Document:

Unassociated Document

    

      Exhibit
        10.3

       

       

      ESCROW
        AGREEMENT

       

       

      ESCROW
        AGREEMENT
        made as
        of the 19
        day of
        April, 2007.

       

      AMONG:

       

      PURE
        BIOFUELS CORP.,
        a Nevada
        corporation with an address at 9440 Little Santa Monica Blvd., Suite 400
        Beverly
        Hills, CA.

       

      (“PBOF”)

       

      AND:

       

      Luis
        Goyzueta

       

      (the
        “Shareholder”) 

       

      AND:

       

      Cornell
        Capital Partners, L.P., a
        Cayman
        Islands limited partnership with an address at 101 Hudson Street, Suite 3700,
        Jersey City, NJ 07303.

       

      (“Cornell”)

       

      AND:

       

      U.S.
        Bank National Association, a
        national banking association with a corporate trust services office at 225
        Asylum Street, 23rd
        Floor,
        Hartford, CT 06103, attention: Corporate Trust Services

       

      (the
        “Escrow
        Agent”)

       

      WITNESS
        THAT WHEREAS:

       

      A.  The
        Shareholder and PBOF wish to appoint the Escrow Agent to accept, hold and
        deliver, pursuant to the terms of this Agreement, 5,000,000 shares of common
        stock of PBOF registered in the name of the Shareholder (the “Shares”);
        

       

      B.  PBOF
        and
        Cornell are parties to the Securities Purchase Agreement of even date herewith
        (the “Purchase
        Agreement”),
        pursuant to which PBOF shall issue and sell to Cornell, as provided in the
        Purchase Agreement and Cornell shall purchase secured convertible
        debentures;

       

      
        
           

        

        
           

          
            

          

        

        
           

        

        -
          2
          -

         

      

      C.  The
        Shareholder and PBOF have agreed that the Shares will be held by the Escrow
        Agent and released only in accordance with this Agreement.

       

      THEREFORE,
        in consideration of the mutual covenants and agreements herein contained
        and
        other good and valuable consideration (the receipt and sufficiency of which
        are
        hereby acknowledged), the parties covenant and agree as follows:

       

      
        1. 
          INTERPRETATION

      

       

      1.1  In
        this
        Agreement:

       

      	(a)  	
              the
                headings have been inserted for convenience of reference only and
                in no
                way define, limit, or enlarge the scope or meaning of the provisions
                of
                this Agreement;

            

       

      	(b)  	
              all
                references to any party, whether a party to this Agreement or not,
                will be
                read with such changes in number and gender as the context or reference
                requires; and

            

       

      	(c)  	
              when
                the context hereof makes it possible, the word “person” includes in its
                meaning any firm and any body corporate or
                politic.

            

       

      2.  DEPOSIT
        INTO ESCROW

       

      2.1  The
        Shareholder will, within five (5) business days of the execution of this
        Agreement, deliver the Shares and fully executed stock power of attorney,
        signature guaranteed as required by the transfer agent of PBOF (the
“PA”),
        to
        the Escrow Agent and the Escrow Agent will hold the Shares and the PA in
        escrow
        subject to the terms and conditions of this Agreement.

       

      3.  ESCROW
        PROVISIONS

       

      3.1  The
        Shareholder and PBOF hereby direct the Escrow Agent to retain the Shares
        and the
        PA and not to cause anything to be done to release the same from escrow except
        in accordance with this Agreement. The Escrow Agent accepts its responsibilities
        hereunder and agrees to perform them in accordance with the terms
        hereof.

       

      3.2  The
        Escrow Agent will hold the Shares and the PA in escrow and will, unless
        prohibited by an order of a court of competent jurisdiction, deliver the
        Shares
        and PA as follows:

       

      	(a)  	
              within
                five business days after its receipt of
                a certificate signed
                by each of PBOF and Cornell to
                the effect that an “Event of Default” (as defined in Secured Convertible
                Debenture issued to Cornell as of even date herewith (the “Debenture”))
                has occurred, the
                Escrow Agent shall deliver the Shares and the PA to Cornell
                at the address set forth in Section 7.5 hereto or at such other address
                as
                Cornell shall instruct the Escrow Agent in writing from time to time.
                For
                the avoidance of doubt, the parties other than the Escrow Agent agree
                among themselves that, in the event they instruct the Escrow Agent
                to
                deliver the Shares in accordance with this Section 3.2(a), they will
                instruct the Escrow Agent to transfer such Shares, or a portion thereof,
                so that the Shares previously owned by and registered in the name
                of the
                Shareholder
                shall be delivered to and re-registered in the name
                of
                Cornell;
                or

