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Unassociated Document

 

    MASTER
      AGREEMENT

    

    THIS
      MASTER AGREEMENT (this
      “Agreement”), dated effective as of August 19, 2008 (the “Effective Date”), is
      made by and among Eugene Science Inc., a Delaware corporation (“Eugene”); KIP
      Biotech, LLC, a Delaware limited liability company (“KIP”); Onbio Corporation, a
      Republic of Korea corporation (“Onbio”); Seung-Kwon
      Noh
      (“Noh”);
      ASA Opportunity Fund L.P., a Delaware limited partnership, Bradley Rotter,
      Zhonghua Chen, Scott Choi, Kang Du (collectively, the “Lenders”) and Benton H.
      Wilcoxon (“Wilcoxon,” collectively with the Lenders, “Creditors”).

    

    WITNESSETH:

    

    WHEREAS on
      or
      about August 24, 2007, the
      Lenders and SummitBridge
      National Investments LLC (“SummitBridge”) advanced funds to Eugene under the
      terms of that certain Note and Warrant Purchase Agreement (the “Purchase
      Agreement”) and were issued notes (the “Notes,” collectively, with the Purchase
      Agreement, the “Loan Documents”) and warrants (the “Warrants”) in connection
      therewith;

    

    WHEREAS
      Wilcoxon
      has purchased the Note held by SummitBridge;

    

    WHEREAS
      Eugene
      is in the business of developing, manufacturing, and marketing nutraceuticals;
      

    

    WHEREAS
      Eugene
      would like to terminate the Loan Documents and extinguish any rights,
      obligations, and conditions related thereto;

    

    WHEREAS
      Onbio,
      which is related to and a shareholder in Eugene and intends to merge with
      Eugene, has agreed to transfer certain patents related to a composition enriched
      in diglyceride with conjugated linoleic acid to Eugene in exchange for good
      and
      valuable consideration provided by Eugene; and

    

    WHEREAS
      Creditors, through KIP (a newly formed entity owned by Creditors), desire to
      exploit on a worldwide basis the products and intellectual property developed
      by
      Eugene for the benefit of Eugene and KIP.

    

    NOW,
      THEREFORE,
      for
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties agree as follows:

    

    ARTICLE
      I. 

    DEFINITIONS

    

    As
      used
      in this Agreement, the following terms shall have the meanings set forth below:
      

    

    1.01 “Competing
      Products” means any and all products that compete in any market in any territory
      with Licensed Products, as defined herein, but which do not employ or are not
      produced by the practice of inventions described in any claim in any issued
      patent included within the Eugene Patents, as defined herein. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.02 “Eugene
      Patents” means those patents and patent applications listed on Schedule A and
      any divisions, reissues, continuations, renewals, and extensions of the
      foregoing, and patents which may issue upon such applications.

    

    1.03 “Improvement”
      means any modification to a component, element, material or process described
      by
      claims in the Eugene Patents or useful in practicing the inventions disclosed
      in
      the Eugene Patents which is first conceived and actually or constructively
      reduced to practice by Eugene or its contractors prior to the third anniversary
      of the Effective Date.

    

    1.04 “Licensed
      Products” means any and all products which employ or are produced by the
      practice of inventions described in any claim in any issued patent included
      within the Eugene Patents.

    

    1.05 “Net
      Sales Revenues” means gross sales receipts, including any commissions and
      royalties received, less (i) expenses incurred from the sale of Licensed
      Products and related taxes, duty fees and insurance on products sold and (ii)
      deductions for returns, discounts, allowances, credits and repayments due to
      rejections and defects.

    1.06 As
      further defined and described in
      Section
      2.04, “Onbio Patents” means those patents and patent applications listed on
      Schedule B and any divisions, reissues, continuations, renewals, and extensions
      of the foregoing, and patents which may issue upon such
      applications.

    

    1.07 As
      further defined and described in Section 2.04, “Onbio Licensed Products” means
      any and all products which employ or are produced by the practice of inventions
      claimed in the Onbio Patents.

    

    ARTICLE
      II. 

    ASSIGNMENT
      OF PATENTS

    

    2.01 Assignment.
      

    

    (a) Eugene
      hereby assigns all of its rights, title, and interest in and to the Eugene
      Patents to KIP. Eugene agrees to contemporaneously execute the Patent Assignment
      attached hereto as Exhibit A and subsequently execute other assignment documents
      that KIP may supply from time to time. 

    

    (b) Eugene
      agrees to cooperate fully with KIP to execute all documents necessary to
      transfer and record the change of ownership of the Eugene Patents to KIP and
      perform such other actions which may be or become necessary, expedient or as
      reasonably requested by KIP to effectuate and carry out the terms of this
      Agreement. Without limiting the generality of the foregoing, Eugene agrees
      to
      execute and deliver documents, including without limitation documents required
      by any government, to effect the assignment under this Agreement when requested
      by KIP.

     

    2.02 Agreement
      to Extinguish Debt.
      In
      consideration of the foregoing assignments and the remaining terms and
      conditions of this Agreement, each of the Creditors does hereby release, cancel,
      forgive, and forever discharge the obligations of Eugene under the terms of
      the
      Loan Documents, but not the Warrants, from all actions, claims, demands,
      damages, obligations, liabilities, controversies and executions, of any kind
      or
      nature whatsoever, whether known or unknown, whether suspected or not, which
      have arisen, or may have arisen, or shall arise, except claims of fraud or
      intentional misrepresentation on the part of Eugene or any party associated
      with
      Eugene or claims arising out of this Agreement. In connection therewith,
      Creditors shall mark the Notes “canceled” and surrender the same to Eugene.
      Nothing in this section shall release Eugene of its obligation or ability to
      issue additional warrants pursuant to any existing and outstanding agreements
      between Eugene and any Creditors.

     

    
      
        
        

      

      
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    2.03 Maintenance
      and Right of First Refusal.
      Following the execution of this Agreement, the maintenance of all Eugene Patents
      successfully transferred to KIP shall be the responsibility of KIP. If KIP
      intends to abandon any of the Eugene Patents, KIP shall notify Eugene in writing
      of such intention upon the earlier of (i) KIP’s decision to abandon such
      patent(s) and (ii) ninety (90) days prior to such patent(s) becoming abandoned,
      and in either event, KIP shall provide Eugene the option of acquiring such
      patent(s) from KIP at no charge to Eugene other than related transfer expenses.
      If Eugene elects to acquire such patent(s) in writing within sixty (60) days
      after such notification, KIP shall take such actions and execute and deliver
      such documents as are necessary in order to transfer and assign such patents
      to
      Eugene.

