December 4, 2008
Pure Biofuels Corp.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the bridge loans made on December 4, 2008 to Pure
Biofuels Corp. (the "Borrower") by Plainfield Peru I LLC ("Plainfield") in the
principal amount of $500,000 and by FDS Corporation S.A ("FDS") in the principal
amount of $1,000,000 (collectively, the "Bridge Loans"), which Bridge Loans are
evidenced by promissory notes dated December 4, 2008 (collectively, the
"Notes").
In connection with the making of the Bridge Loans, and for good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Trimarine Corporation S.A. ("Trimarine") shall provide to the
Borrower and/or or one or more of its existing majority-owned subsidiaries(1),
during the period commencing on the date of the issuance of the Convertible
Notes (as defined below) and ending on the date two years subsequent to the date
of such issuance, access to and the ability to utilize, on terms and conditions
satisfactory to Plainfield in its sole reasonable discretion, Trimarine's
existing $40,000,000 working capital feedstock facility in an amount of not less
than $40,000,000 for the funding of the Borrower's and/or one or more of its
existing majority-owned subsidiaries' (listed in footnote 1) feedstock purchases
in the ordinary course of business, pursuant to documentation related thereto
that is satisfactory in form and substance to Plainfield in its sole reasonable
discretion (the "Trimarine Facility").
2. The Borrower shall (a) provide documentation in form and
substance satisfactory to Plainfield and Trimarine in their reasonable
discretion to the extent Borrower enters into an agreement with Banco
Internacional del Peru - Interbank ("Interbank Peru") pursuant to which
Interbank Peru will provide term loan financing for the Borrower and/or one or
more of its existing majority-owned subsidiaries (listed in footnote 1), as
borrower(s), in a principal amount of not less than $40,330,000 (the "Interbank
Peru Financing"); (b) use its commercially reasonable efforts to refinance the
Trimarine Facility by December 31, 2009 with a working capital facility obtained
in the bank market (the "Refinancing") or, if after using commercially
reasonable efforts the
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1 The existing majority-owned subsidiaries of the Borrower are as follows: Pure
Biofuels del Peru S.A.C., Palma Industrial S.A.C., Ecopalma S.A.C., Aceite
Pucallpa S.A.C., Palmas Tropicales S.A.C. Palmas De Oriente S.A.C. and Pucapalma
S.A.C.
Xxxxxxxx is unable to consummate the Refinancing by such date, issue to
Trimarine duly authorized and validly issued seven-year warrants to purchase one
share of common stock par value $0.001 per share of the Borrower (the "Common
Stock") for every $1.00 of principal amount outstanding under the Trimarine
Facility at December 31, 2009, at a strike price equal to 120% of the volume
weighted average price of the Common Stock for the sixty (60) trading days
immediately preceding December 31, 2009; provided, however, that the strike
price shall not be less than $0.20 per share of Common Stock and not greater
than $0.40 per share of Common Stock; and (c) cooperate fully with Plainfield
and FDS in order to promptly and fully carry out the terms and provisions of
this letter agreement and to execute and deliver such other agreements,
documents or instruments and take such other actions as may be reasonably
necessary or desirable to effectuate the terms of the Notes and the terms and
conditions contained in the letter agreement and the term sheet attached hereto
as Annex A.
3. Plainfield shall (a) purchase $22,500,000 in aggregate principal
amount of convertible notes (the "Convertible Notes") from the Borrower on terms
and conditions identical to the existing convertible notes of the Borrower held
by Plainfield except for the additional terms contained in the term sheet
attached hereto as Annex A and (b) release its liens securing the Loans (as
defined in the Loan Agreement, dated as of September 12, 2007, as amended by
amendments dated as of March 26, 2008 and November 4, 2008, among the Borrower,
Pure Biofuels Del Peru S.A.C., Palma Industrial S.A.C., the other Credit Parties
(as defined therein) and Plainfield Special Situations Master Fund Limited (as
amended, the "Loan Agreement")), in each case subject to and at such time as of
each of the following conditions precedent is satisfied:
(a) the Interbank Peru Facility shall be in full force and
effect, pursuant to documents that are satisfactory in form and
substance to Plainfield in its sole reasonable discretion;
(b) all of the Loans under the Loan Agreement shall have been
repaid in full;
(c) either (i) the Bridge Loans shall have been repaid in full
substantially simultaneously out of a portion of the proceeds from the
purchase of the Convertible Notes or (ii) additional warrants shall be
issued to Plainfield and FDS pursuant to the terms of the Notes and
the Bridge Loans shall be converted, at the option of the respective
payee, into either (A) a note evidencing a three-month term loan, or
(B) the common stock of the Borrower, both option (A) and (B) pursuant
to the terms of the Notes;
(d) the Borrower and/or one or more of its existing
majority-owned subsidiaries (listed in footnote 1) shall have access
to the Trimarine Facility (as described in paragraph 1 above) and the
ability to utilize it, on terms and conditions satisfactory to
Plainfield in its sole reasonable discretion, for the funding of the
Borrower's and/or one or more of its majority-owned subsidiaries'
(listed in footnote 1) feedstock purchases in
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the ordinary course of business, pursuant to documents that are
satisfactory in form and substance to Plainfield in its sole
reasonable discretion;
(e) the Convertible Notes shall have been executed and delivered
and be in full force and effect, pursuant to documents that are
satisfactory in form and substance to Plainfield in its sole
reasonable discretion; and
(f) Plainfield shall have received evidence satisfactory to it
in its sole reasonable discretion that no potential or actual events
of default exist under the Trimarine Facility, the Interbank Peru
Facility, the Refinancing or the Convertible Notes.