            

       

      
        
           

        

        
           

          
            

          

        

        
           

        

        - 3
          -

         

      

      	(b)  	
              within
                five business days after its receipt of
                a certificate signed
                by each of PBOF and Cornell to
                the effect that the Debenture has been fully repaid or converted
                pursuant
                to Sections 3 and 4 of the Debenture, the Escrow Agent shall
                deliver the Shares and related PA to the Shareholder
                at
                the address set out in Section 7.5 hereto or at such other address
                as the
                Shareholder shall instruct the Escrow Agent in writing from time
                to
                time.

            

       

      The
        period of time any of the Shares are held by the Escrow Agent pursuant to
        this
        Section 3.2 shall be referred to herein as the “Escrow Period.”

       

      4.  RIGHTS
        OF SHAREHOLDER IN THE SHARES

       

      4.1  The
        Shareholder, as the registered owner of the Shares, shall retain all of its
        rights as Shareholder of the Company during the Escrow Period, including,
        without limitation, the right to vote such shares, but not including the
        right
        to sell or transfer the Shares except as set forth in Section 4.3.

       

      4.2  During
        the Escrow Period, all cash dividends payable with respect to the Shares
        shall
        be paid to the Shareholder, as the registered owners of the Shares. As used
        herein, the term “Shares” shall be deemed to include all
        non-cash dividends distributed
        thereon, if any. PBOF agrees to deliver all such non-cash dividends attributable
        to the Shares to the Escrow Agent. Unless and until the Escrow Agent actually
        receives such non-cash dividends, it may assume without inquiry that no such
        non-cash dividends have been, or are required to be, paid.

       

      4.3  During
        the Escrow Period, no sale, transfer,
        assignment, encumbrance, pledge, hypothecation,
        or other
        disposition may be made by
        the
        Shareholder with respect to
        any or
        all of the Shares or
        its
        rights under this Agreement except
        (i) by gift to an
        immediate family member of the Shareholder or to a trust, the beneficiary
        of
        which is the Shareholder or a member of the immediate family of the Shareholder,
        (ii) by virtue of the laws of descent and distribution upon the
        death
        of
        the Shareholder, or (iii) pursuant to a qualified domestic relations order;
        provided, however, that any
        such
        transfer
        may be
        implemented only upon the respective transferee’s written agreement to be bound
        by the terms and conditions of this Agreement delivered to, and in form and
        substance acceptable to, the Escrow Agent. Any
        such
        transfer that does not comply with the terms of this Section 4.3 shall be
        null
        and void and shall not be recognized in the books and records of the Company.
        

       

      5.  ESCROW
        AGENT

       

      5.1  In
        exercising the rights, duties and obligations prescribed or confirmed by
        this
        Agreement, the Escrow Agent will act honestly and in good faith and will
        exercise that degree of care, diligence and skill that a reasonably prudent
        person would exercise in comparable circumstances.

       

      5.2  The
        Shareholder,
        PBOF
and
        Cornell agree
        from time to time and at all times hereafter
        to save,
        defend and keep harmless and fully indemnify the Escrow Agent, its officers,
        directors, employees, shareholders,
        successors
        and assigns from and against any
        and all
        losses,
        costs,
        charges, suits, demands, claims, damages and expenses which the Escrow Agent,
        its officers,
        directors, employees, shareholders,
        successors
        or assigns may at any time or times hereafter bear, sustain, suffer or be
        put
        unto for or by reason or on account of its acting pursuant to this Agreement
        or
        anything in any manner relating thereto or by reason of the Escrow Agent’s
        compliance in good faith with the terms hereof.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

        - 4
          -

         

      

      5.3  In
        case
        proceedings should hereafter be taken in any court respecting the Shares,
        the
        Escrow Agent will not be obliged to defend any such action or submit its
        rights
        to the court until it has been indemnified by other good and sufficient security
        in addition to the indemnity given in Clause 5.2
        against
        its costs of such proceedings.
        Such
        costs shall be advanced by the indemnifying party as requested by the Escrow
        Agent.

