SECURITIES PURCHASE AGREEMENT BY AND BETWEEN PURE BIOFUELS CORP. AND PLAINFIELD PERU I LLC PLAINFIELD PERU II LLC
BY
AND
BETWEEN
AND
PLAINFIELD
PERU I LLC
PLAINFIELD
PERU II LLC
Dated
as
of September 12, 2007
TABLE
OF CONTENTS
Page
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ARTICLE
I DEFINITIONS
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1
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ARTICLE
II SALE AND PURCHASE
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12
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SECTION
2.1. Agreement to Sell and to Purchase; Purchase Price
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12
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SECTION
2.2. Closing
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12
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ARTICLE
III THE NOTES
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12
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SECTION
3.1. Authorization of the Notes
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12
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SECTION
3.2. No Optional Prepayments
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12
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SECTION
3.3. Purchase of Notes
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12
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SECTION
3.4. Change of Control
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13
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SECTION
3.5. Convertibility
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14
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SECTION
3.6. Anti-Dilution Adjustments
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15
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SECTION
3.7. Forced Conversion
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18
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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19
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SECTION
4.1. Company Status
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19
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SECTION
4.2. Power and Authority
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19
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SECTION
4.3. No Violation
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19
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SECTION
4.4. Approvals
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19
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SECTION
4.5. True and Complete Disclosure
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20
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SECTION
4.6. Use of Proceeds
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20
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SECTION
4.7. Capital Stock
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20
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SECTION
4.8. Private Offering
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21
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SECTION
4.9. Brokers and Finders
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21
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SECTION
4.10. Representations and Warranties in Other Documents
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21
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ARTICLE
V REPRESENTATIONS AND WARRANTIES OF PURCHASER
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22
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SECTION
5.1. Organization; Authorization; Enforceability
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22
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SECTION
5.2. Private Placement
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22
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SECTION
5.3. Brokers or Finders
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23
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SECTION
5.4. Transfer or Resale; Legends
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23
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SECTION
5.5. No Violation; Consents
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25
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SECTION
5.6. Short Position
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25
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ARTICLE
VI AFFIRMATIVE COVENANTS
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25
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SECTION
6.1. Access to Books and Records
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25
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SECTION
6.2. Use of Proceeds
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25
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SECTION
6.3. Periodic Information
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25
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SECTION
6.4. Directors and Officers Insurance; Indemnification
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26
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SECTION
6.5. Conversion Shares
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26
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SECTION
6.6. Stockholders Meeting
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26
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SECTION
6.7. Plainfield Director
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26
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SECTION
6.8. Information Covenants
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27
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SECTION
6.9. Information Covenants
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30
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i
SECTION
6.10. Maintenance of Property; Insurance
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30
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SECTION
6.11. Maintenance of Property; Insurance
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30
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SECTION
6.12. Compliance with Statutes, etc.
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30
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SECTION
6.13. Compliance with Environmental Laws
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30
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SECTION
6.14. End of Fiscal Years; Fiscal Quarters
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31
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SECTION
6.15. Performance of Obligations
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31
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SECTION
6.16. Payment of Taxes
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31
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SECTION
6.17. Annual Business Plan
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31
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SECTION
6.18. ERISA
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32
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ARTICLE
VII NEGATIVE COVENANTS
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32
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SECTION
7.1. Encumbrances
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32
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SECTION
7.2. Consolidation, Merger, Purchase or Sale of Assets,
etc.
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33
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SECTION
7.3. Dividends
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33
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SECTION
7.4. Indebtedness
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33
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SECTION
7.5. Advances, Investments and Loan
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34
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SECTION
7.6. Transactions with Affiliates
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34
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SECTION
7.7. Capital Expenditures
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34
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SECTION
7.8. Modifications of Certificate of Incorporation, By-Laws and
Certain
Other Agreements; Limitations on Voluntary Payments, etc.
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34
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SECTION
7.9. Limitation on Issuance of Capital Stock
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35
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SECTION
7.10. Business; etc.
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35
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ARTICLE
VIII CONDITIONS PRECEDENT TO CLOSING
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35
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SECTION
8.1. Conditions to the Company’s Obligations
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35
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SECTION
8.2. Conditions to Purchaser’s Obligations
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36
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ARTICLE
IX EVENTS OF DEFAULT.
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37
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SECTION
9.1. Events of Default.
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37
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ARTICLE
X REMEDIES ON DEFAULT, ETC.
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39
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SECTION
10.1. Acceleration
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39
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SECTION
10.2. Other Remedies
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40
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SECTION
10.3. Rescission
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40
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SECTION
10.4. No Waivers or Election of Remedies, Expenses, etc
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41
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ARTICLE
XI AMENDMENT AND WAIVER.
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41
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SECTION
11.1. Requirements
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41
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SECTION
11.2. Solicitation of Holders of Notes
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41
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SECTION
11.3. Binding Effect, etc
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42
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SECTION
11.4. Notes held by Company, etc
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42
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ARTICLE
XII REGISTRATION; EXCHANGE; SUBSTITUTION AND PAYMENT OF
NOTES.