    

    2.04 Onbio
      Patents.
      Eugene
      and Onbio represent that they intend to consummate a merger subject to
      regulatory approvals. Within ninety (90) days of the completion of the merger,
      Eugene or the merged companies will transfer ownership of the Onbio Patents
      to
      KIP. Upon the execution of one or more assignments transferring ownership of
      the
      Onbio Patents to KIP, the parties agree that (i) for purposes of this Agreement
      “Onbio Patents” shall be considered “Eugene Patents,” and “Onbio Licensed
      Products” shall be considered “Licensed Products;” (ii) KIP grants to Eugene
      licenses to the Onbio Patents under the same terms and conditions as those
      provided in Sections 3.01(a), (b), and (c); and (iii) Section 3.01(d) shall
      be
      null and void.

    

    ARTICLE
      III. 

    LICENSES
      

    

    3.01 Grants.
      Subject
      to the terms and conditions set forth in this Agreement, the parties agree
      to
      the following license grants:

    

    (a) KIP
      grants to Eugene an exclusive, revocable, nontransferable license to market
      and
      sell Licensed Products in Japan and the Republic of Korea.

    

    (b) KIP
      grants to Eugene a nonexclusive, revocable, nontransferable license to market
      and sell Licensed Products in the People’s Republic of China.

    

    (c) KIP
      grants to Eugene an exclusive, revocable, nontransferable license to manufacture
      Licensed Products (i) for sales in connection with Sections 3.01(a) and (b)
      and
      (ii) for sales to Archer-Daniels-Midland Company. This license shall not
      restrict KIP’s right to contract with third parties to manufacture Licensed
      Products for sale by KIP in territories other than Japan and the Republic of
      Korea or to customers other than Archer-Daniels-Midland Company.

    

    (d) Onbio
      grants to KIP an exclusive, irrevocable, transferable license to make, use,
      and
      sell Onbio Licensed Products worldwide and to license others to make, use,
      and
      sell Onbio Licensed Products worldwide.

     

    
      
        
        

      

      
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    3.02 Revocability.
      KIP
      shall have the right in its sole discretion exercised in good faith, upon sixty
      (60) days notice of the same, to revoke any of the licenses granted in Sections
      3.01(a), (b), and (c) if (i) Eugene fails to meet the best available fully
      loaded cost of delivered goods available in the markets of Japan or the Republic
      of Korea with respect to delivered cost, volume, or delivery after being
      notified of such failure and being given ten business days to match the best
      market rate, or (ii) Eugene manufactures or sells Licensed Products that are
      materially defective or otherwise cause material injury to the reputation of
      KIP
      or Licensed Products in any territory due to product quality, including any
      failure to properly package or ship products which materially affects product
      quality. In addition, KIP shall have the right to convert any of the licenses
      granted in Sections 3.01(a) and (c) from exclusive to nonexclusive under these
      same conditions. Failure of KIP to exercise any right in this section for any
      period of time shall not constitute a waiver of the rights granted
      herein.

    

    3.03 Sublicensing
      Prohibited.
      Eugene
      shall not sublicense any license or right granted by KIP herein without the
      express written consent of KIP, and any purported sublicense or transfer of
      any
      such license or right without the express written consent of KIP shall be null
      and void.

    

    3.04 Marking.
      Eugene
      agrees to mark all Licensed Products sold by it under the licenses granted
      with
      the words “Patent Pending,” “Patent,” or “Patents” and the number or numbers of
      the Eugene Patents applicable thereto.

    

    ARTICLE
      IV.

    IMPROVEMENTS
      AND COOPERATION

    

    4.01 Improvements.
      

    

    (a) Eugene
      shall disclose to KIP all information in its possession pertaining to each
      and
      every Improvement which may be necessary or useful for the preparation and
      filing of patent applications for the protection of such Improvement. Such
      disclosure shall take place within thirty (30) days of the Improvement being
      actually or constructively reduced to practice. Eugene shall thereafter supply
      to KIP such additional information as may be necessary or desirable to
      facilitate prosecution of such applications.

    

    (b) KIP
      shall
      have the exclusive right to file patent applications worldwide based upon any
      Improvement. KIP shall inform Eugene in writing of its election to exercise
      its
      exclusive right to file patent applications based upon any Improvement within
      thirty (30) days of the disclosure thereof pursuant to the preceding paragraph.
      Eugene agrees to cooperate fully with KIP to provide information and perform
      such actions which may be or become necessary, expedient or as reasonably
      requested by KIP to effectuate and carry out its right to file. Eugene hereby
      assigns to KIP the entire right, title and interest in and to all Improvements
      on which KIP exercises its right to file. Eugene agrees to execute and deliver
      documents, including without limitation documents required by any government,
      to
      effect any assignment under this paragraph when requested by KIP.

    

    (c) For
      any
      Improvement on which KIP declines to exercise its right to file pursuant to
      the
      prior paragraph, expressly or otherwise, Eugene may file patent applications
      based upon any such Improvement and shall have no obligation to assign any
      resulting patent or patent application to KIP; provided
      that
      Eugene
      shall comply with all provisions of this Agreement with respect to any
      Improvement for which the practice of said Improvement results in a product
      that
      is a Licensed Product or a Competing Product.

     

    
      
        
        

      

      
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    4.02 Competing
      Products.
      Eugene
      and Onbio may develop Competing Products subject to the following conditions:
      

    

    (a) Eugene
      and Onbio agree to grant and hereby grant to KIP (i) an exclusive, irrevocable,
      perpetual license to manufacture and sell Competing Products owned by Eugene
      or
      Onbio in all territories except the People’s Republic of China, Japan, and the
      Republic of Korea, and (ii) a nonexclusive, irrevocable, perpetual license
      to
      manufacture and sell Competing Products owned by Eugene or Onbio in the People’s
      Republic of China. All other rights are reserved to Eugene and
      Onbio.

    

    (b) KIP
      shall
      pay a royalty to Eugene for any Competing Products sold by KIP under a license
      granted in the preceding paragraph in accordance with the payment terms provided
      in Section 6.02 and related sections of this Agreement.