       

      5.4  The
        Escrow Agent will have no responsibility in respect of loss of the Shares
        except
        the duty to exercise such care in the safekeeping of the stock certificates
        representing the Shares as it would exercise if the Shares belonged to the
        Escrow Agent. The Escrow Agent may act on the advice of counsel but will
        not be
        responsible for acting or failing to act on the advice of counsel.

       

      5.5  The
        Escrow Agent will not be bound in any way by any contract between the other
        parties hereto whether or not it has notice thereof or of its terms and
        conditions and the only duty, liability and responsibility of the Escrow
        Agent
        will be to hold the certificates representing the Shares and the related
        PAs as
        herein directed and to pay and deliver the same to such persons and other
        such
        conditions as are herein set forth. The Escrow Agent will not be required
        to
        pass upon the sufficiency of any of the Shares or to ascertain whether or
        not
        the person or persons who have executed, signed or otherwise issued or
        authenticated the said documents have authority to so execute, sign or
        authorize, issue or authenticate the said documents or any of them, or that
        they
        are the same persons named therein or otherwise to pass upon any requirement
        of
        such instruments that may be essential for their validity, but it shall be
        sufficient for all purposes under this Agreement insofar as the Escrow Agent
        is
        concerned that the said documents are deposited with it as herein specified
        by
        the parties executing this Agreement with the Escrow Agent.

       

      5.6  In
        the
        event that the Shares are attached, garnished or levied upon under any court
        order, or if the delivery of such property is stayed or enjoined by any court
        order or if any court order, judgment or decree is made or entered affecting
        such property or affecting any act by the Escrow Agent, the Escrow Agent
        may, in
        its sole discretion, obey and comply with all writs, orders, judgments or
        decrees so entered or issued, whether with or without jurisdiction,
        notwithstanding any provision of this Agreement to the contrary. If the Escrow
        Agent obeys and complies with any such writs, orders, judgments or decrees,
        it
        will not be liable to any of the parties hereto or to any other person, form
        or
        corporation by reason of such compliance, notwithstanding that such writs,
        orders, judgments or decrees may be subsequently reversed, modified, annulled,
        set aside or vacated.

       

      5.7  Except
        as
        herein otherwise provided, the Escrow Agent is authorized and directed to
        disregard in its sole discretion any and all notices and warnings which may
        be
        given to it by any of the parties hereto or by any other person, firm,
        association or corporation. It will, however, at its sole discretion, obey
        the
        order, judgment or decree of any court of competent jurisdiction, and it
        is
        hereby authorized to comply with and obey such orders, judgments or decrees
        and
        in case of such compliance, it shall not be liable by reason thereof to any
        of
        the parties hereto or to any other person, firm, association or corporation,
        even if thereafter any such order, judgment or decree may be reversed, modified,
        annulled, set aside or vacated.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

        - 5
          -

         

      

      5.8  If
        the
        Escrow Agent receives any valid court order contrary to the instructions
        contained in this Agreement, the Escrow Agent may continue to hold the Shares
        until the lawful determination of the issue between the parties
        hereto.

       

      5.9  If
        written notice of protest is made by any of the Shareholder, PBOF or
        Cornell
        to
        the
        Escrow Agent to any action contemplated
        by
        the Escrow Agent under this Agreement, and such notice sets out reasons for
        such
        protest, the Escrow Agent may at its sole discretion continue to hold the
        Shares
        until the right to the documents is legally determined by a court of competent
        jurisdiction or otherwise.

       

      5.10  The
        Escrow Agent may resign as Escrow Agent by giving not less than five (5)
        days’
written
        notice
        thereof to the Shareholder,
        PBOF
        and
Cornell.
        The
        Shareholder,
        PBOF
        and
Cornell
        may terminate the Escrow Agent by giving not less than five (5) days’
written
        notice
        to
        the Escrow Agent. The resignation or termination of the Escrow Agent will
        be
        effective and the Escrow Agent will cease to be bound by this Agreement on
        the
        date that is five (5) days after the date of receipt of the termination notice
        given hereunder by
        all
        parties or
        on
        such other date as the Escrow Agent and the Shareholder,
        PBOF
        and
Cornell
        may agree in
        writing.
        All
        indemnities granted to the Escrow Agent herein will survive the termination
        of
        this Agreement or the termination or resignation of the Escrow Agent. In
        the
        event of termination or resignation of the Escrow Agent for any reason, the
        Escrow Agent shall, within that five (5) days’ notice period deliver the Shares
        to the new escrow agent to be named in
        a
        writing signed by
        the
        Shareholder,
        PBOF
        and Cornell or as otherwise instructed in a writing signed by the Shareholder,
        PBOF and the Cornell.

