Document:

Unassociated Document

    Exhibit
      10.7

     

    FINANCING
      CONTINGENCY ESCROW AGREEMENT

     

    THIS
      FINANCING CONTINGENCY ESCROW AGREEMENT
      made as
      of the 22
      day of
      June, 2007.

     

    AMONG:

     

    PURE
      BIOFUELS CORP.,
      a Nevada
      corporation with an address at Suite
      203
      - 910 Richards Street Vancouver, British Columbia Canada V6B 3C1

     

    (“PBOF”)

     

    AND:

     

    THE
      UNDERSIGNED SHAREHOLDERS OF PBOF AS LISTED ON SCHEDULE 1 ATTACHED HERETO

     

    (the
      "Shareholders") 

     

    AND:

     

    THE
      UNDERSIGNED PARTIES AS LISTED ON SCHEDULE 2 ATTACHED HERETO

     

    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
      Shareholders and PBOF wish to appoint the Escrow Agent to accept, hold and
      deliver, pursuant to the terms of this Agreement, 6,000,000 shares of common
      stock of PBOF registered in the respective names and in the respective numbers
      of shares as set out in Schedule 1 attached hereto (the “Shares”);
      

     

    B.  PBOF
      intends to enter into a financing
      transaction or series of transactions pursuant to which PBOF plans to raise
      gross proceeds of at least $7.5 million dollars (each such transaction, a
“Financing”);
      and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 2
-

     

    C.  The
      Shareholders 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
      Shareholders will, upon execution of this Agreement, deliver the Shares and
      fully executed stock powers of attorney, signatures guaranteed as required
      by
      the transfer agent of PBOF (the “PAs”),
      to
      the Escrow Agent and the Escrow Agent will hold the Shares and the PAs in escrow
      subject to the terms and conditions of this Agreement.

     

    
      3.  ESCROW
        PROVISIONS

    

     

    3.1  The
      Shareholders and PBOF hereby direct the Escrow Agent to retain the Shares and
      the PAs 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 PAs in escrow and will, unless
      prohibited by an order of a court of competent jurisdiction, deliver the Shares
      and PAs as follows:

     

    
      	(a)  	
              within
                five business days after its receipt on
                or before August 30, 2007 of a certificate in
                the form attached hereto as Exhibit A signed by each of PBOF, the
                Shareholders and the parties listed on Schedule 2 to
                the effect that PBOF has completed a Financing,
                the Escrow Agent shall deliver Shares and related PAs to each of
                the
                parties
                in
                the numbers of Shares set out on Schedule 2 multiplied by a fraction,
                the
                numerator being the aggregate amount raised in such Financing and
                the
                denominator being $7.5 million, and at the addresses set out on Schedule
                2
                or at such other addresses as such parties shall instruct the Escrow
                Agent
                in writing from time to time. For purposes of this Section 3.2, the
                parties other than the Escrow Agent agree among themselves that a
                “Financing” shall include any equity or
                debt financing
                involving, without limitation, the issuance of common stock, promissory
                notes, convertible
                debentures,
                warrants,
                preferred stock or other exercisable or convertible securities (or
                any combination thereof).
                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 so that the Shares
                previously owned by and registered in the names of the Shareholders
                set forth in Schedule 1 shall be delivered to and re-registered in
                the
                names of the persons set forth in Schedule
                2 in the amounts contemplated
                by this Section 3.2(a);
                or

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 3
-

     

    
      	(b)  	
              if
                the Escrow Agent does not receive certificates contemplated by Section
                3.2(a) to the effect that Financings totalling at least $7.5 million
                have
                been completed on or before August 30, 2007, the Escrow Agent shall
                deliver the number of Shares and related PAs which have not been
                transferred by each Shareholder pursuant to Section 3.2(a) to each
                of the
                Shareholders
                at
                the addresses set out on Schedule 1 or at such other addresses as
                the
                Shareholders 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 SHAREHOLDERS IN THE SHARES

    

     

    4.1  The
      Shareholders, as the registered owners of the Shares, shall retain all of their
      rights as Shareholders 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 Shareholders, 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
      any
      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 a Shareholder or to a trust, the beneficiary of
      which
      is a Shareholder or a member of the immediate family of a Shareholder, (ii)
      by
      virtue of the laws of descent and distribution upon the
      death
      of
      any 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.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 4
-

     

    
      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
      Shareholders,
      PBOF
and
      the
      parties listed on Schedule 2 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.

