SECOND AMENDMENT TO LOAN DOCUMENTS
SECOND
AMENDMENT TO LOAN DOCUMENTS
Second
Amendment to Loan Documents, dated as of April 18, 2008 (this “Amendment”),
among
Pure Biofuels Corp. (the “Guarantor”),
Pure
Biofuels Del Peru S.A.C. and Palma Industrial S.A.C. (each a “Borrower”
and
collectively, the “Borrowers”),
Plainfield Special Situations Master Fund Limited (in its capacities as the
Lender and the Administrative Agent), and the other Credit Parties party hereto.
All capitalized terms used herein and not otherwise defined herein shall have
the respective meanings provided such terms in the Loan Agreement (as defined
below).
WITNESSETH:
WHEREAS,
the Guarantor, the Borrowers, the Lender and the Administrative Agent are
parties to that certain Loan Agreement, dated as of September 12, 2007 (as
amended by an amendment (the “First
Amendment”)
executed and delivered by the Guarantor and the Borrowers on March 13,
2008, the “Loan
Agreement”),
pursuant to which the Lender has made loans to the Borrowers in the aggregate
outstanding principal amount of $20,000,000.00 and the Interest Reserve has
been
reduced to $0.00;
WHEREAS,
the Loans are evidenced and secured by the Loan Agreement and the other Loan
Documents;
WHEREAS,
the Borrowers have requested that the Commitment of the Lender be increased
by
$17,346,939; and
WHEREAS,
subject to the terms and conditions of this Amendment, the parties hereto wish
to amend certain provisions of the Loan Documents as herein
provided.
NOW,
THEREFORE, IT IS AGREED:
1. The
Borrowers represent and warrant that the above recitals are true and correct
in
all respects.
2. The
Loan
Documents are amended as follows:
(a) Schedule
1.01 attached to the Loan Agreement is hereby deleted in its entirety and
replaced with Schedule 1.01 attached hereto, so that the unfunded portion of
the
Commitment of the Lender as of the Amendment Effective Date (as defined below),
before giving effect to any Loans made on such date, shall mean
$17,346,939.
(b) The
maximum aggregate principal amount of Loans evidenced by the Notes shall be
$37,346,939.
(c) Schedule
2.01 attached to the Loan Agreement is hereby deleted in its entirety and
replaced with Schedule 2.01 attached hereto. The Borrowers represent and warrant
that all of the proceeds of Loans made prior to the Amendment Effective Date
were used solely for the purposes as set forth on part A. of Schedule 2.01.
Each
of the Borrowers hereby represents, warrants and agrees that all of the proceeds
of Loans made on or after the Amendment Effective Date shall be used solely
for
the purposes set forth on part B. of Schedule 2.01.
(d) Anything
in the Loan Agreement to the contrary notwithstanding, (i) each Notice of
Borrowing which the Borrowers submit to the Administrative Agent in connection
with a Loan they desire to incur on or after the Amendment Effective Date shall
include a description of the proposed use of the proceeds of such Loan which
shall refer to the applicable use of proceeds items in Schedule 2.01 and contain
such other details with respect to the use of such proceeds as the
Administrative Agent may reasonably request and (ii) from and after the
Amendment Effective Date, Loan proceeds shall not be advanced to the Borrowers
more than once each calendar week and the maximum principal amount of each
such
weekly advance shall not exceed the applicable weekly amount set forth on part
B. of Schedule 2.01.
(e) Anything
in Section 2.08 of the Loan Agreement or the other Loan Documents to the
contrary notwithstanding, interest shall accrue with respect to the Loans during
the period extending from and including March 12, 2008 to but excluding October
1, 2008, and all such interest accrued during such period shall be due and
payable in four equal monthly installments on October 1, 2008, November 1,
2008,
December 1, 2008 and January 1, 2009.
(f) Anything
in Section 3.01(a) of the Loan Agreement to the contrary notwithstanding, there
shall be no Commitment Fee with respect to the Loans made under the Loan
Agreement on or after the Amendment Effective Date.
(g) Anything
in Section 3.01(b) of the Loan Agreement to the contrary notwithstanding, the
Funding Fee with respect to each Borrowing of Loans made under the Loan
Agreement on or after the Amendment Effective Date shall be equal to 2.00%
of
the original principal amount of such Loans.
