”
means
      Pacific Stock Transfer Company.

     

    “UCC”
means
      the Uniform Commercial Code as from time to time in effect in the relevant
      jurisdiction.

     

    “Voting
      Agreement”
means
      the Voting Agreement, dated September 12, 2007, among LLC1, LLC2, the Company
      and the other stockholders party thereto.

     

    “Warrants”
has
      the
      meaning set forth in the second recital to this Agreement. The Warrants shall
      be
      in the form attached hereto as Exhibit
      C.

     

    “Warrant
      Shares”
means
      the shares of Common Stock issuable upon the exercise of the Warrants in
      accordance with the terms of the Warrants.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “Wharton
      Documents”
means
      (i) the letter agreement dated November 2, 2006 from the Company in favor of
      Wharton Capital Partners Ltd. and Wharton Capital Markets, LLC (“Wharton”),
      as
      amended and extended by the letter agreement dated December 14, 2006; (ii)
      the
      Mutual Release dated January 30, 2007 between the Company and Wharton; (iii)
      the
      letter agreement dated April 18, 2007 among the Company and Wharton; (iv) the
      letter dated June 25, 2007 from Wharton to Luis Goyzueta and Steve Magami;
      and
      (v) any amendments or supplements to the foregoing or any other agreement,
      arrangement or settlement relating to the foregoing.

     

    “Working
      Capital Facility”
means
      one or more unsecured working capital facilities approved by Purchaser in its
      reasonable discretion with banks or other lenders providing for revolving credit
      loans, term loans receivables financings (including through the sale of
      receivables to such lenders or to special purpose entities formed to borrow
      from
      such lenders against such receivables) or letters of credit, in each case,
      as
      amended, restated, modified, renewed, refunded, replaced (whether upon or after
      termination or otherwise) or refinanced in whole or in part from time to
      time.

     

    (b) As
      used
      in this Agreement, the following terms shall have the meanings given thereto
      in
      the Sections set forth opposite such terms:

     

    
      	
              Term

            	 	
              Section

            
	
              Accredited
                Investor

            	 	
              5.2(f)

            
	
              Agreement

            	 	
              Preamble

            
	
              Amendment
                Date

            	 	
              6.5

            
	
              Annual
                Business Plan

            	 	
              6.17

            
	
              Bankruptcy
                Code

            	 	
              9.1(e)

            
	
              Closing

            	 	
              2.2

            
	
              Closing
                Date

            	 	
              2.2

            
	
              Company

            	 	
              Preamble

            
	
              Indemnified
                Party

            	 	
              13.1(b)

            
	
              Indemnifying
                Party

            	 	
              13.1(c)

            
	
              Investment

            	 	
              7.5

            
	
              Legend
                Removal Date

            	 	
              5.4(b)

            
	
              Losses

            	 	
              13.1(b)

            
	
              Non-Affiliated
                Purchaser

            	 	
              5.4(b)

            
	
              Notices

            	 	
              13.2

            
	
              Permitted
                Encumbrance

            	 	
              7.1

            
	
              Plainfield
                Director

            	 	
              6.7

            
	
              Purchase
                Price

            	 	
              2.1

            
	
              Purchaser
                

            	 	
              Preamble

            
	
              Securities

            	 	
              Third
                whereas clause

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

     

    SALE
      AND
      PURCHASE

     

    SECTION
      2.1.   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 Closing Date, $10,000,000 in aggregate principal amount of the Notes,
      the
      Issue Date Common Stock and the Warrants for a purchase price of $10,000,000
      (the “Purchase Price”).

     

    SECTION
      2.2.   Closing. 
      Subject to the satisfaction or waiver of the conditions set forth in this
      Agreement, the purchase and sale of the Securities hereunder (the “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 September
      12, 2007 or on such other date as the parties shall mutually agree upon (the
      “Closing Date”).

     

    At
      the
      Closing:

     

    (i) Purchaser
      shall deliver an amount equal to the Purchase Price (net of a funding fee in
      the
      amount of $200,000) 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 Closing Date.

     

    (ii) The
      Company shall deliver to Purchaser against payment of the Purchase Price, a
      certificate or certificates representing the Securities being purchased by
      Purchaser pursuant to Section 2.1, 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 Closing Date;

     

    ARTICLE
      III

     

    THE
      NOTES

     

    SECTION
      3.1.   Authorization
      of the Notes. 
      The
      Company will authorize the issuance of $10,000,000 aggregate principal amount
      of
      the Notes to be issued on the Closing Date and any Notes to be issued in kind
      as
      interest. The Notes shall be substantially in the form set forth in Exhibit
      A.

     

    SECTION
      3.2.   No
      Optional Prepayments. 
      The Company may not make any optional prepayments on any of the
      Notes.

     

    SECTION
      3.3.   Purchase
      of Notes. The Company will not, and will not permit any Affiliate to,
      purchase, redeem, prepay or otherwise acquire, directly or indirectly, any
      of
      the outstanding Notes except upon the payment or prepayment of the Notes in
      accordance with the terms of this Agreement and the Notes. The Company will
      promptly cancel all Notes acquired by it or any Affiliate pursuant to any
      payment, prepayment or purchase of Notes pursuant to any provision of this
      Agreement and no Notes may be issued in substitution or exchange for any such
      Notes.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    SECTION
      3.4.   Change
      of Control. 
      (a) In the event of a Change of Control (the date of such occurrence being
      the “Change of Control Date”), the Company shall notify the Holders of the Notes
      in writing of such occurrence and shall make an offer to purchase (the “Change
      of Control Offer”) all then outstanding Notes at a purchase price of 100% of the
      aggregate principal amount thereof plus an amount in cash equal to all accrued
      and unpaid interest thereon (such applicable purchase price being hereinafter
      referred to as the “Change of Control Purchase Price”).

     

    (b) 
      Within 30 days following the Change of Control Date, the Company shall send
      by first class mail, postage prepaid, a notice to each Holder of Notes at such
      Holder’s address as it appears in the register maintained by the Company
      pursuant to Section 12.1, which notice shall govern the terms of the Change
      of
      Control Offer. The notice to the Holders shall contain all instructions and
      materials necessary to enable such Holders to tender Notes pursuant to the
      Change of Control Offer. Such notice shall state:

     

    (i) that
      a Change of Control has occurred, that the Change of Control Offer is being
      made
      pursuant to this Section 3.4 and that all Notes validly tendered and not
      withdrawn will be accepted for payment; 

     

    (ii) the
      Change of Control Purchase Price and the purchase date (which shall be a
      Business Day no earlier than 30 Business Days nor later than 60 Business Days
      from the date such notice is mailed, other than as may be required by law)
      (the
“Change of Control Payment Date”); 

     

    (iii) that
      any Notes not tendered will continue to accrue interest; 

     

    (iv) that,
      unless the Company defaults in making payment of the Change of Control Purchase
      Price, any Notes accepted for payment pursuant to the Change of Control Offer
      shall cease to accrue interest after the Change of Control Payment Date;

     

    (v) that
      Holders accepting the offer to have any Notes purchased pursuant to a Change
      of
      Control Offer will be required to surrender their Notes, duly endorsed for
      transfer together with such customary documents as the Company may reasonably
      require, in the manner and at the place specified in the notice prior to the
      close of business on the Business Day preceding to the Change of Control Payment
      Date; 

     

    (vi) that
      Holders will be entitled to withdraw their acceptance if the Company receives,
      not later than the close of business on the third Business Day preceding the
      Change of Control Payment Date, a telegram, telex, facsimile transmission or
      letter setting forth the name of the Holder, the aggregate principal amount
      of
      Notes the Holder delivered for purchase and a statement that such Holder is
      withdrawing his election to have such Notes purchased; 

     

    (vii) that
      Holders whose Notes are purchased only in part will be issued a new certificate
      representing the aggregate principal amount of Notes equal to the unpurchased
      portion of the aggregate principal amount of Notes surrendered; and

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (viii) the
      circumstances and relevant facts regarding such Change of Control. 

     

    (c) The
      Company will comply with any securities laws and regulations, to the extent
      such
      laws and regulations are applicable to the purchase of the Notes in connection
      with a Change of Control Offer. 

     

    (d) On
      the Change of Control Payment Date, the Company shall (A) accept for
      payment the Notes tendered pursuant to the Change of Control Offer,
      (B) promptly mail to each Holder of shares so accepted payment in an amount
      in cash equal to the Change of Control Purchase Price for such Notes,
      (C) execute and issue a new Note equal to the aggregate principal amount of
      unpurchased Notes surrendered and (D) cancel and retire each surrendered
      Note. Unless the Company defaults in the payment for the Notes tendered pursuant
      to the Change of Control Offer, interest will cease to accrue with respect
      to
      the Notes tendered and all rights of Holders of such tendered Notes will
      terminate, except for the right to receive payment therefor, on the Change
      of
      Control Payment Date.

     

    SECTION
      3.5.   Convertibility.
      (a)  The
      Holders of the Notes will be entitled at any time after the Amendment Date
      and
      on or prior to the Final Maturity Date to convert any or all of their Notes
      into
      shares of Common Stock at the Conversion Price per share. The amount of shares
      of Common Stock to be delivered shall be the aggregate principal amount of
      the
      Notes delivered for conversion plus the amount of accrued and unpaid interest
      thereon divided by the Conversion Price then in effect.

     

    (b)
      Conversion of shares of the Notes may be effected by any Holder thereof upon
      the
      surrender to the Company, at the principal office of the Company or at the
      office of a conversion agent as may be designated by the Board of Directors,
      of
      the certificate or certificates for such Notes to be converted accompanied
      by a
      complete and manually signed Notice of Conversion (as set forth in the form
      of
      Note attached hereto) along with appropriate endorsements and transfer documents
      as required by the Company or any conversion agent The conversion of the Notes
      will be deemed to have been made on the date (the “Conversion Date”) such
      certificate or certificates have been surrendered and the receipt of such notice
      of conversion. As promptly as reasonably practicable following the Conversion
      Date, the Company shall deliver or cause to be delivered (i) certificates
      representing the number of validly issued, fully paid and nonassessable full
      shares of Common Stock to which the Holder of Notes being converted (or such
      Holder’s transferee) shall be entitled, and (ii) if less than the total
      aggregate principal amount of the Notes evidenced by the surrendered certificate
      are being converted, a new certificate for the aggregate principal amount of
      Notes evidenced by such surrendered certificate or certificates less the
      aggregate principal amount of Notes being converted. On the Conversion Date,
      the
      rights of the Holder of the Notes being converted shall cease except for the
      right to receive shares of Common Stock and the Person entitled to receive
      the
      shares of Common Stock shall be treated for all purposes as having become the
      record Holder of such shares of Common Stock at such time.

     

    (c) In
      connection with the conversion of Notes, no fractions of shares of Common Stock
      shall be issued, but the Company shall, with respect to any fractional interest:
      (i) pay cash with respect to the Market Price of such fractional share; or
      (ii)
      round up to the next whole share of Common Stock.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    SECTION
      3.6.   Anti-Dilution
      Adjustments.
      (a)
If
      after
      the Issue Date, the Company: (1) pays a dividend or makes a distribution on
      its
      Common Stock in shares of its Common Stock; (2) subdivides its outstanding
      shares of Common Stock into a greater number of shares; or (3) combines its
      outstanding shares of Common Stock into a smaller number of shares; then the
      Conversion Price in effect immediately prior to such action shall be adjusted
      to
      the number obtained by multiplying the Conversion Price by a fraction, the
      numerator which shall be the number of shares of Common Stock outstanding
      immediately prior to such action, and the denominator of which shall be the
      number of shares of Common Stock outstanding immediately following such
      action.

     

    (b) If
      the
      Company issues any shares of its Common Stock (or is deemed to have issued
      shares of Common Stock) at a price below the Conversion Price, the Conversion
      Price shall be adjusted as follows:

     

    
      	
              X

            	
              =

            	
              Number
                of shares of
                Common Stock (i) outstanding
                immediately prior to the issuance and (ii) then issuable upon exercise
                of
                any of the Company’s outstanding securities, including, options, warrants,
                and the Notes

            
	
              YA

            	
              =

            	
              Conversion
                Price immediately prior to the announcement of the
                issuance

            
	
              ZB

            	
              =

            	
              Aggregate
                consideration received by the Company

            
	
              Y

            	
              =

            	
              Number
                of shares of Common Stock issued (or deemed issued) in the new
                issuance

            
	
              YAB

            	
              =

            	
              New
                Conversion Price

            
	
              YAB

            	=	YA
              (
              (X + ZB/YA
              )
              /
              (X + Y) )

    

     

    (c) If
      the
      Company issues any shares of its Common Stock (or is deemed to have issued
      shares of Common Stock) at a price below the Market Price, the Conversion Price
      shall be adjusted as follows:

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
              X

            	
              =

            	
              Number
                of shares of
                Common Stock (i) outstanding
                immediately prior to the issuance and (ii) then issuable upon exercise
                of
                any of the Company’s outstanding securities, including, options, warrants,
                and the Notes

            
	
              YA

            	
              =

            	
              Conversion
                Price immediately prior to the announcement of the
                issuance

            
	
              ZB

            	
              =

            	
              Aggregate
                consideration received by the Company

            
	
              M

            	
              =

            	
              Market
                Price immediately prior to the announcement of the
                issuance

            
	
              Y

            	
              =

            	
              Number
                of shares of Common Stock issued (or deemed issued) in the new
                issuance

            
	
              YAB

            	
              =

            	
              New
                Conversion Price

            
	
              YAB

            	=	YA
              (
              (X + ZB/M )
              /
              (X + Y) )

    

     

    (d) If
      the
      Company makes any distribution payable in securities or assets of the Company
      (other than shares of Common Stock), then and in each such event provision
      shall
      be made so that the Holders of Notes shall receive upon conversion thereof,
      in
      addition to the number of shares of Common Stock receivable thereupon, the
      amount of securities or assets of the Company which they would have received
      had
      their Notes been converted into Common Stock on the date of such event and
      had
      they thereafter, during the period from the date of such event to and including
      the date of conversion, retained such securities or assets receivable by them
      as
      aforesaid during such period, subject to all other adjustment called for during
      such period under this Section 3.6 with respect to the rights of the Holders
      of
      Notes.

     

    (e) The
      adjustment shall become effective immediately after the record date in the
      case
      of a dividend or distribution and immediately after the effective date in the
      case of a subdivision, combination or reclassification. If after an adjustment
      a
      Holder of Notes upon conversion of such Notes may receive shares of two or
      more
      classes of Capital Stock of the Company, the Conversion Price will thereafter
      be
      subject to adjustment upon the occurrence of an action taken with respect to
      any
      such class of Capital Stock with respect to the Common Stock on terms comparable
      to those applicable to Common Stock described herein.

     

    (f) Only
      one
      adjustment shall be made with respect to any event causing an adjustment. If
      an
      adjustment is required by Section 3.6(b) and 3.6(c) hereof, only the adjustment
      resulting in the greatest decrease in the Conversion Price shall be
      made.

     

    (g) For
      purposes of Section 3.6(b) and (c):

     

    (i) If
      the
      Company issues any options, warrants or other securities convertible into or
      exchangeable or exercisable for Common Stock (“Convertible Securities”), then
      the number of shares of Common Stock issuable upon the exercise, exchange or
      conversion of such Convertible Securities, shall be deemed to be the issuance
      of
      Common Stock;

     

    (ii) The
      consideration receivable by the Company for Common Stock deemed issued pursuant
      to the preceding clause (i), shall be the total amount, if any, received by
      the
      Company as consideration for the issuance of such Convertible Securities, plus
      the aggregate amount of additional consideration payable to the Company upon
      the
      exercise, exchange or conversion of such Convertible Securities;
      and

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (iii) Upon
      the
      expiration or termination of any Convertible Securities, the Conversion Price,
      to the extent in any way affected by or computed using such Convertible
      Securities, shall then be recomputed to reflect the issuance of only the number
      of shares of Common Stock (and Convertible Securities which remain in effect)
      that were actually issued upon the exercise, exchange or conversion of such
      Convertible Securities.

     

    (g) No
      adjustment in the Conversion Price need be made unless the adjustment would
      require an increase or decrease of at least $0.01 in the Conversion Price.
      Any
      adjustments that are not made shall be carried forward and taken into account
      in
      any subsequent adjustment. All calculations relating to anti-dilution
      adjustments shall be made to the nearest cent.

     

    (h) No
      adjustment need be made for a change in the par value or no par value of the
      Common Stock. No adjustment shall be made to the Conversion Price for the
      issuance of any Excluded Stock.

     

    (i) If
      the
      Company is a party to a transaction involving a sale of substantially all of
      the
      assets of the Company or a merger or binding share exchange which reclassifies
      or changes its outstanding Common Stock, the person obligated to deliver
      securities, cash or other assets upon conversion of Notes will be required
      to
      assume the obligations of the Company with respect to the Notes. In addition,
      if
      the Company in connection with any such transaction makes a distribution to
      all
      holders of its Common Stock of any of its assets, or debt securities or any
      rights, warrants or options to purchase securities of the Company, then, from
      and after the record date for determining the holders of Common Stock entitled
      to receive the distribution, a Holder of Notes that converts such Notes would,
      upon such conversion, be entitled to receive, in addition to the shares of
      Common Stock into which such Notes are convertible, the kind and amount of
      securities, cash or other assets comprising the distribution that such holder
      would have received if such holder had converted such Notes immediately prior
      to
      the record date for determining the holders of Common Stock entitled to receive
      the distribution.

     

    (j) Whenever
      the Conversion Price is adjusted in accordance with this Section 3.6, the
      Company shall: (1) forthwith compute the Conversion Price in accordance with
      this Section 3.6 and prepare and transmit to the Transfer Agent an Officers’
Certificate setting forth the Conversion Price, the method of calculation
      thereof in reasonable detail, and the facts requiring such adjustment and upon
      which such adjustment is based; and (2) as soon as practicable following the
      occurrence of an event that requires an adjustment to the Conversion Price
      pursuant to this Section 3.6 (or if the Company is not aware of such occurrence,
      as soon as practicable after becoming so aware), provide a written notice to
      the
      Holders of Notes of the occurrence of such event and a statement setting forth
      in reasonable detail the method by which the adjustment to the Conversion Price
      was determined and setting forth the adjusted Conversion Price.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (k) After
      an
      adjustment to the Conversion Price, any subsequent event requiring an adjustment
      will cause a subsequent adjustment to the Conversion Price as so
      adjusted.

     

    (l) In
      connection with the conversion of the Notes, no fractions of shares of Common
      Stock shall be issued, but the Company shall, with respect to any fractional
      interest: (i) pay cash with respect to the Market Price of such fractional
      share; or (ii) round up to the next whole share of Common Stock.

     

    (m) It
      is the
      intent of the parties hereto that, in the aggregate, the Issue Date Common
      Stock, the Conversion Shares and the Warrant Shares will, as of the Closing
      Date, represent 51.1% of the fully-diluted Common Stock, assuming the exercise
      of all 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. From and after the Closing Date until September 12, 2008,
      to the extent that the Company issues any Common Stock (or options, warrants
      or
      other rights to acquire Common Stock), pursuant to or in connection with (i)
      the
      Binding Letter of Intent, (ii) the Company’s stock option plan (other than the
      14 million options outstanding under the stock option plan as of the date
      hereof), (iii) the 2006 Private Placement Warrants or (iv) the Wharton
      Agreements (other than any Common Stock, options, warrants or other rights
      to
      acquire Common Stock issued in connection with the exercise or conversion of
      any
      securities previously issued pursuant to the Wharton Agreements), within three
      Business Days of such issuance of Common Stock (or options, warrants or other
      rights to acquire Common Stock), the Company shall issue to the Purchaser,
      warrants to purchase a number of shares of Common Stock equal to the number
      of
      shares of Common Stock (or options, warrants or other rights to acquire Common
      Stock), issued in such issuance with an exercise price equal to the lesser
      of
      (x) the applicable exercise price, conversion price or stock purchase price
      of
      such issuance and (y) $1.50. Other than the exercise price, the warrants issued
      pursuant to this Section 3.6(m) shall have substantially the same terms and
      conditions as the Warrants attached hereto as Exhibit
      C.