     

    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
-

     

    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.

     

    5.8  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 Shareholders, PBOF or
      any
      party listed on Schedule 2
      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 Shareholders,
      PBOF
      and
the
      parties listed on Schedule 2.
      The
      Shareholders,
      PBOF
      and
the
      parties listed on Schedule 2
      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 Shareholders,
      PBOF
      and
the
      parties listed on Schedule 2
      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
      Shareholders,
      PBOF
      and the parties listed on Schedule 2 or as otherwise instructed in a writing
      signed by the Shareholders, PBOF and the parties listed on Schedule
      2.

     

    5.11  Notwithstanding
      anything herein to the contrary, the Escrow Agent may act upon any written
      instructions given jointly by the Shareholders,
      PBOF
      and the
      parties listed on Schedule 2.

     

    5.12  Notwithstanding
      anything to the contrary contained herein, in the event of any dispute arising
      between any of the Shareholders,
      PBOF,
      or the
      parties listed on Schedule 2,
      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
-

     

    
      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.

     

    
      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 Shareholders:

            

    

     

    c/o
      Pure
      Biofuels Corp.

    Suite
      203
      - 910 Richards Street

    Vancouver,
      British Columbia

    Canada
      V6B 3C1

     

    Attention: Luis
      Goyzueta 

    Telephone: +511-221-7365

    Facsimile: +511-221-7347

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 7
-

     

    
      	(b)  	
              If
                to PBOF:

            

    

     

    Suite
      203
      - 910 Richards Street

    Vancouver,
      British Columbia

    Canada
      V6B 3C1

     

    Attention: Luis
      Goyzueta 

    Telephone: +511-221-7365

    Facsimile: +511-221-7347

     

    
      	(c)  	
              If
                to the Escrow Agent:

            

    

     

    
      	(d)  	
              If
                to the Escrow Agent:

            

    

     

    225
      Asylum Street, 23rd
      Floor

    Hartford,
      CT 06103

    Attention:
      Corporate Trust Services (Pure Biofuels/PBOF 2007 financing contingency
      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.

     

    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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 8
-

     

    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.

     

    [The
      Remainder of This Page is Intentionally Left Blank]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 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/
                Mark A. Forgetta

            	 	 	 
	
              
                

              

              Name:
                Mark A. Forgetta

            	 	 	
            
	
              Title:
                Vice
                President

            	 	 	 

    
      	PURE BIOFUELS
              CORP.	 	 	 
	 	 	 	 
	
              
                Per:  /s/
                  Luis Goyzueta

              

            	 	 	 
	
              
                

              

              
                Name:
                  Luis Goyzueta

              

            	 	 	
            
	
              Title:
                President and Director

            	 	 	 

    

     

    
      
        	ARC INVESTMENT PARTNERS,
                LLC	 	 	 
	 	 	 	 
	
                Per:  /s/
                  Adam Roseman 

              	 	 	 
	
                
                  

                

                
                  Name:
                    Adam Roseman

                

              	 	 	
              
	
                Title:
                  Manager

              	 	 	 

      

      
        	TAPIRDO ENTERPRISES,
                LLC	 	 	 
	 	 	 	 
	
                Per:  /s/
                  Adam Roseman 

              	 	 	 
	
                
                  

                

                
                  Name:
                    Adam Roseman

                

              	 	 	
              
	
                Title:
                  Manager

              	 	 	 

      

    

     

    
      
        	SGM CAPITAL, LLC	 	 	 
	 	 	 	 
	
                Per:  /s/
                  Steven Magami 

              	 	 	 
	
                
                  

                

                Name:
                  Steven Magami

              	 	 	
              
	
                Title:
                  Managing Member

              	 	 	 

      

    

     

    
      	 	 	 	 
	/s/
              Luis Goyzueta	 	 	 
	
              
LUIS
              GOYZUETA	 	 	
            

    

        

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      -
        10
-

    

     

    
      
        	 	 	 	 
	/s/ David Clifton	 	 	 
	
                
DAVID
                CLIFTON	 	 	
              

      

        

    

    
      
        
          	 	 	 	 
	/s/ Hiroshi Dejaeghere	 	 	 
	
                  

                  HIROSHI
                    DEJAEGHERE

                	 	 	
                

        

          

      

    

    
      
        
          	 	 	 	 
	/s/ Joy Clifton	 	 	 
	
                  

                  JOY
                    CLIFTONUnassociated Document

    Exhibit
      10.8

     

    EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT, dated as of June 22, 2007, and effective as of May 11, 2007 (this
      “Agreement”),
      by
      and between STEVEN S. MAGAMI, an individual residing in Los Angeles, California
      (the “Employee”),
      and
      PURE BIOFUELS CORP., a Nevada corporation (the “Company”).