4. No failure or delay on the part of any party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder.
5. All notices, demands, requests, consents, approvals or other
communications (collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this letter agreement shall be in
writing and shall be personally served, delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below, or to such other address as such
party shall have specified most recently by written notice. Notice shall be
deemed given on the date of service or transmission if personally served or
transmitted by telegram, telex or facsimile. Notice otherwise sent as provided
herein shall be deemed given on the next business day following delivery of such
notice to a reputable air courier service. Notices shall be delivered as
follows:
If to the Borrower: Pure Biofuels Corp.
Av. Canaval y Xxxxxxx 380 of 402
San Xxxxxx, Lima
Peru
Attention: Xxxx Xxxxxxxx
Telephone: x000-000-0000
Facsimile: x000-000-0000
with a copy to: Pure Biofuels Corp.
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx XX, 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000 0000
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And to: DLA Piper LLP (US)
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-1104
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
if to Plainfield: Plainfield Peru I LLC
c/o Plainfield Asset Management LLC
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to: White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
if to FDS: FDS Corporation S.A.
Xxx Xxxxxx 000 xxxx 00,
Xxxxxxxx Xxxxx xx Xxxxxx,
Xxxxxx xx Xxxxxx,
Xxxxxxxxx de Panama
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to: Estudio Xxxxx
Att: Xxxxx Xxxxxx
Las Begonias 475, 6(0)Piso, Lima 27, Peru
Telephone: 51-1-611-7000 ext. 6137
Facsimile: 00-0-000-0000 or 00-0-000-0000
if to Trimarine: Trimarine Corporation X.X.
Xxxxx Xxxxxxx 000 xx 000 Xxxxxxxxxx, Xxxx Xxxx
Apartado 0823-05658 Panama
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to: Estudio Xxxxx
Att: Xxxxx Xxxxxx
Las Begonias 475, 6(0)Piso, Lima 27, Peru
Telephone: 51-1-611-7000 ext. 6137
Facsimile: 00-0-000-0000 or 00-0-000-0000
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6. No person, other than the parties hereto, shall have any rights
under this letter agreement.
7. This letter agreement may be executed in one or more counterparts
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
8. No amendment, supplement, modification, waiver or termination of
this letter agreement shall be effective against a party against whom the
enforcement of such amendment, supplement, modification, waiver or termination
is asserted, unless such amendment, supplement, modification, waiver or
termination was made in a writing signed by such party.
9. In case any one or more of the provisions contained in this
letter agreement, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein, and any other application thereof, shall
not in any way be affected or impaired thereby.
10. This letter agreement shall be construed in accordance with and
governed by the laws of the State of Nevada.
11. EACH OF THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT.
12. Subject to the terms and conditions of Section 3 hereof, the
definitive agreements providing for the Trimarine Facility, the issuance of the
Convertible Notes and the transactions contemplated by this letter agreement
shall contain such representations, warranties, covenants, agreements,
indemnities, conditions and undertakings as are customary for transactions of
this nature.
[Signatures on next page]
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IN WITNESS WHEREOF, each of the parties has duly executed and delivered
this letter agreement on the date first above written.
Sincerely yours,
FDS CORPORATION S.A.
By: /s/ Xxxxxxx Xxxxx
-----------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Legal
Representative
TRIMARINE CORPORATION S.A.
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Legal
Representative
PURE BIOFUELS CORP.
By: /s/ Xxxx Xxxxxxxx
-----------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive
Officer and
Director
PLAINFIELD PERU I LLC
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director,
General Counsel
and Secretary
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Annex A
Convertible Notes Term Sheet
Capitalized terms used but not defined in this Annex A shall have the
meanings ascribed to such terms elsewhere in the letter agreement.
Permitted Prepayment: The Borrower may prepay the Convertible Notes without
penalty.
Conversion: The Convertible Notes shall be convertible at the
option of Plainfield into shares of Common Stock at
any time on or after January 1, 2010.
Additional Warrants: In the event the Convertible Notes are not repaid
prior to December 31, 2009, the Borrower shall issue
to Plainfield on December 31, 2009, duly authorized
and validly issued seven-year warrants to purchase one
share of Common Stock for every $1.00 principal amount
of Convertible Notes outstanding, at a strike price
equal to 120% of the volume weighted average price of
the Common Stock for the sixty (60) trading days
immediately preceding December 31, 2009; provided,
however, that the strike price shall not be less than
$0.20 per share of Common Stock and not greater than
$0.40 per share of Common Stock.
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