    

    (c) Eugene
      and Onbio shall pay KIP for any Competing Products owned by Eugene or Onbio
      and
      sold by Eugene or Onbio prior to the third anniversary of the Effective Date,
      in
      accordance with the royalty terms provided in Section 6.01(a) and related
      sections of this Agreement.

    

    4.03 Joint
      Inventions.

    

    (a) Each
      party hereto shall grant any consents necessary to the other in the event one
      or
      more countries require the consent of inventors or assignees to the grant of
      licenses or rights under patents issued for joint inventions, and shall obtain
      such consent from its employees, officers and/or contractors as required to
      make
      full and effective any such licenses and rights respecting any Eugene
      Patent.

    

    (b) Each
      party shall obtain whatever other consents are necessary to make full and
      effective such licenses and rights respecting any joint invention purported
      to
      be granted by it hereunder. If, in spite of such reasonable steps, such party
      is
      unable to obtain the requisite consents from such third parties, the resulting
      inability of such party to make full and effective its purported grant of such
      licenses and rights shall not be considered to be a breach of this
      Agreement. 

    

    4.04 Infringement
      by Third Parties.

    

    (a) Eugene
      shall notify KIP in writing within ten (10) days of learning of any alleged
      or
      threatened infringement of any patent right licensed or assigned in this
      Agreement.

    

    (b) In
      Japan
      and the Republic of Korea, Eugene, in its own name or jointly with KIP (if
      required by law), will bring and will diligently prosecute suits for
      infringement of the Eugene Patents. 

    

    (c) Outside
      of Japan and the Republic of Korea, KIP shall have the sole right to bring
      and
      control any action or proceeding with respect to infringement of any licensed
      right in its sole discretion, at its own expense, and by counsel of its own
      choice. Eugene agrees to cooperate fully in any such action or proceeding
      on issues related to the validity of any of the Eugene Patents.

     

    
      
        
        

      

      
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    (d) In
      the
      event either KIP or Eugene brings an infringement action in accordance with
      this
      section, the other party shall cooperate fully, including, if required to bring
      such action, the furnishing of a power of attorney or being named as a
      party.

    

    4.05 Infringement
      of Third Party Rights.
      Subject
      to Article 9, Eugene shall promptly notify KIP in writing of any allegation
      by a
      third party that the activity of either of the parties pursuant to this
      Agreement infringes or may infringe the intellectual property rights of such
      third party. KIP shall have the sole right to control any defense of any such
      claim involving alleged infringement of third party rights by KIP’s activities
      at its own expense and by counsel of its own choice. 

    

    4.06 Non-Interference.
      

    

    (a) Eugene
      and Onbio agree that they will not (i) interfere with KIP’s rights to exploit
      the Eugene Patents, (ii) take any position or make any statement inconsistent
      with KIP’s ownership of the Eugene Patents or the continued validity and
      commercial viability of the Eugene Patents, or (iii) vilify,
      disparage, slander or defame KIP, or any of its officers, board members,
      employees, businesses or business practices.

    

    (b) Eugene
      shall not sell or provide Licensed Products to any person or entity which Eugene
      knows or has any reason to know is distributing Licensed Products in territories
      other than Japan, the Republic of Korea, and the People’s Republic of
      China.

    

    ARTICLE
      V.

    SUPPLEMENTAL
      AGREEMENTS

    

    5.01 Technical
      and Sales Support.
      Eugene
      agrees to provide technical and sales support to KIP and its customers for
      all
      sales generated by KIP of any products sold outside of Japan and the Republic
      of
      Korea at all times during the term of this Agreement. In addition to other
      remedies KIP may have at law or in equity, in the event that that the technical
      and sales support is not provided in a meaningful way, KIP may suspend any
      payment due hereunder in good faith, provided
      that
      Eugene
      fails to resolve any issues with the technical and sales support after being
      given seven (7) business days written notice of such issues. 

    

    5.02 Japan
      CZ Patent.
      Eugene
      shall make best efforts in good faith to secure a release of the pledge in
      favor
      of Hokuyo Koeki and Early Bird relating to the Japan CZ patent, Patent No.
      3535147 (the “CZ Patent”) on or before December 31, 2008. At its sole
      discretion, KIP may make payments otherwise due Eugene under Section 6.02
      directly to Hokuyo Koeki and Early Bird in order to satisfy any amounts owed
      by
      Eugene to Hokuyo Koeki and Early Bird and thus obtain release of the pledge.
      

     

    5.03 Account
      Relationships.
      Absent
      any contractual restrictions on assignment that cannot be reasonably overcome,
      Eugene will transfer all of its customer accounts (including
      Archer-Daniels-Midland Company) to KIP within thirty (30) days of the date
      of
      this Agreement in all territories other than the Republic of Korea, Japan and
      the People’s Republic of China. Eugene will thereafter direct all correspondence
      related to such accounts to the appropriate representatives of KIP.

     

    
      
        
        

      

      
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    5.04 Archer-Daniels-Midland
      Contract.
      Eugene
      and KIP acknowledge and agree that KIP will use its commercially reasonable
      efforts to renegotiate the Strategic Alliance Agreement of April 8, 2004 between
      Archer-Daniels-Midland
      Company
      and
      Eugene in order to increase revenue receipts to Eugene and/or KIP. 

    

    5.05 AD/ADD
      Tonnage Study.
      KIP may
      at its discretion pay KRIBB Republic of Korean Research Institute for Bioscience
      & Biotechnology the balance owing to receive the completed AD/ADD tonnage
      study.

    

    5.06 Agreement
      between Noh and KIP.
      Noh and
      KIP agree to enter into a consulting and noncompetition agreement within ninety
      (90) days of the Effective Date, under the terms of which Noh will provide
      continued research and development expertise to KIP to the exclusion of parties
      other than Eugene, and KIP will provide market based equity incentives to Noh
      whereby Noh will participate in the scientific and economic successes of KIP
      and
      its affiliates.

    

    5.07 CZ
      Oil.
      Eugene,
      Onbio, and KIP acknowledge the existence of potential third-party rights
      relative to sterol products that can be integrated to edible oils (“CZO”).
      Eugene and Onbio hereby agree to use their commercially reasonable best efforts
      to secure exclusive access to all rights, title, and interest associated with
      the development of CZO for the exclusive benefit of Eugene and KIP and their
      affiliates under the terms of this Agreement.

