REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT
(the
“Agreement”)
is
entered into as of September 12, 2007, among PURE
BIOFUELS CORP.,
a
corporation organized and existing under the laws of the state of Nevada (the
“Company”)
and
PLAINFIELD
PERU I LLC,
a
Delaware limited liability company (“LLC1”),
and
PLAINFIELD
PERU II LLC,
a
Delaware limited liability company (“LLC2”
and
together with LLC1, “Plainfield”).
WITNESSETH:
WHEREAS,
concurrent
with the execution of this Agreement, the Company and Plainfield entered into
that certain Securities Purchase Agreement (the “Securities
Purchase Agreement”),
pursuant to which (i) the Company issued to LLC1 $10,000,000 aggregate principal
amount of the 10%/12% Senior Convertible PIK Election Notes due 2012, of the
Company (the “Notes”),
convertible into 16,666,667 (subject to adjustment) shares of common stock
(the
“Common
Stock”),
of
the Company, par value $0.001 per share (“Conversion Shares”)
and
(ii) the Company issued to LLC2 11,000,000 shares of Common Stock (the
“Issue
Date Common Stock”)
and
warrants to purchase shares of Common Stock (the “Warrants”),
exercisable into 56,938,245 shares of Common Stock (the “Warrant
Shares”
and
together with the Conversion Shares and the Issue Date Common Stock, the
“Shares”).
WHEREAS,
the
Company has agreed to grant the Holders (as defined herein) certain registration
rights for the Shares issuable to the Holders upon the conversion of the Notes
and the exercise of the Warrants (the “Registration
Rights”);
WHEREAS,
Plainfield has required that the Company enter into this Agreement to evidence
the grant of the Registration Rights and as a condition to Plainfield’s entering
into the Securities Purchase Agreement with the Company;
WHEREAS,
the
Company believes that the issuance of the Notes, the Issue Date Common Stock
and
the Warrants to Plainfield and the entering into the Securities Purchase
Agreement with Plainfield will be beneficial to the Company; and
WHEREAS,
in
consideration of Plainfield’s execution of the Securities Purchase Agreement,
Company is willing to grant the Holders the Registration Rights provided for
herein.
NOW,
THEREFORE,
for and
in consideration of the premises and the mutual covenants hereinafter set forth,
and for other good and valuable consideration, the parties hereby agree to
enter
into this Agreement as follows:
ARTICLE
I.
REGISTRABLE
SECURITIES
Section
1.1 Registrable
Securities.
For
purposes of this Agreement, “Registrable
Securities”
means
(i) all Shares issuable to Plainfield upon conversion of the Notes, (ii) all
Shares issuable to Plainfield upon exercise of the Warrants, (iii) the Issue
Date Common Stock and (iv) all securities paid, issued or distributed in respect
of any such Shares referred to in (i), (ii) and (iii) above by way of stock
dividend, stock split or distribution, or in connection with a combination
of
shares, recapitalization, reorganization, merger or consolidation, or otherwise
held by Plainfield or a permitted transferee of Plainfield (collectively, the
“Holders”);
provided, that in the event the Company converts, by merger or otherwise, to
another type of entity including but not limited to a limited liability company
or a limited partnership, the term Registrable Securities as defined herein
shall refer to the securities in the new type of entity. Shares or other equity
securities, as the case may be, cease to be “Registrable Securities” when they
(a) are eligible for sale pursuant to Rule 144(k) pursuant to the Securities
Act
of 1933, as amended (the “Securities
Act”),
(b)
are sold pursuant to Rule 144 pursuant to the Securities Act, or (c) are sold
pursuant to an effective registration statement.
ARTICLE
II.
DEMAND
REGISTRATIONS
Section
2.1 Requests
for Registration.