     

    SECTION
      3.7.   Forced
      Conversion.
      Upon
      the consummation of a firm commitment underwritten public offering of Common
      Stock pursuant to an effective registration statement under the Securities
      Act
      of 1933, as amended (the “Securities Act”) resulting in gross proceeds of not
      less than $30.0 million and an offering price to the public of not less than
      $1.80 per share, the Company may, within 5 Trading Days, deliver a written
      notice to all Holders (a “Forced Conversion Notice” and the date such notice is
      received by the Holders, the “Forced Conversion Notice Date”) which shall have
      the effect of forcing the conversion of the Notes specified therein, it being
      understood that the “Conversion Date” for purposes of Section 3.5(b) shall be
      deemed to occur on the third Trading Day following the Forced Conversion Notice
      Date. As to each holder, a Forced Conversion Notice shall state: (i) the
      Conversion Date; (ii) the aggregate principal amount of Notes the Company
      wishes to convert; (iii) such Holder’s pro-rata portion of such aggregate
      principal amount; (iv) the place or places where certificates for such
      Notes are to be surrendered for conversion; (v) that the conversion is
      being made pursuant to Section 3.7 hereof; and (vi) that interest on the
      Notes to be converted will cease to accrue on such conversion date.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

    OF
      THE
      COMPANY

     

    In
      order
      to induce the Purchaser to enter into this Agreement and to purchase the
      Securities, 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
      4.1.   Company
      Status.
      The
      Company (a) is a duly organized and validly existing corporation in good
      standing under the laws of the State of Nevada, (b) has the corporate power
      and
      authority to own its property and assets and to transact the business in which
      it is engaged and presently proposes to engage and (c) is duly qualified and
      is
      authorized to do business and is in good standing in each jurisdiction where
      the
      ownership, leasing or operation of its property or the conduct of its business
      requires such qualifications.

     

    SECTION
      4.2.   Power
      and Authority.
      The
      Company has the corporate power and authority to execute, deliver and perform
      the terms and provisions of each of the Transaction Documents to which it is
      party and has taken all necessary corporate action to authorize the execution,
      delivery and performance by it of each of such Transaction Documents. The
      Company has duly executed and delivered each of the Transaction Documents to
      which it is party, and each of such Transaction Documents constitutes its legal,
      valid and binding obligation enforceable in accordance with its terms, except
      to
      the extent that the enforceability thereof may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      generally affecting creditors’ rights and by equitable principles (regardless of
      whether enforcement is sought in equity or at law).

     

    SECTION
      4.3.   No
      Violation. 
      Neither the execution, delivery or performance by the Company of the Transaction
      Documents to which it is a party, nor compliance by it with the terms and
      provisions thereof, (a) will contravene any provision of any law, statute,
      rule
      or regulation or any order, writ, injunction or decree of any court or
      Governmental Authority, (b) will conflict with or result in any breach of any
      of
      the terms, covenants, conditions or provisions of, or constitute a default
      under, or result in the creation or imposition of (or the obligation to create
      or impose) any Encumbrance , upon any of the property or assets of the Company
      or any of its Subsidiaries pursuant to the terms of any indenture, mortgage,
      deed of trust, credit agreement or loan agreement, or any other agreement,
      contract or instrument, in each case to which Company or any of its Subsidiaries
      is a party or by which it or any of its property or assets is bound or to which
      it may be subject, or (c) will violate any provision of the certificate or
      articles of incorporation, certificate of formation, limited liability company
      agreement or by-laws (or equivalent organizational documents), as applicable,
      of
      the Company or any of its Subsidiaries.

     

    SECTION
      4.4.   Approvals.
      No
      order, consent, approval, license, authorization or validation of, or filing,
      recording or registration with (except for those that have otherwise been
      obtained or made on or prior to the Closing Date and which remain in full force
      and effect on the Closing Date), or exemption by, any Governmental Authority
      is
      required to be obtained or made by, or on behalf of, the Company to authorize,
      or is required to be obtained or made by, or on behalf of, the Company in
      connection with (i) the execution, delivery and performance of any Transaction
      Document or (ii) the legality, validity, binding effect or enforceability of
      any
      Transaction Document.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    SECTION
      4.5.   True
      and Complete Disclosure.
      All
      factual information (taken as a whole) furnished by or on behalf of the Company
      and its Subsidiaries in writing to Purchaser (including, without limitation,
      all
      information contained in the Transaction Documents) for purposes of or in
      connection with this Agreement, the other Transaction Documents or any
      transaction contemplated herein or therein is, and all other such factual
      information (taken as a whole) hereafter furnished by or on behalf of the
      Company and its Subsidiaries in writing to Purchaser will be, true and accurate
      in all material respects on the date as of which such information is dated
      or
      certified and not incomplete by omitting to state any fact necessary to make
      such information (taken as a whole) not misleading in any material respect
      at
      such time in light of the circumstances under which such information was
      provided, it being understood and agreed that for purposes of this Section
      4.5,
      such factual information shall not include any budget information (including,
      without limitation, any Annual Business Plan) or any pro forma
      financial information.

     

    SECTION
      4.6.   Use
      of
      Proceeds.
      (a)
      All
      proceeds from the sale of the Securities shall be used solely for the purposes
      set forth on Schedule 2.01 to the Loan Agreement.

     

    (b)
      No
      part of the proceeds from the sale of the Securities will be used to purchase
      or
      carry any Margin Stock or to extend credit for the purpose of purchasing or
      carrying any Margin Stock. Neither the sale of the Securities nor the use of
      the
      proceeds thereof will violate or be inconsistent with the provisions of
      Regulation T, U or X.

     

    

    SECTION
      4.7.   Capital
      Stock.
      (a) As
      of the Closing Date, the authorized Capital Stock of the Company will consist
      solely of 93,750,000 shares of Common Stock, of which 63,035,769 shares are
      issued and outstanding (assuming no additional exercises of existing stock
      options) no shares are held in treasury and 7,628,762 (such amount does not
      include (i) any management options since they will only be exercisable upon
      an
      increase in the authorized common stock, (ii) the shares convertible upon the
      Cornell debt since the debt will be paid off at closing or (iii) any shares
      or
      warrants issuable under the Binding Letter of Intent since the transaction
      has
      not closed and the final consideration has not yet been determined) are reserved
      for issuance upon the exercise of outstanding warrants, options and other
      convertible or exchangeable securities (other than the Notes and the Warrants).
      Schedule
      4.7
      of the
      Company Disclosure Schedule sets forth the capitalization of the Company as
      of
      the Closing Date. Each share of Capital Stock of the Company that will be issued
      and outstanding immediately following the Closing will be duly authorized and
      validly issued and 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.

     

    (b) Except
      as
      set forth on Schedule
      4.7
      of the
      Company Disclosure Schedule, as of the date of this Agreement, there are and
      on
      the Closing Date there will be (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.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (c) From
      and
      after the Amendment Date, the Conversion Shares and the Warrant Shares will
      have
      been duly authorized and validly reserved for issuance in contemplation of
      the
      conversion of the Notes and the exercise of the Warrants and, when issued and
      delivered in accordance with the terms of the Notes or the Warrants, 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 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
      4.8.   Private
      Offering.
      Assuming the accuracy of the representations and warranties set forth in Section
      5.2, the offer and sale of the Securities to the Purchaser is exempt from the
      registration and prospectus delivery requirements of the Securities Act. Neither
      the Company, nor anyone acting on behalf of it, has offered or sold or will
      offer or sell any securities, or has taken or will take any other action
      (including, without limitation, any offering of any securities of the Company
      under circumstances that would require, under the Securities Act, the
      integration of such offering with the offering and sale of the Securities),
      which would subject the sale of the Securities contemplated hereby to the
      registration provisions of the Securities Act.

     

    SECTION
      4.9.   Brokers
      and Finders.
      Except
      as set forth on Schedule 4.9 of the Company Disclosure Schedule, 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 Agreement
      or any of the transactions contemplated hereby.

     

    SECTION
      4.10.   Representations
      and Warranties in Other Documents.
      All
      representations and warranties set forth in the other Transaction Documents
      and
      the Loan Documents were true and correct in all material respects at the time
      as
      of which such representations and warranties were made (or deemed made) and
      shall be true and correct in all material respects as of the Closing Date as
      if
      such representations or warranties were made on and as of such date (it being
      understood and agreed that any such representation or warranty which by its
      terms is made as of a specified date shall be true and correct in all material
      respects as of such specified date).

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

     

    REPRESENTATIONS
      AND WARRANTIES

     

    OF
      PURCHASER

     

    Purchaser
      hereby represents and warrants to the Company as follows:

     

    SECTION
      5.1.   Organization;
      Authorization; Enforceability.
      Purchaser is duly organized, validly existing and in good standing under the
      laws of the jurisdiction of its organization and has all requisite power and
      authority to own its properties and assets and to carry on its business as
      it is
      now being conducted and as currently proposed to be conducted. Purchaser has
      the
      power to execute, deliver and perform its obligations under each of the
      Transaction Documents to which it is a party and has taken all action necessary
      to authorize the execution, delivery and performance by it of such Transaction
      Documents and to consummate the transactions contemplated hereby and thereby.
      No
      other proceedings on the part of Purchaser are necessary for such authorization,
      execution, delivery and consummation. Purchaser has duly executed and delivered
      this Agreement and, at the Closing, Purchaser will have duly executed and
      delivered each of the other Transaction Documents to be executed and delivered
      at or prior to the Closing. This Agreement constitutes, and each of the other
      Transaction Documents to which Purchaser is a party, when executed and delivered
      by Purchaser, will constitute, a legal, valid and binding obligation of
      Purchaser, enforceable against Purchaser in accordance with its terms, except
      as
      such enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or other similar laws relating to or affecting the
      enforcement of creditors’ rights generally or general principles of equity
      (regardless of whether such enforceability is considered in a proceeding in
      equity or at law).

     

    SECTION
      5.2.   Private
      Placement.
      (a)
      Purchaser understands that the offering and sale of the Securities by the
      Company has not been registered under the Securities Act and state securities
      laws and is intended to be exempt from registration under the Securities Act
      pursuant to Section 4(2) and/or Regulation D thereof.

     

    (b) Purchaser
      has sufficient knowledge and experience in financial and business matters so
      as
      to be capable of evaluating the merits and risks of its investment in the
      Securities and is capable of bearing the economic risks of such investment
      and
      is able, without impairing Purchaser’s financial condition, to hold the
      Securities for an indefinite period of time and to suffer a complete loss of
      Purchaser’s investment.

     

    (c) Purchaser
      has sought such accounting, legal and tax advice, as it has considered necessary
      to make an informed investment decision with respect to its acquisition of
      the
      Securities.

     

    (d) Purchaser
      is acquiring the Securities to be acquired hereunder for its own account, not
      as
      a nominee or agent, for investment and not with a view to the public resale
      or
      distribution thereof, in violation of any securities law.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (e) Purchaser
      understands that the Securities may not be transferred except pursuant to a
      registration statement under the Securities Act or in a transaction that is
      exempt from registration under the Securities Act.

     

    (f)
       Purchaser
      is an “Accredited
      Investor”
as
      that
      term is defined in Rule 501(a)(3) of Regulation D.

     

    (g) Purchaser
      (i) has been furnished with or has had full access to all of the information
      (financial or other) that it considers necessary or appropriate to make an
      informed investment decision with respect to the Company and the Securities
      and
      that it has requested from the Company, (ii) has had an opportunity to discuss
      with management of the Company the intended business, properties, condition
      (financial or other), operations and prospects of the Company and to obtain
      information (to the extent the Company possessed such information or could
      acquire it without unreasonable effort or expense) necessary to verify any
      information furnished to it or to which it had access; it being understood
      that
      nothing set forth in this Section 5.2 shall affect the representations,
      warranties or other obligations of the Company, or the rights and remedies
      of
      Purchaser, under this Agreement in any way whatsoever.

     

    (h) Purchaser
      has reviewed with its own tax advisors the U.S. federal, state, local and
      foreign tax consequences of this investment and the transactions contemplated
      under any of the Transaction Documents. With respect to such matters, Purchaser
      relies solely on such advisors and not on any statements or representations
      of
      the Company or any of its agents, written or oral. Purchaser understands that
      it
      (and not the Company) shall be responsible for its own tax liability that may
      arise as a result of this investment or the transactions contemplated under
      any
      of the Transaction Documents.

     

    SECTION
      5.3.   Brokers
      or Finders

     

    Purchaser
      has not engaged any brokers, finders or agents, and neither the Company has,
      nor
      will, incur, directly or indirectly, as a result of any action taken by
      Purchaser, any liability for brokerage or finders’ fees or agents’ commissions
      or any similar charges under any of the Transaction Documents.

     

    SECTION
      5.4.   Transfer
      or Resale; Legends

     

    (a) Purchaser
      understands that except as provided in the Registration Rights Agreement: (i)
      the Securities have not been and are not being registered under the Securities
      Act or any state securities laws, and may not be offered for sale, sold,
      assigned or transferred unless (A) subsequently registered thereunder, (B)
      Purchaser shall have delivered to the Company an opinion of counsel, in a
      generally acceptable form, to the effect that such Securities to be sold,
      assigned or transferred may be sold, assigned or transferred pursuant to an
      exemption from such registration requirements, or (C) Purchaser provides the
      Company with reasonable assurances (in the form of seller and broker
      representation letters) that such Securities can be sold, assigned or
      transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
      the Securities Act, as amended (or a successor rule thereto) (collectively,
      “Rule
      144”),
      in
      each case following the applicable holding period set forth therein; (ii) any
      sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the
      seller (or the person through whom the sale is made) may be deemed to be an
      underwriter (as that term is defined in the Securities Act) may require
      compliance with some other exemption under the Securities Act or the rules
      and
      regulations of the Commission thereunder; and (iii) neither the Company nor
      any
      other person is under any obligation to register the Securities under the
      Securities Act or any state securities laws or to comply with the terms and
      conditions of any exemption thereunder. 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b) Legends.
      Purchaser understands and agrees that the certificates evidencing the Notes
      or
      the Conversion Shares, or any other securities issued in respect of the Notes
      or
      the Conversion Shares upon any stock split, stock dividend, recapitalization,
      merger, consolidation or similar event, bear the following legend (in addition
      to any legend required by the Registration Rights Agreement or under applicable
      state securities laws):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A
      VIEW
      TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
      AN
      OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
      REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

     

    Certificates
      evidencing the Conversion Shares or Warrant Shares shall not contain any legend
      (including the legend set forth above), (i) following the sale of such
      Conversion Shares or Warrant Shares pursuant to a registration statement
      (including the Registration Statement) covering the resale of such security
      which is effective under the Securities Act, (ii) following any sale of such
      Conversion Shares or Warrant Shares pursuant to Rule 144, (iii) if such
      Conversion Shares or Warrant Shares are eligible for sale under Rule 144(k),
      or
      (iv) if such legend is not required under applicable requirements of the
      Securities Act (including judicial interpretations and pronouncements issued
      by
      the staff of the Commission). The Company shall cause its counsel to issue
      a
      legal opinion to the Company’s transfer agent as soon as practicable upon notice
      by the Purchaser that it is selling Securities pursuant to a Registration
      Statement if required by the Company’s transfer agent to effect the removal of
      the legend hereunder. The Company agrees that at such time as such legend is
      no
      longer required under this Section 5.4(b), it will, no later than three (3)
      Trading Days following the delivery by a purchaser that is not an Affiliate
      of
      the Company (a “Non-Affiliated Purchaser”) to the Company or the Transfer Agent
      of a certificate representing Conversion Shares or Warrant Shares, as the case
      may be, issued with a restrictive legend (such third Trading Day, the
“Legend
      Removal Date”),
      deliver of cause to be delivered to such Non-Affiliated Purchaser a certificate
      representing such shares that is free from all restrictive and other legends.
      The Company may not make any notation on its records or give instructions to
      any
      transfer agent of the Company that enlarge the restrictions on transfer set
      forth in this Section 5.4. Purchaser acknowledges that the Company’s agreement
      hereunder to remove all legends from Conversion Shares or Warrant Shares is
      not
      an affirmative statement or representation that such Conversion Shares or
      Warrant Shares are freely tradable.

     

    
      
        
        

      

      
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    SECTION
      5.5.   No
      Violation; Consents.
      (a) The
      execution, delivery and performance by Purchaser of each of the Transaction
      Documents to which it is a party and the consummation of the transactions
      contemplated hereby do not and will not contravene any Applicable Law. The
      execution, delivery and performance by Purchaser of each of the Transaction
      Documents to which it is a party and the consummation of the transactions
      contemplated hereby (i) will not violate, result in a breach of or constitute
      (with or without due notice or lapse of time or both) a default (or give rise
      to
      any right of termination, cancellation or acceleration) under any Contract
      to
      which Purchaser is party or by which Purchaser is bound or to which any of
      its
      assets is subject, except for any such violations, breaches or defaults that
      would not, individually or in the aggregate, reasonably be expected to have
      a
      material adverse effect on the ability of Purchaser to perform its obligations
      under this Agreement, and (ii) will not conflict with or violate any provision
      of the articles of incorporation or bylaws or other governing documents of
      Purchaser.

     

    (b) no
      consent, authorization or order of, or filing or registration with, any
      Governmental Authority or other Person is required to be obtained or made by
      Purchaser for the execution, delivery and performance of any of the Transaction
      Documents to which it is a party or the consummation of any of the transactions
      contemplated hereby, except where the failure to obtain such consents,
      authorizations or orders, or make such filings or registrations, would not,
      individually or in the aggregate, reasonably be expected to have a material
      adverse effect on the ability of Purchaser to perform its obligations under
      this
      Agreement.

     

    SECTION
      5.6.   Short
      Position.
      Neither
      Purchaser nor any of its Affiliates have an open short position in the Common
      Stock of the Company.

     

    ARTICLE
      VI

     

    AFFIRMATIVE
      COVENANTS 

     

    SECTION
      6.1.   Access
      to Books and Records.
      So long
      as Purchaser holds any Securities, Conversion Shares or Warrant Shares, the
      Company shall afford to Purchaser and Purchaser’s representatives (including
      without limitation, its accountants and counsel) full access during normal
      business hours to all its properties, books, Contracts, commitments and records
      (including, but not limited to, tax returns) and permit the Purchaser and its
      representatives to discuss with management and the Company’s accountants the
      business and affairs of the Company and the Subsidiaries. 

     

    SECTION
      6.2.   Use
      of
      Proceeds.
      The
      Company shall use the proceeds from the issuance of Securities for the specific
      purposes set forth in the Loan Agreement.

     

    SECTION
      6.3.   Periodic
      Information.
      For so
      long as the Notes or any Conversion Shares are outstanding the Company shall
      file all reports, if any, required to be filed by the Company under Section
      13
      or 15(d) of the Exchange Act and, if no longer required to file such reports,
      shall provide the holders of the Securities, the Conversion Shares, the Warrant
      Shares and prospective purchasers of such securities with the information
      specified in Rule 144A(d) under the Securities Act.

     

    
      
        
        

      

      
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    SECTION
      6.4.   Directors
      and Officers Insurance; Indemnification.
      For so
      long as Purchaser holds any Notes, the Company shall maintain directors’ and
      officers’ insurance with policy limits and deductibles at least as favorable to
      the beneficiaries of such insurance as are cur-rently maintained and otherwise
      on terms reasonably comparable to the coverage maintained by the Company on
      the
      date hereof, such insurance to be maintained with either (i) a Lloyds of London
      syndicate reasonably acceptable to Purchaser or (ii) an insurer with an A.M.
      Best financial strength rating of “A” or better. For purposes of this Section
      6.4, it is understood that the directors’ and officers’ insurance maintained by
      the Company on the date hereof is acceptable to Purchaser and that the
      indemnification provisions of the Company bylaws are acceptable to Purchaser.
      For so long as Purchaser holds any Notes, the Company shall indemnify the
      Company’s directors and officers to the fullest extent permitted under the NGCL
      and shall enter into all such agreements and use its best efforts to obtain
      any
      necessary amendments to its articles of incorporation or bylaws to give effect
      to this Section 6.4.

     

    SECTION
      6.5.   Conversion
      Shares.
      The
      Company agrees to use its best efforts to cause the Articles of Incorporation
      to
      be amended as soon as practicable to increase the authorized common stock to
      a
      number sufficient to support the issuance of the Common Stock underlying the
      Notes and the Warrants (the effective date of such amendment, the “Amendment
      Date”).
      Thereafter, the Company shall at all times reserve and keep available, free
      from
      preemptive rights, out of its authorized but unissued Common Stock, for the
      purpose of effecting the conversion of Notes, the full number of shares of
      common of the Company then issuable upon the conversion into Common Stock of
      all
      of the outstanding principal (including PIK Interest) and accrued interest
      that
      are outstanding from time to time under the provisions of the Note Documents.
      The Company covenants that all of the Conversion Shares that may be issued
      upon
      the conversion of Notes will, upon issuance, be fully paid and nonassessable,
      and the Company will pay all taxes (including transfer and stamp), liens and
      charges with respect to the issue thereof.

     

    SECTION
      6.6.   Stockholders
      Meeting.
      The
      Company shall hold the stockholders meeting contemplated by the Voting Agreement
      by no later than November 30, 2007; provided,
      however,
      that in
      the event that the Commission reviews the preliminary proxy statement filed
      in
      connection with such stockholders meeting, such stockholders meeting shall
      be
      held no later than January 31, 2008.