     

    WITNESSETH

     

    WHEREAS,
      the Company desires to engage the Employee as the President of the Company
      and
      such other duties as shall from time to time be assigned to him in the
      reasonable discretion of the Board of Directors of the Company consistent with
      the duties of an executive officer, and the Employee desires to be so engaged,
      subject to the terms and conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the respective covenants and
      agreements herein contained, and for other good and valuable consideration,
      the
      receipt and sufficiency of which is hereby acknowledged, the parties hereto
      intending to be legally bound hereby agree as follows:

     

    1.  Engagement.
      Subject
      to the terms and conditions of this Agreement, the Company hereby agrees to
      engage the Employee to render, and the Employee hereby agrees to render, the
      duties as shall from time to time be assigned to him in the reasonable
      discretion of the Board of Directors of the Company consistent with the duties
      of an executive officer. Without limiting the generality of the foregoing
      sentence, it is intended by the Company that the Employee will assist management
      in operating the business of the Company and provide his knowledge and expertise
      with respect thereto. The Employee further agrees to use his commercially
      reasonable efforts to promote the interests of the Company and to devote such
      business time, energies and skill to the business and affairs of the Company
      in
      accordance with the reasonable directions and orders of the Company’s management
      not inconsistent with this Agreement for the Employment Term of this Agreement.
      While the Employee is engaged by the Company, the Employee shall not, directly
      or indirectly, engage or participate in any business which is in competition
      whatsoever with the business of the Company.

     

    2.  Term.
      The
      term of this Agreement is one year, from May 11, 2007, until May 11, 2008 (the
      “Employment
      Term”).
      This
      Agreement (unless earlier terminated pursuant to the terms set forth in Section
      9 below), will be renewable automatically each year for a one year term unless
      terminated by giving notice to the Employee at least three (3) months prior
      to
      the expiration date above. In such case, any discussions or negotiations the
      Employee may elect to entertain concerning a subsequent renewal or extension
      of
      this Agreement shall not create any binding obligation on the Company unless
      a
      written employment
      agreement renewing or extending this Agreement beyond the aforementioned one
      year term has been signed by both parties.

     

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

     

    3.  Performance
      of duties out of the Company.
      This
      Agreement shall not prohibit the Employee from making passive personal
      investments nor will it prevent the Employee from conducting private business
      affairs provided those activities do not interfere with the services required
      under this Agreement nor conflict with the interest of the Company. The
      expenditure of reasonable amounts of time for educational, charitable, or
      industry activities shall not be deemed a breach of this Agreement if those
      activities do not interfere with the services assigned by the Board of Directors
      of the Company. The parties acknowledge that the Employee is at present a
      Managing Director and Partner of ARC Investment Partners, LLC and an affiliate
      of SGM Capital, LLC.

     

    4.  Board
      of Directors.
      The
      Employee may, at the discretion of the Company, during the term of
      this
      Agreement, hold a seat on the Board of Directors of the Company and other
      positions on management, and shall serve in such capacities as the Board shall
      from time to time determine. 

     

    5.  Place
      of Employment.
      The
      Employee’s place of services shall be Los Angeles County, California which can
      be changed only with the Employee’s consent.

     

    6.  Compensation.

     

    
      6.1  Base
        Salary.

       

      The
        Company shall pay, or shall cause to be paid, to the Employee an annual base
        salary of One Hundred Thousand Dollars ($100,000) per year, payable in
        accordance with the usual practices of the Company, but not less often than
        twice monthly (the “Base
        Salary”).
        The
        Base Salary will be payable in substantially equal installments and adjusted
        on
        a prorated basis for any fraction of the year or month during which the Employee
        is not so engaged. Increases to the existing Base Salary package may be
        considered and subject to review and approval by the Board of Directors of
        the
        Company. For avoidance of doubt, Employee’s Base Salary shall be paid
        retroactively to February 6, 2007, the date he became a director of the
        Company.