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42
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SECTION
12.1. Registration of Notes
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42
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SECTION
12.2. Transfer and Exchange of Notes
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42
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SECTION
12.3. Replacement of Notes
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43
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ii
ARTICLE
XIII MISCELLANEOUS
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43
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SECTION
13.1. Indemnification
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43
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SECTION
13.2. Notices
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44
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SECTION
13.3. Governing Law; Submission to Jurisdictionl Venue; Waiver
of Jury
Trial
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45
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SECTION
13.4. Headings Descriptive
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46
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SECTION
13.5. Exhibits and Schedules
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46
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SECTION
13.6. Expenses
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46
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SECTION
13.7. Press Releases and Public Announcements
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47
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SECTION
13.8. Assignment; No Third Party Beneficiaries
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47
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SECTION
13.9. Severability
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47
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SECTION
13.10. Counterparts
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47
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SECTION
13.11. Further Assurances
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47
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SECTION
13.12. No Waiver; Remedies Cumulative
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47
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SECTION
13.13. Specific Performance
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48
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SECTION
13.14. Confidentiality
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48
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iii
SECURITIES
PURCHASE AGREEMENT dated as of September 12, 2007 (this “Agreement”), by and
between PURE BIOFUELS CORP., a Nevada corporation (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, the “Purchaser”).
ARTICLE
I
DEFINITIONS
(a) As
used
in this Agreement, the following terms shall have the following
meanings:
“2006
Private Placement Warrants”
means
the aggregate 3,702,101 warrants with an exercise price of $1.50 issued to
certain private placement investors prior to the date hereof.
1
“Affiliate”
means,
with respect to any Person, any other Person (including, but not limited to,
all
directors and officers of such Person) directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person.
A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power (a) to vote 20% or more of the securities
having ordinary voting power for the election of directors (or equivalent
governing body) of such Person or (b) to direct or cause the direction of the
management and policies of such other Person, whether through the ownership
of
voting securities, by contract or otherwise; provided,
however,
that
none of the Purchaser, any Holder or any of their respective Affiliates shall
be
considered an Affiliate of the Company or its Subsidiaries.
“Applicable
Law”
means
(a) any United States federal, state, local or foreign law, statute, rule,
regulation, order, writ, injunction, judgment, decree or permit of any
Governmental Authority and (b) any rule or listing requirement of any applicable
national stock exchange or listing requirement of any national stock exchange
or
Commission recognized trading market on which securities issued by the Company,
or any of the Subsidiaries are listed or quoted.
“Authorized
Representative”
means
Xxxx Xxxxxxxx or Xxxxxx Xxxxxx or any person or persons that has or have been
authorized by the Board of Directors or the board of directors of Pure Biofuels
del Peru S.A.C. and Palma Industrial S.A.C. and are otherwise reasonably
acceptable to Plainfield Special Situations Master Fund Limited.
“Binding
Letter of Intent”
means
the binding letter of intent between Pure Biofuels del Peru S.A.C. and
Interpacific Oil S.A.C. entered into on May 11, 2007.
“Board
of Directors”
means
the Board of Directors of the Company.
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be in New York,
New York, a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close.
“Capital
Expenditures”
means,
with respect to any Person, all expenditures by such Person which should be
capitalized in accordance with GAAP or International GAAP, as the case may
be,
and, without duplication, the amount of Capitalized Lease Obligations incurred
by such Person.
“Capitalized
Lease Obligations”
means,
with respect to any Person, all rental obligations of such Person which, under
GAAP or International GAAP, as the case may be, are or will be required to
be
capitalized on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with such
principles.
“Capital
Stock”
means
(i) with respect to any Person that is a corporation, any and all shares,
interests, participations, rights or other equivalents (however designated)
of
corporate stock and (ii) with respect to any other Person, any and all
partnership or other equity interests of such Person.
“Cash
Equivalents”
means,
as to any Person, (a) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof
(provided
that the
full faith and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within six months from the date of acquisition thereof and, at the
time
of acquisition, having one of the two highest ratings obtainable from either
S&P or Moody’s, and (c) U.S. dollar-denominated time deposits, certificates
of deposit and bankers acceptances of any commercial bank having, or which
is
the principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least “A” or the equivalent thereof from S&P or
“A2” or the equivalent thereof from Moody’s with maturities of not more than six
months from the date of acquisition by such Person.
2
“CERCLA”
means
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as the same has been amended and may hereafter be amended from time to
time, 42 U.S.C. § 9601 et seq.
“Change
of Control”
means
the occurrence of any of the following: (i) any Person (including a Person’s
Affiliates), other than a Permitted Holder, becomes the beneficial owner (as
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of 20% or more of the total voting power of the Company’s
Common Stock, (ii) there shall be consummated any consolidation or merger of
the
Company in which the Company is not the continuing or surviving corporation
or
pursuant to which the Common Stock of the Company would be converted into cash,
securities or other property, other than a merger or consolidation of the
Company in which the holders of the common stock of the Company outstanding
immediately prior to the consolidation or merger hold, directly or indirectly,
at least a majority of the voting power of the common stock of the surviving
corporation immediately after such consolidation or merger, (iii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company has been approved by a majority
of
the directors then still in office who either were directors at the beginning
of
such period or whose election or recommendation for election was previously
so
approved) cease to constitute a majority of the Board of Directors, (iv) either
of Pure Biofuels Del Peru S.A.C. or Palma Industrial S.A.C. ceases to be a
wholly-owned Subsidiary of the Company, or (v) Xxxx Xxxxxxxx Xxxxxxxx (i)
transfers, in one or a series of transactions, more than 10% of the Company’s
Common Stock or (ii) ceases to control (as such term is used in clause (b)
of
the definition of “Affiliate”) each of the Company and its
Subsidiaries.
“Code”
means
the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder. Section references to
the
Code are to the Code as in effect at the date of this Agreement and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto
or
substituted therefor.
“Commission”
means
the United States Securities and Exchange Commission.
“Commission
Filings”
means,
with respect to any point in time, all reports, registration statements and
other filings filed by the Company or any Subsidiary with the Commission (and
all notes, exhibits and schedules thereto and all documents incorporated by
reference therein) filed by the Company or any Subsidiary, prior to such point
in time, pursuant to the Exchange Act.