(h) Anything
in the Loan Documents to the contrary notwithstanding, the Administrative Agent
and the Lender hereby release any lien, security interest or other Encumbrance
which they may have pursuant to the Loan Documents on inventory (including
raw
materials, finished product, byproducts and inventory in process) and accounts
receivable and the proceeds therefrom of the Borrowers. Each of the
Administrative Agent and the Lender covenants and agrees to take all actions
which are reasonably necessary to effect such release of such liens, security
interests or other Encumbrances as a matter of public record following the
Amendment Effective Date.
3. Notwithstanding
anything to the contrary contained in this Amendment or the other Loan
Documents, each of the Borrowers and the other Credit Parties hereby covenants
and agrees to take all actions set forth on Exhibit A to this Amendment, at
their sole cost and expense, to (a) implement a trust arrangement with respect
to the Collateral (including, without limitation, if requested by the Purchaser
(as defined in the Securities Purchase Agreement) and/or the Lender, any
collateral secured pursuant to (i) the Convertible Note Documents and/or (ii)
the post closing matters set forth on Exhibit A to this Amendment), which trust
arrangement (including, without limitation, the documentation therefor) shall
be
in form and substance reasonably satisfactory to the Lender (the “Trust
Arrangement”),
(b)
recapitalize the debt and equity structure of the Borrowers and the other Credit
Parties in order to cause the reduction of the amount outstanding under the
Convertible Notes and an increase in the amount outstanding under the Loans
in a
manner satisfactory to the Administrative Agent (the “Recapitalization”),
(c)
have Holdings issue warrants to the Purchaser to purchase an amount of shares
of
Common Stock in an amount when exercised equal to $17,346,939 divided by an
exercise price per share of Common Stock to be determined but no greater than
$0.30 (the “Warrant
Issuance”)
and in
connection with the Warrant Issuance there will be grants of certain equity
to
management based on performance measures to be mutually agreed upon by Holdings
and the Lender, and (d) amend Holdings’ articles of incorporation to increase
its authorized Common Stock in an amount sufficient to support the issuance
of
the Common Stock underlying the Warrant Issuance (the “Stock
Authorization Amendment”),
all
of the above to be completed within the time periods set forth therein and
the
parties hereto acknowledge and agree that the failure to take any of the actions
required on Exhibit A to this Amendment, within the relevant time periods
required, shall give rise to an immediate Event of Default.
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4. Except
as
set forth on Schedule 4 hereto, each of the Borrowers and the other Credit
Parties hereby represents and warrants that all of the representations and
warranties made by it in the Loan Agreement and the other Loan Documents are
true and correct as of the date made and, to the extent it is a continuing
representation or warranty, as of the Amendment Effective Date.
5. Each
of
the Borrowers and the other Credit Parties acknowledges, confirms and agrees
that (a) the aggregate principal amount of the Loans outstanding immediately
prior to the Amendment Effective Date is $20,000,000.00 and (b) it possesses
no
claims, defenses, offsets, rights of recoupment or counterclaims of any kind
or
nature against the Lender or with respect to the Loans, the Loan Documents
or
the enforcement thereof (collectively, the “Claims”),
nor
does either of the Borrowers or any of the other Credit Parties now have
knowledge of any facts that would or might give rise to any Claims. If facts
now
exist which would or could give rise to any Claim against the Lender or with
respect to the Loans, the Loan Documents or the enforcement thereof, each of
the
Borrowers and the other Credit Parties hereby unconditionally, irrevocably
and
unequivocally waives and fully releases any and all such Claims as if such
Claims were the subject of a law suit, adjudicated to final judgment from which
no appeal can be taken, and therein dismissed with prejudice. Each of the
Borrowers and the other Credit Parties hereby waives the provisions of any
applicable laws restricting the release of claims which the releasing party
does
not know or suspect to exist at the time of release which, if known, would
have
materially affected its decision to agree to this release. In this regard,
each
of the Borrowers and the other Credit Parties hereby agrees, represents and
warrants to the Lender that it realizes and acknowledges that factual matters
now unknown to it may have given or may hereafter give rise to causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses
which
are presently unknown, unanticipated and unsuspected, and each of the Borrowers
and the other Credit Parties further agrees, represents and warrants that the
release provided hereunder has been negotiated and agreed upon in light of
that
realization, and that each of the Borrowers and the other Credit Parties
nevertheless hereby intends to release, discharge and acquit the Lender from
any
such unknown causes of action, claims, demands, debts, controversies, damages,
costs, losses and expenses which are in any manner set forth in or related
to
the Loans, the Loan Documents (including, without limitation, the enforcement
thereof), the Mortgaged Property, the improvements located therein, the other
Collateral and/or any and all dealings in connection therewith.