    

    5.08 CZ
      Soluble.
      Eugene,
      Onbio, and KIP acknowledge the existence of potential third-party rights
      relative to water soluble sterol products (“CZ Soluble”). Eugene and Onbio
      hereby agree to use their commercially reasonable best efforts to secure
      exclusive access to all rights, title, and interest associated with the
      development of CZ Soluble for the exclusive benefit of Eugene and KIP and their
      affiliates under the terms of this Agreement. 

    

    ARTICLE
      VI. 

    ROYALTIES
      AND PAYMENTS

    

    6.01 Royalty
      from Eugene to KIP.

    

    (a) Eugene
      shall pay a royalty to KIP in the amount of five percent (5%) of its Net Sales
      Revenues directly or indirectly received by Eugene from the sale or lease of
      any
      Licensed Products. 

    

    (b) Eugene
      shall pay a royalty to KIP in the amount of seven and a half percent (7.5%)
      of
      its Net Sales Revenues directly or indirectly received from
      Archer-Daniels-Midland Company by Eugene from the sale or lease of any Licensed
      Products until Eugene has successfully transferred its Archer-Daniels-Midland
      account to KIP, at which time Eugene shall have no obligation to pay a royalty
      under this Section 6.01(b).

    

    6.02 Payment
      from KIP to Eugene.
      Subject
      to the Payment Advance Addendum attached hereto as Exhibit B, KIP shall pay
      Eugene in the amount of five percent (5%) of its Net Sales Revenues directly
      or
      indirectly received by KIP from the sale of any products which employ or are
      produced by the practice of inventions claimed in the Eugene Patents while
      such
      patent claims are valid and enforceable.

     

    
      
        
        

      

      
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    6.03 Future
      Sale of Patents.
      In the
      event that KIP sells, assigns or otherwise transfers (other than a license)
      any
      of the Eugene Patents, KIP shall pay the appropriate amount(s) set forth below.
      The payment of such amount shall extinguish the obligations of KIP to make
      the
      payments set forth in Section 6.02 with respect to the Eugene Patents so
      transferred. 

     

    (a) If
      the
      sale, assignment or transfer occurs within twelve
      (12) months of the Effective Date, KIP shall pay Eugene thirty percent (30%)
      of
      the net proceeds of such sale.

    

    (b) If
      the
      sale, assignment or transfer occurs between twelve (12) and twenty-four (24)
      months after the Effective Date, KIP shall pay Eugene twenty percent (20%)
      of
      the net proceeds of such sale.

    

    (c) If
      the
      sale, assignment or transfer occurs more than twenty-four (24) months after
      the
      Effective Date, KIP shall pay Eugene ten percent (10%) of the net proceeds
      of
      such sale.

    

    As
      used
      herein, the term “net proceeds” shall mean the gross amount received from a
      purchaser of the Eugene Patents less all expenses in connection with offering,
      selling, transferring and assigning such Eugene Patents and all maintenance
      and
      enhancement fees paid by KIP in connection with the maintenance of the Eugene
      Patents as well as any costs incurred by litigation involving the transfer,
      assignment or validity thereof. In the event that the Eugene Patents are
      transferred in connection with the sale of any other assets of KIP, the
      accountants regularly servicing the books and records of KIP shall in good
      faith
      determine the relative proportion of value paid which is attributed to the
      Eugene Patents. Payments of such net proceeds (whether in the form of cash,
      principal and interest, securities or royalties) to Eugene shall be made within
      fifteen (15) days of the actual receipt thereof by KIP. 

    

    6.04 Accrual,
      Reports, Records, and Payments.

    

    (a) Within
      thirty (30) days after the end of each calendar quarter, Eugene agrees to
      provide KIP with a written report indicating (i) Eugene’s Net Sales Revenues
      during the just completed calendar quarter resulting from sales of Licensed
      Products and any and all products or services generated from or using,
      incorporating or otherwise involving Licensed Products,
      and
      (ii) the amount of the royalties due for such calendar quarter. Simultaneously
      with making such report, Eugene shall pay to KIP the amount of royalties then
      due. Eugene shall have no obligation to pay KIP while any uncured material
      breach of this Agreement remains outstanding; provided
      that
      KIP has
      not cured such breach after thirty (30) days of Eugene having identified such
      breach to KIP in writing in lieu of or in addition to a written report.

    

    (b) Subject
      to the Payment Advance Addendum attached hereto as Exhibit B, within thirty
      (30)
      days after the end of each calendar quarter, KIP agrees to provide Eugene with
      a
      written report indicating (i) KIP’s Net Sales Revenues during the just completed
      calendar quarter resulting from sales of any products which employ or are
      produced by the practice of inventions claimed in the Eugene Patents while
      such
      claims are valid and enforceable,
      and
      (ii) the amount of payment due for such calendar quarter. Simultaneously with
      making such report, KIP
      shall
      pay
      to Eugene
      the
      amount then due. KIP shall have no obligation to pay Eugene while any uncured
      material breach of this Agreement remains outstanding, provided
      that Eugene
      has not cured such breach after thirty (30) days of KIP having identified such
      breach to Eugene in writing in lieu of or in addition to a written
      report.

     

    
      
        
        

      

      
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    (c) Each
      of
      KIP and Eugene shall in good faith keep detailed and accurate records with
      respect to all products and shall furnish any information which the other party
      may reasonably prescribe from time to time to enable it to ascertain the proper
      royalty or payment due hereunder on account of products sold. The other party
      shall have the right through its accredited auditors to make an examination,
      during normal business hours, of all records and accounts bearing upon the
      amount payable to it hereunder. Prompt adjustment shall be made to compensate
      for any material errors or omissions disclosed by such examination.

    

    (d) Obligations
      to pay accrued amounts of royalties or payments shall survive termination of
      licenses and rights under the terms of the Agreement, but in no event shall
      any
      new royalty or payment be due or owing on any expired patent.

    

    (e) Payments
      by either Eugene or KIP may be made to the other party at the addresses
      specified in this Agreement. Alternatively, payments may be made by bank wire
      transfers by arrangement of the parties.

    

    ARTICLE
      VII. 