3
“Common
Stock”
means
the common stock, par value $.001 per share, of the Company.
“Company
Disclosure Schedule”
means
the Company disclosure schedule delivered to the Purchaser concurrently with
the
date hereof.
“Contingent
Obligation”
means,
as to any Person, any obligation of such Person as a result of such Person
being
a general partner of any other Person, unless the underlying obligation is
expressly made non-recourse as to such general partner, and any obligation
of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of
such primary obligation or (d) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided,
however,
that
the term Contingent Obligation shall not include endorsements of instruments
for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good
faith.
“Contract”
means
any contract, lease, loan agreement, mortgage, security agree-ment, trust
indenture, note, bond, instrument, or other agreement or arrangement (whether
written or oral).
“Conversion
Price”
means
$0.60, subject to adjustments set forth in Section 3.6.
“Conversion
Shares”
means
the shares of Common Stock issuable upon the conversion of the
Notes.
“Credit
Parties”
has
the
meaning ascribed to such term in the Loan Agreement.
“Dividend”
means,
with respect to any Person, that such Person has declared or paid a dividend,
distribution or returned any equity capital to its stockholders, partners or
members or authorized or made any other distribution, payment or delivery of
property (other than common Capital Stock of such Person) or cash to its
stockholders, partners or members in their capacity as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for a
consideration any shares of any class of its capital stock or any other Capital
Stock outstanding on or after the Closing Date (or any options or warrants
issued by such Person with respect to its Capital Stock), or set aside any
funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares
of
any class of the Capital Stock of such Person outstanding on or after the
Closing Date (or any options or warrants issued by such Person with respect
to
its Capital Stock). Without limiting the foregoing, “Dividends”
with
respect to any Person shall also include all payments made or required to be
made by such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes.
4
“Domestic
Subsidiary”
means
any Subsidiary of the Company other than a Foreign Subsidiary.
“Encumbrance”
means
any mortgage, pledge, security interest, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the
same
effect as any of the foregoing).
“Environmental
Claims”
means
any and all administrative, regulatory or judicial actions, suits, demands,
demand letters, directives, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (hereafter, “Claims”),
including, without limitation, (a) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any
and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief in connection with alleged
injury or threat of injury to health, safety or the environment due to the
presence of Hazardous Materials.
“Environmental
Law”
means
any statute, law, treaty, convention, rule, regulation, ordinance, code,
guideline, policy or principal of law now or hereafter in effect and in each
case as amended, and any judicial or administrative interpretation thereof,
including any order or consent decree or any agreement entered into with any
Governmental Authority (“Law”),
relating to the environment, employee health and safety or Hazardous Materials,
applicable to the Company or any of its Subsidiaries or their respective
operations or assets or Real Property owned, leased, or operated by the Company
or any of its Subsidiaries , including, without limitation, any state,
provincial, regional or local Law of Peru, and any federal, state or local
law
of the United States, relating to the environment, employee health and safety
or
Hazardous Materials.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Agreement
and
any subsequent provisions of ERISA, amendatory thereof, supplemental thereto
or
substituted therefor.
5
“ERISA
Affiliate”
means
each person (as defined in Section 3(9) of ERISA) which together with any of
the
Company or its Subsidiaries or would be deemed to be a “single employer” (i)
within the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as
a
result of any of the Company or its Subsidiaries being or having been a general
partner of such person.
“Exchange
Act”
means
the Securities Exchange Act of 1934, and the rules and regulations of the
Commission promulgated thereunder.
“Excluded
Stock”
means
(i) shares of Common Stock issued upon conversion of the Notes; (ii) shares
of
Common Stock issued by the Company in transactions that are described in Section
3.6(a) hereof; (iii) any shares of Common or warrants Stock issued by the
Company in connection with the Binding Letter of Intent (iv) all options,
warrants, and any other type of securities and any securities to be issued
upon
exercise or conversion thereof issued by the Company and outstanding as of
the
date hereof and listed on Schedule 4.7; and (v) shares of Common Stock issued
upon exercise of the Warrants.
“Existing
Indebtedness”
has
the
meaning ascribed to such term in the Loan Agreement.
“Fair
Market Value”
means,
with respect to any asset (including any Capital Stock of any Person), the
price
at which a willing buyer, not an Affiliate of the seller, and a willing seller
who does not have to sell, would agree to purchase and sell such asset, as
determined in good faith by the board of directors or other governing body
or,
pursuant to a specific delegation of authority by such board of directors or
governing body, an Authorized Representative, of the Person selling such
asset.
“Final
Maturity Date”
means
September 12, 2012.
“Foreign
Subsidiary”
means
any Subsidiary of the Company that is not organized under the laws of the United
States of America or any State thereof or the District of Columbia.
“GAAP”
means
generally accepted accounting principles in the United States as in effect
from
time to time.
“Governmental
Authority”
means
the government of the United States, Peru, any other nation or any political
subdivision thereof, whether state, provincial or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
“Hazardous
Materials”
means
(a) any petroleum or petroleum products, radioactive materials, asbestos in
any
form that is or could become friable, urea formaldehyde foam insulation,
dielectric fluid containing levels of polychlorinated biphenyls, and radon
gas;
(b) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous waste,” “hazardous materials,”
“extremely hazardous substances,” “restricted hazardous waste,” “toxic
substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of
similar import, under any applicable Environmental Law; and (c) any chemical,
material or substance, the use of, exposure to, or Release of which is
prohibited, limited or regulated by any applicable Governmental Authority or
could give rise to an Environmental Claim.