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6. (a)
Each
of the Borrowers and the other Credit Parties ratifies and confirms each of
the
liens and security interests granted by it to the Lender in the Loan Documents;
(b) (i)
each
of the Borrowers and the other Credit Parties ratifies and confirms that the
Security Documents create in favor of the Administrative Agent, for the benefit
of the Lender, a security interest in all right, title and interest of each
of
the Borrowers and the other Credit Parties in those items and types of
collateral described in the Security Documents, as security for the Obligations
which include, without limitation, all Loans advanced to the Borrowers under
the
Loan Agreement, as amended by the First Amendment and this Amendment;
(ii)
in
furtherance of the foregoing, Section 1(i) of the Pledge Agreement is hereby
amended to add the following after the words “each such Loan Document” and prior
to the words “(all such obligations, liabilities and indebtedness under this
clause (i), being herein collectively called the “Loan Document
Obligations”)”:
“,
an
amendment to the Loan Agreement executed and delivered by Holdings and the
Borrowers on March 13, 2008, the Second Amendment to Loan Documents, dated
as of
April 18, 2008 (the “Second Amendment”), among Holdings, Pure Biofuels and
Palma, Plainfield Special Situations Master Fund Limited (in its capacities
as
the Lender and the Administrative Agent), and the other Credit Parties party
thereto, and the Notes, dated April 18, 2008, issued by each of Pure Biofuels
and Palma in favor of Plainfield Special Situations Master Fund Limited pursuant
to the Second Amendment”;
(c) each
of
the Borrowers and the other Credit Parties acknowledges and agrees that, except
as set forth in Section 2(e) as it applies to prior payments of interest due
under Section 11.01(b) of the Loan Agreement subsequent to March 12, 2008 and
prior to the Amendment Effective Date, the Lender has not waived, and by its
execution and delivery of this Amendment the Lender is not waiving, any Default
or Event of Default under the Loan Documents as amended hereby; and
(d) each
of
Holdings and the Subsidiary Guarantors ratifies and confirms its Guaranty;
7. Each
of
the Loan Documents, as and to the extent amended hereby, remains in full force
and effect in accordance with the terms and provisions thereof and
hereof.
8. This
Amendment is limited as specified and shall not constitute a modification,
acceptance or waiver of any other provisions of the Loan Agreement or any other
Loan Document. In the event of any conflict between this Amendment and any
of
the Loan Documents, the terms and provisions of this Amendment shall govern
and
control. Each of the Borrowers and the other Credit Parties will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, at its sole cost and expense, all such further acts, deeds,
conveyances, mortgages, assignments, transfers, pledges and assurances as the
Lender may reasonably require or deem desirable for the better assuring and
confirming the terms and provisions of this Agreement.
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9. From
and
after the Amendment Effective Date, each reference in any Loan Document to
any
other Loan Document shall be deemed to be a reference to such Loan Document
as
and to the extent amended hereby.
10. This
Amendment may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which counterparts when
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A complete set of counterparts shall
be
lodged with each of the Lender and the Borrowers.
11. The
provisions of Sections 13.03 and 13.08 of the Loan Agreement are incorporated
by
reference herein (as if set forth in full in this section) so that this
Amendment shall be subject to the terms and provisions of such sections of
the
Loan Agreement.