(a) At
any
time and from time to time the Holders of at least 20% of the Registrable
Securities (the “Initiating
Holders”)
may
request registration under the Securities Act of all or any part of their
Registrable Securities (each, a “Demand
Registration”)
on the
applicable form of registration statement, subject to the terms and conditions
of this Agreement. Any request (a “Registration
Request”)
for a
Demand Registration shall specify (a) the approximate number of shares of
Registrable Securities requested to be registered (but not less than 20% of
the
total number of shares of Registrable Securities then outstanding), and (b)
the
intended method of distribution of such shares. Within ten (10) days after
the
date of sending of such request, the Company will give written notice of such
requested registration to any other Holders of Registrable Securities and will
include in such registration all shares of Registrable Securities which Holders
of Registrable Securities request the Company to include in such registration
by
written notice given to the Company within fifteen (15) days after the date
of
sending of the Company’s notice.
For
purposes of this Agreement, the terms “register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing a registration statement
or
similar document in compliance with the Securities Act, and the declaration
or
ordering of effectiveness of such registration statement or
document;
(b) The
Holders will be entitled to request up to three (3) such Demand Registrations
pursuant to Section 2.1(a); provided,
that
the Company shall not be required to effect more than one Demand Registration
during any twelve (12) month period.
(c) A
registration will not count as one of the Demand Registrations unless a
registration statement in respect of at least 75% of the Registrable Securities
requested to be included in such registration has become effective.
(d) The
Company will not include in any Demand Registration any securities other than
the shares of Registrable Securities without the prior written consent of
Holders of at least a majority of the shares of Registrable Securities included
in such registration, except that the Company may include in such registration
equity securities of the Company (the “Equity
Securities”)
to be
sold for the account of the Company if the managing underwriter(s) advise the
Company in writing that in their opinion the inclusion of such shares of
Registrable Securities and other Equity Securities proposed to be included
in
such offering will not adversely affect the ability of the underwriter to sell
the shares of Registrable Securities and such Equity Securities in an orderly
manner in such offering within a price range acceptable to the Holders of at
least a majority of the shares of Registrable Securities included in such
registration. If the managing underwriter(s) advise the Company in writing
that
in their opinion the number of shares of Registrable Securities and other Equity
Securities proposed to be included in such registration for sale by the Company
exceeds the number of shares that can be sold in an orderly manner in such
offering within a price range acceptable to the Holders of at least a majority
of the shares of Registrable Securities included in such registration, the
Company will include in such registration, prior to the inclusion of any
securities other than Registrable Securities, the number of shares of
Registrable Securities requested to be included that, in the opinion of such
underwriters, can be sold in an orderly manner within the price range of such
offering, pro rata among the respective Holders of such Registrable Securities
on the basis of the number of shares of Registrable Securities that each such
Holder has requested the Company to include in such registration over the total
number of shares of Registrable Securities requested to be included in such
registration.
2
Section
2.2 Selection
of Underwriter.
The
Holders of at least a majority of the shares of Registrable Securities included
in such registration will have the right to select the managing underwriter(s)
to manage the offering, subject to the Company’s approval, which will not be
unreasonably withheld or delayed.
Section
2.3 Shelf
Registration.
(a) Registrations
on Form S-3.
The
Company shall use its commercially reasonable efforts to qualify for
registration on a registration statement on Form S-3 or any comparable or
successor form or forms. After the Company has qualified for the use of Form
S-3
or any comparable or successor form or forms, in addition to the rights
contained in Section
2.1
and
Section
2.2,
the
Holders of at least 25% of the shares of Registrable Securities shall have
the
right, once in each 12-month period, to request a registration on Form S-3
covering the resale of Registrable Securities by the Holders (a “Shelf
Registration Statement”).