6
“Holder”
means,
with respect to any Note, the Person in whose name such Note is registered
in
the register maintained by the Company pursuant to Section 12.1.
“Indebtedness”
means,
as to any Person, without duplication, (a) all indebtedness of such Person
for
borrowed money or for the deferred purchase price of property or services,
(b)
the maximum amount available to be drawn or paid under all letters of credit,
bankers’ acceptances, bank guaranties, surety and appeal bonds and similar
obligations issued for the account of such Person and all unpaid drawings and
unreimbursed payments in respect of such letters of credit, bankers’
acceptances, bank guaranties, surety and appeal bonds and similar obligations,
(c) all indebtedness of the types described in clause (a), (b) and (d) of this
definition secured by any Encumbrance on any property owned by such Person,
whether or not such indebtedness has been assumed by such Person (provided
that, if
the Person has not assumed or otherwise become liable in respect of such
indebtedness, such indebtedness shall be deemed to be in an amount equal to
the
lesser of the Fair Market Value of the property to which such Encumbrance
relates and the stated amount of such Indebtedness), (d) all obligations of
such
Person to pay a specified purchase price for goods or services, whether or
not
delivered or accepted, i.e.,
take-or-pay and similar obligations and (e) all Contingent Obligations of such
Person. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is directly liable therefor as a result
of
such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person
is
not liable therefor. Notwithstanding the foregoing, Indebtedness shall not
include trade payables, accrued expenses and deferred tax and other credits
incurred by any Person in accordance with customary practices and in the
ordinary course of business of such Person.
“International
GAAP”
shall
mean generally accepted accounting principles outside the United States as
in
effect from time to time.
“Leaseholds”
of
any
Person means all the right, title and interest of such Person as lessee or
licensee in, to and under leases or licenses of land, improvements and/or
fixtures.
“Loan
Agreement”
means
the loan agreement, dated September 12, 2007, among Pure Biofuels del Peru
S.A.C. and Palma Industrial S.A.C., as Borrowers, the Company, as Guarantor,
the
lenders from time to time party thereto and Plainfield Special Situations Master
Fund Limited, as administrative agent.
“Loan
Documents”
has
the
meaning ascribed to such term in the Loan Agreement.
“Management
Agreements”
has
the
meaning ascribed to such term in the Loan Agreement.
“Margin
Stock”
has
the
meaning provided in Regulation U.
7
“Market
Price”
as
of
any date (the “Reference Date”) means the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted
on the American Stock Exchange, the New York Stock Exchange, the NASDAQ Global
Select Market, the NASDAQ Global Market or the NASDAQ Capital Market, whichever
is at the time the principal trading exchange or market for the Common Stock
(a
“Principal Market”), the volume weighted average price of the Common Stock on
the Principal Market on which the Common Stock is then listed or quoted for
the
10 Trading Days immediately preceding the Reference Date ; (b) if the Common
Stock is not then listed or quoted on a Principal Market and if prices for
the
Common Stock are then quoted on the Over-The-Counter Bulletin Board, the volume
weighted average price of the Common Stock on the Over-The-Counter Bulletin
Board for the 10 Trading Days immediately preceding the Reference Date; (c)
if
the Common Stock is not then listed or quoted on the Over-The-Counter Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets LLC (or a similar organization or agency succeeding
to
its functions of reporting prices), the average of the closing bid and ask
price
per share of the Common Stock so reported for the 10 Trading Days immediately
preceding the Reference Date; or (d) in all other cases, the fair market value
of a share of Common Stock as determined by the Company’s Board of Directors
acting reasonably and in good faith and evidenced by a resolution of such Board
of Directors.
“Material
Adverse Effect”
means
(a) a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of
the
Company and its Subsidiaries, taken as a whole, or (b) a material adverse effect
(i) on the rights or remedies of the Holders or Purchaser hereunder or under
any
other Transaction Document, or (ii) on the ability of the Company to perform
its
obligations to the Holders or Purchaser hereunder or under any other Transaction
Document.
“Moody’s”
means
Xxxxx’x Investors Service, Inc. or any successor thereto.
“Net
Insurance Proceeds”
means,
with respect to any Recovery Event, the cash proceeds received by the respective
Person in connection with such Recovery Event (net of (a) reasonable costs
and
taxes incurred in connection with such Recovery Event and (b) required payments
of any Indebtedness which is secured by the respective assets the subject of
such Recovery Event).
“NGCL”
means
Chapters 78 and 92A of the Nevada Revised Statutes.
“Note
Documents”
means
this Agreement and the Notes.
“Officer”
means
the Chairman, any Vice Chairman, the Chief Executive Officer, the President,
the
Chief Operating Officer, any Vice President, the Chief Financial Officer, the
Treasurer, or the Secretary of the Company.
“Officers’
Certificate”
means
a
written certificate signed in the name of the Company by any two Officers,
and
delivered to the Holders.
“Permitted
Holders”
means
Xxxx
Xxxxxxxx Xxxxxxxx
or
Plainfield Asset Management LLC, its Affiliates and their successors or
assigns.
8
“Person”
means
any individual, partnership, joint venture, firm, corporation, association,
limited liability company, trust or other enterprise or any Governmental
Authority.
“Plan”
means
any “employee benefit plan” as defined in Section 3(3) of ERISA or any “plan”
subject to Section 4975 of the Code.