      

      6.2.  Bonus
        Potential.
        The
        Company shall pay the Employee a bonus in the amount of up to 150% of the
        earned
        Base Salary subject to the Company’s Board of Directors approval. This bonus
        shall be paid to the Employee no later than the April 30th after the calendar
        year to which the bonus relates.

      

      6.3.  Benefits.
        The
        Employee will be entitled to all employee benefits that other United States
        corporate executives of the Company or its subsidiaries are entitled to receive,
        including any profit sharing plan; 401(k) plan; life, medical, dental, vision
        or
        disability group insurance plan; other insurance plan or policy; product
        award
        or discount plan; or other plan or benefit the Company may provide during
        the
        term of this Agreement (the “Benefits”) in an amount which will be not less than
        the most extensive benefit provisions for any United States employee of the
        Company. The
        Company will
        cause no delay in the effective date of benefit coverage for the Employee,
        except for delays, if any, imposed by the requirements of the Company’s benefit
        plans. The Company will reimburse the Employee for any premiums paid from
        the
        first day of employment at the Company’s offices to the date the Employee’s
        benefits become effective under the Company’s benefit plans. Nothing herein
        shall affect the Company’s ability to modify, alter, terminate or otherwise
        change any benefit plan it has in effect at any given time, to the extent
        permitted by law.

       

      
        
          
          

        

        
          Page
            2

          
            

          

        

        
          
          

        

      

      
         

        6.4.  Vacation,
          Holidays and Leave.
          The
          Employee will be entitled to four weeks of paid vacation, and holidays,
          sick
          leave and other leave time in accordance with the plans, policies, programs
          and
          practices in effect generally and with respect to other corporate executives
          of
          the Company in an amount no less than the most extensive such plan, policy,
          program or practice offered to any other United States officer of the
          Company.

         

      

      6.5.  Expenses.
        The
        Company will reimburse the Employee for all reasonable business expenses
        incurred by the Employee during the term of this Agreement upon presentation
        by
        the Employee of an itemized account for such expenditures in accordance with
        the
        Company’s current expense reimbursement policies and practices. The Company will
        provide the Employee, at no cost to him, all reasonably necessary workplace
        tools to effectively carry out his duties, including, but not limited to,
        office
        space, computer hardware and software, and communications devices.

      

      6.6.  Other.
        The
        Employee shall not receive any other compensation from the Company, its
        subsidiaries or affiliates or participate in or accrue or receive benefits
        under
        any of the Company’s, its subsidiaries’ or affiliates’ employee benefit programs
        or receive any other benefits from the Company, its subsidiaries or affiliates
        (including without limitation health, disability, life insurance, retirement,
        pension and profit sharing benefits). The Employee shall comply with all
        applicable United States and foreign, federal, state and local income taxes
        in
        connection with any compensation payments in connection with this
        Agreement.

    

     

    7.  Stock
      Options.
      The
      Company has granted to the Employee options to purchase 1,750,000 shares of
      the
      Company’s common stock at an exercise price equal to $0.98, the fair market
      value of the shares on the date of grant. The options shall be governed by
      the
      terms of the Company’s Nonstatutory Stock Option Agreement substantially in the
      form attached hereto as Exhibit
      A
      of this
      Agreement and the Pure Biofuels Corp. Stock Incentive Plan (the “Stock Incentive
      Plan”).

     

    8.  Pre-Financing
      Compensation.
      The
      Employee agrees to defer any and all cash compensation until the Company has
      closed its anticipated near-term financing of at least $4.0 million other than
      $500 per week. The Company agrees to pay all accrued cash compensation at the
      time of the financing from the proceeds provided that the Employee is employed
      by the Company on the date of closing of such financing.