       

      5.11  Notwithstanding
        anything herein to the contrary, the Escrow Agent may act upon any written
        instructions given jointly by the Shareholder,
        PBOF
        and
        Cornell.

       

      5.12  Notwithstanding
        anything to the contrary contained herein, in the event of any dispute arising
        between the Shareholder,
        PBOF,
        or
        Cornell,
        this
        Agreement or any matters arising thereto, the Escrow Agent may in its sole
        discretion deliver and interplead the Shares into court and such delivery
        and
        interpleading will be an effective discharge to the Escrow Agent.

       

      6.  FEES

       

      6.1  PBOF
        will
        pay all of the compensation of the Escrow Agent and will reimburse the Escrow
        Agent for any and all reasonable expenses, disbursements and advances made
        by
        the Escrow Agent in the negotiation, execution and delivery of, and the
        performance of its duties under this Agreement, including the reasonable
        fees,
        expenses and disbursements incurred by its counsel.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

        - 6
          -

         

      

      7.  GENERAL

       

      7.1  This
        Agreement contains the entire agreement of the parties hereto with respect
        to
        the subject matter hereof and, except as herein otherwise provided, no
        subsequent alteration, amendment, change, or addition to this Agreement will
        be
        binding upon the parties hereto unless reduced to writing and signed by
all
        the
        parties.

       

      7.2  This
        Agreement will enure to the benefit of and be binding upon the parties and
        their
        respective heirs, executors, administrators and successors.

       

      7.3  The
        parties will execute and deliver all such further documents, do or cause
        to be
        done all such further acts and things, and give all such further assurances
        as
        may be necessary to give full effect to the provisions and intent of this
        Agreement.

       

      7.4  This
        Agreement will be governed by and construed in accordance with the laws of
        the
        State of Colorado.

       

      7.5  Any
        notice required or permitted to be given under this Agreement will be in
        writing
        and may be given by delivering, sending by electronic facsimile transmission
        or
        other means of electronic communication capable of producing a printed copy,
        or
        sending by prepaid registered mail, the notice to the following address:
        

       

      	(a)  	
              If
                to the Shareholder:

            

       

      c/o
        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

       

      	(b)  	
              If
                to PBOF:

            

       

      Pure
        Biofuels Corp.

      Av.
        Canaval y Moreyra 380

      of
        402

      San
        Isidro, Lima

      Peru

       

      Attention: Luis
        Goyzueta 

      Telephone: +511-221-7365

      Facsimile: +511-221-7347

       

      With
        a
        copy to:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      - 7
        -

       

      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

      

       

      Attention:
         Daniel
        I.
        Goldberg, Esq.

      Telephone: 212-335-4966

      Facsimile: 212-884-8466

       

      	(c)  	
              If
                to Cornell:

            

       

      Cornell
        Capital Partners L.P.

      101
        Hudson Street, Suite 3700

      Jersey
        City, NJ 07302

       

      Attention: Mark
        A.
        Angelo

      Telephone: 201-985-8300

      Facsimile: 201-985-8744

       

      	(d)  	
              If
                to the Escrow Agent:

            

       

      225
        Asylum Street, 23rd
        Floor

      Hartford,
        CT 06103

      Attention:
        Corporate Trust Services (Pure Biofuels/PBOF Cornell escrow)

      

       

      Attention: Philip
        G.
        Kane, Jr. 

      Telephone: (860)
        241-6842

      Facsimile: (860)
        241-6881

       

      or
        to
        such other address as any party may specify by notice in writing to another
        party. Any notice delivered or sent by electronic facsimile transmission
        or
        other means of electronic communication capable of producing a printed copy
        on a
        business day will be deemed conclusively to have been effectively given on
        the
        day the notice was delivered, or the electronic communication was successfully
        transmitted, as the case may be. Any notice sent by prepaid registered mail
        will
        be deemed conclusively to have been effectively given on the third business
        day
        after posting; but if at the time of posting or between the time of posting
        and
        the third business day thereafter there is a strike, lockout, or other labour
        disturbance affecting postal service, then the notice will not be effectively
        given until actually delivered. Notwithstanding the foregoing, notices addressed
        to the Escrow Agent shall be effective only upon actual receipt.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      - 8
        -

       

      7.6  Time
        is
        of the essence of this Agreement.

       

      7.7  It
        is
        understood and agreed by the parties to this Agreement that the only duties
        and
        obligations of the Escrow Agent are those specifically stated herein and
        no
        other.