“Purchaser
Affiliate”
means
(a) any direct or indirect holder of any equity interests or securities in
Purchaser (whether limited or general partners, members, stockholders or
other-wise), (b) any Affiliate of Purchaser, (c) any director, officer,
employee, representative or agent of (i) Purchaser, (ii) any Affiliate of
Purchaser or (iii) any holder of equity interests or securities referred to
in
clause (a) above or (d) any person who is a “control person” of Purchaser, as
defined under Section 15 of the Securities Act or Section 20 of the Exchange
Act.
“Real
Property”
of
any
Person means all the right, title and interest of such Person in and to land,
improvements and fixtures, including Leaseholds.
“Recovery
Event”
means
the receipt by the Company or any of its Subsidiaries of any cash insurance
proceeds or condemnation awards payable (a) by reason of theft, loss, physical
destruction, damage, taking or any other similar event with respect to any
property or assets of such Person or (b) under any policy of insurance
maintained by any of them.
“Registration
Rights Agreement”
means
the Registration Rights Agreement, to be dated as of the Closing Date, to be
entered into by and between the Company and Purchaser, in the form attached
hereto as Exhibit
B.
“Regulation
T”
means
Regulation T of the Board of Governors of the Federal Reserve System of the
United States as from time to time in effect and any successor to all or a
portion thereof.
“Regulation
U”
means
Regulation U of the Board of Governors of the Federal Reserve System of the
United States as from time to time in effect and any successor to all or a
portion thereof.
“Regulation
X”
means
Regulation X of the Board of Governors of the Federal Reserve System of the
United States as from time to time in effect and any successor to all or a
portion thereof.
“Release”
means
actively or passively disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping,
migrating or the like, into or upon any land or water or air, or otherwise
entering into the environment.
“Required
Holders”
means,
at any time, the Holders of at least a majority in aggregate principal amount
of
the Notes at the time outstanding (exclusive of Notes then owned by the Company,
any Subsidiary or any of their respective Affiliates).
“Responsible
Officer”
means
as to any Person, the Chief Executive Officer, the President, the Chief
Financial Officer, the Chief Operating Officer or any Vice President of such
Person. Unless otherwise specified, all references to a Responsible Officer
herein means a Responsible Officer of the Company.
9
“S&P”
means
Standard & Poor’s Ratings Service, a division of The XxXxxx-Xxxx Companies,
Inc., or any successor thereto.
“Securities
Act”
means
the Securities Act of 1933, and the rules and regulations of the Commission
promulgated thereunder.
“Stockholders
Agreement”
means
the agreement, dated September 12, 2007, among LLC1, LLC2, the Company and
the
other stockholders party thereto.
“Subsidiary”
means,
as to any Person, (i) any corporation more than 50% of whose stock of any class
or classes having by the terms thereof ordinary voting power to elect a majority
of the directors of such corporation (irrespective of whether or not at the
time
stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
owned
by such Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person
has
more than a 50% equity interest at the time. Unless otherwise qualified, all
references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.
“Trading
Day”
means
a
day on which the Common Stock traded on the Company’s principal national
securities exchange or quotation system or in the over-the-counter market and
was not suspended from trading on any national securities exchange or quotation
system or over-the-counter market at the close of business on such
day.
“Transaction
Documents”
means
this Agreement, the Notes, the Registration Rights Agreement, the Stockholders
Agreement, the Voting Agreement and the Warrants.
“Transactions”
means
the transactions contemplated by this Agreement and the other Transaction
Documents.
“Transfer
Agent”
means
Pacific Stock Transfer Company.
“UCC”
means
the Uniform Commercial Code as from time to time in effect in the relevant
jurisdiction.
“Voting
Agreement”
means
the Voting Agreement, dated September 12, 2007, among LLC1, LLC2, the Company
and the other stockholders party thereto.
“Warrants”
has
the
meaning set forth in the second recital to this Agreement. The Warrants shall
be
in the form attached hereto as Exhibit
C.
“Warrant
Shares”
means
the shares of Common Stock issuable upon the exercise of the Warrants in
accordance with the terms of the Warrants.
10
“Xxxxxxx
Documents”
means
(i) the letter agreement dated November 2, 2006 from the Company in favor of
Xxxxxxx Capital Partners Ltd. and Xxxxxxx Capital Markets, LLC (“Xxxxxxx”),
as
amended and extended by the letter agreement dated December 14, 2006; (ii)
the
Mutual Release dated January 30, 2007 between the Company and Xxxxxxx; (iii)
the
letter agreement dated April 18, 2007 among the Company and Xxxxxxx; (iv) the
letter dated June 25, 2007 from Xxxxxxx to Xxxx Xxxxxxxx and Xxxxx Xxxxxx;
and
(v) any amendments or supplements to the foregoing or any other agreement,
arrangement or settlement relating to the foregoing.
“Working
Capital Facility”
means
one or more unsecured working capital facilities approved by Purchaser in its
reasonable discretion with banks or other lenders providing for revolving credit
loans, term loans receivables financings (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow
from
such lenders against such receivables) or letters of credit, in each case,
as
amended, restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced in whole or in part from time to
time.