     

    SECTION
      6.7.   Plainfield
      Director.
      (a)
      From and after the 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 one Director (the “Plainfield
      Director”).
      As
      promptly as practicable after the Closing Date, the Board of Directors shall
      increase the number of Directors to permit the addition of the Plainfield
      Director and elect the person 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 person designated by to be the Plainfield
      Director shall be nominated by the Board of Directors or any nominating
      committee thereof.

     

    
      
        
        

      

      
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    (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.

     

    (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
      nominee selected in accordance with this Section 6.7.

     

    (d)
      If at
      any time Purchaser has the right to nominate a director 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 (the “Observer”).
      The
      Observer 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.

     

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

     

     

    SECTION
      6.8.   Information
      Covenants.
      Holdings will furnish to each Holder:

     

    (a)  Monthly
      Reports.
      Within
      30 days after the end of each fiscal month of the Company (other than the last
      fiscal month of any fiscal quarter of the Company ), the balance sheet of the
      Company as at the end of such fiscal month and the related statements of income
      and statement of cash flows for such fiscal month and for the elapsed portion
      of
      the fiscal year ended with the last day of such fiscal month, and setting forth
      (x) comparable budgeted income statement figures for such fiscal month as set
      forth in the respective Annual Business Plan delivered pursuant to Section
      6.17
      and (y) beginning with the fiscal month of the Company ending September 30,
      2007
      comparative figures for all such financial information for the corresponding
      fiscal month in the prior fiscal year. All of the foregoing financial statements
      shall be certified by an Authorized Representative of the Company that they
      fairly present in all material respects in accordance with GAAP the financial
      condition of the Company and its Subsidiaries as of the dates indicated and
      the
      consolidated results of their operations for the periods indicated, subject
      to
      normal year-end audit adjustments and the absence of footnotes.

     

    (b)  Quarterly
      Financial Statements.
      Within
      45 days after the close of the first three quarterly accounting periods in
      each
      fiscal year of the Company, (i) the balance sheet of the Company as at the
      end
      of such quarterly accounting period and the related statements of income and
      statement of cash flows for such quarterly accounting period and for the elapsed
      portion of the fiscal year ended with the last day of such quarterly accounting
      period, and setting forth (x) comparable budgeted income statement figures
      for
      such quarterly accounting period as set forth in the respective Annual Business
      Plan delivered pursuant to Section 6.17 and (y) beginning with the quarterly
      accounting period ending September 30, 2007 comparative figures for all such
      financial information for the corresponding quarterly accounting period in
      the
      prior fiscal year, and (ii) management’s discussion and analysis of the
      important operational and financial developments during such quarterly
      accounting period. All of the foregoing financial statements shall be certified
      by an Authorized Representative of the Company that they fairly present in
      all
      material respects in accordance with GAAP the financial condition of the Company
      and its Subsidiaries as of the dates indicated and the results of their
      operations for the periods indicated, subject to normal year-end audit
      adjustments and the absence of footnotes. Notwithstanding the foregoing, the
      filing with the Commission of a quarterly report on Form 10-Q or Form 10-QSB
      within the time frame allotted by the Commission for such filing, including
      any
      extension pursuant to Rule 12b-25, shall be deemed to fulfill the obligations
      under this Section 6.8(b).

     

    
      
        
        

      

      
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    (c)  Annual
      Financial Statements.
      Within
      120 days after the close of each fiscal year of the Company, (i) the balance
      sheet of the Company as at the end of such fiscal year and the related
      statements of income and retained earnings and statement of cash flows for
      such
      fiscal year setting forth, commencing with the fiscal year of the Company ending
      December 31, 2007, comparative figures for the preceding fiscal year and
      certified by Moore Stephens Worth Frazer and Torbert, LLP or other independent
      certified public accountants of recognized national standing reasonably
      acceptable to Purchaser, accompanied by an opinion of such accounting firm
      (which opinion shall be without a “going concern” or like qualification or
      exception and without any qualification or exception as to scope of audit)
      stating that in the course of its regular audit of the financial statements
      of
      the Company, which audit was conducted in accordance with generally accepted
      auditing standards, such accounting firm obtained no knowledge of any Default
      or
      an Event of Default relating to financial or accounting matters which has
      occurred and is continuing or, if in the opinion of such accounting firm such
      a
      Default or an Event of Default has occurred and is continuing, a statement
      as to
      the nature thereof, and (ii) management’s discussion and analysis of the
      important operational and financial developments during such fiscal year.
      Notwithstanding the foregoing, the filing with the SEC of an annual report
      on
      Form 10-K or Form 10-KSB within the time frame allotted by the SEC for such
      filing, including any extension pursuant to Rule 12b-25, shall be deemed to
      fulfill the obligations under this Section 6.8(c).

     

    (d)  Management
      Letters.
      Promptly after receipt thereof by the Company or any of its Subsidiaries, a
      copy
      of any “management letter” received from its certified public accountants and
      management’s response thereto.

     

    (e)  Certificates.
      At the
      time of the delivery of the financial statements provided for in Sections 6.8
      (b) and (c), a compliance certificate from an Authorized Representative of
      the
      Company in the form of Exhibit G certifying on its behalf that, to such Person’s
      knowledge after due inquiry, no Default or Event of Default has occurred and
      is
      continuing or, if any Default or Event of Default has occurred and is
      continuing, specifying the nature and extent thereof. 

     

    
      
        
        

      

      
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    (f)  Notice
      of Default, Litigation and Material Adverse Effect.
      Promptly, and in any event within three Business Days after any Authorized
      Representative of the Company or any of its Subsidiaries obtains knowledge
      thereof, notice of (i) the occurrence of any event which constitutes a Default
      or an Event of Default, (ii) any litigation or governmental investigation or
      proceeding pending against the Company or any of its Subsidiaries (A) which,
      either individually or in the aggregate, has had, or could reasonably be
      expected to have, a Material Adverse Effect or (B) with respect to any
      Transaction Document, or (iii) any other event, change or circumstance that
      has
      had, or could reasonably be expected to have, a Material Adverse
      Effect.

     

    (g)  Environmental
      Matters.
      Promptly after the Company or any of its Subsidiaries obtains knowledge thereof,
      notice of one or more of the following environmental matters to the extent
      that
      such environmental matters, either individually or when aggregated with all
      other such environmental matters, could reasonably be expected to have a
      Material Adverse Effect:

     

    (i)  any
      pending or threatened Environmental Claim against any of the
      Company or its Subsidiaries or
      any
      Real Property owned, leased or operated by it;

     

    (ii)  any
      condition or occurrence on or arising from any Real Property owned, leased
      or
      operated by the Company or any of its Subsidiaries that (A) results in
      noncompliance by it with any applicable Environmental Law or (B) could
      reasonably be expected to form the basis of an Environmental Claim against
      it or
      any such Real Property;

     

    (iii)  any
      condition or occurrence on any Real Property owned, leased or operated by the
      Company or any of its Subsidiaries that could reasonably be expected to cause
      such Real Property to be subject to any restrictions on the ownership, lease,
      occupancy, use or transferability by it of such Real Property under any
      Environmental Law; and

     

    (iv)  the
      taking of any removal or remedial action in response to the actual or alleged
      presence of any Hazardous Material on any Real Property owned, leased or
      operated by the Company or any of its Subsidiaries as required by any
      Environmental Law or any governmental or other administrative agency;
provided
      that in
      any event the Company and its Subsidiaries shall deliver to Purchaser all
      notices received by it from any government or governmental agency under, or
      pursuant to, any Environmental Law (including, without limitation, CERCLA)
      which
      identifies it as a potentially responsible party for remediation costs or which
      otherwise notify such Borrower or any Guarantor of potential liability under
      any
      Environmental Law (including, without limitation, CERCLA).

     

    
      
        
        

      

      
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    All
      such
      notices shall describe in reasonable detail the nature of the claim,
      investigation, condition, occurrence or removal or remedial action and the
      Company’s response thereto.

     

    (h)  Other
      Information.
      From
      time to time, such other information or documents (financial or otherwise)
      with
      respect to the Company and its Subsidiaries as the Purchaser may reasonably
      request.

     

    SECTION
      6.9.   Information
      Covenants.
      Each of
      the Company and its Subsidiaries will keep proper books of record and accounts
      in which full, true and correct entries in conformity with GAAP, with respect
      to
      the Company and its Domestic Subsidiaries, or International GAAP, with respect
      to Foreign Subsidiaries, as applicable, and all requirements of law shall be
      made of all dealings and transactions in relation to its business and
      activities

     

    SECTION
      6.10.   Maintenance
      of Property; Insurance.
      The
      Company will, and will cause its Subsidiaries to, (i) keep all property
      necessary to its business in good working order and condition, ordinary wear
      and
      tear excepted and subject to the occurrence of casualty events, (ii) maintain
      with financially sound and reputable insurance companies insurance on all such
      property and against all such risks as is consistent and in accordance with
      industry practice for companies similarly situated owning similar properties
      and
      engaged in similar businesses as it, and (iii) furnish to Purchaser, upon its
      request therefor, full information as to the insurance carried. Such insurance
      shall include physical damage insurance on all real and personal property
      (whether now owned or hereafter acquired) on an all risk basis and business
      interruption insurance.

     

    SECTION
      6.11.   Maintenance
      of Property; Insurance.
      The
      Company will, and will cause its Subsidiaries to, do or cause to be done all
      things necessary to preserve and keep in full force and effect its existence
      and
      its material rights, franchises, licenses, permits, copyrights, trademarks
      and
      patents; provided,
      however,
      that
      nothing in this Section 6.11 shall prevent sales of assets and other
      transactions by the Company or its Subsidiaries in accordance with Section
      7.2.

     

    SECTION
      6.12.   Compliance
      with Statutes, etc..
      The
      Company will, and will cause its Subsidiaries to, comply with all applicable
      statutes, regulations and orders of, and all applicable restrictions imposed
      by,
      all Governmental Authorities in respect of the conduct of its business and
      the
      ownership of its property (including applicable statutes, regulations, orders
      and restrictions relating to environmental standards and controls).

     

    SECTION
      6.13.   Compliance
      with Environmental Laws.
      (a) The
      Company will, and will cause its Subsidiaries to, comply with all Environmental
      Laws and permits applicable to, or required by, the ownership, lease or use
      of
      its Real Property now or hereafter owned, leased or operated by it, and will
      promptly pay or cause to be paid all costs and expenses incurred in connection
      with such compliance, and will keep or cause to be kept all such Real Property
      free and clear of any Encumbrances imposed pursuant to such Environmental Laws.
      The Company will not, and will not permit any of its Subsidiaries to, generate,
      use, treat, store, Release or dispose of, or permit the generation, use,
      treatment, storage, Release or disposal of Hazardous Materials on any Real
      Property now or hereafter owned, leased or operated by it or transport or permit
      the transportation of Hazardous Materials to or from any such Real Property,
      except for Hazardous Materials generated, used, treated, stored, Released or
      disposed of at any such Real Properties in compliance in all material respects
      with all applicable Environmental Laws and as required in connection with the
      normal operation, use and maintenance of its business or
      operations.

     

    
      
        
        

      

      
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    (b) (i)
      After
      the receipt by Purchaser of any notice of the type described in Section 6.8(g),
      (ii) at any time that the Company is not in compliance with Section 6.13(a)
      or
      (iii) in the event that the Holders have exercised any of the remedies pursuant
      to Article X, the Company will provide, at the sole expense of the Company
      and
      at the request of Purchaser, an environmental site assessment report concerning
      any Real Property owned, leased or operated by any of the Company or its
      Subsidiaries, prepared by an environmental consulting firm reasonably approved
      by Purchaser, indicating the presence or absence of Hazardous Materials and
      the
      potential cost of any removal or remedial action in connection with such
      Hazardous Materials on such Real Property. If the Company fails to provide
      the
      same within 30 days after such request was made, Purchaser may order the same,
      the cost of which shall be borne by the Company, and the Company shall grant
      and
      hereby grant to Purchaser and the Holders and their respective agents access
      to
      such Real Property and specifically grant Purchaser and the Holders an
      irrevocable non-exclusive license, subject to the rights of tenants, to
      undertake such an assessment at any reasonable time upon reasonable notice
      to
      the Company, all at the sole expense of the Company.

     

    SECTION
      6.14.   End
      of
      Fiscal Years; Fiscal Quarters.
      (a) The
      Company will cause (a) its fiscal year to end on December 31 of each calendar
      year and (b) its fiscal quarters to end on dates consistent with a fiscal year
      end as provided in preceding clause (a).

     

    SECTION
      6.15.   Performance
      of Obligations.
      The
      Company will, and will cause each of its Subsidiaries to, perform all of its
      obligations under the terms of each mortgage, indenture, security agreement,
      loan agreement or credit agreement and each other agreement, contract or
      instrument by which it is bound.

     

    SECTION
      6.16.   Payment
      of Taxes.
      The
      Company will, and will cause each of its Subsidiaries to, pay and discharge
      all
      taxes, assessments and governmental charges or levies imposed upon it or upon
      its income or profits or upon any properties belonging to it, prior to the
      date
      on which penalties attach thereto, and all lawful claims which, if unpaid,
      might
      become an Encumbrance or charge upon any of its properties not otherwise
      permitted under Section 7.1(a); provided
      that
      none of the Company and its Subsidiaries shall be required to pay any such
      tax,
      assessment, charge, levy or claim which is being contested in good faith and
      by
      proper proceedings if it has maintained adequate reserves with respect thereto
      in accordance with GAAP, with respect to the Company and its Domestic
      Subsidiaries, or International GAAP, with respect to Foreign Subsidiaries,
      as
      applicable.

     

    SECTION
      6.17.   Annual
      Business Plan.
      No
      later than thirty (30) days prior to the end of the then current calendar year,
      the Company shall prepare (or cause to be prepared) an annual business plan
      for
      the Company and its Subsidiaries for 2008 or the next calendar year, as
      applicable, which plan must be approved in writing by Purchaser, which approval
      shall not be unreasonably withheld. A plan approved by Purchaser is referred
      to
      herein as the “Annual
      Business Plan.”
No
      changes or departures from any item in an Annual Business Plan approved by
      Purchaser, shall be made without the prior written approval of Purchaser, which
      approval shall not to be unreasonably withheld. Each Annual Business Plan shall
      include such information as Purchaser may reasonably request. All actual costs
      incurred by Purchaser in reviewing and approving any Annual Business Plan shall
      be reimbursed by the Company promptly following demand.

     

    
      
        
        

      

      
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    SECTION
      6.18.   ERISA.
      None of
      the Company or its Subsidiaries or any ERISA Affiliate thereof will maintain
      or
      contribute to (or have an obligation to contribute to) a Plan except as may
      be
      required by Peruvian Law.

     

    ARTICLE
      VII

     

    NEGATIVE
      COVENANTS

     

    The
      Company hereby covenants and agrees that on and after the Closing Date and
      until
      the Notes (in each case, together with interest thereon) and all other
      obligations under the Transaction Documents (other than any indemnities
      described in Section 13.1 that are not then due and payable) are paid in full,
      the Company will not, and will not permit any of its Subsidiaries
      to:

     

    SECTION
      7.1.   Encumbrances.
      Create,
      incur, assume or suffer to exist any Encumbrance upon or with respect to any
      of
      its property or assets (real or personal, tangible or intangible), whether
      now
      owned or hereafter acquired, or sell any such property or assets subject to
      an
      understanding or agreement, contingent or otherwise, to repurchase such property
      or assets (including sales of accounts receivable with recourse to it), or
      assign any right to receive income or permit the filing of any financing
      statement under the UCC or any other similar notice of Encumbrance under any
      similar recording or notice statute; provided
      that the
      provisions of this Section 7.1 shall not prevent the creation, incurrence,
      assumption or existence of the following (Encumbrances described below are
      herein referred to as “Permitted
      Encumbrances”):

     

    (a)  inchoate
      Encumbrances for taxes, assessments or governmental charges or levies not yet
      due or Encumbrances for taxes, assessments or governmental charges or levies
      being contested in good faith and by appropriate proceedings for which adequate
      reserves have been established in accordance with GAAP, with respect to the
      Company and its Domestic Subsidiaries, or International GAAP, with respect
      to
      Foreign Subsidiaries, as applicable;

     

    (b)  Encumbrances
      in respect of its property or assets imposed by law, which were incurred in
      the
      ordinary course of business and do not secure Indebtedness for borrowed money,
      such as carriers’, warehousemen’s, materialmen’s and mechanics’ Encumbrances and
      other similar Encumbrances arising in the ordinary course of business, and
      (i)
      which do not in the aggregate materially detract from the value of its property
      or assets or materially impair the use thereof in the operation of its business
      or (ii) which are being contested in good faith by appropriate proceedings,
      which proceedings have the effect of preventing the forfeiture or sale of the
      property or assets subject to any such Encumbrance;

     

    
      
        
        

      

      
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    (c)  Encumbrances
      created by or pursuant to this Agreement and the Loan Documents;

     

    (d)  easements,
      rights-of-way, restrictions, encroachments and other similar charges or
      encumbrances, and minor title deficiencies, in each case not securing
      Indebtedness and not materially interfering with the conduct of its business;
      and

     

    (e)  Encumbrances
      arising out of the existence of judgments or awards in respect of which it
      shall
      in good faith be prosecuting an appeal or proceedings for review and in respect
      of which there shall have been secured a subsisting stay of execution pending
      such appeal or proceedings; provided
      that the
      aggregate amount of all cash and the Fair Market Value of all other property
      subject to such Encumbrances does not exceed $100,000 at any time
      outstanding.

     

    SECTION
      7.2.   Consolidation,
      Merger, Purchase or Sale of Assets, etc..
      Wind
      up,
      liquidate or dissolve its affairs or enter into any partnership, joint venture,
      or transaction of merger or consolidation, convey, sell or otherwise dispose
      of
      all or any part of their property or assets, or enter into any sale-leaseback
      transactions, or purchase or otherwise acquire (in one or a series of related
      transactions) any part of the property or assets of any Person (or agree to
      do
      any of the foregoing at any future time), except that:

     

    (i)  Capital
      Expenditures by it shall be permitted to the extent not in violation of Section
      7.7;

     

    (ii)  the
      Company and its Subsidiaries may enter into or complete the transaction
      contemplated by the Binding Letter of Intent by means of a merger of
      Interpacific Oil S.A.C, into Pure Biofuels del Peru S.A.C., in accordance with
      the Peruvian General Corporations Act (Ley General de Sociedades).;

     

    (iii)  Investments
      may be made to the extent permitted by Section 7.5; and

     

    (iv)  it
      may
      liquidate or otherwise dispose of Cash Equivalents in the ordinary course of
      business, in each case for cash at Fair Market Value.

     

    

    SECTION
      7.3.   Dividends.
      Authorize, declare or pay any Dividends with respect to it, except Dividends
      payable to the Company or its Subsidiaries.

    

    SECTION
      7.4.   Indebtedness.
      Contract, create, incur, assume or suffer to exist any Indebtedness,
      except:

     

    (a)  The
      Notes
      and Indebtedness incurred pursuant to the Loan Documents; 

     

    (b)  Indebtedness
      incurred pursuant to the Working Capital Facility in an aggregate principal
      amount at any time outstanding not to exceed $5,000,000;
      

     

    (c)  Indebtedness
      in the ordinary course of its business (including, without limitation,
      Indebtedness such as bonds, guarantees and letters of credit, which may be
      deemed to exist in connection with agreements providing for indemnification,
      purchase price adjustments and similar obligations in connection with the
      disposition of assets in accordance with the requirements of this Agreement,
      so
      long as any such obligations are those of the Person making the respective
      acquisition or sale, and are not guaranteed by any other Person); and

     

    
      
        
        

      

      
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    (d)  Existing
      Indebtedness.

     

    

    SECTION
      7.5.   Advances,
      Investments and Loan.
      Directly or indirectly, lend money or credit or make advances to any Person,
      or
      purchase or acquire any stock, obligations or securities of, or any other Equity
      Interest in, or make any capital contribution to, any other Person, or purchase
      or own a futures contract or otherwise become liable for the purchase or sale
      of
      currency or other commodities at a future date in the nature of a futures
      contract (each of the foregoing an “Investment”
and,
      collectively, “Investments”),
      except that the following shall be permitted:

     

    (a)  it
      may
      acquire and hold accounts receivable owing to it, if created or acquired in
      the
      ordinary course of its business and payable or dischargeable in accordance
      with
      its customary trade terms;

     

    (b)  it
      may
      acquire and hold cash and Cash Equivalents; 

     

    (c)  Contingent
      Obligations permitted by Section 7.4, to the extent constituting Investments;
      and

     

    (d) the
      Company may make Investments in its Subsidiaries. 

    

    SECTION
      7.6.   Transactions
      with Affiliates.
      Enter
      into any transaction or series of related transactions with any Affiliate,
      other
      than in the ordinary course of business and on terms and conditions
      substantially as favorable to it as would reasonably be obtained by it at that
      time in a comparable arm’s-length transaction with a Person other than an
      Affiliate, except that the following in any event shall be
      permitted:

     

    (a)  Dividends
      may be paid by it to the extent provided in Section 7.3; and

     

    (b)  Loans
      may
      be made and other transactions may be entered into by it to the extent permitted
      by Sections 7.2, 7.4 and 7.5.