     

    9.  Termination

     

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

     

    
      9.1  Termination
        by the Company for “Cause”.
        The
        Company may terminate the Employee’s services with the Company for Cause, which
        means to a termination for any of the following reasons: (i) the Employee’s
        failure or refusal to perform the Employee’s duties within the scope of this
        Agreement other than any such failure resulting from the Employee’s incapacity
        due to physical or mental illness except after written notice of the same
        and
        the Employee’s failure to cure the problem within a reasonable time after such
        notice; (ii) the Employee’s conviction of, or entry of a plea of no contest to,
        a felony involving fraud, embezzlement or financial improprieties, or any
        lesser
        crime involving the property of the Company or its customers including, but
        not
        limited to fraud, or embezzlement or other misappropriation of property
        belonging to the Company or its customers; (iii) any intentional violation
        by
        the Employee of governmental laws or regulations applicable to the Company’s
        business which has a materially adverse effect on the business or reputation
        of
        the Company; and (iv) Employee's
        pursuit
        of activities that are materially contrary to the best interests of the Company,
        and which are reasonably likely to result in material harm to the
        Company.
        In the
        event the Company terminates the Employee’s services for Cause, the Company
        shall by the date service of the Employee is terminated pay to the Employee
        any
        accrued but unpaid Base Salary, reimbursable business expenses, and any other
        vested benefit due under this Agreement or pursuant to applicable law through
        the date service of the Employee is terminated. The Company shall thereafter
        have no other obligation to pay the Employee further compensation of any
        kind,
        including, but not limited to, severance compensation in any form. 

       

      9.2. Termination
        by the Employee.
        In the
        event the Employee terminates his services for any reason, the Company shall
        by
        the termination date, or such later date permitted by applicable law, pay
        to the
        Employee any accrued but unpaid Base Salary, reimbursable business expenses,
        and
        any other vested benefit due under this Agreement or pursuant to applicable
        law.
        The Company shall thereafter have no obligation to pay the Employee further
        compensation of any kind, including, but not limited to, severance compensation
        in any form.

       

    

    10.  Disability
      and Death.
      

    

      10.1  Termination
        due to Employee’s Permanent Disability.
        To the
        extent permissible under applicable law, in the event the Employee becomes
        permanently disabled during employment with the Company, the Company may
        terminate Employee’s employment under this Agreement by giving thirty (30) days
        notice to the Employee of its intent to terminate Employee’s employment, and
        unless the Employee resumes performance of the duties set forth in Section
        1
        within five (5) days of the date of the notice and continues performance
        for the
        remainder of the notice period, Employee’s employment shall terminate at the end
        of the thirty (30) day period. The Employee will not be entitled to and shall
        not receive any compensation or benefits of any type following the effective
        date of termination, except for any accrued but unpaid salary, bonuses, or
        reimbursable business expenses. "Permanently disabled" for the purposes of
        this
        Agreement means the inability, due to physical or mental ill health, to perform
        the essential functions of Employee’s job, with or without a reasonable
        accommodation, for ninety (90) days during any one employment year irrespective
        of whether such days are consecutive.

       

      
        
          
          

        

        
          Page
            4

          
            

          

        

        
          
          

        

      

       

      10.2   Termination
        Due To Employee’s Death.
        Employee’s employment under this Agreement will terminate immediately upon the
        Employee’s death and the Company shall not have any further liability or
        obligation to the Employee, his executors, heirs, assigns or any other person
        claiming under or through his estate, except that Employee’s estate shall
        receive any accrued but unpaid salary or bonuses. 

       

    

    11.  Merger,
      Consolidation or Acquisition.
      This
      Agreement shall not be terminated by any voluntary or involuntary modification
      in the ownership of the Company’s capital stock or modification of the Company’s
      corporate structure. In the event that of any merger or consolidation or
      transfer of assets of the Company or any of its subsidiaries, the Company’s
      obligations hereunder shall be assigned to the surviving or resulting
      corporation or the transferee of the assets of the Company or the Company’s
      subsidiaries. 

     

    12.  Change
      of Control.
      In the
      event of a “change of control”, as defined in the Stock Incentive Plan, the
      Employee is entitled to 100% acceleration of unvested stock options.