    REPRESENTATIONS
      AND WARRANTIES

    

    7.01 Mutual
      Representations and Warranties.
      Each of
      Eugene, Onbio and KIP hereby represents, warrants, and covenants to the other
      party the following:

    

    (a) It
      is a
      corporation duly organized and validly existing and in good standing under
      the
      laws of the state, country, province or territory of its incorporation and
      is in
      good standing in each other jurisdiction where a failure to be in good standing
      would have a material adverse effect on the operations of such
      party.

    

    (b) It
      has
      all necessary right, power and authority to enter into this Agreement and
      perform its obligations hereunder, and, in so doing, will not violate any other
      agreement to which it is a party. 

    

    (c) It
      has
      taken all corporate action necessary to authorize the execution and delivery
      of
      this Agreement. This Agreement is legally binding upon it, enforceable in
      accordance with its terms.

    

    7.02 Eugene’s
      Representations and Warranties.
      Eugene
      specifically represents, warrants, and covenants that:

    

    (a) it
      has
      full authority to execute this Agreement;

    

    (b) its
      execution, delivery, and performance of this Agreement will not violate any
      judgment, award, decree, agreement, or other instrument to which it is a
      party;

    

    (c) it
      is not
      required to obtain any approval, authorization, consent, order, or action of
      or
      filing with any court, administrative agency, or other governmental authority
      for it to execute and deliver this Agreement;

     

    
      
        
        

      

      
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    (d) there
      are
      no actions, suits or proceedings now pending or threatened relating to the
      Eugene Patents or threatened against Eugene, or before or by any governmental
      agency or instrumentality; 

    

    (e) it
      is the
      sole and exclusive owner of the Eugene Patents, including all the rights and
      title associated with such an interest, and the Eugene Patents are free of
      all
      liens, claims, security interests, and other encumbrances other than those
      running in favor of Creditors and the pledge on the CZ Patent, and upon
      execution of the Patent Assignment attached hereto as Exhibit A, KIP will
      receive the Eugene Patents free and clear of any and all such encumbrances,
      except the pledge on the CZ Patent;

    

    (f) it
      is and
      will be the sole and exclusive owner of all Improvements; and

    

    (g) its
      Licensed Products will conform to all specifications and quality control
      standards that KIP may provide from time to time.

    

    ARTICLE
      VIII. 

    TERM
      AND TERMINATION

    

    8.01 Term.
      This
      Agreement shall continue in effect until the expiration of the last to expire
      of
      the Eugene Patents or upon termination as described in this
      Article.

    

    8.02 Termination
      for Cause.
      KIP may
      terminate any number of the licenses and rights granted by it to Eugene
      hereunder if (i) Eugene fails to make commercially reasonable efforts to exploit
      the Licensed Products in Japan, the Republic of Korea, and the People’s Republic
      of China; (ii) Eugene sells or transships Licensed Products outside of Japan,
      the Republic of Korea, and the People’s Republic of China; or (iii) Eugene or
      Onbio materially breaches this agreement; provided
      that KIP
      has
      given Eugene thirty (30) days written notice of (a) such failure to exploit,
      faulty sale or transshipment, or material breach, as applicable; (b) the
      effective date of termination; and (c) any affected patent, product, and/or
      territory; and Eugene has failed to cure or adequately explain to KIP’s
      satisfaction such failure to exploit, faulty sale or transshipment, or material
      breach, as the case may be, within said thirty (30) days.

    

    8.03 Insolvency.
      Either
      party may terminate this Agreement immediately upon written notice if the other
      party ceases conducting business in the normal course, becomes insolvent, makes
      a general assignment for the benefit of creditors, suffers or permits the
      appointment of a receiver for its business or assets, avails itself of or
      becomes subject to any petition or proceeding under any statute of any state
      or
      country relating to insolvency or the protection of the rights of creditors,
      or
      any other insolvency or bankruptcy proceeding or other similar proceeding for
      the settlement of the other party’s debt is instituted. Upon termination of this
      Agreement under this section the licenses granted by KIP shall automatically
      terminate.

    

    8.04 Survival.
      The
      obligations and rights of the parties under Article 4, Article 9 and Sections
      2.01 and 6.04 shall survive expiration or termination of this Agreement or
      any
      portion thereof. All other provisions of this Agreement shall be of no further
      force and effect upon expiration or termination of this Agreement.
      Notwithstanding the foregoing, expiration or termination of this Agreement
      shall
      not release either party from any obligation that has accrued prior to such
      expiration or termination, including without limitation any obligation to pay
      any amount which became due and payable under the terms and conditions of this
      Agreement prior to such expiration or termination.

     

    
      
        
        

      

      
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    ARTICLE
      IX. 

    INDEMNIFICATION

    

    9.01 Mutual
      Indemnification.
      Each
      party agrees to indemnify and hold the other parties and its affiliates,
      officers, directors, employees, agents and shareholders harmless against any
      and
      all losses, liabilities, damages, claims, judgments, demands, and expenses
      (including reasonable attorneys' fees) and costs (together or individually,
      a
      "Loss") arising out of or in connection with the breach by the indemnifying
      party of any of its representations or warranties or the nonperformance, partial
      or total, of any covenants of the indemnifying party contained in this
      Agreement.

    

    9.02 KIP’s
      Additional Indemnification.
      KIP
      further agrees to indemnify, defend and hold Eugene and Onbio and its directors
      officers, employees and agents (“Eugene/Onbio Indemnities”) harmless from and
      against any and all Losses to which any Eugene/Onbio Indemnities may becomes
      subject as a result of any claim, demand, action or other proceeding by any
      third party to the extent such Losses arise directly or indirectly out of:
      (a)
      the practice by KIP of any license granted to it hereunder; or (b) the
      manufacture, use, handling, storage, sale or other disposition of any product
      licensed hereunder by KIP; except, in each case, to the extent such Losses
      result from the gross negligence or willful misconduct of a Eugene/Onbio
      Indemnities or the breach by Eugene or Onbio of any warranty, representation,
      covenant or agreement made by Eugene or Onbio in this Agreement.