     

    

    SECTION
      7.7.   Capital
      Expenditures.
      Make
      any Capital Expenditures except (a) Capital Expenditures set forth in the
      applicable Annual Business Plan and (b) Capital Expenditures made with the
      amount of Net Insurance Proceeds received by it from any Recovery Event so
      long
      as such Net Insurance Proceeds are used to replace or restore any properties
      or
      assets in respect of which such Net Insurance Proceeds were paid.

     

    SECTION
      7.8.   Modifications
      of Certificate of Incorporation, By-Laws and Certain Other Agreements;
      Limitations on Voluntary Payments, etc..
(a)
      Amend, modify or change its certificate or articles of incorporation (including,
      without limitation, by the filing or modification of any certificate or articles
      of designation), certificate of formation, limited liability company agreement
      or by-laws (or the equivalent organizational documents), as applicable, or
      any
      agreement entered into by it with respect to their Capital Stock (including
      any
      stockholders agreement), or enter into any new agreement with respect to their
      Capital Stock, unless such amendment, modification, change or other action
      contemplated by this clause (a) could not reasonably be expected to be adverse
      to the interests of Purchaser and the terms of any such amendment, modification,
      change or other action will not violate any of the other provisions of this
      Agreement or any other Transaction Document; or

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (b)  amend,
      modify or change any provision of any Management Agreement unless such
      amendment, modification or change could not reasonably be expected to be adverse
      to the interests of Purchaser (although no amendment, modification or change
      may
      be made to any monetary term thereof); or

     

    (c)  amend,
      modify or change any provision of any material agreement set forth on Schedule
      8.23 to the Loan Agreement unless such amendment, modification or change could
      not reasonably be expected to be adverse to the interests of Plainfield
      (although no amendment, modification or change may be made to any monetary
      term
      thereof).

     

    SECTION
      7.9.   Limitation
      on Issuance of Capital
      Stock.
      (a)
      Issue any Capital Stock or securities convertible into Capital Stock (other
      than
      issuances of Excluded Stock) or (b) create, or make any amendments to, any
      equity incentive plan of the Company or any of its Subsidiaries other than
      to
      the 2006 Stock Option and Award Plan as amended and restated as the Pure
      Biofuels Corp. Stock Incentive Plan as described in the definitive proxy
      statement filed with the Commission on July 2, 2007. 

     

    SECTION
      7.10.   Business;
      etc..
      Engage,
      directly or indirectly, in any business other than the businesses engaged in
      by
      it as of the Closing Date and reasonable extensions thereof and businesses
      ancillary or complimentary thereto.

     

    ARTICLE
      VIII

     

    CONDITIONS
      PRECEDENT TO CLOSING

     

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

     

    (a) The
      representations and warranties of Purchaser contained in this Agreement which
      are qualified by any “materiality”, “material adverse effect” or any similar
      qualifier shall be true and correct in all respects and the representations
      and
      warranties of Purchaser which are not so qualified shall be true and correct
      in
      all material respect, in each case on and as of the Closing Date.

     

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

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    (c) 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
      8.2.   Conditions
      to Purchaser’s Obligations.
      The
      obligations of Purchaser to purchase the Securities contemplated by this
      Agreement shall be subject to the satisfaction, at or prior to the Closing,
      of
      the following conditions:

     

    (a)  On
      the
      Closing Date and also after giving effect to the sale of the Notes on such
      date
      (a) there shall exist no Default or Event of Default and (b) all representations
      and warranties contained herein and in the other Transaction Documents shall
      be
      true and correct in all material respects with the same effect as though such
      representations and warranties had been made on the 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).

     

    (b)  Purchaser
      shall have received a certificate, dated the Closing Date and signed on behalf
      of the Company by an Authorized Representative, certifying on behalf of the
      Company that all of the conditions in Sections 8.2(a), (f), (g) and (h) have
      been satisfied on such date.

     

    (c)  Purchaser
      shall have received (from each of DLA Piper US LLP and Lewis
      and
      Roca LLP,
      special
      counsel to the Company, an opinion addressed to Purchaser and dated the 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 Closing Date,
      signed by an Authorized Representative, and attested to by another Authorized
      Representative, in the form of Exhibit F 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 each of the
      foregoing shall be in form and substance reasonably acceptable to
      Purchaser.

     

    (e)  On
      the
      Closing Date, all corporate and legal proceedings and all instruments and
      agreements in connection with the transactions contemplated by this Agreement
      and the other Transaction Documents 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 June 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.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    (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.
      On the 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 the Transactions.

     

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

     

    (i)  The
      Company shall have executed and delivered the Loan Agreement and all conditions
      precedent to the effectiveness of the Loan Agreement and the initial borrowings
      thereunder shall have been satisfied and the initial borrowings shall have
      been
      made.

     

    (j)  The
      Company and the stockholders party thereto shall have executed and delivered
      the
      Stockholders Agreement and the Voting Agreement.

     

    (k)  The
      Company shall have executed and delivered the Registration Rights
      Agreement.

     

    (l)  The
      bylaws of the Company shall have been amended in form and substance satisfactory
      to the Purchaser.

     

    (m)  Purchaser
      shall have received certificates representing the Issue Date Common Stock,
      the
      Notes and the Warrants purchased by Purchaser.

     

    (n)  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
      IX

     

    EVENTS
      OF
      DEFAULT.

     

    SECTION
      9.1.   Events
      of Default. 

     

    One
      or
      more of the following events shall constitute an “Event of Default”

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (a)  The
      Company shall default in the payment when due of any principal of any Note,
      or
      (b) default, and such default shall continue unremedied for three or more
      Business Days, in the payment when due of any interest on any Note;
      or

     

    (b)  
      Any
      representation, warranty or statement made or deemed made by the Company herein
      or in any other Transaction Document or in any certificate delivered to
      Purchaser or any Holder pursuant hereto or thereto shall prove to be untrue
      in
      any material respect on the date as of which made or deemed made;
      or

     

    (c)  The
      Company shall (a) default in the due performance or observance by it of any
      term, covenant or agreement contained in Sections 6.2 and 6.8(g)(i) or Article
      X
      or (b) default in the due performance or observance by it of any other term,
      covenant or agreement contained in this Agreement (other than those set forth
      in
      Sections 9.1(a) and (b)) and such default shall continue unremedied for a period
      of 30 days; or

     

    (d)  (i)
      The
      Company or any of its Subsidiaries shall (A) default in any payment of any
      Indebtedness (other than the Notes) beyond the period of grace, if any, provided
      in an instrument or agreement under which such Indebtedness was created or
      (B)
      default in the observance or performance of any agreement or condition relating
      to any Indebtedness (other than the Notes) or contained in any instrument or
      agreement evidencing, securing or relating thereto, or any other event shall
      occur or condition exist, the effect of which default or other event or
      condition is to cause, or to permit the holder or holders of such Indebtedness
      (or a trustee or agent on behalf of such holder or holders) to cause (determined
      without regard to whether any notice is required), any such Indebtedness to
      become due prior to its stated maturity, or (ii) any Indebtedness (other than
      the Notes) of the Company or any its Subsidiaries shall be declared to be (or
      shall become) due and payable, or required to be prepaid other than by a
      regularly scheduled required prepayment, prior to the stated maturity thereof,
      provided
      that it
      shall not be a Default or an Event of Default under this Section 9.1(d) unless
      the aggregate principal amount of all Indebtedness as described in preceding
      clauses (i) and (ii) is at least $100,000; or

     

    (e)  The
      Company or any of its Subsidiaries shall commence a voluntary case concerning
      itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or
      hereafter in effect, or any successor thereto (the “Bankruptcy
      Code”);
      or an
      involuntary case is commenced against the Company or any of its Subsidiaries,
      and the petition is not controverted within 10 days, or is not dismissed within
      60 days after the filing thereof; or a custodian (as defined in the Bankruptcy
      Code) is appointed for, or takes charge of, all or substantially all of the
      property of the Company or any of its Subsidiaries, to operate all or any
      substantial portion of the business of the Company or any of its Subsidiaries,
      or the Company or any of its Subsidiaries commences any other proceeding under
      any reorganization, arrangement, adjustment of debt, relief of debtors,
      dissolution, insolvency or liquidation or similar law of any jurisdiction
      whether now or hereafter in effect relating to the Company or any of its
      Subsidiaries, or there is commenced against the Company or any of its
      Subsidiaries any such proceeding which remains undismissed for a period of
      60
      days after the filing thereof, or the Company or any of its Subsidiaries is
      adjudicated insolvent or bankrupt; or any order of relief or other order
      approving any such case or proceeding is entered; or the Company or any of
      its
      Subsidiaries makes a general assignment for the benefit of creditors; or any
      action is taken by the Company or any of its Subsidiaries for the purpose of
      effecting any of the foregoing; or
      any
      Subsidiary of the Company organized under the laws of Peru (a “Peruvian
      Subsidiary”) shall commence a voluntary insolvency, liquidation, dissolution or
      reorganization proceeding under the bankruptcy laws of Peru (Ley General
      Concursal) or the General Corporations Act of Peru (Ley General de Socíedades)
      as now hereafter in effect; or a proceeding or case shall be commenced against
      any Peruvian Subsidiary, without application or consent, seeking (i) its
      reorganization, liquidation, dissolution, arrangement or warranty, (ii) the
      appointment of a receiver, custodian, trustee, examiner, liquidator or the
      like
      of it or of all or any substantial part of its property or (iii) similar relief
      in respect of it under any law relating to bankruptcy, insolvency,
      reorganization, winding up, or composition or adjustment of debts, and such
      proceeding shall continue undismissed, or in order, judgment or decree approving
      or ordering any of the foregoing shall be entered and continued unstayed and
      in
      effect, for a period of 60 or more days, or a declaration of bankruptcy or
      suspension of payment shall be entered against any Peruvian Subsidiary under
      the
      bankruptcy laws of Peru (Ley General Concursal) or the General Corporations
      Act
      of Peru (Ley General de Sociedades) as now or hereafter in effect;
      or

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (f)  Any
      of
      the Transaction Documents shall cease to be in full force and effect, or shall
      cease to give Purchaser and the Holders the rights, powers and privileges
      purported to be created thereby, or the Company shall default in the due
      performance or observance of any term, covenant or agreement on its part to
      be
      performed or observed pursuant to any such Transaction Document and such default
      shall continue beyond the period of grace, if any, specifically applicable
      thereto pursuant to the terms of such Transaction Document; or

     

    (g)  One
      or
      more judgments or decrees shall be entered against the Company or any of its
      Subsidiaries involving in the aggregate for such Person a liability (to the
      extent not paid or not covered by a reputable and solvent insurance company)
      and
      such judgments and decrees either shall be final and non-appealable or shall
      not
      be vacated, discharged or stayed or bonded pending appeal for any period of
      30
      consecutive days, and the aggregate amount of all such judgments equals or
      exceeds $100,000; or

     

    (h)  The
      Amendment Date shall not have occurred on or prior to November 30, 2007;
provided,
      however,
      that
      such date shall be extended until January 31, 2008 in the event that the
      Commission reviews the preliminary proxy statement filed in connection with
      the
      stockholders meeting contemplated by the Voting Agreement.

     

    ARTICLE
      X

     

    REMEDIES
      ON DEFAULT, ETC.

     

    SECTION
      10.1.   Acceleration.
      (a)
 If
      an
      Event of Default with respect to the Company or any Subsidiary described in
      Section 9.1(e) has occurred, all the Notes then outstanding shall automatically
      become immediately due and payable.

     

    (b) If
      any
      other Event of Default has occurred and is continuing, any Holder or Holders
      of
      more than 50% in principal amount of the Notes at the time outstanding may
      at
      any time, at its or their option, by notice or notices to the Company, declare
      all the Notes then outstanding to be immediately due and payable.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (c) If
      any
      Event of Default described in Section 9.1(a) has occurred and is continuing,
      any
      Holder or Holders of Notes at the time outstanding affected by such Events
      of
      Default may at any time, at its or their option, by notice or notices to the
      Company, declare all the Notes held by it or them to be immediately due and
      payable.

     

    (d) Upon
      any
      Notes becoming due and payable under this Section, whether automatically or
      by
      declaration, such Notes will forthwith mature and the entire unpaid principal
      amount of such Notes, plus (i) all accrued and unpaid interest thereon, and
      (ii)
      all fees, expense reimbursements obligations and other obligations of the
      Company accrued hereunder and under the Notes and the other Note Documents,
      shall all be immediately due and payable, in each and every case without
      presentment, demand, protest or further notice, all of which are hereby
      waived.

     

    (e) Subject
      to applicable law, all proceeds received from the Company after maturity of
      the
      Notes, whether by acceleration or otherwise, shall be applied:

     

    
      	(i)  	first, pro rata to payment or reimbursement of fees,
              expenses and indemnities payable to the
              Purchaser;

      	 	 

      	(ii)  	second,
              pro rata to payment of principal amount outstanding on the
              Notes;

      	 	 

      	(iii) 
              	
              third,
                pro rata to any other obligations outstanding under the Note Documents;
                and

            

    

     

    
      	(iv) 
              	
              fourth,
                any excess, after all obligations under the Note Documents shall
                have been
                indefeasibly paid in full in cash, shall be paid to the Company or
                as
                otherwise required by law.

            

    

     

    SECTION
      10.2.   Other
      Remedies.
      If any
      Default or Event of Default has occurred and is continuing, and irrespective
      of
      whether any Notes have become or have been declared immediately due and payable
      under Section 10.1, the Holder of any Note at the time outstanding may proceed
      to protect and enforce the rights of such Holder by an action at law, suit
      in
      equity or other appropriate proceeding, whether for the specific performance
      of
      any agreement contained herein or in any Note, or for an injunction against
      a
      violation of any of the terms hereof or thereof, or in aid of the exercise
      of
      any power granted hereby or thereby or by law or otherwise.

     

    SECTION
      10.3.   Rescission.
      At any
      time after any Notes have been declared due and payable pursuant to clause
      (b)
      or (c) of Section 10.1, the Holders of at least a majority in aggregate
      principal amount of the Notes then outstanding, by written notice to the
      Company, may rescind and annul any such declaration and its consequences if
      (a)
      the Company has paid all overdue interest on the Notes, all principal of any
      Notes that is due and payable and is unpaid other than by reason of such
      declaration, and all interest on such overdue principal and (to the extent
      permitted by applicable law) overdue interest in respect of the Notes, (b)
      all
      Events of Default and Defaults, other than non-payment of amounts that have
      become due solely by reason of such declaration, have been cured or have been
      waived pursuant to Section 11.1, and (c) no judgment or decree has been entered
      for the payment of any monies due pursuant hereto or to the Notes. No rescission
      and annulment under this Section 10.3 will extend to or affect any subsequent
      Event of Default or Default or impair any right consequent thereon.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    SECTION
      10.4.   No
      Waivers or Election of Remedies, Expenses, etc.
      No
      course of dealing and no delay on the part of any Holder of any Note in
      exercising any right, power or remedy shall operate as a waiver thereof or
      otherwise prejudice such Holder’s rights, powers or remedies. No right, power or
      remedy conferred by this Agreement or by any Note upon any Holder thereof shall
      be exclusive of any other right, power or remedy referred to herein or therein
      or now or hereafter available at law, in equity, by statute or otherwise. The
      Company will pay to the Purchaser on demand such further amount as shall be
      sufficient to cover all reasonable costs and expenses of the Holders incurred
      in
      any enforcement or collection under this Section 10, including, without
      limitation, reasonable attorneys’ fees, expenses and disbursements.

     

    ARTICLE
      XI

     

    AMENDMENT
      AND WAIVER.

     

    SECTION
      11.1.   Requirements.
      This
      Agreement and the Notes may be amended, and the observance of any term hereof
      or
      of the Notes may be waived (either retroactively or prospectively), with (and
      only with) the written consent of the Company and the Required Holders, except
      that (a) no amendment or waiver of any of the provisions of Article II, III,
      IV,
      V, VIII and Section 13.13 hereof, or any defined term (as it is used therein),
      will be effective as to Purchaser unless consented to by Purchaser in writing,
      and (b) no such amendment or waiver may, without the written consent of Holder
      of each Note at the time outstanding affected thereby, (i) subject to the
      provisions of Article X relating to acceleration or rescission, change the
      amount or time of any prepayment or payment of principal of, or reduce the
      rate
      or change the time of payment or method of computation of interest on the Notes,
      (ii) change the percentage of the principal amount of the Notes the Holders
      of
      which are required to consent to any such amendment or waiver or (iii) amend
      any
      of Article III, X or XI Section 9.1(a).

     

    SECTION
      11.2.   Solicitation
      of Holders of Notes.
      (a) Solicitation.
      The Company will provide each Holder of the Notes (irrespective of the amount
      of
      Notes then owned by it) with sufficient information, sufficiently far in advance
      of the date a decision is required, to enable such Holder to make an informed
      and considered decision with respect to any proposed amendment, waiver or
      consent in respect of any of the provisions hereof or of the Notes. The Company
      will deliver executed or true and correct copies of each amendment, waiver
      or
      consent effected pursuant to the provisions of this Section 11 to each Holder
      of
      outstanding Notes promptly following the date on which it is executed and
      delivered by, or receives the consent or approval of, the requisite Holders
      of
      Notes.

     

    (b) Payment.
      The Company will not directly or indirectly pay or cause to be paid any
      remuneration, whether by way of supplemental or additional interest, fee or
      otherwise, or grant any security, to any Holder of Notes as consideration for
      or
      as an inducement to the entering into by any Holder of Notes or any waiver
      or
      amendment of any of the terms and provisions hereof unless such remuneration
      is
      concurrently paid, or security is concurrently granted, on the same terms,
      ratably to each Holder of Notes then outstanding even if such Holder did not
      consent to such waiver or amendment.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.3.   Binding
      Effect, etc.
      Any
      amendment or waiver consented to as provided in this Section 11 applies equally
      to Holders of Notes and is binding upon them and upon each future Holder of
      any
      Note and upon the Company without regard to whether such Note has been marked
      to
      indicate such amendment or waiver. No such amendment or waiver will extend
      to or
      affect any obligation, covenant, agreement, Default or Event of Default not
      expressly amended or waived or impair any right consequent thereon. No course
      of
      dealing between the Company, on the one hand, and the Holder of any Note, on
      the
      other, nor any delay in exercising any rights hereunder or under any Note shall
      operate as a waiver of any rights of any Holder of such Note. 

     

    SECTION
      11.4.   Notes
      held by Company, etc.
      Solely
      for the purpose of determining whether the Holders of the requisite percentage
      of the aggregate principal amount of Notes then outstanding approved or
      consented to any amendment, waiver or consent to be given under this Agreement
      or the Notes, or have directed the taking of any action provided herein or
      in
      the Notes to be taken upon the direction of the Holders of a specified
      percentage of the aggregate principal amount of Notes then outstanding, Notes
      directly or indirectly owned by the Company or any of the Company’s Affiliates
      shall be deemed not to be outstanding. 

     

    ARTICLE
      XII

     

    REGISTRATION;
      EXCHANGE; SUBSTITUTION AND PAYMENT OF NOTES.

     

    SECTION
      12.1.   Registration
      of Notes.
      The
      Company shall keep at its principal executive office a register for the
      registration and registration of transfers of Notes. The name and address of
      each Holder of one or more Notes, each transfer thereof and the name and address
      of each transferee of one or more Notes shall be registered in such register.
      Prior to due presentment for registration of transfer, the Person in whose
      name
      any Note shall be registered shall be deemed and treated as the owner and Holder
      thereof for all purposes hereof, and the Company shall not be affected by any
      notice or knowledge to the contrary. The Company shall give to any Holder of
      a
      Note upon request therefor, a complete and correct copy of the names and
      addresses of all registered Holders of Notes.