       

      7.8  This
        Agreement may be executed in one or more counterparts, all of which will
        be
        considered one and the same agreement and will become effective when one
        or more
        counterparts have been signed by each of the parties and delivered to the
        other
        parties, it being understood that all parties need not sign the same
        counterpart. This Agreement may be executed by delivery of executed signature
        pages by fax and such fax execution will be effective for all
        purposes.

       

      7.9     
         Each
        of
        the parties to this Agreement, other than the Escrow Agent, each shall provide
        to the Escrow Agent such information as the Escrow Agent may require to permit
        the Escrow Agent to comply with its obligations under the USA Patriot
        Act.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      -
        9
        -

       

      IN
        WITNESS WHEREOF the parties have caused this Agreement to be executed as
        of the
        day and year first written above.

       

      U.S.
        BANK NATIONAL ASSOCIATION, as
        Escrow
        Agent

       

       

      Per: /s/
        Philip G. Kane, Jr.

      Name:
        Philip G. Kane, Jr.

      Title:
        Vice President

       

      PURE
        BIOFUELS CORP.

       

       

      Per: /s/
        Luis Goyzueta

      Name:
        Luis Goyzueta

      Title:
        President

       

       

      CORNELL
        CAPITAL PARTNERS, L.P.

       

      By: Yorkville
        Advisors, LLC

      Its: Investment
        Advisor

       

       

      Per: /s/
        Gerald Eicke

      Name:
        Gerald Eicke

      Title:
        Managing Member

       

       

      /s/
        Luis Goyzueta    

      LUIS
        GOYZUETAUnassociated Document

    Exhibit
      10.4

    

     

    PLEDGE
      AGREEMENT

     

    PLEDGE
      AGREEMENT
      (the
“Agreement”)
      dated
      April 19, 2007 made by each of the undersigned (each a “Pledgor”,
      and
      collectively, the “Pledgors”),
      in
      favor of each Buyer listed on signature pages attached hereto (individually,
      a
“Buyer”
or
      collectively “Buyers”).

     

    RECITALS:

     

    WHEREAS, Pure
      Biofuels Corp., a Nevada corporation (the “Company”),
      and
      each Buyer are parties to the Securities Purchase Agreement of even date
      herewith (the “Securities
      Purchase Agreement”),
      pursuant to which the Company shall issue and sell to the Buyers, as provided
      in
      the Securities Purchase Agreement and the Buyers shall purchase secured
      convertible debentures (the “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value $0.001
      per share (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”);

     

    WHEREAS,
      it is a
      condition precedent to the Buyers purchasing the Convertible Debentures that
      the
      Pledgors pledge to the Buyer certain shares of Common Stock of the Company
      to
      secure all of the obligations of the Company under the Securities Purchase
      Agreement, the Convertible Debentures and the Transaction Documents (as defined
      in the Securities Purchase Agreement);

     

    WHEREAS,
      each
      Pledgor has determined that the execution, delivery and performance of this
      Agreement directly benefits, and is in the best interest of, such Pledgor;
      and

     

    WHEREAS, the
      parties to this Agreement desire to appoint U.S.
      Bank
      National Association,
      as
      escrow agent (“Escrow
      Agent”)
      to
      hold in escrow the Pledged Shares (as defined below) pursuant to the terms
      and
      conditions of the Escrow Agreement dated the date hereof (the “Escrow
      Agreement”). 