All
requests shall be in writing and shall state the number of shares of Registrable
Securities proposed to be disposed of and the intended method of distribution
of
such shares by such Holder or Holders. The Company shall be obligated to effect
such registration pursuant to this Section
2.3
unless:
(i) the
Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public of less than $2,500,000; or
(ii) the
Company shall furnish to the Holders a certificate signed by the president
or
CEO of the Company (or in the absence of such officer, any manager of the
Company) stating that in the good faith judgment of the Board, it is likely
to
be detrimental to the Company in a material respect and its stockholders for
such registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the registration no more than once during
any 12-month period for a period of not more than 180 days after receipt of
the
request of the Holder or Holders under this Section
2.3,
provided,
that,
all reasonable costs and expenses incurred by the affected Holders in connection
with such deferred filing shall be reimbursed to such Holders and paid by the
Company in accordance with Section
5.2
hereof.
3
(b) Delay
Rights.
Notwithstanding anything to the contrary contained herein, the Company may,
upon
written notice to any Holder whose Registrable Securities are included in the
Shelf Registration Statement, suspend such Holder’s use of any prospectus which
is a part of the Shelf Registration Statement (in which event the Holder shall
discontinue sales of the Registrable Securities pursuant to the Shelf
Registration Statement) if (i) the Company is pursuing an acquisition, merger,
reorganization, disposition or other similar transaction and the Company
determines in good faith that the Company’s ability to pursue or consummate such
a transaction would be materially and adversely affected by any required
disclosure of such transaction in the Shelf Registration Statement; (ii) the
Commission or any other Federal or state governmental authority in writing
requests any amendment or supplement to the Shelf Registration Statement or
prospectus or requests additional information related thereto; (iii) the Company
receives notice in writing of any suspension of the qualification or exemption
from qualification of any Registrable Securities for sale in any jurisdiction,
or the initiation or threat of any proceeding for such purpose; (iv) the
financial statements included or incorporated by reference in the Shelf
Registration Statement become ineligible for inclusion or incorporation therein
or any statement made in the Shelf Registration Statement or prospectus or
any
document incorporated or deemed to be incorporated therein by reference is
untrue in any material respect or any revision to the Shelf Registration
Statement, prospectus or other document is required so that it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not misleading; or (v)
the Company has experienced some other material non-public event the disclosure
of which at such time, in the good faith judgment of the Company, would
materially and adversely affect the Company; however, in no event shall any
delay pursuant hereto exceed sixty (60) days in any one hundred-eighty (180)
day
period or ninety (90) days in any twelve-month period. Upon disclosure of such
information or the termination of the condition described above, the Company
shall provide prompt notice to the Holders whose Registrable Securities are
included in the Shelf Registration Statement, and shall promptly terminate
any
suspension of sales it has put into effect and shall take such other actions
to
permit registered sales of Registrable Securities as contemplated in this
Agreement.
(c) Obligations
to Suspend Distribution.
Upon
receipt of any notice from the Company of the issuance or threatened issuance
by
the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any action, claim, suit,
investigation or proceeding (a “Proceeding”)
(and
the Company shall take all commercially reasonable actions required to prevent
any such Proceeding or the entry of such stop order or to remove it if entered),
each Holder of Registrable Securities included in any registration shall
immediately discontinue disposition of such Registrable Securities pursuant
to
the Shelf Registration Statement covering such Registrable Securities until
such
Holder receives the supplemented or amended prospectus, and, if so directed
by
the Company, each such Holder will deliver to the Company all copies in such
Holder’s possession, other than permanent file copies then in such holder’s
possession or as may be required to be retained in accordance with applicable
law, of the most recent prospectus covering such Registrable Securities at
the
time of receipt of such notice from the Company of any suspension contemplated
by this Section 2.3(c).
4
(d) Notwithstanding
anything contained in Article II, if the Commission prevents the Company from
including any or all of the Registrable Securities on any Shelf Registration
Statement due to limitations on the use of Rule 415 under the Securities Act,
for the resale of the Registrable Securities by the Holders, the Company shall
seek to register on such Shelf Registration Statement the maximum number of
Registrable Securities as is permitted by the Commission, and the Company shall
continue to use commercially reasonable efforts to register all remaining
Registrable Securities. In such event, the number of shares of Common Stock
to
be registered for each Holder in such Shelf Registration Statement shall be
reduced pro rata
among
all Holders and the Company shall register as many shares of Common Stock
issuable upon conversion of the Notes as it is permitted to register prior
to
including any shares of Common Stock issuable upon exercise of the Warrants.