    

    9.03 Eugene’s
      Additional Indemnification.
      Eugene
      further agrees to indemnify, defend and hold KIP and its directors, officers,
      employees and agents (“KIP Indemnitees”) harmless from and against any and all
      Losses, to which any KIP Indemnitee may become subject as a result of any claim,
      demand, action or other proceeding by any third party to the extent such Losses
      arise directly or indirectly out of: (a) the practice by Eugene of any
      license granted to it hereunder; (b) the manufacture, use, handling,
      storage, sale or other disposition of any Licensed Product by Eugene;
      (c) any dispute regarding the ownership of any Improvement; or (d) any
      dispute regarding the inventorship or ownership of any Eugene Patent arising
      out
      of any transaction or occurrence taking place on or before the assignment of
      said patent to KIP; except, in each case, to the extent such Losses result
      from
      the gross negligence or willful misconduct of any KIP Indemnitee or the breach
      by KIP of any warranty, representation, covenant or agreement made by KIP in
      this Agreement. Eugene will indemnify KIP for any damages suffered by KIP in
      connection with its failure to secure the release of the pledge on the CZ
      Patent. 

    

    9.04 Conditions
      to Indemnification.
      As a
      condition to the indemnified party's right to indemnification under this Article
      IX, the indemnified party shall give prompt notice to the indemnifying party
      of
      any suits, claims or demands by third parties or the indemnified party which
      may
      give rise to any Loss for which indemnification may be required under this
      Article IX. The indemnifying party shall be entitled to assume the defense
      and
      control of any suit, claim or demand of any third party at its own cost and
      expense; provided, however, that (i) the other party shall have the right to
      be
      represented by its own counsel at its own cost in such matters, and (ii) any
      settlement of such suit, claim or demand shall be subject to the prior written
      consent of such other party, which consent shall not be withheld or delayed
      unreasonably.

     

    
      
        
        

      

      
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    ARTICLE
      X. 

    MISCELLANEOUS
      PROVISIONS

    

    10.01 Nonassignability.
      KIP has
      entered into this Agreement in contemplation of personal performance by Eugene
      and Noh and intends that the licenses, rights, and obligations hereunder shall
      not be transferred to third parties without KIP's express written consent.
      KIP
      shall have the right to transfer ownership of this agreement in whole or in
      part.

    

    10.02 Confidential
      Information.
      The
      parties may provide to each other certain valuable confidential trade secret
      information under this Agreement including, but not limited to, financial
      information, marketing information, product samples, specifications, methods
      of
      operation, techniques, trade secrets, documentation, systems, ideas, know-how,
      and concepts related thereto. Each party agrees to hold such confidential
      information in confidence and not to disclose any confidential information
      at
      any time to third parties or use such information for the benefit of third
      parties without the express written authorization of the disclosing
      party.

    

    10.03 Governing
      Law; Proceedings.
      This
      Agreement and the respective rights and obligations of the parties hereto shall
      be governed by the laws of the state of Minnesota. With
      respect to any dispute, controversy or claim arising out of or relating to
      this
      Agreement or the relationship between the parties, each party hereto agrees
      and
      consents to jurisdiction of and exclusive venue in the United States District
      Court, District of Minnesota,
      Fourth
      Division or in the Minnesota State Courts, Hennepin County, Fourth Judicial
      District. Each
      party hereby irrevocably (i) submits to the jurisdiction of such courts and
      (ii) waives any objection it may now or hereafter have as to the venue of
      any such action or proceeding brought in such court or that such court is an
      inconvenient forum.

    

    10.04 Contractor
      Status.
      Nothing
      contained in this Agreement or otherwise shall be deemed to create any agency,
      employment, partnership or joint venture among the parties hereto. No party
      hereto, nor any of their employees will hold itself/themselves out as anything
      but an independent contractor of one another based upon this
      Agreement.

    

    10.05 Notices.
      All
      notices, requests, demands, and other communications hereunder shall be in
      writing and shall be deemed to have been duly served or delivered (i) upon
      actual physical delivery when delivered in person or via courier such as Federal
      Express, (ii) if sent by facsimile to the facsimile number of such party set
      forth hereinafter, upon receipt of confirmation of the transmission thereof
      to
      that number, provided that the sender thereof mails a copy of such notice,
      request, demand or other communication by the business day next succeeding
      the
      date such facsimile or email was transmitted, or (iii) if mailed, on the fourth
      business day after being deposited in the United States Mail, provided it is
      sent by certified mail, return receipt requested, postage prepaid, and addressed
      as follows:

     

    
      
        
        

      

      
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    (a)
      if to
      Eugene Science Inc., to:

     

    Eugene
      Science, Inc

    8th
      Floor, LG Palace Building

    165-8
      Donggyo-Dong, Mapo-Gu

    Seoul,
      Republic of Korea

    Attn: Chief
      Executive Officer

    Fax: 82-2-338-6096

    

    With
      a
      copy (which will not constitute notice) to:

    

    Stradling
      Yocca Carlson & Rauth

    660
      Newport Center Drive

    Newport
      Beach, CA 92660

    Attn:
      Shivbir Grewal

    Fax:
      (949) 725-4100

    

    (b)
      if to
      the Creditors or KIP, to: 

     

    ASA
      Opportunity Fund L.P.

    c/o
      ASA
      OF Advisors LLC, General Partner

    601
      Carlson Pkwy #610 

    Minnetonka,
      MN, 55305 

    Attn:
      Robert D. Furst, Jr., Managing Member

    Fax: (952)
      847-2451

     

    With
      a
      copy (which will not constitute notice) to:

    

    Winthrop
      & Weinstine, P.A.

    225
      South
      Sixth Street, Suite 3500

    Minneapolis,
      MN 55402

    Attn:
      Scott J. Dongoske

    Fax: (612)
      604-6800

    

    Any
      party
      hereto may from time to time, by written notice to the other parties given
      in
      the manner hereinabove set forth, designate a different address or different
      facsimile number, which shall be substituted for the one specified above for
      such party.

     

    10.06 Integration.
      This
      Agreement, together with all Exhibits and Schedules referred to herein, sets
      forth the entire agreement and understanding between the parties as to the
      subject matter hereof and supersedes all prior discussions between them. None
      of
      the parties shall be bound by any warranties, understandings, or representations
      with respect to such subject matter other than as expressly provided herein
      or
      in a writing signed contemporaneously with or subsequent to execution hereof
      by
      an authorized representative of the party to be bound thereby.

    

    10.07 Attorney
      Fees.
      If any
      party brings a legal action or other proceeding to enforce this Agreement,
      or
      because of an alleged dispute, breach, default or misrepresentation relating
      to
      this Agreement, the successful or prevailing party in such dispute shall be
      entitled to recover reasonable attorney’s fees and other costs incurred in such
      action or proceeding. Such relief shall be in addition to any other relief
      to
      which that party may be entitled.