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants, agreements, warranties, and
      representations herein contained, and for other good and valuable consideration,
      the receipt and sufficiency of which is hereby acknowledged, the parties hereto
      agree as follows:

     

     

    TERMS
      AND CONDITIONS

     

    1.  Obligations
      Secured. The
      security interest created hereby in the Pledged Shares constitutes continuing
      collateral security for all obligations of the Company now existing or
      hereinafter incurred to the Buyers in connection with an Event of Default (as
      defined herein), whether oral or written and whether arising before, on or
      after
      the date hereof including, without limitation of the following obligations
      (collectively, the “Obligations”):

     

    (a)
      for
      so long as the Convertible Debentures are outstanding, the payment by the
      Company, as and when due and payable (by scheduled maturity, acceleration,
      demand or otherwise), of all amounts from time to time owing by it in respect
      of
      the Securities Purchase Agreement, the Convertible Debentures and the other
      Transaction Documents; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      for
      so long as the Convertible Debentures are outstanding, the due performance
      and
      observance by the Company of all of its other obligations from time to time
      existing in respect of any of the Transaction Documents, including without
      limitation, the Company’s obligations with respect to any conversion or
      redemption rights of the Buyers under the Convertible Debentures.

     

    2.  Pledge
      and Transfer of Pledged Shares.
      Each
      Pledgor hereby grants to the Buyer an irrevocable, first priority security
      interest in all the securities set forth next to such Pledgor’s name on Schedule
      I attached hereto (the “Pledged
      Shares”)
      as
      security for the Obligations. Within five (5) business days from the execution
      of this Agreement, each Pledgor shall deliver to the Escrow Agent, and the
      Escrow Agent shall hold in escrow pursuant to the terms of the Escrow Agreement,
      stock certificates made out in favor of the Pledgor representing the Pledged
      Shares, together with fully executed stock powers of attorney, signature
      guaranteed as required by the transfer agent of the Company (the “Transfer
      Documents”),
      and
      such stock certificates and Transfer Documents shall be held by the Escrow
      Agent
      pursuant to the Escrow Agreement.

     

    3.  Rights
      Relating to Pledged Shares.
      During
      the Escrow Period (as defined in the Escrow Agreement) the rights of the Pledgor
      in the Pledged Shares shall be as set forth in the Escrow Agreement. Upon the
      occurrence of an Event of Default, and receipt of the Pledged Shares in
      accordance with the Escrow Agreement, the Buyer shall be entitled to vote the
      Pledged Shares, receive dividends and other distributions thereon, and enjoy
      all
      other rights and privileges incident to the ownership of the Pledged Shares.
      

     

    4.  Release
      of Pledged Shares from Pledge.
      Upon
      return of the Pledged Shares to the Pledgor from escrow pursuant to Section
      3.2(b) of the Escrow Agreement, this Agreement and all rights of the Buyer
      in
      the Pledged Shares shall be terminated.

     

    5.  Event
      of Default.
      An
“Event
      of Default”
shall
      be deemed to have occurred under this Agreement upon an Event of Default under
      the Convertible Debentures.

     

    6.  Remedies.
      

     

    a.  Upon
      and
      anytime after the occurrence of an Event of Default, the Buyer shall have the
      right acquire the Pledged Shares in accordance with the procedures set forth
      in
      the Escrow Agreement. 

     

    b.  Upon
      receipt of the Pledged Shares by the Buyer in accordance with the Escrow
      Agreement, the Buyer shall have the right to (i) sell the Pledged Shares and
      to
      apply the proceeds of such sales, net of any selling commissions, to the
      Obligations owed to the Buyer by the Company under the Transaction Documents,
      including, without limitation, outstanding principal, interest, legal fees,
      and
      any other amounts owed to the Buyer, and exercise all other rights and (ii)
      any
      and all remedies of a secured party with respect to such property as may be
      available under the Uniform Commercial Code as in effect in the State of New
      Jersey. To the extent that the net proceeds received by the Buyers are
      insufficient to satisfy the Obligations in full, the Buyer shall be entitled
      to
      a deficiency judgment against the Pledgor for such amount, the timing (but
      not
      the right) of which shall be subject to the agreements of the Buyer set forth
      in
      Section 6.d. below. Upon receipt of the Pledged Shares by the Buyer in
      accordance with the Escrow Agreement, the Buyer shall also have the absolute
      right to sell or dispose of the Pledged Shares in any manner it sees fit and
      shall have no liability to any Pledgor or any other party for selling or
      disposing of such Pledged Shares even if other methods of sales or dispositions
      would or allegedly would result in greater proceeds than the method actually
      used. The Pledgor shall remain liable for shortfalls, if any, that may exist
      after the Buyer has exhausted all remedies hereunder. The Buyer shall return
      any
      Pledged Shares issued to it and instruct the Escrow Agent to return any Pledged
      Shares it is holding in escrow after the full satisfaction of the Obligations.
      