     

    SECTION
      12.2.   Transfer
      and Exchange of Notes.
      Upon
      surrender of any Note at the principal executive office of the Company for
      registration of transfer or exchange (and in the case of a surrender for
      registration of transfer, duly endorsed or accompanied by a written instrument
      of transfer duly executed by the registered Holder of such Note or his attorney
      duly authorized in writing and accompanied by the address for notices of each
      transferee of such Note or part thereof), the Company shall execute and deliver,
      at the Company’s expense (except as provided below), one or more new Notes (as
      requested by the Holder thereof) in exchange therefor, in an aggregate principal
      amount equal to the unpaid principal amount of the surrendered Note. Each such
      new Note shall be payable to such Person as such Holder may request and shall
      be
      substantially in the form of Exhibit A. Each such new Note shall be dated and
      bear interest from the date to which interest shall have been paid on the
      surrendered Note or dated the date of the surrendered Note if no interest shall
      have been paid thereon. The Company may require payment of a sum sufficient
      to
      cover any stamp tax or governmental charge imposed in respect of any such
      transfer of Notes. Notes shall not be transferred in denominations of less
      than
      $100,000, provided
      that if
      necessary to enable the registration of transfer by a Holder of its entire
      holding of Notes, one Note may be in a denomination of less than $100,000.
      Any
      transferee, by its acceptance of a Note registered in its name (or the name
      of
      its nominee), shall be deemed to have made the representation set forth in
      Section 5.2

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    SECTION
      12.3.   Replacement
      of Notes.
      Upon
      receipt by the Company of evidence reasonably satisfactory to it of the
      ownership of and the loss, theft, destruction or mutilation of any Note,
      and

     

    (a)  in
      the
      case of loss, theft or destruction, of indemnity reasonably satisfactory to
      it
      (provided
      that if
      the Holder of such Note is, or is a nominee for, the Purchaser or another Holder
      of a Note with a minimum net worth of at least $10,000,000, such Person’s own
      unsecured agreement of indemnity shall be deemed to be satisfactory),
      or

     

    (b)  in
      the
      case of mutilation, upon surrender and cancellation thereof,

     

    within
      ten (10) Business Days thereafter, the Company at its own expense shall execute
      and deliver, in lieu thereof, a new Note, dated and bearing interest from the
      date to which interest shall have been paid on such lost, stolen, destroyed
      or
      mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
      Note if no interest shall have been paid thereon.

     

    ARTICLE
      XIII

     

    MISCELLANEOUS

     

    SECTION
      13.1.   Indemnification.
      The
      Company hereby agrees to: (i) after the occurrence of an Event of Default,
      pay
      all reasonable out-of-pocket costs and expenses of Purchaser in connection
      with
      the enforcement of this Agreement and the other Transaction Documents and the
      documents and instruments referred to herein and therein or in connection with
      any refinancing or restructuring of the Notes in the nature of a “work-out” or
      pursuant to any insolvency or bankruptcy proceedings (including, in each case
      without limitation, the reasonable fees and disbursements of counsel and
      consultants for Purchaser); (ii) pay and hold Purchaser harmless from and
      against any and all present and future stamp, excise and other similar
      documentary taxes with respect to the foregoing matters and save the Purchaser
      harmless from and against any and all liabilities with respect to or resulting
      from any delay or omission (other than to the extent attributable to Purchaser)
      to pay such taxes; and (iii) indemnify Purchaser, and its officers, directors,
      employees, representatives, agents, affiliates, trustees and investment advisors
      from and hold each of them harmless against any and all liabilities, obligations
      (including removal or remedial actions), losses, damages, penalties, claims,
      actions, judgments, suits, costs, expenses and disbursements (including
      reasonable attorneys’ and consultants’ fees and disbursements) incurred by,
      imposed on or assessed against any of them as a result of, or arising out of,
      or
      in any way related to, or by reason of, (x) any investigation, litigation or
      other proceeding (whether or not Purchaser is a party thereto and whether or
      not
      such investigation, litigation or other proceeding is brought by or on behalf
      of
      the Company) related to the entering into and/or performance of this Agreement
      or any other Transaction Document or the use of the proceeds of from the sale
      of
      the Notes or the consummation of the Transactions or the exercise of any of
      their rights or remedies provided herein or in the other Transaction Documents,
      (y) the actual or alleged presence of Hazardous Materials in the air, surface
      water or groundwater or on the surface or subsurface of any Real Property at
      any
      time owned, leased or operated by the Company or any of its Subsidiaries, the
      generation, storage, transportation, handling or disposal of Hazardous Materials
      by the Company or any of its Subsidiaries at any location, whether or not owned,
      leased or operated by the Company or any of its Subsidiaries, the non-compliance
      by the Company or any of its Subsidiaries with any Environmental Law (including
      applicable permits thereunder) applicable to any Real Property, or any
      Environmental Claim asserted against the Company or any of its Subsidiaries,
      or
      any Real Property at any time owned, leased or operated by the Company or any
      of
      its Subsidiaries or (z) claims asserted or alleged by any broker, consultant
      or
      other advisor of any Credit Party, including, in each case, without limitation,
      the reasonable fees and disbursements of counsel and other consultants incurred
      in connection with any such investigation, litigation or other proceeding (but
      excluding any losses, liabilities, claims, damages or expenses to the extent
      incurred by reason of the gross negligence or willful misconduct of the Person
      to be indemnified (as determined by a court of competent jurisdiction in a
      final
      and non-appealable decision)). To the extent that the undertaking to indemnify,
      pay or hold harmless Purchaser set forth in the preceding sentence may be
      unenforceable because it is violative of any law or public policy, the Company
      shall make the maximum contribution to the payment and satisfaction of each
      of
      the indemnified liabilities which is permissible under applicable
      law.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
          
            	
                    If
                      to the Company:

                  	 	
                    Pure
                      Biofuels Corp.

                  
	 	 	
                    Av.
                      Canaval y Moreyra 380 of 402

                  
	 	 	
                    San
                      Isidro, Lima

                  
	 	 	
                    Peru

                  
	 	 	
                    Attention:
                      Luis Goyzueta

                  
	 	 	
                    Telephone:
                      +511-221-7365

                  
	 	 	
                    Facsimile:
                      +511-221-7347

                  

          

        

      

       

    

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      
        	
                with
                  a copy to:

              	 	
                ARC
                  Investment Partners, LLC

              
	 	 	
                9440
                  Little Santa Monica Blvd., Suite 400

              
	 	 	
                Beverly
                  Hills, CA 90210

              
	 	 	
                Attention:
                  Steven Magami

              
	 	 	
                Telephone:
                  310-402-5901

              
	 	 	
                Facsimile:
                  310-402-5947

              
	 	 	 
	
                And:

              	 	
                DLA
                  Piper US LLP

              
	 	 	
                1251
                  Avenue of the Americas

              
	 	 	
                New
                  York, NY 10020-1104

              
	 	 	
                Attn:
                  Daniel I. Goldberg, Esq.

              
	 	 	
                Telephone:
                  212-335-4966

              
	 	 	
                Facsimile:
                  212-884-8466

              
	 	 	 
	
                if
                  to Purchaser:

              	
                 

              	
                Plainfield
                  Peru I LLC

              
	 	 	
                Plainfield
                  Peru II LLC

              
	 	 	
                c/o
                  Plainfield Asset Management LLC

              
	 	 	
                55
                  Railroad Avenue

              
	 	 	
                Greenwich,
                  CT 06830

              
	 	 	
                Attention:
                  General Counsel

              
	 	 	
                Telephone:
                  203-302-1700

              
	 	 	
                Facsimile:
                  203-302-1779

              
	 	 	 
	
                with
                  a copy to:

              	
                 

              	
                White
                  & Case LLP

              
	 	 	
                1155
                  Avenue of the Americas

              
	 	 	
                New
                  York, New York 10036

              
	 	 	
                Attn:
                  Thomas P. Higgins, Esq.

              
	 	 	
                Telephone:
                  212-819-8813

              
	 	 	
                Facsimile:
                  212-354-8113

              

      

    

    
       

    

    SECTION
      13.3.   Governing
      Law; Submission to Jurisdictionl Venue; Waiver of Jury Trial.
      (a)
      THIS
      AGREEMENT AND THE OTHER NOTE DOCUMENTS 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). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
      AGREEMENT OR ANY OTHER NOTE DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
      OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
      IN
      EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND
      DELIVERY OF THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT, THE COMPANY HEREBY
      IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
      UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY HEREBY
      FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
      JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
      OR
      PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT BROUGHT
      IN
      ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION
      OVER IT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
      OUT
      OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
      MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
      TO
      IT AT ITS ADDRESS SET FORTH SECTION 13.2, SUCH SERVICE TO BECOME EFFECTIVE
      30
      DAYS AFTER SUCH MAILING. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
      TO
      SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREE NOT TO PLEAD
      OR
      CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER NOTE
      DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
      HEREIN SHALL AFFECT THE RIGHT OF THE PURCHASER OR THE HOLDER OF ANY NOTE TO
      SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
      PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER
      JURISDICTION.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

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

     

    (c)  EACH
      OF
      THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
      BY
      JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
      THIS AGREEMENT, THE OTHER NOTE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
      OR THEREBY.

     

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

     

    SECTION
      13.5.   Exhibits
      and Schedules.
      Each of
      the exhibits and schedules referred to herein and attached hereto is an integral
      part of this Agreement and is incorporated herein by reference.

     

    SECTION
      13.6.   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, Estudio
      Echecopar, Peruvian counsel to the Purchaser, and Lionel Sawyer & Collins,
      Nevada counsel to the Purchaser. On the Closing Date, Purchaser shall provide
      the Company with documentation reasonably satisfactory to the Company for such
      disbursements and out-of-pocket expenses. 

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    SECTION
      13.7.   Press
      Releases and Public Announcements.
      All
      public announcements or disclosures relating to this Agreement and the
      transactions contemplated hereby shall be made only if mutually agreed upon
      by
      the Company and Purchaser, except to the extent such disclosure is, in the
      opinion of counsel, required by or advisable under Applicable Law, provided
      that (a)
      any such required disclosure shall only be made, to the extent consistent with
      Applicable Law and (b) no such announcement or disclosure (except as required
      by
      Applicable Law) shall identify Purchaser without Purchaser’s prior
      consent.

     

    SECTION
      13.8.   Assignment;
      No Third Party Beneficiaries.
      This
      Agreement and the rights, duties and obligations hereunder may not be assigned
      or delegated by the Company without the prior written consent of Purchaser,
      and
      may not be assigned or delegated by Purchaser without the Company’s prior
      written consent except that Purchaser may assign any or all of its rights and
      obligations under this Agreement to any Purchaser Affiliate, provided Purchaser
      notifies the Company in writing, and Purchaser may transfer the Notes as
      provided in Article XII. Any attempted assignment or delegation of rights,
      duties or obligations hereunder other than as contemplated in the preceding
      sentence shall be void and of no effect. This Agreement and the provisions
      hereof shall be binding upon and shall inure to the benefit of each of the
      parties and their respective successors and permitted assigns. This Agreement
      is
      not intended to confer any rights or benefits on any Persons other than the
      parties hereto and their permitted successors and assigns (including any
      subsequent Holder of a Note), except as expressly set forth in Section 13.1
      or
      this Section 13.8.

     

    SECTION
      13.9.   Severability.
      This
      Agreement shall be deemed severable, and the invalidity or unenforceability
      of
      any term or provision hereof shall not affect the validity or enforceability
      of
      this Agreement or of any other term or provision hereof. Furthermore, in lieu
      of
      any such invalid or unenforceable term or provision, the parties hereto intend
      that there shall be added as a part of this Agreement a provision as similar
      in
      terms to such invalid or unenforceable provision as may be possible and be
      valid
      and enforceable.

     

    SECTION
      13.10.   Counterparts.
      This
      Agreement 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.

     

    SECTION
      13.11.   Further
      Assurances.
      Each
      party hereto, upon the request of any other party hereto, shall do all such
      further acts and execute, acknowledge and deliver all such further instruments
      and documents as may be necessary or desirable to carry out the transactions
      contemplated hereby, including, in the case of the Company, such acts,
      instruments and documents as may be necessary or desirable to convey and
      transfer to Purchaser the Notes to be purchased by it hereunder.

     

    SECTION
      13.12.   No
      Waiver; Remedies Cumulative.
      No
      failure or delay on the part of the Purchaser or any Holder in exercising any
      right, power or privilege hereunder or under any other Note Document and no
      course of dealing between the Company and the Purchaser or any Holder shall
      operate as a waiver thereof; nor shall any single or partial exercise of any
      right, power or privilege hereunder or under any other Note Document preclude
      any other or further exercise thereof or the exercise of any other right, power
      or privilege hereunder or thereunder. The rights, powers and remedies herein
      or
      in any other Note Document expressly provided are cumulative and not exclusive
      of any rights, powers or remedies which the Purchaser or any Holder would
      otherwise have. No notice to or demand on the Company in any case shall entitle
      the Company to any other or further notice or demand in similar or other
      circumstances or constitute a waiver of the rights of the Purchaser or any
      Holder to any other or further action in any circumstances without notice or
      demand.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    SECTION
      13.13.   Specific
      Performance.
      The
      parties hereto agree that the remedy at law for any breach of this Agreement
      may
      be inadequate, and that as between the Company and Purchaser any party by whom
      this Agreement is enforceable shall be entitled to specific performance in
      addition to any other appropriate relief or remedy. Such party may, in its
      sole
      discretion, apply to a court of competent jurisdiction for specific performance
      or injunctive or such other relief as such court may deem just and proper in
      order to enforce this Agreement as between the Company and Purchaser, or prevent
      any violation hereof, and, to the extent permitted by applicable as between
      the
      Company and Purchaser law, each party waives any objection to the imposition
      of
      such relief.

     

    SECTION
      13.14.   Confidentiality.
      The
      Purchaser and each of the Holders agrees that, without the prior consent of
      the
      Company, it will use its best efforts not to disclose any information with
      respect to the Company that is furnished pursuant to this Agreement, any other
      Note Document or any documents contemplated by or referred to herein or therein
      and which is designated by the Company to the Holders in writing as confidential
      or as to which it is otherwise reasonably clear such information is not public,
      except that any Holder may disclose any such information (a) to its employees,
      Affiliates, auditors and counsel, advisors or to another Holder, (b) as has
      become generally available to the public other than by a breach of this Section
      13.14, (c) as may be required or appropriate in any report, statement or
      testimony submitted to any municipal, state or federal regulatory body having
      or
      claiming to have jurisdiction over such Holder or to the Federal Reserve Board
      or the Federal Deposit Insurance Corporation or the Office of the Comptroller
      of
      the Currency, the NAIC, the SVO or similar organizations (whether in the United
      States or elsewhere) or their successors, (d) as may be required or appropriate
      in response to any summons or subpoena or any law, order, regulation or ruling
      applicable to such Holder, (e) to any prospective Holder in connection with
      any
      contemplated transfer pursuant to Article XII; provided
      that
      such prospective Holder shall have been made aware of this Section 13.14 and
      shall have agreed to be bound by its provisions as if it were a party to this
      Agreement, (f) to Gold Sheets and other similar bank trade publications; such
      information to consist of deal terms and other information regarding the this
      Agreement customarily found in such publications, (g) in connection with any
      suit, action or proceeding for the purpose of defending itself, reducing its
      liability, or protecting or exercising any of its claims, rights, remedies
      or
      interests under or in connection with the Note Documents, (h) to a Person that
      is an investor or prospective investor in the Holder or any Affiliate thereto,
      that, in each case, agrees that its access to information regarding the Company
      and the Notes is solely for purposes of evaluating an investment in such entity,
      (i) to a Person that is an investor or prospective investor in a Securitization
      (as defined below) that agrees that its access to information regarding the
      Company and the Notes is solely for purposes of evaluating an investment in
      such
      Securitization, (j) to a Person that is a trustee, collateral manager, servicer,
      noteholder or secured party in a Securitization in connection with the
      administration, servicing and reporting on the assets serving as collateral
      for
      such Securitization, or (k) to a nationally recognized rating agency that
      requires access to information regarding the Company, the Notes and the Note
      Documents in connection with ratings issued with respect to a Securitization.
      For purposes of this Section, “Securitization”
means
      a
      public or private offering by a Holder or any of its Affiliates or their
      respective successors and assigns, of securities which represent an interest
      in,
      or which are collateralized, in whole or in part, by the Notes or the Note
      Documents.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    

     

    [SIGNATURE
      PAGES TO FOLLOW]

     

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 
 	 
 	 PURE
              BIOFUELS CORP.
 
	 	 	 
	Date: 	  	By
/s/
              Luis Goyzueta 
	 	
              
Name:
              Luis Goyzeuta
	 	Title:
              Chief Executive Officer 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 
 	 
 	PLAINFIELD
              PERU I LLC
 
	 	 	 
	 	 	 
	 	  	By
              /s/
	 	
              
Name: 
	 	Title:
              
	 	 
	 	 
	 	PLAINFIELD PERU II LLC
	 	 
	 	 
	 	By /s/
	 	
              
                
Name:

            
	 	Title:REGISTRATION
      RIGHTS AGREEMENT

    

    by
      and
      among

    

    ARC
      INVESTMENT PARTNERS, LLC

    

    TAPIRDO
      ENTERPRISES, LLC

    

    SGM
      CAPITAL, LLC

    

    ADAM
      ROSEMAN

    

    STEVEN
      MAGAMI

    

    and

    

    PURE
      BIOFUELS CORP.

    

     

     

      
        

      

    

    
      Dated
        as
        of September 12, 2007 

    

    
      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      Table
        of Contents

    

    
      	 	 	
              Page

            
	
               

            
	
              ARTICLE
                I Definitions

            	
              2

            
	
              1.1

            	
              Defined
                Terms.

            	
              2

            
	
              1.2

            	
              Other
                Definitional Provisions; Interpretation.

            	
              5

            
	
               

            	 	 
	
              ARTICLE
                II Registration Rights

            	5
	
              2.1

            	
              Securities
                Act Registration on Request.

            	
              5

            
	
              2.2

            	
              Piggyback
                Registration.

            	
              9

            
	
              2.3

            	
              Expenses.

            	
              10

            
	
              2.4

            	
              Registration
                Procedures.

            	
              10

            
	
              2.5

            	
              Underwritten
                Offerings.

            	
              14

            
	
              2.6

            	
              Preparation:
                Reasonable Investigation.

            	
              16

            
	
              2.7

            	
              Postponements.

            	
              17

            
	
              2.8

            	
              Indemnification
                by the Company.

            	
              18

            
	
              2.9

            	
              Registration
                Rights to Others.

            	
              21

            
	
              2.10

            	
              Adjustments
                Affecting Registrable Common Stock.

            	
              21

            
	
              2.11

            	
              Rule
                144 and Rule 144A.

            	
              21

            
	
              2.12

            	
              Nominees
                for Beneficial Owners.

            	
              21

            
	
              2.13

            	
              Calculation
                of Percentage or Number of Shares of Registrable Common
                Stock.

            	
              21

            
	
              2.14

            	
              Termination
                of Registration Rights.

            	
              22

            
	 	 	 
	
              ARTICLE
                III Miscellaneous

            	22
	
              3.1

            	
              Injunctive
                Relief.

            	
              22

            
	
              3.2

            	
              Amendments;
                Entire Agreement.

            	
              22

            
	
              3.3

            	
              Severability.

            	
              22

            
	
              3.4

            	
              Successors
                and Assigns.

            	
              22

            
	
              3.5

            	
              Notices.

            	
              22

            
	
              3.6

            	
              Counterparts.

            	
              23

            
	
              3.7

            	
              Governing
                Law; Consent to Jurisdiction.

            	
              23

            
	
              3.8

            	
              Waiver
                of July Trial.

            	
              23

            
	 	 	 

    

     

    SCHEDULES:

     

    SCHEDULE
      A - NOTICES

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    REGISTRATION
      RIGHTS AGREEMENT, dated as of September 12, 2007, by and among PURE BIOFUELS
      CORP., a Nevada corporation (the “Company”); ARC
      Investment Partners, LLC a Delaware limited liability company, (“ARC”);
      Tapirdo Enterprises, LLC, a Delaware limited liability company (“TAPIRDO”);
      SGM
      Capital, LLC, a Delaware a limited liability company (“SGM”);
      Adam
      Roseman (“ROSEMAN”);
      and
      Steven Magami (“MAGAMI”).

    

    WHEREAS,
      the Company has agreed to enter into a registration rights agreement with ARC,
      TAPIRDO, SGM, ROSEMAN and MAGAMI to register the offer and resale of shares
      of
      common stock that the Shareholders (as defined below) received pursuant to
      that
      certain escrow agreement, dated as of July 22, 2007; and

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements herein
      contained, the parties hereto agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1 Defined
      Terms.
      As used
      in this Agreement, terms defined in the headings and the recitals shall have
      their respective assigned meanings, and the following capitalized terms shall
      have the meanings ascribed to them below:

     

    “Affiliate”
shall
      mean any Person who is an “affiliate” of such Person as defined in
      Rule 12b-2 of the General Rules and Regulations under the Exchange
      Act.

     

    “Agreement”
means
      this Registration Rights Agreement, as the same may be amended, supplemented
      or
      otherwise modified from time to time.

     

    “ARC”
has
      the
      meaning set forth in the Preamble hereto.

     

    “Board”
shall
      mean the Board of Directors of the Company.

     

    “Business
      Day”
means
      any day except a Saturday, Sunday or other day on which commercial banks in
      New
      York City and/or Los Angeles are authorized or required by law to be
      closed.