     

    
      
        
        

      

      
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    10.08 Successors
      and Assigns.
      This
      Agreement is and shall be binding upon and inure to the benefit of the parties
      hereto and their respective legal representatives, successors, and permitted
      assigns.

    

    10.09 Amendments.
      This
      Agreement may not be changed or modified except in a writing signed by the
      parties hereto.

    

    10.10 Waiver.
      A
      failure or delay of either Party to enforce any of the provisions of this
      Agreement may in no way be construed to be a waiver of such
      provision.

    

    10.11 Savings.
      Any
      provision of this Agreement that is invalid, illegal, or unenforceable for
      any
      reason shall be ineffective only to the extent of such invalidity, illegality,
      or unenforceability, without affecting in any way the remaining provisions
      or
      rendering any other provision of this Agreement invalid, illegal, or
      unenforceable.

    

    10.12 Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which, taken together, shall constitute one
      document. Facsimile and facsimile signatures shall be deemed originals in all
      cases.

    

    10.13 Force
      Majeure.
      No
      party hereto shall be liable for failures or delays in performance hereunder
      due
      to fire, explosion, breakdown of plant, lockout, labor dispute, casualty or
      accident, lack or failure of source of supply of labor, raw materials, power
      or
      supplies, acts of God or the public enemy, interference by civil or military
      authority, compliance with laws of any governmental authority, or any other
      cause beyond the control of the party in question. 

    

    

    [The
      remainder of this page is intentionally blank.]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has caused this Agreement to be signed as of the date first
      written above.

     

    
      
        	
                EUGENE
                  SCIENCE INC.

              	 	
                KIP
                  BIOTECH, LLC

              	 
	 	 	 	 	 	 	 	 	 	 
	
                By:
                  

              	/s/
                Christopher Craney	 	
                By:

              	/s/
                Robert D. Furst Jr.	 
	
                Name:
                  

              	
                Christopher
                  Craney

              	 	
                Name:
                  

              	
                Robert
                  D. Furst Jr.

              	 
	
                Title:

              	 
	President
                and CEO	 	
                Title:

              	 	Managing
                Member	 
	 	 	 	 	 	 	 	 	 	 
	
                ASA
                  OPPORTUNITY FUND L.P.

              	 	
                ONBIO
                  CORPORATION

              	 
	 	 	 	 	 	 	 	 	 	 
	
                By:

              	/s/
                Robert D. Furst Jr.	 	
                By:

              	/s/
                Seung-Kwon Noh	 
	
                Name:
                  

              	
                Robert
                  D. Furst Jr.

              	 	
                Name:
                  

              	
                Seung-Kwon
                  Noh

              	 
	
                Title:

              	  	Managing
                Member of General Partner	 	
                Title:

              	 
	President	 
	 	 	 	 	 	 	 	 	 	 
	
                /s/
                  Bradley Rotter

              	 	
                /s/
                  Zhonghua Chen

              	 
	
                Bradley
                  Rotter

              	 	
                Zhonghua
                  Chen

              	 
	 	 	 	 	 	 	 	 	 	 
	
                /s/
                  Scott Choi

              	 	
                /s/
                  Seung-Kwon Noh

              	 
	
                Scott
                  Choi

              	 	
                Seung-Kwon
                  Noh

              	 
	 	 	 	 	 	 	 	 	 	 
	
                /s/Kang
                  Du

              	 	
                /s/
                  Benton H. Wilcoxon

              	 
	
                Kang
                  Du

              	 	
                Benton
                  H Wilcoxon

              	 

      

       

    

    
      
        
        

      

      
        Page
          15 of
          15WARRANT
      EXCHANGE AGREEMENT

    

    WARRANT
      EXCHANGE AGREEMENT, dated as of September
      8,
      2008
      (this “Agreement”),
      by
      and between PURE BIOFUELS CORP., a Nevada corporation (the “Company”),
      and
      YA Global Investments, L.P. (formerly known as Cornell Capital Partners, L.P.)
      (“PURCHASER”).
      Capitalized terms used and not otherwise defined herein shall have the meanings
      assigned to such terms in the Securities Purchase Agreement, dated as of April
      19, 2007 (the “Purchase
      Agreement”),
      by
      and between the Company and the Buyers listed on Schedule I
      thereto.

    

    WITNESSETH:

    

    WHEREAS,
      PURCHASER is a holder of (i) Warrant No.: PBOF-1-1 (the “July
      Warrant”)
      to
      purchase 704,082 shares of Common Stock at an exercise price of $0.60 and (ii)
      Warrant No.: PBOF-1-2 to purchase 704,082 shares of Common Stock at an exercise
      price of $0.60 (the “April
      Warrant”
and
      together with the July Warrant, the “Warrants”);

    

    WHEREAS,
      PURCHASER desires,
      for
      valid business reasons, to consummate an exchange of the Warrants pursuant
      to
      the terms hereof;

    

    WHEREAS,
      the Company has determined that it is in its best interest to recapitalize
      its
      capital structure through the exchange of the Warrants pursuant to the terms
      hereof as a plan of reorganization; and

    

    WHEREAS,
      for Federal income tax purposes, it is intended that this Agreement shall
      qualify as a “reorganization” within the meaning of Section 368(a) of the
      Internal Revenue Code of 1986, as amended, and the regulations promulgated
      thereunder (the “Code”).

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and of the
      representations, warranties, covenants and agreements contained in this
      Agreement, and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties agree as
      follows:

    

    1. Agreement
      to Exchange.
      PURCHASER and the Company agree that PURCHASER shall exchange all of the
      Warrants for 938,776
      shares
      of
      Common Stock (the “Exchange
      Shares”).
      Upon
      issuance of the Exchange Shares to PURCHASER, the Warrants will be null and
      void
      and of no further force or effect. The parties agree to issue the Exchange
      Shares in the name of the PURCHASER. 

    

    2. Surrender
      of Warrant Certificates.
      Concurrently with the execution of this Agreement and the issuance of the
      Exchange Shares, PURCHASER shall surrender the Warrants it holds in certificated
      form to the Company, upon which surrender PURCHASER shall be deemed to be the
      holder of record of the Exchange Shares.