If
the Commission, by written or oral comment or otherwise, limits the Company’s
ability to file, or prohibits the filing of, a Shelf Registration Statement
with
respect to any or all the Registrable Securities which were not included in
such
Shelf Registration Statement, it shall not be a breach or default by the Company
under this Agreement and shall not be deemed a failure by the Company to use
“commercially reasonable efforts” as set forth above or elsewhere in this
Agreement.
ARTICLE
III.
PIGGYBACK
REGISTRATIONS
Section
3.1 Right
to Piggyback.
If the
Company proposes to register any of its securities under the Securities Act
(other than pursuant to a Demand Registration or a registration solely in
connection with an employee benefit or stock ownership plan or in a transaction
described in Rule 145 under the Securities Act) and the registration form to
be
used may be used for the registration of the sale of Registrable Securities
(a
“Piggyback
Registration”),
the
Company will give prompt written notice to all Holders of Registrable Securities
of its intention to effect such a registration (each a “Piggyback
Notice”).
Subject to Section 3.2 and Section 3.3, the Company will include in such
registration all Registrable Securities that Holders of Registrable Securities
request the Company to include in such registration by written notice given
to
the Company within fifteen (15) days after the date of the Company’s
notice.
5
Section
3.2 Priority
on Primary Registrations. If a Piggyback Registration relates to an underwritten
public offering of securities by the Company and the managing underwriter(s)
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number that can be
sold in an orderly manner in such offering within a price range acceptable
to
the Company, the Company will include in such registration (i) first, the
securities proposed to be sold by the Company; (ii) second, the Registrable
Securities requested to be included in such registration, pro rata among the
Holders, based on the ratio of the number of Registrable Securities that each
such Holder has requested the Company to include in such registration over
the
total number of shares of Registrable Securities requested to be included in
such registration by the Holders; and (iii) third, other securities requested
to
be included in such registration, pro rata among the holders of such other
securities based on the ratio of the number of such other securities that each
such holder has requested the Company include in such registration over the
total number of other securities requested to be included in such
registration.
Section
3.3 Priority
on Secondary Registrations. If a Piggyback Registration relates to an
underwritten public offering of securities by holders of the Company securities
and the managing underwriter(s) advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number that can be sold in an orderly manner in such offering within
a price range acceptable to the holders initially requesting such registration,
the Company will include in such registration (i) first, the securities
requested to be included therein by the holders requesting such registration;
(ii) second, the Registrable Securities requested to be included in such
registration, pro rata among the Holders, based on the ratio of the number
of
Registrable Securities that each such Holder has requested the Company to
include in such registration over the total number of Registrable Securities
requested to be included in such registration by the Holders; and (iii) third,
other securities requested to be included in such registration, pro rata among
the holders of such securities based on the ratio of the number of such other
securities that each such holder has requested the Company include in such
registration over the total number of other securities requested to be included
in such registration.
Section
3.4 Limitation
on Subsequent Registration Rights. Schedule 3.4 sets forth all agreements to
which the Company is a party granting registration rights. The Company
represents, warrants and covenants to each Holder that (i) no individual,
corporation, limited liability company, partnership, trust or any other
organization or entity
(collectively, “Person”)
has
registration rights with respect to any securities of the Company held by such
Person nor is the Company party to any agreement or understanding to grant
or
allow any other Persons any registration rights with respect to any securities
of the Company held by such Persons whether outstanding on the date hereof
or
issued hereafter, that are inconsistent with the rights granted to the Holders
in this Agreement and this Agreement does not violate the rights of the rights
of any Person under any such other agreement, and (ii) the Company will not
enter into any agreement or understanding to grant or allow any other Persons
any registration rights with respect to any securities of the Company that
are
inconsistent with or violate the rights granted to the Holders in this
Agreement.