     

    “Closing
      Price”
means,
      with respect to the Registrable Common Stock, as of the date of determination:
      (a) if the Registrable Common Stock is listed on a national securities exchange,
      the closing price per share of the Registrable Common Stock on such date
      published in The
      Wall Street Journal (National Edition)
      or, if
      no such closing price on such date is published in The
      Wall Street Journal (National Edition),
      the
      average of the closing bid and asked prices on such date, as officially reported
      on the principal national securities exchange on which the Registrable Common
      Stock is then listed or admitted to trading; (b) if the Registrable Common
      Stock
      is not then listed or admitted to trading on any national securities exchange
      but is designated as a national market system security by the NASD, the last
      trading price per share of the Registrable Common Stock on such date; (c) if
      there shall have been no trading on such date or if the Registrable Common
      Stock
      is not designated as a national market system security by the NASD, the average
      of the reported closing bid and asked prices of the Registrable Common Stock
      on
      such date as shown by the OTCBB; or (d) if none of (a), (b) or (c) is
      applicable, a market price per share determined in good faith by the Board
      of
      Directors. If trading is conducted on a continuous basis on any exchange, then
      the closing price shall be determined at 4:00 p.m., New York City
      time.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Commission”
means
      the U.S. Securities and Exchange Commission or any similar agency then having
      jurisdiction to enforce the Securities Act.

     

    “Common
      Stock”
means
      the shares of common stock, $.001 par value per share, of the Company, as
      adjusted to reflect any merger, consolidation, recapitalization,
      reclassification, split-up, stock dividend, rights offering or reverse stock
      split made, declared or effected with respect to the Common Stock.

     

    “Company”
has
      the
      meaning set forth in the preamble to this Agreement.

     

    “Company
      Indemnitee”
has
      the
      meaning set forth in Section 2.8(a) hereof.

     

    “Demanding
      Shareholder”
means
      (a) ROSEMAN or TAPIRDO, as applicable, if ROSEMAN initiates the request to
      the
      Company for the registration with the Commission of their shares of Registrable
      Common Stock pursuant to Section 2.1(a) of the Agreement, (b) MAGAMI or SGM,
      as
      applicable, if MAGAMI initiates the request to the Company for the registration
      with the Commission of their shares of Registrable Common Stock pursuant to
      Section 2.1(a) of this Agreement or (c) ARC, if it initiates the request to
      the
      Company for the registration with the Commission of its shares of Registrable
      Common Stock pursuant to Section 2.1(a) of this Agreement.

     

    “Exchange
      Act”
means
      the U.S. Securities Exchange Act of 1934, as amended, and the rules and
      regulations thereunder, or any similar or successor statute.

     

    “Expenses”
means
      all expenses incurred by the Company incident to the Company’s performance of or
      compliance with its obligations under this Agreement, including, without
      limitation, all registration, filing, listing, stock exchange and NASD fees,
      all
      fees and expenses of complying with state securities or blue sky laws (including
      the reasonable fees, disbursements and other charges of counsel for the
      underwriters in connection with blue sky filings), all of the Company’s word
      processing, duplicating and printing expenses, messenger, telephone and delivery
      expenses, the fees, disbursements and other charges of counsel for the Company
      and of its independent registered public accounting firm, including the expenses
      incurred in connection with “cold comfort” letters required by or incident to
      such performance and compliance, the fees and expenses incurred by the Company
      in connection with the listing of the securities to be registered on each
      securities exchange or national market system on which similar securities issued
      by the Company are then listed, any fees and disbursements of underwriters
      customarily paid by issuers or sellers of securities, the fees and expenses
      of
      any special experts retained by the Company in connection with such
      registration, and the fees and expenses of other persons retained by the
      Company, and any fees and expenses of counsel for any seller of Registrable
      Common Stock, which in no event shall exceed $10,000, but excluding underwriting
      discounts and commissions and applicable transfer taxes, if any, which
      discounts, commissions, transfer taxes, fees and expenses shall be borne by
      the
      seller or sellers of Registrable Common Stock in all cases.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Governmental
      Authority”
means
      (a) the government of any nation, state, city, locality or other political
      subdivision thereof, (b) any entity exercising executive, legislative,
      judicial, regulatory or administrative functions of or pertaining to government,
      and (c) any corporation or other entity owned or controlled, through stock
      or capital ownership or otherwise, by any of the foregoing.

     

    “Loss”
and
      “Losses”
have
      the meanings set forth in Section 2.8(a) hereof. 

     

    “MAGAMI”
has
      the
      meaning set forth in the preamble to this Agreement.

     

    “Market
      Price”
means,
      on any date of determination, the average of the daily Closing Price of the
      Registrable Common Stock during the immediately preceding thirty (30) days
      on
      which the national securities exchanges are open for trading.

     

    “NASD”
means
      the National Association of Securities Dealers, Inc. 

     

    “Offering
      Documents”
has
      the
      meaning set forth in Section 2.8(a) hereof.

     

    “OTCBB”
means
      the OTC Bulleting Board.

     

    “Person”
means
      any individual, corporation, partnership, firm, joint venture, association,
      joint stock company, trust, unincorporated organization or other entity.

     

    “Piggyback
      Requesting Shareholder”
has
      the
      meaning set forth in Section 2.2 hereof.

     

    “Public
      Offering”
means
      a
      public offering and sale of Common Stock pursuant to an effective registration
      statement filed under the Securities Act.

     

    “Registrable
      Common Stock”
means,
      with respect to any Shareholder, any of the Common Stock owned by such
      Shareholder as of the date hereof and any shares of Common Stock acquired by
      such Shareholder or any of its Affiliates after the date hereof if such
      Shareholder or Affiliate is an Affiliate of the Company on the date of such
      acquisition; provided,
      however,
      that a
      share of Common Stock will cease to be Registrable Common Stock upon the
      earliest to occur of the time that (i) such share has been sold under a
      registration statement effected pursuant hereto or pursuant to Rule 144
      promulgated under the Securities Act or (ii) such share, along with all of
      the
      other shares held by such Shareholder, may immediately be sold under
      Rule 144(k) or any successor rule.

     

    “ROSEMAN”
has
      the
      meaning set forth in the preamble to this Agreement.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Securities
      Act”
means
      the U.S. Securities Act of 1933, as amended, and the rules and regulations
      thereunder, or any similar or successor statute.

     

    “Selling
      Shareholders”
means
      the holders of Registrable Common Stock requested to be registered pursuant
      hereto.

     

    “SGM”
has
      the
      meaning set forth in the Preamble hereto.

     

    “Shareholder
      Information”
has
      the
      meaning set forth in Section 2.4 hereof.

     

    “Shareholder
      Indemnitee”
has
      the
      meaning set forth in Section 2.8(b) hereof.

     

    “Shareholders”
means
      ARC, TAPIRDO, SGM, ROSEMAN and MAGAMI.

     

    “Subsidiary”
shall
      mean with respect to any Person, any corporation, partnership, association
      or
      other business entity of which fifty percent (50%) or more of the total voting
      power of shares of capital stock entitled (without regard to the occurrence
      of
      any contingency) to vote generally in the election of directors, managers or
      trustees thereof, or fifty percent (50%) or more of the equity interest therein,
      is at the time owned or controlled, directly or indirectly, by any Person or
      one
      or more of the other Subsidiaries of such Person or a combination
      thereof.

     

    “TAPIRDO”
has
      the
      meaning set forth in the Preamble hereto.

     

    1.2 Other
      Definitional Provisions; Interpretation.  (a)   The
      words “hereof”, “herein”, and “hereunder” and words of similar import when used
      in this Agreement shall refer to this Agreement as a whole and not to any
      particular provision of this Agreement, and Section, Subsection and Schedule
      references are to this Agreement unless otherwise specified.

     

    (b) The
      headings in this Agreement are included for convenience of reference only and
      shall not limit or otherwise affect the meaning or interpretation of this
      Agreement.

     

    (c) The
      meanings given to terms defined herein shall be equally applicable to both
      the
      singular and plural forms of such terms.

     

    ARTICLE
      II

     

    REGISTRATION
      RIGHTS

     

    2.1 Securities
      Act Registration on Request. At any time and from time to time after the date hereof, any or
      each of ROSEMAN or MAGAMI may make a written request to the Company for the
      registration with the Commission under the Securities Act of all or part of
      such
      Shareholder’s Registrable Common Stock which request shall specify the number of
      shares of Registrable Common Stock to be disposed of by each such Shareholder
      and the proposed plan of distribution therefor. Upon the receipt of any request
      for registration from ROSEMAN or MAGAMI pursuant to this paragraph, the Company
      promptly shall notify each of ROSEMAN or MAGAMI of the receipt of such request.
      Upon the receipt of any request for registration made in accordance with the
      terms of this paragraph, the Company will effect, at the earliest practicable
      date, such registration under the Securities Act of:

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (i) the
      Registrable Common Stock which the Company has been so requested to register
      by
      the Demanding Shareholder, and

     

    (ii) all
      other
      Registrable Common Stock which the Company has been requested to register by
      ARC, TAPIRDO or SGM by written request given to the Company within 15 days
      after
      the giving of written notice by the Company to such other Shareholders of the
      request by the Demanding Shareholder; provided
      that
      ARC, TAPIRDO or SGM shall acknowledge in their written notice to the Company
      whether they will also be a Demanding Shareholder for the requested
      registration,

     

    all
      to
      the extent necessary to permit the disposition (in accordance with Section
      2.1(c) hereof) of the Registrable Common Stock so to be registered; provided
      that,

     

    (A) the
      Company shall not be required to effect more than a total of two demand
      registrations pursuant to this Section 2.1(a) for ROSEMAN or TAPIRDO, a total
      of
      two demand registrations pursuant to this Section 2.1(a) for MAGAMI or SGM
      and a
      total of two demand registrations pursuant to this Section 2.1(a) for
      ARC

     

    (B) if
      the
      Company has previously effected a registration pursuant to this Section 2.1(a)
      or Section 2.1(g) hereof or has previously effected a registration of which
      notice has been given to the Shareholders pursuant to Section 2 hereof, the
      Company shall not be required to effect any registration pursuant to this
      Section 2.1(a) until a period of 180 days shall have elapsed from the date
      on
      which such previous registration ceased to be effective;

     

    (C) any
      Shareholder whose Registrable Common Stock was to be included in any such
      registration pursuant to this Section 2.1(a), by written notice to the Company,
      may withdraw such request and, on receipt of such notice of the withdrawal
      of
      such request from Shareholders holding a percentage of Registrable Common Stock,
      such that the Shareholders that have not elected to withdraw do not hold, in
      the
      aggregate, the requisite percentage or amount of the Registrable Common Stock
      to
      require or initiate a request for a registration under clause (D) of this
      Section 2.1(a), the Company shall not be required to effect such registration;
      provided
      that, if
      the Shareholder or Shareholders that have elected to withdraw such registration
      agree to pay the Expenses related to such registration, then the request for
      registration shall not be counted for purposes of determining the number of
      registrations to which such Shareholders are entitled pursuant to this Section
      2.1; and

     

    (D) the
      Company shall not be required to effect any registration to be effected pursuant
      to this Section 2.1(a) unless the shares of Registrable Common Stock proposed
      to
      be sold in such registration have an aggregate price (calculated based upon
      the
      Market Price of such Registrable Common Stock as of the date of such request)
      of
      at least $1,000,000.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) Registration
      of Other Securities.
      Whenever the Company shall effect a registration pursuant to Section 2.1(a)
      hereof, no securities other than (i) Registrable Common Stock and (ii) subject
      to Section 2.1(f), Common Stock to be sold by the Company for its own account
      shall be included among the securities covered by such registration unless
      the
      Selling Shareholders holding not less than a majority of the shares of
      Registrable Common Stock to be covered by such registration shall have consented
      in writing to the inclusion of such other securities.

     

    (c) Registration
      Statement Form.
      Registrations under Section 2.1(a) hereof shall be on Form S-1 or SB-2 or,
      if
      permitted by law, Form S-3 (or, in either case, any successor forms thereto)
      and
      shall permit the disposition of the Registrable Common Stock pursuant to an
      underwritten Public Offering unless the Demanding Shareholder(s) determine
      otherwise, in which case pursuant to the method of disposition determined by
      such Demanding Shareholder(s). The Company agrees to include in any such
      registration statement filed pursuant to Section 2.1(a) hereof all information
      which the Demanding Shareholder(s), upon advice of counsel, shall reasonably
      request.

     

    (d) Effective
      Registration Statement.
      A
      registration requested pursuant to Section 2.1(a) or Section 2.1(g) hereof
      shall
      not be deemed to have been effected:

     

    (i) unless
      a
      registration statement with respect thereto has become effective by the
      Commission and remains effective in compliance with the provisions of the
      Securities Act and the laws of any state or other jurisdiction applicable to
      the
      disposition of Registrable Common Stock covered by such registration statement
      until such time as all of such Registrable Common Stock have been disposed
      of in
      accordance with such registration statement or there shall cease to be any
      Registrable Common Stock;

     

    (ii) if,
      after
      it has become effective, such registration is interfered with by any stop order,
      injunction or other order or requirement of the Commission or other Governmental
      Authority or court for any reason other than a violation of applicable law
      solely by any Selling Shareholder and has not thereafter become effective;
      or

     

    (iii) if,
      in
      the case of an underwritten Public Offering, the conditions to closing specified
      in an underwriting agreement to which the Company is a party are not satisfied
      or waived other than by reason of any breach or failure by any Selling
      Shareholder or are not otherwise waived.

     

    The
      holders of Registrable Common Stock to be included in a registration statement
      may at any time terminate a request for registration made pursuant to Section
      2.1(a) in accordance with Section 2.1(C).

     

    (e) Selection
      of Underwriters.
      The
      underwriter or underwriters of each underwritten Public Offering, if any, of
      the
      Registrable Common Stock to be registered pursuant to Section 2.1(a) or Section
      2.2 hereof shall be an investment bank mutually selected by the Selling
      Shareholders owning at least a majority of the shares of Registrable Common
      Stock to be registered and the Company.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (f) Priority
      in Requested Registration.
      If a
      registration under this Section involves an underwritten Public Offering, and
      the managing underwriter of such underwritten Public Offering shall advise
      the
      Company in writing (with a copy to each Selling Shareholder requesting that
      Registrable Common Stock be included in such registration statement) that,
      in
      its opinion, the number of shares of Registrable Common Stock requested to
      be
      included in such registration exceeds the number of such securities that can
      be
      sold in such offering within a price range stated to such managing underwriter
      by Selling Shareholders owning at least a majority of the shares of Registrable
      Common Stock requested to be included in such registration to be acceptable
      to
      such Selling Shareholders, the Company shall include in such registration,
      to
      the extent of the number and type of securities which the Company is advised
      can
      be sold in such offering, all Registrable Common Stock requested to be
      registered pursuant to Section 2.1(a) hereof, (i) first, all of the shares
      of
      Registrable Common Stock being sold for the accounts of the Demanding
      Shareholders, pro
      rata
      among
      such Demanding Shareholders based on the number of shares of Registrable Common
      Stock requested to be included in such registration by such Demanding
      Shareholders, and
      (ii)
      second, pro
      rata among
      the
      Selling Shareholders (other than the Demanding Shareholders) who request their
      shares of Registrable Common Stock to be included in such registration pursuant
      to Section 2.1(a) on the basis of the number of shares of Registrable Common
      Stock requested to be registered by all such Selling Shareholders, and (iii)
      third, to the Company.

     

    (g) Shelf
      Registration.
      ROSEMAN
      or MAGAMI may make a written request that the Company file a shelf registration
      statement (a “Shelf
      Registration Statement”)
      pursuant to Rule 415 promulgated under the Securities Act (a “Shelf
      Registration”)
      and
      any related qualification or compliance with respect to all or part of the
      Registrable Common Stock owned by ROSEMAN or MAGAMI, as the case may be,
      provided that ROSEMAN or MAGAMI (together with all other holders of Registrable
      Common Stock to be included in such registration) propose to sell shares of
      their Registrable Common Stock having an aggregate price (calculated based
      upon
      the Market Price of such Registrable Common Stock as of the date of such
      request) of at least $500,000. The Company shall (i) promptly give written
      notice of the proposed registration, and any related qualification or
      compliance, to all other holders of Registrable Common Stock; and (ii) as soon
      as practicable, file such Shelf Registration Statement under the Securities
      Act
      at the earliest practicable date, but in any event not later than 60 days after
      the Shelf Registration is requested, and use its best efforts to have such
      Shelf
      Registration Statement thereafter become effective with the Commission at the
      earliest practicable date. The Company agrees to keep the Shelf Registration
      Statement continuously effective for the period beginning on the date on which
      the Shelf Registration Statement becomes effective under the Securities Act
      until the earlier to occur of (i) twenty-four (24) months thereafter (plus
      a
      number of Business Days equal to the number of Business Days, if any, that
      the
      Shelf Registration Statement is not kept effective after the initial date of
      its
      effectiveness and prior to twenty-four (24) thereafter pursuant to Section
      2.7(b) or otherwise), (ii) the day after the date on which all of the
      Registrable Common Stock covered by the Shelf Registration Statement has been
      sold pursuant to the Shelf Registration Statement or another registration
      statement and (iii) the first date on which there shall cease to be any
      Registrable Common Stock covered by such Shelf Registration Statement. The
      Company further agrees, if necessary, to supplement or amend the Shelf
      Registration Statement, if required by the rules, regulations or instructions
      applicable to the registration form used by the Company for such Shelf
      Registration or by the Securities Act or by any other rules and regulations
      thereunder for Shelf Registration, and the Company agrees to furnish to ROSEMAN
      or MAGAMI whose Registrable Common Stock is included in such Shelf Registration
      Statement copies of any such supplement or amendment promptly after its being
      issued or filed with the Commission. No registration requested by ROSEMAN or
      MAGAMI pursuant to this Section 2.1(g) shall be deemed a registration pursuant
      to Section 2.1(a); provided
      that if
      any offering by ROSEMAN or MAGAMI made pursuant to the Shelf Registration
      Statement is an underwritten Public Offering or otherwise includes the
      participation by an underwriter which requires legal opinions, comfort letters,
      due diligence or other actions or efforts customarily associated with an
      underwritten Public Offering including but not limited to a roadshow in which
      the Company’s management are requested to participate then such offering shall
      constitute a demand registration pursuant to Section 2.1(a). Not more than
      one
      registration pursuant to this Section 2.1(g) shall be required in a given nine
      month period. If at the time a request for a Shelf Registration is made under
      this Section 2.1(g), the Company is a “well-known seasoned issuer” (as defined
      in Rule 405 of the Securities Act) then the Company’s obligation to file a
      registration statement under this Section 2.1(g) shall be deemed satisfied
      if
      there is a Form S-3 on file pursuant to which the requesting Shareholder shall
      be entitled to dispose of all its Registrable Common Stock.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    2.2 Piggyback
      Registration.
      If the
      Company proposes to register any of its securities under the Securities Act
      by
      registration on any forms other than Form S-4 or S-8 (or any successor or
      similar form(s)), whether or not pursuant to registration rights granted to
      other holders of its securities (including pursuant to this Agreement) and
      whether or not for sale for its own account, it shall give prompt written notice
      to all of the Shareholders of its intention to do so and of such Shareholders’
rights (if any) under this Section 2.2, which notice, in any event, shall be
      given at least 30 days prior to such proposed registration. Upon the written
      request of any Shareholder receiving notice of such proposed registration that
      is a holder of Registrable Common Stock (a “Piggyback
      Requesting Shareholder”)
      made
      within 20 days after the receipt of any such notice with written confirmation
      to
      follow promptly thereafter, stating that (i) such registration will be on Form
      S-3 and (ii) such shorter period of time is required because of a planned filing
      date), which request shall specify the Registrable Common Stock intended to
      be
      disposed of by such Piggyback Requesting Shareholder, the Company shall, subject
      to Section 2.5(b) hereof, effect the registration under the Securities Act
      of
      all Registrable Common Stock which the Company has been so requested to register
      by the Piggyback Requesting Shareholders thereof; provided
      that,

     

    (a) prior
      to
      the effective date of the registration statement filed in connection with such
      registration, promptly following receipt of notification by the Company from
      the
      managing underwriter (if an underwritten Public Offering) of the price at which
      such securities are to be sold, the Company shall so advise each Piggyback
      Requesting Shareholder of such price, and such Piggyback Requesting Shareholder
      shall then have the right, exercisable in its sole discretion, irrevocably
      to
      withdraw its request to have its Registrable Common Stock included in such
      registration statement, by delivery of written notice of such withdrawal to
      the
      Company within five Business Days of its being advised of such price, without
      prejudice to the rights of any holder or holders of Registrable Common Stock
      to
      include Registrable Common Stock in any future registration (or registrations)
      pursuant to this Section 2.2 or to cause such registration to be effected as
      a
      registration under Section 2.1(a) or Section 2.1(g) hereof, as the case may
      be;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (b) if
      at any
      time after giving written notice of its intention to register any securities
      and
      prior to the effective date of the registration statement filed in connection
      with such registration, the Company shall determine for any reason not to
      register or to delay registration of such securities, the Company may, at its
      election, give written notice of such determination to each Piggyback Requesting
      Shareholder and (i) in the case of a determination not to register, shall be
      relieved of its obligation to register any Registrable Common Stock in
      connection with such registration (but not from any obligation of the Company
      to
      pay the Expenses in connection therewith), without prejudice, however, to the
      rights of any Shareholder to include Registrable Common Stock in any future
      registration (or registrations) pursuant to this Section 2.2 or to cause such
      registration to be effected as a registration under Section 2.1(a) or Section
      2.1(g) hereof, as the case may be, and (ii) in the case of a determination
      to
      delay registering, shall be permitted to delay registering any Registrable
      Common Stock, for the same period as the delay in registering such other
      securities; and

     

    (c) if
      such
      registration was initiated by the Company for its own account and involves
      an
      underwritten Public Offering, each Piggyback Requesting Shareholder shall sell
      its Registrable Common Stock on the same terms and conditions as those that
      apply to the Company, and the underwriters of each such underwritten Public
      Offering shall be a nationally recognized underwriter (or underwriters) selected
      by the Company.