    

    3. Issuance
      of Exchange Shares.
      Upon
      surrender by PURCHASER of the Warrants it holds in certificated form pursuant
      to
      Section 2 hereof, the Company
      agrees
      to adopt this plan of reorganization and
      shall
      issue and deliver to PURCHASER the Exchange Shares issuable to PURCHASER
      pursuant to this Agreement, registered in the name of PURCHASER with the
      Transfer Agent.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4. Registration
      Rights. The
      Company and PURCHASER agree that the Exchange Shares shall constitute
“Registrable Securities” under the Registration Rights Agreement.

    

    5. Representations
      and Warranties of the Company.
      In
      order to induce PURCHASER to enter into this Agreement, the Company hereby
      represents and warrants to and agrees with PURCHASER that:

    

    (i) All
      Exchange Shares shall, when issued in exchange for the Warrants, be duly
      authorized, validly issued, fully paid and non-assessable, and free of any
      liens, encumbrances and preemptive or similar rights, and shall not be in
      violation of the Company’s Certificate of Incorporation or Bylaws or any
      applicable law.

    

    (ii) The
      Company has the corporate power and authority to execute, deliver and perform
      the terms and provisions of this Agreement and has taken all necessary corporate
      action to authorize the execution, delivery and performance by it of this
      Agreement. The Company has duly executed and delivered this Agreement, and
      this
      Agreement 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).

    

    (iii) No
      order,
      consent, approval, license, authorization or validation of, or filing, recording
      or registration with, 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 (a) the execution, delivery and performance of this Agreement, (b) the
      legality, validity, binding effect or enforceability of this Agreement, or
      (c)
      the issuance of the Exchange Shares to PURCHASER and the registration of the
      Exchange Shares with the Transfer Agent.

    

    (iv)
      Neither the execution, delivery or performance by the Company of this Agreement,
      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 the
      Company or any of its subsidiaries or property or assets is bound or to which
      the Company or any of its subsidiaries 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.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (v) (a)
      Upon
      issuance of the Exchange Shares, the authorized capital stock of the Company
      will consist solely of 250,000,000 shares of Common Stock and 1,000,000 shares
      of preferred stock, of which 172,374,699 shares of Common Stock (assuming no
      additional exercises of existing stock options described in Schedule 4.7 to
      this
      Agreement) and no shares of preferred stock will be issued and outstanding,
      no
      shares are held in treasury and 69,745,250 shares of Common Stock (such amount
      does not include any shares, warrants or other convertible or exchangeable
      securities that may be issued pursuant to the Agreement and Plan of Merger,
      dated as of December 4, 2007, by and among the Company, Pure Biofuels del Peru
      S.A.C., Interpacific Oil S.A.C. and certain Target Stockholders identified
      therein, as amended on January 23, 2008 (the “Merger Agreement”)) will be
      reserved for issuance upon the exercise of outstanding warrants, options and
      other convertible or exchangeable securities (other than the Exchange Shares).
      Schedule 4.7 to this Agreement sets forth the capitalization of the Company
      as
      of the issuance of the Exchange Shares.

    

    (b)
       Except
      as
      set forth on Schedule 4.7 to this Agreement, as of the date of this Agreement,
      there are and upon issuance of the Exchange Shares 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.

    

    (vi)
      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.

    

    6. Representations
      and Warranties of PURCHASER.
      PURCHASER represents and warrants to the Company that:

    

    (i) PURCHASER
      has the power to execute, deliver and perform its obligations under this
      Agreement and has taken all action necessary to authorize the execution,
      delivery and performance by it of this Agreement and to consummate the
      transactions contemplated hereby. 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. This Agreement
      constitutes 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).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) The
      execution, delivery and performance by PURCHASER of this Agreement does not
      and
      will not (a) violate any organizational document of PURCHASER, (b) contravene
      any material applicable law, (c) require any consent of any governmental
      authority or other Person, except where the failure to obtain such consent
      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, or (d) constitute a default under any contract binding upon
      PURCHASER, except for any such 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.

    

    (iii) 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 this Agreement or the transactions contemplated
      hereby.

    

    7. Reserved.
      

    

    8. Reserved.
      

    

    9. Certain
      Taxes.
      The
      Company shall pay any and all documentary, stamp or similar issue or transfer
      taxes payable in respect of the issue or delivery of the Exchange
      Shares.

    

    10. Incorporation
      of Provisions from the Purchase Agreement.
      The
      provisions of Section 9(a) of the Purchase Agreement are incorporated by
      reference herein (as if set forth in full in this section) so that this
      Agreement shall be subject to the terms and provisions of such section of the
      Purchase Agreement.

    

    11. Waiver;
      Exercise of Rights and Remedies.
      Any
      provision of this Agreement may be amended or waived if, and only if, such
      amendment or waiver is in writing and signed by PURCHASER and the Company.
      No
      failure or delay by any party in exercising any right, power or privilege
      hereunder shall operate as a waiver thereof nor shall any single or partial
      exercise thereof preclude any other or further exercise thereof or the exercise
      of any other right, power or privilege. The rights and remedies herein provided
      shall be cumulative and not exclusive of any rights or remedies provided by
      law.

    

    12. Counterparts.
      This
      Agreement may be executed in any number of counterparts and by the different
      parties hereto on separate counterparts, each of which counterparts when
      executed and delivered shall be an original, but all of which shall together
      constitute one and the same instrument. A complete set of counterparts shall
      be
      lodged with each of the parties hereto.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13. Reorganization.
      The
      Company and PURCHASER intend, and shall take the position, that the exchange
      of
      the Warrants pursuant to this Agreement should be characterized as a
      reorganization within the meaning of Section 368(a) of the Code and shall not
      take any position on any United States tax filing that is inconsistent with
      such
      characterization.

    

    [Remainder
      of page intentionally left blank.]

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, PURCHASER and the Company have each duly caused this Agreement
      to be executed on the day and year first written above.

     

    
      	 	
              PURE
                BIOFUELS CORP.

              

              By:
                /s/ Luis Goyzueta

              Name: 
                Luis Goyzueta

              Title:  
                 Director and CEO

               

              YA
                GLOBAL INVESTMENTS, L.P.

              By: 
                Yorkville Advisors, LLC

              Its: 
                Investment Advisor

               

              By:
                /s/ Troy Rillo

              Name: 
                Troy Rillo

              Title:   
                Senior Managing Director

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