     

    13.  Termination
      without Cause.
      If the
      Company terminates the Employee without Cause other than due to death, permanent
      disability or nonrenewal of this Agreement after the Employment Term, the
      Employee shall receive (i) accrued but unpaid Base Salary and bonus pursuant
      to
      Section 6.2, and reimbursable business expenses, upon termination of this
      Agreement; and (ii) payment equivalent to Base Salary for one year (the
“Severance Payment”), which shall be paid out as if Employee’s employment had
      continued during the one year severance period. The Employee shall not be
      entitled to any Severance Payment unless (i) Employee complies with all
      surviving provisions of any non-competition agreement, non-solicitation
      agreement, confidentiality agreement or invention assignment agreement signed
      by
      Employee, and (ii) Employee executes and delivers to the Company after a notice
      of termination a release in form and substance acceptable to the Company by
      which the Employee releases the Company from any obligations and liabilities
      of
      any type whatsoever under this Agreement, except for the Company's obligations
      with respect to the Severance Payment, which release shall not affect the
      Employee’s right to indemnification, if any, for actions taken within the scope
      of his employment. Notwithstanding anything herein, no Severance Payment shall
      be paid or otherwise provided until all applicable revocation periods have
      fully
      expired, and the mutual release becomes fully and finally enforceable. The
      parties hereto acknowledge that the Severance Payment to be provided under
      this
      Section is to be provided in part in consideration for the above-specified
      release. 

     

    14.  Confidentiality.

     

    14.1   The
      Employee agrees that all Confidential Information that comes or has come into
      the Employee’s possession by reason of this Agreement or his employment with the
      Company is the property of the Company and shall not be used except for the
      Company’s exclusive benefit. Further, the Employee shall not, during the
      Employment Term of this Agreement, or thereafter until such Confidential
      Information is or becomes public (other than through an unauthorized disclosure
      of such Confidential Information by Employee or any other employee of the
      Company), disclose or acknowledge the content of any Confidential Information
      to
      any person who is not an employee or a consultant of the Company authorized
      to
      possess such Confidential Information. Upon termination of this Agreement,
      the
      Employee shall deliver to the Company all documents, writings, electronic
      storage devices, and other tangible things containing any Confidential
      Information and the Employee shall not make or retain copies, excerpts, or
      notes
      of such Confidential Information.

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

     

    14.2   For
      purposes of this Section, “Confidential Information” shall mean all proprietary
      and other information relating to the business and operations of the Company,
      subsidiaries and its affiliates, which has not been specifically designated
      for
      release to the public by an authorized representative of the Company,
      subsidiaries or any of its affiliates, including, but not limited to the
      following: (i) information, observations, procedures, models and data concerning
      the business or affairs of the Company, subsidiaries or any of its affiliates;
      (ii) products or services; (iii) costs and pricing structures; (iv) marketing
      plans or analyses; (v) drawings, photographs and reports; (vi) computer
      software, including operating systems, applications and program listings; (vii)
      flow charts, manuals and documentation; (viii) data bases; (ix) accounting
      and
      business methods; (x) inventions, devices, new developments, methods and
      processes, whether patentable or un-patentable and whether or not reduced to
      practice; (xi) customers, vendors, suppliers and customer, vendor and supplier
      lists; (xii) other copyrightable works; (xiii) all production methods,
      processes, technology and trade secrets and (xiv) all similar and related
      information in whatever form. Confidential Information will not include any
      information that has been published in a form generally available to the public
      prior to the date the Employee proposes to disclose or use such information.
      

    

    15.  Non-solicitation
      / Non-disparagement.
      In the
      event of the termination of this Agreement for any reason, the Employee shall
      not, for a period of one year thereafter, directly or indirectly: (i) solicit,
      induce or encourage any employee or consultant of the Company to terminate
      his
      or her employment or consulting agreement with the Company; (ii) make any
      disparaging public statement concerning the Company; or (iii) use the Company’s
      Confidential Information to induce, attempt to induce or knowingly encourage
      any
      Customer (as defined below) of the Company to divert any business or income
      from
      the Company, or to stop or alter the manner in which they are then doing
      business with the Company. The term “Customer” with respect to the Company shall
      mean any individual or business firm that is, or within the prior twenty-four
      (24) months was, a customer or client of the Company, or whose business was
      actively solicited by the Company at any time, regardless of whether such
      Customer was generated, in whole or in part, by the Employee
      efforts.