6
ARTICLE
IV.
REGISTRATION
PROCEDURES
Section
4.1 Registration
Procedures. Whenever any Holder has requested that the sale of any Registrable
Securities be registered pursuant to this Agreement, the Company will use its
commercially reasonable efforts consistent with this Agreement, legal
requirements and, in the case of an offering by the Company, prevailing market
conditions, to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of distribution thereof and
will as expeditiously as possible:
(a) prepare
and file with the Securities and Exchange Commission (the “Commission”)
a
registration statement with respect to such Registrable Securities and use
its
commercially reasonable efforts to cause such registration statement to become
effective, provided
that,
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the selling stockholders’
counsel selected by the Holders of a majority of the Registrable Securities
covered by such registration statement copies of all such documents proposed
to
be filed, which documents will be subject to the review of such
counsel;
(b) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be
necessary to keep such registration statement effective for the earlier of:
(i)
such time as all such Registrable Securities covered by the registration
statement have been sold or (ii) a period of six months after the effective
date
of the registration statement covering such Registrable Securities, and comply
with the provisions of the Securities Act with respect to the disposition of
all
securities covered by such registration statement during such period in
accordance with the intended methods of distribution by the Holders set forth
in
such registration statement;
(c) furnish
to each Holder such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents
as
such Holder may reasonably request in order to facilitate the disposition of
the
Registrable Securities owned by such Holder;
(d) use
its
commercially reasonable efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
as
any Holder reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to consummate
the
disposition in such jurisdictions of the Registrable Securities owned by such
Holder, provided that the Company will not be required (i) to qualify generally
to do business in any jurisdiction where it would not otherwise be required
to
qualify but for this paragraph, (ii) to subject itself to taxation in any such
jurisdiction or (iii) to consent to general service of process in any such
jurisdiction;
7
(e) notify
each Holder of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading, and, at the
request of any such Holder, the Company will prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement
of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(f) cause
all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed and to be qualified
for
trading on each system on which similar securities issued by the Company are
from time to time qualified;
(g) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such registration statement and thereafter maintain such
a
transfer agent and registrar;
(h) enter
into such customary agreements not inconsistent with this Agreement (including
underwriting agreements in customary form) and take all such other actions
as
the Holders of a majority of the Registrable Securities covered by such
registration statement or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable
Securities;
(i) make
available for inspection by any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company’s officers, directors, employees and independent accountants to supply
all information reasonably requested by any such underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise
use its commercially reasonable efforts to comply with all applicable rules
and
regulations of the Commission, and make available to its security holders,
as
soon as reasonably practicable, an earnings statement covering the period of
at
least twelve months beginning with the first day of the Company’s first full
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) permit
any Holder that might be deemed, in the reasonable judgment of such Holder,
to
be an underwriter or a controlling Person of the Company, to participate in
the
preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, which in
the
reasonable judgment of such Holder and its counsel should be included;
and
8
(l) in
the
event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of
any
related prospectus or suspending the qualification of any Registrable Securities
included in such registration statement for sale in any jurisdiction, the
Company will use its commercially reasonable efforts promptly to obtain the
withdrawal of such order.
If
any
such registration or comparable statement refers to any Holder by name or
otherwise as the holder of any securities of the Company and if, in its
reasonable judgment, such Holder is or might be deemed to be a controlling
Person of the Company, such Holder shall have the right to require (a) the
inclusion in such registration statement of language, in form and substance
reasonably satisfactory to such Holder, to the effect that the holding of such
securities by such Holder is not to be construed as a recommendation by such
Holder of the investment quality of the Company’s securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any
future financial requirements of the Company, or (b) in the event that such
reference to such Holder by name or otherwise is not required by the Securities
Act or any similar federal statute then in force, the deletion of the reference
to such Holder; provided,
that
with respect to this clause (b) such Holder shall furnish to the Company an
opinion of counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Company.