     

    No
      registration effected under this Section 2.2 shall relieve the Company of its
      obligation to effect any registration upon request under Section 2.1(a) or
      Section 2.1(g) hereof and no registration effected pursuant to this Section
      2.2
      shall be deemed to have been effected pursuant to Section 2.1(a) or Section
      2.1(g) hereof.

     

    2.3 Expenses.
      The
      Company shall pay all Expenses in connection with any registration initiated
      pursuant to Sections 2.1(a), 2.1(g) or 2.2 hereof, whether or not such
      registration shall become effective and whether or not all or any portion of
      the
      Registrable Common Stock originally requested to be included in such
      registration are ultimately included in such registration.

     

    2.4 Registration
      Procedures.
      If and
      whenever the Company is required to effect any registration under the Securities
      Act as provided in Sections 2.1(a), 2.1(g) and 2.2 hereof, the Company shall,
      as
      expeditiously as possible:

     

    (a) prepare
      and file with the Commission (promptly and, in any event on or before the date
      that is (i) 90 days, in the case of any registration pursuant to Section 2.1(a),
      after the receipt by the Company of the written request from the relevant
      Demanding Shareholder or (ii) 60 days, in the case of any registration pursuant
      to Section 2.1(g), after the receipt by the Company of the written request
      from
      the relevant Shareholder) the requisite registration statement to effect such
      registration and thereafter use its reasonable best efforts to cause such
      registration statement to become and remain effective; provided,
      however,
      that
      the Company may discontinue any registration of its securities that are not
      shares of Registrable Common Stock (and, under the circumstances specified
      in
      Sections 2.2 and 2.7(b) hereof, its securities that are shares of Registrable
      Common Stock) at any time prior to the effective date of the registration
      statement relating thereto;

     

    
      
        
        

      

      
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    (b) prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective and to comply with
      the
      provisions of the Securities Act and the Exchange Act with respect to the
      disposition of all Registrable Common Stock covered by such registration
      statement until such time as all of such Registrable Common Stock has been
      disposed of in accordance with the method of disposition set forth in such
      registration statement;

     

    (c) furnish
      to each seller of Registrable Common Stock covered by such registration
      statement and each underwriter, if any, such number of copies of such drafts
      and
      final conformed versions of such registration statement and of each such
      amendment and supplement thereto (in each case including all exhibits and any
      documents incorporated by reference), such number of copies of such drafts
      and
      final versions of the prospectus contained in such registration statement
      (including each preliminary prospectus and any summary prospectus) and any
      other
      prospectus filed under Rule 424 under the Securities Act, in conformity with
      the
      requirements of the Securities Act, and such other documents, as any Selling
      Shareholder or any underwriter may reasonably request in writing;

     

    (d) (i)
      register or qualify all Registrable Common Stock and other securities, if any,
      covered by such registration statement under such other securities or blue
      sky
      laws of such states or other jurisdictions of the United States of America
      as
      the sellers of Registrable Common Stock covered by such registration statement
      shall reasonably request in writing, (ii) keep such registration or
      qualification in effect for so long as such registration statement remains
      in
      effect and (iii) take any other action that may be necessary or reasonably
      advisable to enable such sellers to consummate the disposition in such
      jurisdictions of the securities to be sold by such sellers, except that the
      Company shall not for any such purpose be required to qualify generally to
      do
      business as a foreign corporation in any jurisdiction wherein it would not
      but
      for the requirements of this subsection (d) be obligated to be so qualified,
      to
      subject itself to taxation in such jurisdiction or to consent to general service
      of process in any such jurisdiction;

     

    (e) cause
      all
      Registrable Common Stock and other securities, if any, covered by such
      registration statement to be registered with or approved by such other
      Governmental Authority as may be necessary in the opinion of counsel to the
      Company and counsel to the seller or sellers of Registrable Common Stock to
      enable the seller or sellers thereof to consummate the disposition of such
      Registrable Common Stock;

     

    (f) obtain
      and furnish to each seller of Registrable Common Stock, and each such seller’s
      underwriters, if any, a signed

     

    
      
        
        

      

      
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    (i) opinion
      of counsel for the Company, dated the effective date of such registration
      statement (and, if such registration involves an underwritten Public Offering,
      dated the date of the closing under the underwriting agreement and addressed
      to
      the underwriters), reasonably satisfactory (based on the customary form and
      substance of opinions of issuers’ counsel customarily given in such an offering)
      in form and substance to such seller, and

     

    (ii) “cold
      comfort” letter, dated the effective date of such registration statement (and,
      if such registration involves an underwritten Public Offering, dated the date
      of
      the closing under the underwriting agreement and addressed to the underwriters)
      and signed by the independent registered public accounting firm who have
      certified the Company’s financial statements included or incorporated by
      reference in such registration statement, reasonably satisfactory (based on
      the
      customary form and substance of “cold comfort” letters of issuers’ independent
      registered public accounting firm customarily given in such an offering) in
      form
      and substance to such seller,

     

    in
      each
      case or clauses (i) and (ii) above, covering substantially the same matters
      with
      respect to such registration statement (and the prospectus included therein)
      and, in the case of the independent registered public accounting firm’s comfort
      letter, with respect to events subsequent to the date of such financial
      statements, as are customarily covered in opinions of issuer’s counsel and in
      the independent registered public accounting firm’s comfort letters delivered to
      underwriters in underwritten Public Offerings of securities;

     

    (g) notify
      each seller of Registrable Common Stock and other securities covered by such
      registration statement, if any, at any time when a prospectus relating thereto
      is required to be delivered under the Securities Act, upon discovery that,
      or
      upon the happening of any event as a result of which, the prospectus included
      in
      such registration statement, as then in effect, includes an untrue statement
      of
      a material fact or omits to state any material fact required to be stated
      therein or necessary to make the statements therein not misleading in the light
      of the circumstances under which they were made, and, at the written request
      of
      any such seller of Registrable Common Stock, promptly prepare and furnish to
      it
      a reasonable number of copies of a supplement to or an amendment of such
      prospectus as may be necessary so that, as thereafter delivered to the
      purchasers of such securities, such prospectus, as supplemented or amended,
      shall not include an untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in the light of the circumstances under which they were
      made;

     

    (h) use
      its
      reasonable best efforts to obtain the withdrawal of any order suspending the
      effectiveness of a registration statement relating to the Registrable Common
      Stock at the earliest possible moment;

     

    
      
        
        

      

      
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    (i) otherwise
      comply with all applicable rules and regulations of the Commission and any
      other
      Governmental Authority having jurisdiction over the offering, and make available
      to its security holders, as soon as reasonably practicable, an earning statement
      covering the period of at least twelve months, but not more than eighteen
      months, beginning with the first full calendar month after the effective date
      of
      such registration statement, which earning statement shall satisfy the
      provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
      thereunder, and furnish to each seller of Registrable Common Stock and to the
      managing underwriter, if any, at least ten days prior to the filing thereof
      a
      copy of any amendment or supplement to such registration statement or
      prospectus;

     

    (j) cause
      all
      Registrable Common Stock covered by a registration statement to be listed on
      a
      national securities exchange on which similar securities issued by the Company
      are then listed, if the listing of such Registrable Common Stock is then
      permitted under the rules of such exchange;

     

    (k) provide
      a
      transfer agent and registrar for the Registrable Common Stock covered by a
      registration statement no later than the effective date thereof; 

     

    (l) enter
      into such agreements (including an underwriting agreement in customary form)
      and, subject to Section 2.7(c), take such other actions as the Shareholders
      holding a majority of the shares of Registrable Common Stock covered by such
      registration statement shall reasonably request in order to expedite or
      facilitate the disposition of such Registrable Common Stock, including customary
      indemnification;

     

    (m) if
      requested by the managing underwriter(s) or the Shareholders holding a majority
      of the shares of Registrable Common Stock being sold in connection with an
      underwritten Public Offering, promptly incorporate in a prospectus supplement
      or
      post-effective amendment such information as the managing underwriter(s) and
      the
      Shareholders of a majority of the Registrable Common Stock being sold agree
      should be included therein relating to the plan of distribution with respect
      to
      such Registrable Common Stock, including without limitation, information with
      respect to the number of shares of Registrable Common Stock being sold to such
      underwriters, the purchase price being paid therefore by such underwriters
      and
      with respect to any other terms of the underwritten Public Offering of the
      Registrable Common Stock to be sold in such offering; and make all required
      filings of such prospectus supplement or post-effective amendment as soon as
      notified of the matters to be incorporated in such prospectus supplement or
      post-effective amendment; and

     

    (n) if
      requested by the Selling Shareholders holding a majority of the shares of
      Registrable Common Stock being sold, cooperate with the Selling Shareholders
      of
      Registrable Common Stock and the managing underwriter(s), if any, to facilitate
      the timely preparation and delivery of certificates representing Registrable
      Common Stock to be sold and not bearing any restrictive legends; and enable
      such
      Registrable Common Stock to be in such share amounts and registered in such
      names as the managing underwriter(s) or, if none, the Selling Shareholders
      holding a majority of the shares of Registrable Common Stock being sold, may
      request at least three Business Days prior to any sale of Registrable Common
      Stock to the underwriters.

     

    
      
        
        

      

      
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    As
      a
      condition to the obligations of the Company to complete any registration
      pursuant to this Agreement with respect to the Registrable Common Stock of
      a
      Shareholder, such Shareholder must furnish to the Company in writing such
      information (the “Shareholder
      Information”)
      regarding itself, the Registrable Common Stock held by it and the intended
      methods of disposition of the Registrable Common Stock held by it as is
      necessary to effect the registration of such Shareholder’s Registrable Common
      Stock and is requested in writing by the Company. At least 30 days prior to
      the
      first anticipated filing date of a registration statement for any registration
      under this Agreement, the Company will notify in writing each Shareholder of
      the
      Shareholder Information which the Company is requesting from that Shareholder
      whether or not such Shareholder has elected to have any of its Registrable
      Common Stock included in the registration statement. If, within ten days prior
      to the anticipated filing date, the Company has not received the requested
      Shareholder Information from a Shareholder, then the Company may file the
      registration statement without including Registrable Common Stock of that
      Shareholder. 

     

    Each
      Shareholder agrees that as of the date that a final prospectus is made available
      to it for distribution to prospective purchasers of Registrable Common Stock
      it
      shall cease to distribute copies of any preliminary prospectus prepared in
      connection with the offer and sale of such Registrable Common Stock. Each
      Shareholder further agrees that, upon receipt of any notice from the Company
      of
      the happening of any event of the kind described in subsection (g) of this
      Section 2.4, such Shareholder shall forthwith discontinue such Shareholder’s
      disposition of Registrable Common Stock pursuant to the registration statement
      relating to such Registrable Common Stock until such Shareholder’s receipt of
      the copies of the supplemented or amended prospectus contemplated by subsection
      (g) of this Section 2.4 and, if so directed by the Company, shall deliver to
      the
      Company (at the Company’s expense) all copies, other than permanent file copies,
      then in such Shareholder’s possession of the prospectus relating to such
      Registrable Common Stock current at the time of receipt of such notice. If
      any
      event of the kind described in subsection (g) of this Section 2.4 occurs and
      such event is the fault solely of a Shareholder or Shareholders due to the
      inaccuracy of the Shareholder Information provided by such Shareholder(s) for
      inclusion in the registration statement, such Shareholder (or Shareholders)
      shall pay all Expenses attributable to the preparation, filing and delivery
      of
      any supplemented or amended prospectus contemplated by subsection (g) of this
      Section 2.4.

     

    2.5 Underwritten
      Offerings.
      (a) Requested
      Underwritten Offerings. If requested by the underwriters in connection with
      a request for a registration under Section 2.1 hereof that is a firm commitment
      underwritten Public Offering, the Company and the Selling Shareholders shall
      enter into a firm commitment underwriting agreement with such underwriters
      for
      such offering, such agreement to be reasonably satisfactory in substance and
      form to the Company and the Selling Shareholders owning at least a majority
      of
      the Registrable Common Stock that is included in such registration and to
      contain such representations and warranties by the Company and the Selling
      Shareholders and such other terms as are customary in agreements of that type,
      including, without limitation, indemnification and contribution to the effect
      and to the extent provided in Section 2.8 hereof. 

     

    
      
        
        

      

      
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    (b) Piggyback
      Underwritten Offerings; Priority.

     

    (i) If
      the
      Company proposes to register any of its securities under the Securities Act
      for
      its own account as contemplated by Section 2.2 hereof and such securities are
      to
      be distributed by or through one or more underwriters, and if the managing
      underwriter of such underwritten Public Offering shall advise the Company in
      writing (with a copy to the Piggyback Requesting Shareholders) that if all
      the
      Registrable Common Stock requested to be included in such registration were
      so
      included, in its opinion, the number and type of securities proposed to be
      included in such registration would exceed the number and type of securities
      which could be sold in such offering within a price range acceptable to the
      Company (such writing to state the basis of such opinion and the approximate
      number and type of securities which may be included in such offering without
      such effect), then the Company shall include in such registration pursuant
      to
      Section 2.2, to the extent of the number and type of securities which the
      Company is so advised can be sold in such offering, (i) first, securities that
      the Company proposes to issue and sell for its own account, (ii) second,
      Registrable Common Stock requested to be registered by Piggyback Requesting
      Shareholders pursuant to Section 2.2 hereof, pro
      rata
      among
      the Piggyback Requesting Shareholders on the basis of the number of shares
      of
      Registrable Common Stock requested to be registered by all such Piggyback
      Requesting Shareholders and (iii) third, other securities, if any. 

     

    (ii) In
      the
      case of any other registration contemplated by Section 2.2 involving an
      underwritten Public Offering, if the managing underwriter of such underwritten
      Public Offering shall advise the Company in writing (with a copy to the
      Piggyback Requesting Shareholders) that if all Registrable Common Stock
      requested to be included in such registration were so included, in its opinion,
      the number and type of securities proposed to be included in such registration
      would exceed the number and type of securities which would be sold in such
      offering within a price range stated to such managing underwriter by Selling
      Shareholders owning at least a majority of the shares of Registrable Common
      Stock requested to be included in such registration to be acceptable to such
      Selling Shareholders (such writing to state the basis of such opinion and the
      approximate number and type of securities which may be included in such offering
      without such effect), then the Company shall include in such registration
      pursuant to Section 2.2, to the extent of the number and type of securities
      which the Company is so advised can be sold in such offering, (i) first,
      Registrable Common Stock requested to be registered by Piggyback Requesting
      Shareholders pursuant to Section 2.2 hereof, pro
      rata
      among
      the Piggyback Requesting Shareholders on the basis of the number of shares
      of
      Registrable Common Stock requested to be registered by all such Piggyback
      Requesting Shareholders, (ii) second, securities that the Company proposed
      to
      issue and sell for its own account and (iii) third, other
      securities.

     

    Any
      Shareholder may withdraw its request to have all or any portion of its
      Registrable Common Stock included in any such offering by notice to the Company
      within ten days after receipt of a copy of a notice from the managing
      underwriter pursuant to this Section.

     

    (c) Shareholders
      to be Parties to Underwriting Agreement.
      The
      holders of Registrable Common Stock to be distributed by underwriters in an
      underwritten Public Offering contemplated by subsections (a) or (b) of this
      Section shall be parties to the underwriting agreement between the Company
      and
      such underwriters and any such Shareholder, at its option, may reasonably
      require that any or all of the representations and warranties by, and the other
      agreements on the part of, the Company to and for the benefit of such
      underwriters shall also be made to and for the benefit of such Shareholders
      and
      that any or all of the conditions precedent to the obligations of such
      underwriters under such underwriting agreement be conditions precedent to the
      obligations of such Shareholders. No such Shareholder shall be required to
      make
      any representations or warranties to or agreements with the Company or the
      underwriters other than representations, warranties or agreements regarding
      such
      Shareholder, such Shareholder’s Registrable Common Stock and such Shareholder’s
      intended method of distribution.

    
      
        
        

      

      
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    (d) Holdback
      Agreements.
      Each
      Shareholder agrees, unless otherwise agreed to by the managing underwriter
      for
      any underwritten Public Offering pursuant to this Agreement, not to effect
      any
      sale or distribution of any equity securities of the Company or securities
      convertible into or exchangeable or exercisable for equity securities of the
      Company, including any sale under Rule 144 under the Securities Act, during
      the
      ten days prior to the date on which an underwritten registration of Registrable
      Common Stock pursuant to Section 2.1 or 2.2 hereof has become effective and
      until 90 days after the effective date of such underwritten registration, except
      as part of such underwritten registration or to the extent that such Shareholder
      is prohibited by applicable law from agreeing to withhold securities from sale
      or is acting in its capacity as a fiduciary or an investment adviser. Without
      limiting the scope of the term “fiduciary,” a holder shall be deemed to be
      acting as a fiduciary or an investment adviser if its actions or the securities
      proposed to be sold are subject to the Employee Retirement Income Security
      Act
      of 1974, as amended, the Investment Company Act of 1940, as amended, or the
      Investment Advisers Act of 1940, as amended, or if such securities are held
      in a
      separate account under applicable insurance law or regulation.

     

    The
      Company agrees (i) not to effect any Public Offering or distribution of any
      equity securities of the Company, or securities convertible into or exchangeable
      or exercisable for equity securities of the Company, during the ten days prior
      to the date on which any underwritten registration pursuant to Section 2.1
      or
      2.2 hereof (other than Section 2.1(g)) has become effective and until 90 days
      after the effective date of such underwritten registration, except as part
      of
      such underwritten registration, and (ii) to cause each holder of any equity
      securities, or securities convertible into or exchangeable or exercisable for
      equity securities, in each case, acquired from the Company at any time on or
      after the date of this Agreement (other than in a Public Offering), to agree
      not
      to effect any Public Offering or distribution of such securities, during such
      period.

     

    2.6 Preparation:
      Reasonable Investigation.   (a) Registration
      Statements. In connection with the preparation and filing of each
      registration statement under the Securities Act pursuant to this Agreement,
      the
      Company shall (i) give representatives (designated to the Company in writing)
      of
      each Selling Shareholder, the underwriters, if any, and one firm of counsel,
      one
      firm of accountants and one firm of other agents retained on behalf of all
      underwriters and one firm of counsel, one firm of accountants and one firm
      of
      other agents retained on behalf of the Selling Shareholders (as a group), the
      reasonable opportunity to participate in the preparation of such registration
      statement, each prospectus included therein or filed with the Commission, and
      each amendment thereof or supplement thereto, (ii) upon reasonable advance
      notice to the Company, give each of them such reasonable access to all financial
      and other records, corporate documents and properties of the Company and its
      subsidiaries, as shall be necessary, in the reasonable opinion of such
      Shareholders’ and such underwriters’ counsel, to conduct a reasonable due
      diligence investigation for purposes of the Securities Act, and (iii) upon
      reasonable advance notice to the Company, provide such reasonable opportunities
      to discuss the business of the Company with its officers, directors, employees
      and the independent public accounting firm who have certified its financial
      statements as shall be necessary, in the reasonable opinion of such
      Shareholders’ and such underwriters’ counsel, to conduct a reasonable due
      diligence investigation for purposes of the Securities Act. 

     

    
      
        
        

      

      
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    (b) Confidentiality.
      Each
      Shareholder shall maintain the confidentiality of any confidential information
      received from or otherwise made available by the Company to such Shareholder.
      Information that (i) is or becomes available to a Shareholder from a public
      source other than as a result of a disclosure by such Shareholder or any of
      its
      Affiliates, (ii) is disclosed to a Shareholder by a third-party source who
      the
      Shareholder reasonably believes is not bound by an obligation of confidentiality
      to the Company, (iii) is or becomes required to be disclosed by a Shareholder
      by
      law, including by court order, or (iv) is independently developed by a
      Shareholder, shall not be deemed to be confidential information for purposes
      of
      this Agreement. The Shareholder shall not grant access, and the Company shall
      not be required to grant access, to information under this Section 2.6 to any
      Person who will not agree to maintain the confidentiality (to the same extent
      a
      Shareholder is required to maintain confidentiality) of any confidential
      information received from or otherwise made available to it by the Company
      or
      the Shareholder under this Agreement.