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    c.  Each
      right, power and remedy of the Buyer provided for in this Agreement or any
      other
      Transaction Document shall be cumulative and concurrent and shall be in addition
      to every other such right, power or remedy of the Buyer. The
      exercise or beginning of the exercise by the
      Buyer
      of any
      one or more of the rights, powers or remedies provided for in this Agreement
      or
any
      other
      Transaction Document or
      now or
      hereafter existing at law or in equity or by statute or otherwise shall not
      preclude the simultaneous or later exercise by the
      Buyer
      of all
      such other rights, powers or remedies, and no failure or delay on the part
      of
the
      Buyer
      to
      exercise any such right, power or remedy shall operate as a waiver thereof.
      No
      notice to or demand on any Pledgor in any case shall entitle any Pledgor to
      any
      other or further notice or demand in similar or other circumstances or
      constitute a waiver of any of the rights of the
      Buyer
      to any
      other further action in any circumstances without demand or notice. The
      Buyer
      shall
      have the full power to enforce or to assign or contract is rights under this
      Agreement to a third party. 

     

    d.  In
      the
      event that the net proceeds from the Buyer’s sale or disposition of the Pledged
      Shares received by the Buyers are insufficient to satisfy the Obligations in
      full, the Buyer agrees to exhaust all its rights, powers, and remedies provided
      for in the Security Agreement, Guaranty Agreement, Mortgage and the Peruvian
      Security Documents (each as defined in the Securities Purchase Agreement),
      before proceeding against the Pledgor. Nothing herein shall limit the ability
      of
      the Buyer to exercise any power, right, or remedy with respect to the Pledged
      Shares regardless of the progress or status of any other right, power, or remedy
      provided for in the Transaction Documents. 

     

    7.  Representations,
      Warranties and Covenants.
      

     

    a.  The
      Pledgor represents, warrants and covenants that:

     

    (i)  Pledgor
      is, and at the time when pledged hereunder will be, the legal, beneficial and
      record owner of, and has (and will have)
      good and
      valid title to, all Pledged Shares pledged by it hereunder, subject to no
      pledge, lien, mortgage, hypothecation, security interest, charge, option or
      other encumbrance whatsoever;

     

    (ii)  Pledgor
      has full power, authority and legal right to pledge all the Pledged Shares
      pledged pursuant to this Agreement; and

     

    (iii)  all
      the
      Pledged Shares have been duly and validly issued, are fully paid and
      non-assessable and are subject to no options to purchase or similar
      rights.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    b.  The
      Pledgor covenants and agrees to take all reasonable steps to defend the Buyer’s
      right, title and security interest in and to the Pledged Shares and the proceeds
      thereof against the claims and demands of all persons whomsoever (other than
      the
      Buyer and the Escrow Agent); and the Pledgor covenants and agrees that it will
      have like title to
      and
      right to pledge any other property at any time hereafter pledged to the
      Buyer
      as
      collateral hereunder and will likewise take all reasonable steps to defend
      the
      right thereto and security interest therein of the
      Buyer.

     

    c.  The
      Pledgor covenants and agrees to take no action which would violate or be
      inconsistent with any of the terms of any Transaction Document, or which would
      have the effect of impairing the position or interests of the Buyer under any
      Transaction Document.

     

    d.  The
      Pledgor covenants and agrees that this Agreement is made with recourse and
      that
      upon an Event of Default, the Buyer shall be deemed to have acquired the Pledged
      Shares on the date they were acquired by the Pledgor. Unless
      otherwise indicated on the Schedule II attached hereto, each Pledgor is an
      “affiliate” of the Company, as such term is defined in Rule 144(a) promulgated
      under the Securities Act of 1933, as amended. 

     

    8.  Notices.
      Unless
      otherwise provided herein, all demands, notices, consents, service of process,
      requests and other communications hereunder shall be in writing and shall be
      delivered in person or by overnight courier service, or mailed by certified
      mail, return receipt requested, addressed:

     

    
      	
              If
                to the
                Buyer:

            	
              Cornell
                Capital Partners L.P.

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention:
                 Mark
                A. Angelo

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile:
                 (201)
                985-8744

            
	 	 
	
              With
                copy to:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention:
                 Troy
                Rillo, Esq.