ARTICLE
V.
REGISTRATION
EXPENSES
Section
5.1 Definition.
The
term “Registration
Expenses”
means
all reasonable expenses incident to the Company’s performance of or compliance
with this Agreement, including without limitation all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and expenses of attorneys,
accountants and other experts, fees and expenses of underwriters and their
attorneys and experts (other than underwriters’ discounts and commissions, which
shall be deducted from the proceeds of the offering payable by the selling
Holders of Registrable Securities).
Section
5.2 Payment.
The Company shall pay all of the Registration Expenses in connection with (i)
three (3) Demand Registrations, (ii) any and all Piggyback Registrations and
(iii) all registrations pursuant to Section 2.3. In connection with each Demand
Registration, each registration pursuant to Section 2.3 and each Piggyback
Registration, the Company will reimburse the Holders covered by each such
registration for the reasonable fees and disbursements of one counsel chosen
by
the Holders of a majority of such Registrable Securities.
ARTICLE
VI.
INDEMNIFICATION
Section
6.1 Indemnification
by the Company.
The
Company agrees to indemnify, to the extent permitted by law, each Holder, the
officers, directors, partners, members, managers, stockholders, accountants,
attorneys, agents and employees of each of them, and each Person who controls
such Holder (within the meaning of the Securities Act) and the officers,
directors, partners, members, managers, stockholders, accountants, attorneys,
agents and employees of each such controlling Person, against all losses,
claims, damages, liabilities and expenses, costs (including, without limitation,
costs of preparation and reasonable attorneys’ fees and any legal or other fees
or expenses incurred by such party in connection with any investigation or
proceeding), judgments, fines, penalties, charges and amounts paid in settlement
(collectively, “Losses”),
as
incurred, caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus
or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification, or compliance, and will reimburse each
such Holder, each of its officers, directors, partners, members, managers,
stockholders, accountants, attorneys, agents and employees and each Person
controlling such Holder, for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling any such
claim, loss, damage, liability, or action, except insofar as the same are caused
by or contained in any information furnished in writing to the Company by such
Holder expressly for use therein; provided, however, that the Company shall
not
be required to indemnify any Person for any Losses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading to the extent, but only to the extent, that (i) such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein,
or
to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed
and
expressly approved in writing by such Holder expressly for use in such
registration statement, such prospectus or such form of prospectus or in any
amendment or supplement thereto or (ii) such Person uses an outdated or
defective prospectus after the Company has notified such Person in writing
that
the prospectus is outdated or defective. In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning
of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
9
Section
6.2 Indemnification
by Holders. In connection with any registration statement in which a Holder
is participating, each such Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement and related prospectus and,
to
the extent permitted by law, will indemnify, severally and not jointly, the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any Losses resulting from
any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading and will reimburse the Company and such directors, officers,
partners, members, managers, stockholders, accountants, attorneys, employees,
agents, Persons, or control Persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but
only
to the extent, that such untrue statement or omission is contained or should
have been contained in any information or affidavit so furnished in writing
by
such Holder expressly for use in such registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto; provided,
that the obligation to indemnify will be individual to each Holder and will
be
limited to the amount of net proceeds received by such holder from the sale
of
Registrable Securities pursuant to such registration statement.
10
Section
6.3 Notice;
Defense of Claims. Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement
made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such
claim.
Section
6.4 Survival;
Contribution. The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or
on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. Subject
to the limitations and conditions of this Article VI, the Company also agrees
to
make such provisions as are reasonably requested by any indemnified party for
contribution to such party in the event the Company’s indemnification provided
herein is unavailable for any reason.