     

    16.  Breach
      by the Employee.
      Both
      parties recognize that the services to be rendered under this Agreement by
      the
      Employee are special, unique and extraordinary in character, and that in the
      event of a breach by the Employee of the material terms and conditions of
      Section 14 and Section 15 of this Agreement, the Company and its affiliates
      shall be entitled, if it so elects, to institute and prosecute proceedings
      in
      any court of competent jurisdiction, either in law or in equity, to obtain
      damages for any breach of such Sections, or to enforce the specific performance
      thereof by the Employee. Without limiting the generality of the foregoing,
      the
      parties acknowledge that a breach by the Employee of his material obligations
      under Section 14 and Section 15 of this Agreement could Cause the Company,
      subsidiaries and/or its affiliates irreparable harm for which no adequate remedy
      at law would be available in respect thereof and that therefore upon proof
      of
      the same the Company, subsidiaries and/or its affiliates would be entitled
      to
      seek injunctive relief with respect thereto, as well as to seek reasonable
      attorneys’ fees and other costs it incurred in its efforts to obtain enforcement
      of the Agreement.

     

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

     

    17.  Conflicting
      Agreements.
      The
      Employee hereby represents and warrants to the Company that (i) neither the
      execution of this Agreement by the Employee nor the performance by the Employee
      of any of his obligations or duties under this Agreement will conflict with
      or
      violate or constitute a breach of the terms of any employment or other agreement
      to which the Employee is a party or by which the Employee is bound, and (ii)
      the
      Employee is not required to obtain the consent of any person, firm, corporation
      or other entity in order to enter into this Agreement or to perform any of
      his
      obligations or duties under this Agreement. The Employee agrees to indemnify
      and
      hold harmless the Company for any liability the Company may incur as the result
      of the existence of any such obligations, duties or agreements.

     

    18.  Further
      Assurances.
      The
      Employee hereby agrees to execute and deliver such agreements, certificates
      or
      other documents as may be reasonably requested by the Company which may be
      necessary or are required under this Agreement.

     

    19.  Miscellaneous.

     

    19.1  Arbitration.
      Any and
      all disputes or controversies arising out of or relating to this Agreement,
      other than injunctive relief pursuant to Section 16, shall be resolved by
      arbitration at the American Arbitration Association at its Los Angeles offices
      before one arbitrator (mutually selected by the Company and the Employee or,
      if
      the Company and Employee cannot agree on one arbitrator, then as selected under
      the rules of the American Arbitration Association) under the then existing
      commercial rules and regulations of the American Arbitration Association. The
      parties agree that in any such arbitration, the arbitrator shall not have the
      power to reform or modify this Agreement in any way and to that extent their
      powers are so limited. The determination of the arbitrator shall be final and
      binding on the parties hereto and judgment on it may be entered in any court
      of
      competent jurisdiction. Except as required by law, neither the Company nor
      the
      Employee shall issue any press release or make any statement which is reasonably
      foreseeable to become public with respect to any arbitration or dispute between
      the parties without receiving the prior written consent of the other party
      to
      the content of such press release or statement.

     

    19.2  Successors;
      Binding Agreement.
      This
      Agreement and all rights of the Employee hereunder shall inure to the benefit
      of
      the parties hereto and their respective heirs, personal representatives,
      successors and assigns; provided,
      that
      the duties of the Employee hereunder are personal to the Employee and may not
      be
      delegated or assigned by him.

     

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

     

    19.3  Notices.
      All
      notices and other communications under this Agreement shall be in writing and
      shall be deemed given if delivered personally, by facsimile or other electronic
      transmission (with confirmation) or by overnight courier to the parties at
      the
      following addresses (or at such other address for a party as shall be specified
      by like notice):

     

    
      
        	
                (i)

              	
                If
                  to the Company, one copy to:

              
	 	 
	 	
                Pure
                  Biofuels Corp.

              
	 	
                9440
                  Little Santa Monica Blvd., Suite 401

              
	 	
                Beverly
                  Hills, CA 90210

              
	 	
                Attention:
                  Luis Goyzueta

              
	 	 
	 	
                with
                  a simultaneous copy to (which copy shall 

              
	 	
                not
                  be deemed notice):

              
	 	 
	 	
                DLA
                  Piper US LLP

              
	 	
                1251
                  Avenue of the Americas

              
	 	
                New
                  York, New York 10020-1104

              
	 	
                Fax:
                  (212) 884-8466

              
	 	
                Attention:
                  Daniel I. Goldberg, Esq.