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-1964

            
	 	 
	
              If
                to the Pledgors, to:

            	
              To
                the addresses provided on the signature pages attached
                hereto

            

    

    

    Any
      such
      notice shall be effective (a) when delivered, if delivered by hand delivery
      or overnight courier service, or (b) five (5) days after deposit in the
      United States mail, as applicable.

     

    9.  Binding
      Effect.
      All of
      the covenants and obligations contained herein shall be binding upon and shall
      inure to the benefit of the respective parties, their successors and
      assigns.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    10.  Governing
      Law; Venue; Service of Process.
      The
      validity, interpretation and performance of this Agreement shall be determined
      in accordance with the laws of the State of New Jersey applicable to contracts
      made and to be performed wholly within that state except to the extent that
      Federal law applies. The parties hereto agree that any disputes, claims,
      disagreements, lawsuits, actions or controversies of any type or nature
      whatsoever that, directly or indirectly, arise from or relate to this Agreement,
      including, without limitation, claims relating to the inducement, construction,
      performance or termination of this Agreement, shall be brought in the state
      superior courts located in Hudson County, New Jersey or Federal district courts
      located in Newark, New Jersey, and the parties hereto agree not to challenge
      the
      selection of that venue in any such proceeding for any reason, including,
      without limitation, on the grounds that such venue is an inconvenient forum.
      The
      parties hereto specifically agree that service of process may be made, and
      such
      service of process shall be effective if made, pursuant to Section 8
      hereto.

     

    11.  Enforcement
      Costs.
      If any
      legal action or other pro-ceeding is brought for the enforcement of this
      Agreement, or because of an alleged dispute, breach, default or
      misrepresenta-tion in connection with any provisions of this Agreement, the
      successful or prevailing party or parties shall be entitled to recover
      reasonable attorneys’ fees, court costs and all expenses even if not taxable as
      court costs (including, without limita-tion, all such fees, costs and expenses
      incident to appeals), incurred in that action or proceeding, in addition to
      any
      other relief to which such party or parties may be entitled.

     

    12.  Remedies
      Cumulative.
      No
      remedy herein conferred upon any party is intended to be exclusive of any other
      remedy, and each and every such remedy shall be cumulative and shall be in
      addition to every other remedy given hereunder or now or here-after existing
      at
      law, in equity, by statute, or otherwise. No single or partial exercise by
      any
      party of any right, power or remedy hereunder shall preclude any other or
      further exercise thereof. 

     

    13.  Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute the same
      instrument.

     

    14.  No
      Penalties.
      No
      provision of this Agreement is to be interpreted as a penalty upon any party
      to
      this Agreement.

     

    15.  JURY
      TRIAL.
      EACH OF
      THE COLATERAL AGENT AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY OF ANY
      CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING OUT OF, UNDER
      OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN THE BUYER AND PLEDGOR, THIS
      PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH,
      OR
      ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
      OR ACTIONS OF ANY PARTY HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING
      OR
      HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.

     

    [REMAINDER
      OF PAGE INTENTIALLY LEFT BLANK]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    IN
      WITNESS WHEREOF,
      each
      Pledgor has caused this Pledge and Escrow Agreement to be executed by its
      respective duly authorized officer, as of the date first above
      written.

     

    
      	 	 	Pledgor
	 	 
	 
 	 
 	 

	 	 	/s/ Luis Goyzueta
	 	
              
LUIS
              GOYZUETA
	 	 
	 	Address: 
	 	c/o 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

    

     

    FOR
      VALUE
      RECEIVED, the Pledgor hereby acknowledges that this Agreement is made with
      recourse.

     

    
      	 	 	 	 
	
              /s/
                Luis Goyzueta

            	 	 	 
	
              
LUIS
              GOYZUETA	 	 	
            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF,
      the
      undersigned acknowledge and agree to the terms and conditions of this Pledge
      Agreement as of the date first above written. 

     

    
      	 	 	 
	 
 	 
 	
              THE
                BUYER:

              Cornell
                Capital Partners, L.P. 

            
	 	 	 
	 	 	By:  Yorkville
              Advisors, LLC
	 	 	Its: Investment
              Advisor
	 	 	 
	 	  	By:
              /s/ Gerald Eicke
	 	
              
Name: Gerald
              Eicke
	 	Title: Managing
              Partner

    

     

    
      
        
        

      

      
        7

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