Section
6.5 Underwriting
Agreement. To the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into by the Company
in connection with an underwritten public offering are in conflict with the
provisions of this Article VI the provisions contained in the underwriting
agreement shall control.
ARTICLE
VII.
PARTICIPATION
IN UNDERWRITTEN REGISTRATIONS
Section
7.1 Acceptance
of Underwriting.
No
Person may participate in any registration hereunder that is underwritten unless
such Holder (i) agrees to sell such Holder’s securities on the basis provided in
any underwriting arrangements approved by the Holders entitled hereunder to
approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements and in the time
and
manner set forth by the underwriters; provided, that, no Holder included in
any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters other than representations and
warranties regarding such Holder as are reasonably required by the
underwriters.
11
ARTICLE
VIII.
REPORTING
REQUIREMENTS UNDER EXCHANGE ACT
Section
8.1 Reporting.
The
Company shall keep effective the registration of the Common Stock under Section
12 of the Exchange Act, as amended, and shall timely file such information,
documents and reports for so long as the Commission may require or prescribe
under Section 13 of the Exchange Act. The Company shall (whether or not it
shall
then be required to do so) timely file such information, documents and reports
which a corporation, partnership or other entity (whichever is applicable)
subject to Section 13 or 15(d) of the Exchange Act is required to file. The
Company acknowledges and agrees that the purposes of the requirements contained
in this Article VIII are (a) to enable any such Holder to comply with the
current public information requirement contained in paragraph (c) of Rule 144
under the Securities Act should such Holder ever wish to dispose of any of
the
securities of the Company acquired by it without registration in reliance upon
Rule 144 under the Securities Act (or any other similar exemptive provision)
and
(b) to qualify the Company for the use of registration statements on Form S-3.
In addition, so long as the Company is subject to Section 13 or 15(d) of the
Exchange Act, the Company shall take such other measures and file such other
information, documents and reports, as shall hereafter be required by the
Commission as a condition to the availability of Rule 144 under the Securities
Act (or any similar exemptive provision hereafter in effect) and the use of
Form
S-3.
ARTICLE
IX.
Section
9.1 Other
Jurisdictions.
In the
event that the Company undertakes an underwritten public offering and listing
of
its securities in a jurisdiction other than the U.S., the Holders shall have
such rights which are substantially similar to the rights granted hereunder
with
respect to the registration of their Registrable Securities under the laws
of
such non-U.S. jurisdiction to the extent such rights are recognized or necessary
under the laws of such jurisdiction. At such time, the Company agrees to enter
into an agreement with the Holders memorizalizing such rights.
ARTICLE
X.
MISCELLANEOUS
Section
10.1 Adjustments
Affecting Shares.
The
Company will not take any action, or permit any change to occur, with respect
to
its securities for the purpose of (i) materially and adversely affecting the
ability of the Holders to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or (ii) materially and adversely affecting
the marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
stock); provided, that, this Section
10.1
shall
not apply to actions or changes with respect to the Company’s business, earnings
or revenues in which the effect of such actions or changes on the Registrable
Securities is merely incidental.
Section
10.2 Notices.
All notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”) required or permitted to be given hereunder or which
are given with respect to this Agreement shall be in writing and shall be
personally served, delivered by reputable air courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall
have
specified most recently by written notice. Notice shall be deemed given on
the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile. Notice otherwise sent as provided herein shall be deemed
given on the next business day following delivery of such notice to a reputable
air courier service. Notices shall be delivered as follows:
12
|
If
to the Company:
|
|
|
Xx.