(b) As
used
in this Agreement, the following terms shall have the meanings given thereto
in
the Sections set forth opposite such terms:
Term
|
Section
|
|
Accredited
Investor
|
5.2(f)
|
|
Agreement
|
Preamble
|
|
Amendment
Date
|
6.5
|
|
Annual
Business Plan
|
6.17
|
|
Bankruptcy
Code
|
9.1(e)
|
|
Closing
|
2.2
|
|
Closing
Date
|
2.2
|
|
Company
|
Preamble
|
|
Indemnified
Party
|
13.1(b)
|
|
Indemnifying
Party
|
13.1(c)
|
|
Investment
|
7.5
|
|
Legend
Removal Date
|
5.4(b)
|
|
Losses
|
13.1(b)
|
|
Non-Affiliated
Purchaser
|
5.4(b)
|
|
Notices
|
13.2
|
|
Permitted
Encumbrance
|
7.1
|
|
Plainfield
Director
|
6.7
|
|
Purchase
Price
|
2.1
|
|
Purchaser
|
Preamble
|
|
Securities
|
Third
whereas clause
|
11
ARTICLE
II
SALE
AND
PURCHASE
SECTION
2.1. Agreement
to Sell and to Purchase; Purchase Price. Subject
to the terms and conditions set forth in this Agreement, the Company agrees
to
issue and sell to Purchaser, and Purchaser agrees to purchase from the Company,
on the Closing Date, $10,000,000 in aggregate principal amount of the Notes,
the
Issue Date Common Stock and the Warrants for a purchase price of $10,000,000
(the “Purchase Price”).
SECTION
2.2. Closing.
Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, the purchase and sale of the Securities hereunder (the “Closing”)
shall take place at 10:00 a.m. at the offices of White & Case LLP, counsel
to Purchaser, at 1155 Avenue of the Americas, New York, New York, on September
12, 2007 or on such other date as the parties shall mutually agree upon (the
“Closing Date”).
At
the
Closing:
(i) Purchaser
shall deliver an amount equal to the Purchase Price (net of a funding fee in
the
amount of $200,000) via wire transfer of immediately available funds to such
bank account as the Company shall have designated not later than one Business
Day prior to the Closing Date.
(ii) The
Company shall deliver to Purchaser against payment of the Purchase Price, a
certificate or certificates representing the Securities being purchased by
Purchaser pursuant to Section 2.1, which shall be in definitive form and
registered in the name of Purchaser or its nominee or designee and in a single
certificate or in such other denominations as Purchaser shall have requested
not
later than one Business Day prior to the Closing Date;
ARTICLE
III
THE
NOTES
SECTION
3.1. Authorization
of the Notes.
The
Company will authorize the issuance of $10,000,000 aggregate principal amount
of
the Notes to be issued on the Closing Date and any Notes to be issued in kind
as
interest. The Notes shall be substantially in the form set forth in Exhibit
A.
SECTION
3.2. No
Optional Prepayments.
The Company may not make any optional prepayments on any of the
Notes.
SECTION
3.3. Purchase
of Notes. The Company will not, and will not permit any Affiliate to,
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any
of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
12
SECTION
3.4. Change
of Control.
(a) In the event of a Change of Control (the date of such occurrence being
the “Change of Control Date”), the Company shall notify the Holders of the Notes
in writing of such occurrence and shall make an offer to purchase (the “Change
of Control Offer”) all then outstanding Notes at a purchase price of 100% of the
aggregate principal amount thereof plus an amount in cash equal to all accrued
and unpaid interest thereon (such applicable purchase price being hereinafter
referred to as the “Change of Control Purchase Price”).
(b)
Within 30 days following the Change of Control Date, the Company shall send
by first class mail, postage prepaid, a notice to each Holder of Notes at such
Holder’s address as it appears in the register maintained by the Company
pursuant to Section 12.1, which notice shall govern the terms of the Change
of
Control Offer. The notice to the Holders shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the
Change of Control Offer. Such notice shall state:
(i) that
a Change of Control has occurred, that the Change of Control Offer is being
made
pursuant to this Section 3.4 and that all Notes validly tendered and not
withdrawn will be accepted for payment;
(ii) the
Change of Control Purchase Price and the purchase date (which shall be a
Business Day no earlier than 30 Business Days nor later than 60 Business Days
from the date such notice is mailed, other than as may be required by law)
(the
“Change of Control Payment Date”);
(iii) that
any Notes not tendered will continue to accrue interest;
(iv) that,
unless the Company defaults in making payment of the Change of Control Purchase
Price, any Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(v) that
Holders accepting the offer to have any Notes purchased pursuant to a Change
of
Control Offer will be required to surrender their Notes, duly endorsed for
transfer together with such customary documents as the Company may reasonably
require, in the manner and at the place specified in the notice prior to the
close of business on the Business Day preceding to the Change of Control Payment
Date;
(vi) that
Holders will be entitled to withdraw their acceptance if the Company receives,
not later than the close of business on the third Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the aggregate principal amount
of
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(vii) that
Holders whose Notes are purchased only in part will be issued a new certificate
representing the aggregate principal amount of Notes equal to the unpurchased
portion of the aggregate principal amount of Notes surrendered; and
13
(viii) the
circumstances and relevant facts regarding such Change of Control.
(c) The
Company will comply with any securities laws and regulations, to the extent
such
laws and regulations are applicable to the purchase of the Notes in connection
with a Change of Control Offer.
(d) On
the Change of Control Payment Date, the Company shall (A) accept for
payment the Notes tendered pursuant to the Change of Control Offer,
(B) promptly mail to each Holder of shares so accepted payment in an amount
in cash equal to the Change of Control Purchase Price for such Notes,
(C) execute and issue a new Note equal to the aggregate principal amount of
unpurchased Notes surrendered and (D) cancel and retire each surrendered
Note. Unless the Company defaults in the payment for the Notes tendered pursuant
to the Change of Control Offer, interest will cease to accrue with respect
to
the Notes tendered and all rights of Holders of such tendered Notes will
terminate, except for the right to receive payment therefor, on the Change
of
Control Payment Date.
SECTION
3.5. Convertibility.
(a) The
Holders of the Notes will be entitled at any time after the Amendment Date
and
on or prior to the Final Maturity Date to convert any or all of their Notes
into
shares of Common Stock at the Conversion Price per share. The amount of shares
of Common Stock to be delivered shall be the aggregate principal amount of
the
Notes delivered for conversion plus the amount of accrued and unpaid interest
thereon divided by the Conversion Price then in effect.