              
	 	 
	
                (ii)

              	
                If
                  to the Employee, one copy to:

              
	 	 
	 	
                Steven
                  S. Magami

              
	 	
                ARC
                  Investment Partners, LLC

              
	 	
                9440
                  Little Santa Monica Blvd., Suite 401

              
	 	
                Beverly
                  Hills, CA 90210

              
	 	
                Fax:
                  (310) 402-5947

              
	 	 
	 	
                with
                  a simultaneous copy to (which copy shall 

              
	 	
                not
                  be deemed notice):

              
	 	 
	 	
                Brownstein
                  Hyatt & Farber, P.C.

              
	 	
                410
                  Seventeenth Street, Twenty-Second Floor

              
	 	
                Denver,
                  CO 80202-4437

              
	 	
                Fax:
                  (303) 223-0934

              
	 	
                Attention:
                  Adam Agron

              

      

    

     

    19.4  Governing
      Law.
      This
      Agreement shall be governed by and in accordance with the laws of the State
      of
      California without regard to conflict of law rules thereof.

     

    19.5  Amendment;
      Waivers.
      This
      Agreement may only be amended by written agreement, signed by the parties.
      The
      waiver of either party hereto of any right hereunder or of any failure to
      perform or breach by the other party hereto shall not be deemed a waiver of
      any
      other right hereunder or of any other failure or breach by the other party
      hereto, whether of the same or a similar nature or otherwise. No waiver shall
      be
      deemed to have occurred unless set forth in a writing executed by or on behalf
      of the waiving party. No such written waiver shall be deemed a continuing waiver
      unless specifically stated therein, and each such waiver shall operate only
      as
      to the specific term or condition waived and shall not constitute a waiver
      of
      such term or condition for the future or as to any act other than that
      specifically waived.

     

    
      
        
        

      

      
        Page
          8

        
          

        

      

      
        
        

      

    

     

    19.6  Validity;
      Legal Fees.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall otherwise remain in full force and effect. Moreover, if any one
      or
      more of the provisions contained in this Agreement is held to be excessively
      broad as to duration or scope, such provisions shall be construed by limiting
      and reducing them so as to be enforceable to the maximum extent compatible
      with
      applicable law. Except as expressly provided herein, each party shall bear
      the
      costs of any legal fees and other fees and expenses which may be incurred in
      respect of enforcing its respective rights under this Agreement.

     

    19.7  Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding of the parties
      in
      respect of the subject matter contained herein, and supersedes all prior
      agreements, promises, covenants, arrangements, communications, representations
      or warranties, whether oral or written, by any officer, the Employee or
      representative of either party in respect of said subject matter.

     

    19.8  Survivorship. The
      respective rights and obligations of the parties hereunder shall survive any
      termination of this Agreement to the extent necessary to the intended
      preservation of such rights and obligations. The provisions of this Section
      19.8
      are in addition to the survivorship provisions of any other section to this
      Agreement.

     

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

     

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

     

    20.  Section
      409A.
      Notwithstanding anything in this Agreement to the contrary, if the Employee
      is a
“specified employee” as described in Internal Revenue Code section 409A and the
      Treasury Regulations thereunder (“Section 409A”) and as determined by the
      Company in accordance with its procedures, by which determination the Employee
      is bound, any amount to which the Employee would otherwise be entitled during
      the first six months following the Employee’s separation from service that
      constitutes nonqualified deferred compensation within the meaning of Section
      409A and that is therefore not exempt from Section 409A as involuntary
      separation pay or a short-term deferral, will be accumulated and paid without
      interest on the first business day of the seventh month following the date
      of
      the Employee’s separation from service. For purposes of this Agreement, each
      amount to be paid or benefit to be provided shall be construed as a separate
      identified payment for purposes of Section 409A.

     

    
      
        
        

      

      
        Page
          9

        
          

        

      

      
        
        

      

    

     

    [Remainder
      of page intentionally left blank.]

     

    
      
        
        

      

      
        Page
          10

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	 	 
	 	
              PURE
                BIOFUELS CORP.

            
	 
 	 
 	 
 
	 	By:  	
              /s/
                Luis Goyzueta

            
	 	
              
Name:
              Luis Goyzueta
	 	
              Title:
                Chief Executive Officer

            

    

     

    
      	 	 	 
	 	
              STEVEN
                S. MAGAMI

            
	 
 	 
 	 
 
	 	
              /s/
                Steven Magami

            
	 	
              

            
	 	 

    

    

    Signature
      page to the Employment Agreement between Pure Biofuels Corp. and Steven
      Magami

     

    
      
        
        

      

      
        Page
          11

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