     

    2.7 Postponements. If
      the
      Company shall fail to file any registration statement to be filed pursuant
      to a
      request for registration under Section 2.1(a) hereof, the Demanding
      Shareholder(s) requesting such registration shall have the right to withdraw
      the
      request for registration. Any such withdrawal shall be made by giving written
      notice to the Company within 20 days after, in the case of a request pursuant
      to
      Section 2.1(a) hereof, the date on which a registration statement would
      otherwise have been required to have been filed with the Commission under clause
      (i) of Section 2.4(a) hereof (i.e., 20 days after the date that is 90 days
      after
      the receipt by the Company of the written request from the Demanding
      Shareholder(s)). In the event of such withdrawal, the request for registration
      shall not be counted for purposes of determining the number of registrations
      to
      which Shareholders are entitled pursuant to Section 2.1 hereof. The Company
      shall pay all Expenses incurred in connection with a request for registration
      withdrawn pursuant to this paragraph.

     

    (b) The
      Company shall not be obligated to file any registration statement, or file
      any
      amendment or supplement to any registration statement, and may suspend any
      Selling Shareholder’s rights to make sales pursuant to any effective
      registration statement, at any time (but not to exceed one time in any
      twelve-month period) when the Company, in the good faith judgment of the Board,
      reasonably believes that the filing thereof at the time requested, or the
      offering of securities pursuant thereto, would adversely affect a pending or
      proposed Public Offering of the Company’s securities, a material financing, or a
      material acquisition, merger, recapitalization, consolidation, reorganization
      or
      similar transaction, or negotiations, discussions or pending proposals with
      respect thereto. The filing of a registration statement, or any amendment or
      supplement thereto, by the Company cannot be deferred, and the Selling
      Shareholders’ rights to make sales pursuant to an effective registration
      statement cannot be suspended, pursuant to the provisions of the preceding
      sentence for more than ten days after the abandonment or consummation of any
      of
      the foregoing proposals or transactions or for more than 120 days after the
      date
      of the Board’s determination referenced in the preceding sentence. If the
      Company suspends the Selling Shareholders’ rights to make sales pursuant hereto,
      the applicable registration period shall be extended by the number of days
      of
      such suspension. 

     

    
      
        
        

      

      
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    (c) If
      a
      Shelf Registration Statement has been filed, becomes effective and remains
      effective under Section 2.1(g), then the Company shall be entitled to postpone
      any demand registration pursuant to Section 2.1(a) or underwritten Public
      Offering requested by the Shareholders for a period not exceeding 90 days from
      the date of such request if, in the reasonable opinion of the Company’s
      management acting in good faith, the filing of the registration statement or
      underwritten Public Offering and all obligations arising out of such actions
      are
      not in the best interests of the Company at that time. It being understood
      that
      the Company shall only be entitled to such postponement under this Section
      2.7(c) once every 180 days.

     

    2.8 Indemnification
      by the Company.   (a) In
      connection with any registration statement filed by the Company pursuant to
      Section 2.1 or 2.2 hereof, to the fullest extent permitted by law the Company
      shall, and hereby agrees to, indemnify and hold harmless, each Shareholder
      and
      seller of any Registrable Common Stock covered by such registration statement
      and each other Person who participates as an underwriter in the offering or
      sale
      of such securities and each other Person, if any, who controls (within the
      meaning of the Exchange Act) such Shareholder or seller or any such underwriter,
      and their respective shareholders, members, directors, officers, employees,
      partners, agents and Affiliates (each, a “Company Indemnitee” for
      purposes of this Section 2.8(a)), against any losses, claims, damages,
      liabilities (or actions or proceedings, whether commenced or threatened, in
      respect thereof and whether or not such indemnified party is a party thereto),
      joint or several, and expenses, including, without limitation, the reasonable
      fees, disbursements and other charges of legal counsel and reasonable costs
      of
      investigation, to which such Company Indemnitee may become subject under the
      Securities Act or otherwise (collectively, a “Loss” or “Losses”),
      insofar as such Losses arise out of or are based upon any untrue statement
      or
      alleged untrue statement of any material fact contained in any registration
      statement under which such securities were registered or otherwise offered
      or
      sold under the Securities Act or otherwise, any preliminary prospectus, final
      prospectus or summary prospectus related thereto, or any amendment or supplement
      thereto (collectively, “Offering Documents”), or any omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein in the light of the circumstances
      in
      which they were made not misleading, or any violation by the Company of any
      federal or state law, rule or regulation applicable to the Company and relating
      to action required of or inaction by the Company in connection with any such
      registration; provided that, the Company shall not be liable in any such case
      to
      the extent that any such Loss arises out of or is based upon an untrue statement
      or alleged untrue statement or omission or alleged omission made in such
      Offering Documents in reliance upon and in conformity with information furnished
      to the Company in a writing duly executed by such Company Indemnitee
      specifically stating that it is expressly for use therein; and provided,
      further, that the Company shall not be liable to any Person who participates
      as
      an underwriter in the offering or sale of Registrable Common Stock or any other
      person, if any, who controls (within the meaning of the Exchange Act) such
      underwriter, in any such case to the extent that any such Loss arises out of
      such Person’s failure to send or give a copy of the final prospectus (including
      any documents incorporated by reference therein), as the same may be then
      supplemented or amended, to the Person asserting an untrue statement or alleged
      untrue statement or omission or alleged omission at or prior to the written
      confirmation of the sale of Registrable Common Stock to such Person if such
      statement or omission was corrected in such final prospectus. Such indemnity
      shall remain in full force and effect regardless of any investigation made
      by or
      on behalf of such Company Indemnitee and shall survive the transfer of such
      securities by such Company Indemnitee.

     

    
      
        
        

      

      
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    (b) Indemnification
      by the Shareholders.
      In
      connection with any registration statement filed by the Company pursuant to
      Section 2.1 or 2.2 hereof in which a Shareholder has registered for sale
      Registrable Common Stock, each such Shareholder or seller of Registrable Common
      Stock shall, and hereby agrees to, indemnify and hold harmless to the fullest
      extent permitted by law the Company and each of its directors, officers,
      employees, agents, partners, shareholders, Affiliates and each other Person,
      if
      any, who controls (within the meaning of the Exchange Act) the Company and
      each
      other seller and such seller’s employees, directors, officers, shareholders,
      members, partners, agents and Affiliates (each, a “Shareholder
      Indemnitee”
for
      purposes of this Section 2.8(b)), against all Losses insofar as such Losses
      arise out of or are based upon any untrue statement or alleged untrue statement
      of a material fact contained in any Offering Documents (or any document
      incorporated by reference therein) or any omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein in the light of circumstances in which they were made not
      misleading, if such untrue statement or alleged untrue statement or omission
      or
      alleged omission was made in reliance upon and in conformity with information
      furnished to the Company in a writing duly executed by such Shareholder or
      seller of Registrable Common Stock specifically stating that it is expressly
      for
      use therein; provided,
      however,
      that
      the liability of such indemnifying party under this Section shall be limited
      to
      the amount of the net proceeds (after giving effect to underwriting discounts
      and commissions) received by such indemnifying party in the sale of Registrable
      Common Stock giving rise to such liability. Such indemnity shall remain in
      full
      force and effect, regardless of any investigation made by or on behalf of the
      Shareholder Indemnitee and shall survive the transfer of such securities by
      such
      indemnifying party.

     

    (c) Notices
      of Losses, etc.
      Promptly after receipt by an indemnified party of written notice of the
      commencement of any action or proceeding involving a Loss referred to in the
      preceding subsections of this Section, such indemnified party will, if a claim
      in respect thereof is to be made against an indemnifying party, give written
      notice to the latter of the commencement of such action; provided,
      however,
      that
      the failure of any indemnified party to give notice as provided herein shall
      not
      relieve the indemnifying party of its obligations under the preceding
      subsections of this Section except to the extent that the indemnifying party
      is
      materially and actually prejudiced by such failure to give notice. In case
      any
      such action is brought against an indemnified party, the indemnifying party
      shall be entitled to participate in and, unless in such indemnified party’s
      reasonable judgment a conflict of interest between such indemnified and
      indemnifying parties may exist in respect of such Loss, to assume and control
      the defense thereof, in each case at its own expense, jointly with any other
      indemnifying party similarly notified, to the extent that it may wish, with
      counsel reasonably satisfactory to such indemnified party, and after its
      assumption of the defense thereof, the indemnifying party shall not be liable
      to
      such indemnified party for any legal or other expenses subsequently incurred
      by
      the latter in connection with the defense thereof other than reasonable costs
      of
      investigation, unless in such indemnified party’s reasonable judgment a conflict
      of interest between such indemnified and indemnifying parties arises in respect
      of such claim after the assumption of the defense thereof. No indemnifying
      party
      shall be liable for any settlement of any such action or proceeding effected
      without its written consent, which shall not be unreasonably withheld. No
      indemnifying party shall, without the consent of the indemnified party, consent
      to entry of any judgment or enter into any settlement which does not include
      as
      an unconditional term thereof the giving by the claimant or plaintiff to such
      indemnified party of a release from all liability in respect of such Loss or
      which requires action on the part of such indemnified party or otherwise
      subjects the indemnified party to any obligation or restriction to which it
      would not otherwise be subject.

    
      
        
        

      

      
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    (d) Contribution.
      If the
      indemnification provided for in this Section shall for any reason be unavailable
      to an indemnified party under subsection (a) or (b) of this Section in respect
      of any Loss, then, in lieu of the amount paid or payable under subsection (a)
      or
      (b) of this Section the indemnified party and the indemnifying party under
      subsection (a) or (b) of this Section shall contribute to the aggregate Losses
      (including legal or other expenses reasonably incurred in connection with
      investigating the same) (i) in such proportion as is appropriate to reflect
      the
      relative fault of the Company and the prospective sellers of Registrable Common
      Stock covered by the registration statement which resulted in such Loss or
      action in respect thereof, with respect to the statements, omissions or action
      which resulted in such Loss or action in respect thereof, as well as any other
      relevant equitable considerations, or (ii) if the allocation provided by clause
      (i) above is not permitted by applicable law, in such proportion as shall be
      appropriate to reflect the relative benefits received by the Company, on the
      one
      hand, and such prospective sellers, on the other hand, from their sale of
      Registrable Common Stock; provided
      that,
      for purposes of this clause (ii), the relative benefits received by the
      prospective sellers shall be deemed not to exceed the amount received by such
      sellers. No Person guilty of fraudulent misrepresentation (within the meaning
      of
      Section 10(f) of the Securities Act) shall be entitled to contribution from
      any
      Person who was not guilty of such fraudulent misrepresentation. The obligations,
      if any, of the selling holders of Registrable Common Stock to contribute as
      provided in this subsection (d) are several in proportion to the relative value
      of their respective Registrable Common Stock covered by such registration
      statement and not joint. In addition, no Person shall be obligated to contribute
      hereunder any amounts in payment for any settlement of any action or Loss
      effected without such Person’s consent.

     

    (e) Other
      Indemnification. The
      Company shall, in connection with any registration statement filed by the
      Company pursuant to Section 2.1(a), 2.1(g) or 2.2, and each Shareholder who
      has
      registered for sale Registrable Common Stock shall, with respect to any required
      registration or other qualification of securities under any federal or state
      law
      or regulation of any Governmental Authority other than the Securities Act,
      indemnify Shareholder Indemnitees and Company Indemnitees, respectively, against
      Losses, or, to the extent that indemnification shall be unavailable to a
      Shareholder Indemnitee or Company Indemnitee, contribute to the aggregate Losses
      of such Shareholder Indemnitee or Company Indemnitee in a manner similar to
      that
      specified in the preceding subsections of this Section (with appropriate
      modifications).

     

    
      
        
        

      

      
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     (f) Indemnification
      Payments. The indemnification and contribution required by this Section 2.8
      shall be made by periodic payments of the amount thereof during the course
      of
      any investigation or defense, as and when any Loss is incurred and is due and
      payable.

     

    2.9 Registration
      Rights to Others.
      If the
      Company shall at any time hereafter provide to any holder of any securities
      of
      the Company rights with respect to the registration of such securities under
      the
      Securities Act, such rights shall not be in conflict with or adversely affect
      any of the rights provided to the holders of Registrable Common Stock in, or
      conflict (in a manner that adversely affects holders of Registrable Common
      Stock) with any other provisions included in, this Agreement. To the extent
      the
      Company provides any right to others that are more favorable than those provided
      for herein, the Company shall be required to make appropriate modifications
      to
      this Agreement to ensure that each Shareholder will have the benefit of terms
      that are at least as favorable as those provided to such other
      persons.

     

    2.10 Adjustments
      Affecting Registrable Common Stock.
      Without
      the written consent of ARC, TAPIRDO and SGM, the Company shall not effect or
      permit to occur any combination, subdivision or reclassification of Registrable
      Common Stock that would materially adversely affect the ability of the
      Shareholders to include such Registrable Common Stock in any registration of
      its
      securities under the Securities Act contemplated by this Agreement or the
      marketability of such Registrable Common Stock under any such registration
      or
      other offering.

     

    2.11 Rule
      144 and Rule 144A.
      The
      Company shall take all actions reasonably necessary to enable Shareholders
      to
      sell Registrable Common Stock without registration under the Securities Act
      within the limitation of the exemptions provided by (a) Rule 144 under the
      Securities Act, as such Rule may be amended from time to time, (b) Rule 144A
      under the Securities Act, as such Rule may be amended from time to time, or
      (c)
      any similar rules or regulations hereafter adopted by the Commission, including,
      without limiting the generality of the foregoing, filing on a timely basis
      all
      reports required to be filed under the Exchange Act. Upon the written request
      of
      any Shareholder, the Company shall deliver to such Shareholder a written
      statement as to whether it has complied with such requirements. 

     

    2.12 Nominees
      for Beneficial Owners.
      In the
      event that any Registrable Common Stock is held by a nominee for the beneficial
      owner thereof, the beneficial owner thereof may, at its election in writing
      delivered to the Company, be treated as the Shareholder of such Registrable
      Common Stock for purposes of any request or other action by any Shareholder
      or
      Shareholders pursuant to this Agreement or any determination of the number
      or
      percentage of shares of Registrable Common Stock held by any Shareholder or
      Shareholders contemplated by this Agreement. If the beneficial owner of any
      Registrable Common Stock so elects, the Company may require assurances
      reasonably satisfactory to it of such owner’s beneficial ownership of such
      Registrable Common Stock.

     

    2.13 Calculation
      of Percentage or Number of Shares of Registrable Common Stock.
      For
      purposes of this Agreement, all references to a percentage or number of shares
      of Registrable Common Stock or Common Stock shall be calculated based upon
      the
      number of shares of Registrable Common Stock or Common Stock, as the case may
      be, outstanding at the time such calculation is made and shall exclude any
      Registrable Common Stock or Common Stock, as the case may be, owned by the
      Company or any Subsidiary of the Company. For the purposes of calculating any
      percentage or number of shares of Registrable Common Stock or Common Stock
      as
      contemplated by the previous sentence, the terms “Shareholder,” “ARC,” “,
      TAPIRDO,” and “SGM” shall include all Affiliates thereof owning any shares of
      Registrable Common Stock or Common Stock.

     

    
      
        
        

      

      
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    2.14 Termination
      of Registration Rights.
      The
      Company’s obligations under Sections 2.1 and 2.2 hereof to register Common Stock
      for sale under the Securities Act with respect to any Shareholder shall
      terminate on the first date on which no shares of Registrable Common Stock
      are
      held by such Shareholder.

     

    ARTICLE
      III

     

    MISCELLANEOUS

     

    3.1 Injunctive
      Relief.
      The
      Shareholders and the Company acknowledge and agree that a violation of any
      of
      the terms of this Agreement will cause the Shareholders irreparable injury
      for
      which adequate remedy at law is not available. Accordingly, it is agreed that
      each of the Company and the Shareholders shall be entitled to an injunction,
      restraining order or other equitable relief to prevent breaches of the
      provisions of this Agreement and to enforce specifically the terms and
      provisions hereof in any court of competent jurisdiction in the United States
      or
      any state thereof, in addition to any other remedy to which it may be entitled
      at law or equity.

     

    3.2 Amendments;
      Entire
      Agreement.
      This
      Agreement may be amended and the Company may take action herein prohibited,
      or
      omit to perform any act herein required to be performed by it, if, but only
      if,
      the Company has obtained the written consent of ROSEMAN and MAGAMI. This
      Agreement constitutes the entire agreement and supersedes all other prior
      agreements and understandings, both written and oral, among some or all of
      the
      parties with respect to the subject matter hereof.

     

    3.3 Severability.
      Whenever
      possible, each provision of this Agreement shall be interpreted in such manner
      as to be effective and valid under applicable law, but if any provision of
      this
      Agreement shall be held to be prohibited by or invalid under applicable law,
      such provision shall be ineffective only to the extent of such prohibition
      or
      invalidity, without invalidating the remainder of such provision or the
      remaining provisions of this Agreement. 

     

    3.4 Successors
      and Assigns.
      The
      provisions of this Agreement shall be binding upon and shall inure to the
      benefit of the parties hereto and their respective successors, each of which
      successors shall agree in a writing in form and substance reasonably
      satisfactory to the Company to become a party hereto and be bound to the same
      extent as the parties hereto hereby. This Agreement, and any and all rights,
      duties and obligations hereunder, shall not be assigned or transferred by any
      Shareholder without the prior written consent of the Company, except for
      transfers to the Affiliates, heirs, executors and administrators of such
      Shareholder. Any purported assignment in violation of this provision shall
      be
      null and void ab
      initio.
      

     

    
      
        
        

      

      
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    3.5 Notices.
      All
      notices, requests and demands to or upon the respective parties hereto to be
      effective shall be in writing (including by telecopy), and, unless otherwise
      expressly provided herein, shall be deemed to have been duly given or made
      when
      delivered by hand, or two Business Days after being delivered to a recognized
      courier (whose stated terms of delivery are two Business Days or less to the
      destination of such notice), or, in the case of telecopy notice, when received,
      addressed as set forth on Schedule A hereto to the parties hereto, or to such
      other address as may be hereafter notified by the respective parties
      hereto.

     

    3.6 Counterparts.
      This
      Agreement may be executed in two or more counterparts, and by different parties
      on separate counterparts each of which shall be deemed an original, but all
      of
      which shall constitute one and the same instrument.

     

    3.7 Governing
      Law; Consent to Jurisdiction.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New York applicable to contracts made and to be performed
      therein. The parties hereto irrevocably submit to the exclusive jurisdiction
      of
      any state or federal court sitting in the County of New York, in the State
      of
      New York over any action or proceeding arising out of or relating to this
      Agreement or the transaction contemplated hereby to the fullest extent they
      may
      effectively do so under applicable law, the parties hereto irrevocably waive
      and
      agree not to assert, by way of motion, as a defense or otherwise, (a) any claim
      that they are not subject to the jurisdiction of any such court, (b) any
      objection that they may now or hereafter have to the laying of the venue of
      any
      such action or proceeding brought in any such court and (c) any claim that
      any
      such action or proceeding brought in any such court has been brought in an
      inconvenient forum.

     

    3.8 Waiver
      of July Trial.
      Each
      party acknowledges and agrees that any controversy which may arise under this
      Agreement is likely to involve complicated and difficult issues and, therefore,
      each such party irrevocably and unconditionally waives any right it may have
      to
      a trail by jury in respect of any action or proceeding arising out of or
      relating to this Agreement or the transactions contemplated hereby.

     

    [remainder
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    IN
      WITNESS WHEREOF, the parties hereto have executed this Registration Rights
      Agreement as of the date first above written.

     

    COMPANY:

     

    PURE
      BIOFUELS CORP.

     

    By: 
      /s/________________

    Name:
      

    Title:

     

    SHAREHOLDERS:

     

    ARC
      INVESTMENT PARTNERS, LLC

     

    By:
      /s/
      Adam Roseman

    Name:
      

    Title:
      

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    SHAREHOLDERS
      (CONTINUED)

    

    

    TAPIRDO
      ENTERPRISES, LLC

     

    By:
      /s/
      Adam Roseman 

    Name:
      

    Title:
      

     

    SGM
      CAPITAL, LLC

     

    By:
      /s/
      Steven Magami 

    Name:
      

    Title:
      

     

     

    DEMANDING
      SHAREHOLDERS:

     

    ADAM
      ROSEMAN

     

    By:
      /s/
      Adam Roseman 

    

     

    STEVEN
      MAGAMI

     

    By:
      /s/
      Steven Magami 

    
      
        
        

      

      
        25

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