(b)
Conversion of shares of the Notes may be effected by any Holder thereof upon
the
surrender to the Company, at the principal office of the Company or at the
office of a conversion agent as may be designated by the Board of Directors,
of
the certificate or certificates for such Notes to be converted accompanied
by a
complete and manually signed Notice of Conversion (as set forth in the form
of
Note attached hereto) along with appropriate endorsements and transfer documents
as required by the Company or any conversion agent The conversion of the Notes
will be deemed to have been made on the date (the “Conversion Date”) such
certificate or certificates have been surrendered and the receipt of such notice
of conversion. As promptly as reasonably practicable following the Conversion
Date, the Company shall deliver or cause to be delivered (i) certificates
representing the number of validly issued, fully paid and nonassessable full
shares of Common Stock to which the Holder of Notes being converted (or such
Holder’s transferee) shall be entitled, and (ii) if less than the total
aggregate principal amount of the Notes evidenced by the surrendered certificate
are being converted, a new certificate for the aggregate principal amount of
Notes evidenced by such surrendered certificate or certificates less the
aggregate principal amount of Notes being converted. On the Conversion Date,
the
rights of the Holder of the Notes being converted shall cease except for the
right to receive shares of Common Stock and the Person entitled to receive
the
shares of Common Stock shall be treated for all purposes as having become the
record Holder of such shares of Common Stock at such time.
(c) In
connection with the conversion of Notes, no fractions of shares of Common Stock
shall be issued, but the Company shall, with respect to any fractional interest:
(i) pay cash with respect to the Market Price of such fractional share; or
(ii)
round up to the next whole share of Common Stock.
14
SECTION
3.6. Anti-Dilution
Adjustments.
(a)
If
after
the Issue Date, the Company: (1) pays a dividend or makes a distribution on
its
Common Stock in shares of its Common Stock; (2) subdivides its outstanding
shares of Common Stock into a greater number of shares; or (3) combines its
outstanding shares of Common Stock into a smaller number of shares; then the
Conversion Price in effect immediately prior to such action shall be adjusted
to
the number obtained by multiplying the Conversion Price by a fraction, the
numerator which shall be the number of shares of Common Stock outstanding
immediately prior to such action, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately following such
action.
(b) If
the
Company issues any shares of its Common Stock (or is deemed to have issued
shares of Common Stock) at a price below the Conversion Price, the Conversion
Price shall be adjusted as follows:
X
|
=
|
Number
of shares of
Common Stock (i) outstanding
immediately prior to the issuance and (ii) then issuable upon exercise
of
any of the Company’s outstanding securities, including, options, warrants,
and the Notes
|
YA
|
=
|
Conversion
Price immediately prior to the announcement of the
issuance
|
ZB
|
=
|
Aggregate
consideration received by the Company
|
Y
|
=
|
Number
of shares of Common Stock issued (or deemed issued) in the new
issuance
|
YAB
|
=
|
New
Conversion Price
|
YAB
|
= | YA ( (X + ZB/YA ) / (X + Y) ) |
(c) If
the
Company issues any shares of its Common Stock (or is deemed to have issued
shares of Common Stock) at a price below the Market Price, the Conversion Price
shall be adjusted as follows:
15
X
|
=
|
Number
of shares of
Common Stock (i) outstanding
immediately prior to the issuance and (ii) then issuable upon exercise
of
any of the Company’s outstanding securities, including, options, warrants,
and the Notes
|
YA
|
=
|
Conversion
Price immediately prior to the announcement of the
issuance
|
ZB
|
=
|
Aggregate
consideration received by the Company
|
M
|
=
|
Market
Price immediately prior to the announcement of the
issuance
|
Y
|
=
|
Number
of shares of Common Stock issued (or deemed issued) in the new
issuance
|
YAB
|
=
|
New
Conversion Price
|
YAB
|
= | YA ( (X + ZB/M ) / (X + Y) ) |
(d) If
the
Company makes any distribution payable in securities or assets of the Company
(other than shares of Common Stock), then and in each such event provision
shall
be made so that the Holders of Notes shall receive upon conversion thereof,
in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities or assets of the Company which they would have received
had
their Notes been converted into Common Stock on the date of such event and
had
they thereafter, during the period from the date of such event to and including
the date of conversion, retained such securities or assets receivable by them
as
aforesaid during such period, subject to all other adjustment called for during
such period under this Section 3.6 with respect to the rights of the Holders
of
Notes.
(e) The
adjustment shall become effective immediately after the record date in the
case
of a dividend or distribution and immediately after the effective date in the
case of a subdivision, combination or reclassification. If after an adjustment
a
Holder of Notes upon conversion of such Notes may receive shares of two or
more
classes of Capital Stock of the Company, the Conversion Price will thereafter
be
subject to adjustment upon the occurrence of an action taken with respect to
any
such class of Capital Stock with respect to the Common Stock on terms comparable
to those applicable to Common Stock described herein.
(f) Only
one
adjustment shall be made with respect to any event causing an adjustment. If
an
adjustment is required by Section 3.6(b) and 3.6(c) hereof, only the adjustment
resulting in the greatest decrease in the Conversion Price shall be
made.