12. This
Amendment shall become effective on the first date (the “Amendment
Effective Date”)
on
which each of the following conditions is satisfied: (a) the Borrowers, the
Lender and each of the other Credit Parties shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered
(including by way of facsimile transmission) the same to the Lender (with a
copy
to White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000
Attention: Xxxx Xxx, Esq. (facsimile number 212-354-8113)) and each of the
Borrowers shall have executed and delivered to the Lender a Note in the
principal amount of up to $17,346,939 to evidence the increase in the Commitment
of the Lender effected by this Amendment; (b) the Lender shall have received
an
opinion letter, addressed to the Administrative Agent and the Lender and dated
the Amendment Effective Date, from each of DLA Piper US LLP, Muniz,
Ramirez, Xxxxx-Xxxxxx & Xxxx-Xxxxxxxx and Xxxxx
& Xxxx, LLP with respect to this Amendment and such matters incident thereto
and to the transactions contemplated herein and therein as the Administrative
Agent may reasonably request; (c) the Lender shall have received (i) from each
Borrower, a certificate, dated the Amendment Effective Date and signed on behalf
of each of the Borrowers by an Authorized Representative of such Borrower in
the
form of Exhibit B with appropriate insertions, together with copies of the
certificate or articles of incorporation and by-laws (or other equivalent
organizational documents), as applicable, of such Borrower and the resolutions
of such Borrower referred to in such certificate certifying on behalf of such
Borrower that all of the conditions in Sections 5.06 (for purposes of this
Amendment, the reference to June 30, 2007 in Section 5.06 shall instead refer
to
September 30, 2007) and 5.07 of the Loan Agreement have been satisfied on such
date and (ii) from each Credit Party other than the Borrowers, a certificate,
dated the Amendment Effective Date, signed by an Authorized Representative
of
such Credit Party, and attested to by another Authorized Representative of
such
Credit Party, in the form of Exhibit B with appropriate insertions, together
with copies of the certificate or articles of incorporation and by-laws (or
other equivalent organizational documents), as applicable, of such Credit Party
and the resolutions of such Credit Party referred to in such certificate, and
each of (i) and (ii) above shall be in form and substance reasonably acceptable
to the Lender; (d) the Lender shall have received such other documents and
evidence as are customary for transactions of this type or as the Lender may
reasonably request in order to evidence the satisfaction of the other conditions
set forth above; and (e) the Borrowers shall have paid all of the Lender’s
costs and disbursements (including, without limitation, attorney’s fees and
expenses) in connection with the Loan Documents and this Amendment.
*
* *
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IN
WITNESS WHEREOF, the parties have executed and delivered this Amendment as
of
the date first set forth above.
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LENDER:
PLAINFIELD
SPECIAL SITUATIONS MASTER FUND LIMITED,
as
the Lender and the Administrative Agent
By:
/s/StevenSegaloff
Name:
Xxxxxx Xxxxxxxx
Title:
Authorized Individual
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BORROWERS:
PURE
BIOFUELS DEL PERU S.A.C.
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
PALMA
INDUSTRIAL S.A.C.
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
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OTHER
CREDIT PARTIES:
as
a Guarantor
By:
/s/ Xxxx Xxxxxxxx
Name:
/s/ Xxxx Xxxxxxxx
Title:
President and Chief Executive Officer
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ACEITE
PUCALLPA S.A.C.,
as
a Guarantor
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
PALMAS
TROPICALES S.A.C.,
as
a Guarantor
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
PUCAPALMA
S.A.C.,
as
a Guarantor
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
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ECOPALMA
S.A.C.,
as
a Guarantor
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
PALMAS
DE ORIENTE S.A.C.,
as
a Guarantor
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
PURE
BIOCARBURANTES S.A.,
as
a Guarantor
By:
/s/ Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Authorized Signatory
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The
undersigned agrees that the Credit Parties entry into this Amendment and the
use
of the proceeds thereof for the purposes set forth on Schedule 2.01 hereto
will
not violate the terms of the Securities Purchase Agreement and the Convertible
Notes issued thereunder.
| PLAINFIELD PERU I LLC | ||
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| By: | /s/ Xxxxxx Xxxxxxxx | |
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Name:
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Xxxxxx Xxxxxxxx
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| Title: |
Authorized Individual
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| PLAINFIELD PERU II LLC | ||
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| By: | /s/ Xxxxxx Xxxxxxxx | |
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Name:
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Xxxxxx Xxxxxxxx
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| Title: |
Authorized Individual
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