Xxxxxxx x Xxxxxxx 000 xx 000
|
|
|
Xxx
Xxxxxx, Xxxx
|
|
|
Xxxx
|
|
|
Attention:
Xxxx Xxxxxxxx
|
|
|
Telephone:
x000-000-0000
|
|
|
Facsimile:
x000-000-0000
|
|
|
with
a copy to:
|
ARC
Investment Partners, LLC
|
|
0000
Xxxxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
|
|
|
Xxxxxxx
Xxxxx, XX 00000
|
|
|
Attention:
Xxxxxx Xxxxxx
|
|
|
Telephone:
000-000-0000
|
|
|
Facsimile:
000-000-0000
|
|
|
And:
|
DLA
Piper US LLP
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
|
|
Xxx
Xxxx, XX 00000-0000
|
|
|
Attn:
Xxxxxx X. Xxxxxxxx, Esq.
|
|
|
Telephone:
000-000-0000
|
|
|
Facsimile:
000-000-0000
|
13
|
if
to Plainfield:
|
Plainfield
Peru I LLC
|
|
Plainfield
Peru II 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 the Holders:
|
to
their most recent address as set forth in the books and records
of the
Company
|
Section
10.3 Termination.
This
Agreement (other than Article V and Article VI hereof) shall terminate once
the
Holders cease to own any Registrable Securities.
Section
10.4 Amendments
and Waivers. Except as otherwise provided herein, no amendment,
modification, termination or cancellation of this Agreement shall be effective
unless made in writing signed by the Company and the Holders of at least 66-2/3%
of the then outstanding shares of Registrable Securities.
Section
10.5 Successors
and Assigns. The Holder may assign all or any portion of its rights under
this Agreement to any affiliate, partner, member or shareholder of such Holder
or to any Person to whom such Holder transfers Registrable Securities then
held
by such Holder. Subject to the foregoing, the rights of the parties under this
Agreement shall inure to the benefit of, and this Agreement shall be binding
upon, the successors and assigns of the parties hereto.
Section
10.6 Severability.
If any provision of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall be deemed to
be
modified to the extent necessary to render it legal, valid and enforceable,
and
if no such modification shall render it legal, valid and enforceable, then
this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.
Section
10.7 Entire
Agreement. This Agreement, those documents expressly referred to herein, and
the other documents of even date herewith constitute the entire agreement of
the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements, representations, understandings, negotiations and
discussions between the parties, whether oral or written, with respect to the
subject matter hereof.
14
Section
10.8 Headings
Descriptive. The headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any way affect
the
meaning or construction of any provision of this Agreement.
Section
10.9 Mutual
Drafting. This Agreement is the joint product of the Company and Plainfield
and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of the Company and Plainfield , and shall not be
construed for or against any party hereto.
Section
10.10 Governing
Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial. (a) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK
(WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH
CASE
WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY
OF
THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER IT, AND AGREES NOT TO PLEAD
OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION
OVER IT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO
IT AT ITS ADDRESS SET FORTH IN SECTION 10.2, SUCH SERVICE TO BECOME EFFECTIVE
30
DAYS AFTER SUCH MAILING. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
TO
SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF
PLAINFIELD OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
(b)
THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS
REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
15
(c)
EACH
OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
10.11 Further
Assurances. Each party to this Agreement hereby covenants and agrees,
without the necessity of any further consideration, to execute and deliver
any
and all such further documents and take any and all such other actions as may
be
necessary or appropriate to carry out the intent and purposes of this Agreement
and to consummate the transactions contemplated hereby.
Section
10.12 Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. Delivery of an executed counterpart
hereof by facsimile or electronic transmission shall be as effective as delivery
of any original executed counterpart hereof.
[Remainder
of page intentionally left blank; signature pages follow.]
16
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
| COMPANY: | ||
| PURE BIOFUELS CORP. | ||
| |
|
|
| By: /s/ Xxxx Xxxxxxxx | ||
|
Name: Xxxx Xxxxxxxx |
||
| Title: Chief Executive Officer | ||
| HOLDERS: | ||
| PLAINFIELD PERU I LLC | ||
| |
|
|
| By: /s/ | ||
|
Name: |
||
| Title: | ||
| PLAINFIELD PERU II LLC | ||
| By: /s/ | ||
|
Name: |
||
| Title: | ||