(g) For
purposes of Section 3.6(b) and (c):
(i) If
the
Company issues any options, warrants or other securities convertible into or
exchangeable or exercisable for Common Stock (“Convertible Securities”), then
the number of shares of Common Stock issuable upon the exercise, exchange or
conversion of such Convertible Securities, shall be deemed to be the issuance
of
Common Stock;
(ii) The
consideration receivable by the Company for Common Stock deemed issued pursuant
to the preceding clause (i), shall be the total amount, if any, received by
the
Company as consideration for the issuance of such Convertible Securities, plus
the aggregate amount of additional consideration payable to the Company upon
the
exercise, exchange or conversion of such Convertible Securities;
and
16
(iii) Upon
the
expiration or termination of any Convertible Securities, the Conversion Price,
to the extent in any way affected by or computed using such Convertible
Securities, shall then be recomputed to reflect the issuance of only the number
of shares of Common Stock (and Convertible Securities which remain in effect)
that were actually issued upon the exercise, exchange or conversion of such
Convertible Securities.
(g) No
adjustment in the Conversion Price need be made unless the adjustment would
require an increase or decrease of at least $0.01 in the Conversion Price.
Any
adjustments that are not made shall be carried forward and taken into account
in
any subsequent adjustment. All calculations relating to anti-dilution
adjustments shall be made to the nearest cent.
(h) No
adjustment need be made for a change in the par value or no par value of the
Common Stock. No adjustment shall be made to the Conversion Price for the
issuance of any Excluded Stock.
(i) If
the
Company is a party to a transaction involving a sale of substantially all of
the
assets of the Company or a merger or binding share exchange which reclassifies
or changes its outstanding Common Stock, the person obligated to deliver
securities, cash or other assets upon conversion of Notes will be required
to
assume the obligations of the Company with respect to the Notes. In addition,
if
the Company in connection with any such transaction makes a distribution to
all
holders of its Common Stock of any of its assets, or debt securities or any
rights, warrants or options to purchase securities of the Company, then, from
and after the record date for determining the holders of Common Stock entitled
to receive the distribution, a Holder of Notes that converts such Notes would,
upon such conversion, be entitled to receive, in addition to the shares of
Common Stock into which such Notes are convertible, the kind and amount of
securities, cash or other assets comprising the distribution that such holder
would have received if such holder had converted such Notes immediately prior
to
the record date for determining the holders of Common Stock entitled to receive
the distribution.
(j) Whenever
the Conversion Price is adjusted in accordance with this Section 3.6, the
Company shall: (1) forthwith compute the Conversion Price in accordance with
this Section 3.6 and prepare and transmit to the Transfer Agent an Officers’
Certificate setting forth the Conversion Price, the method of calculation
thereof in reasonable detail, and the facts requiring such adjustment and upon
which such adjustment is based; and (2) as soon as practicable following the
occurrence of an event that requires an adjustment to the Conversion Price
pursuant to this Section 3.6 (or if the Company is not aware of such occurrence,
as soon as practicable after becoming so aware), provide a written notice to
the
Holders of Notes of the occurrence of such event and a statement setting forth
in reasonable detail the method by which the adjustment to the Conversion Price
was determined and setting forth the adjusted Conversion Price.
17
(k) After
an
adjustment to the Conversion Price, any subsequent event requiring an adjustment
will cause a subsequent adjustment to the Conversion Price as so
adjusted.
(l) In
connection with the conversion of the Notes, no fractions of shares of Common
Stock shall be issued, but the Company shall, with respect to any fractional
interest: (i) pay cash with respect to the Market Price of such fractional
share; or (ii) round up to the next whole share of Common Stock.
(m) It
is the
intent of the parties hereto that, in the aggregate, the Issue Date Common
Stock, the Conversion Shares and the Warrant Shares will, as of the Closing
Date, represent 51.1% of the fully-diluted Common Stock, assuming the exercise
of all outstanding options, warrants, agreements, conversion rights, exchange
rights, preemptive rights or other rights (whether contingent or not) to
subscribe for, purchase or acquire any issued or unissued shares of Capital
Stock of the Company. From and after the Closing Date until September 12, 2008,
to the extent that the Company issues any Common Stock (or options, warrants
or
other rights to acquire Common Stock), pursuant to or in connection with (i)
the
Binding Letter of Intent, (ii) the Company’s stock option plan (other than the
14 million options outstanding under the stock option plan as of the date
hereof), (iii) the 2006 Private Placement Warrants or (iv) the Xxxxxxx
Agreements (other than any Common Stock, options, warrants or other rights
to
acquire Common Stock issued in connection with the exercise or conversion of
any
securities previously issued pursuant to the Xxxxxxx Agreements), within three
Business Days of such issuance of Common Stock (or options, warrants or other
rights to acquire Common Stock), the Company shall issue to the Purchaser,
warrants to purchase a number of shares of Common Stock equal to the number
of
shares of Common Stock (or options, warrants or other rights to acquire Common
Stock), issued in such issuance with an exercise price equal to the lesser
of
(x) the applicable exercise price, conversion price or stock purchase price
of
such issuance and (y) $1.50. Other than the exercise price, the warrants issued
pursuant to this Section 3.6(m) shall have substantially the same terms and
conditions as the Warrants attached hereto as Exhibit
C.
SECTION
3.7. Forced
Conversion.
Upon
the consummation of a firm commitment underwritten public offering of Common
Stock pursuant to an effective registration statement under the Securities
Act
of 1933, as amended (the “Securities Act”) resulting in gross proceeds of not
less than $30.0 million and an offering price to the public of not less than
$1.80 per share, the Company may, within 5 Trading Days, deliver a written
notice to all Holders (a “Forced Conversion Notice” and the date such notice is
received by the Holders, the “Forced Conversion Notice Date”) which shall have
the effect of forcing the conversion of the Notes specified therein, it being
understood that the “Conversion Date” for purposes of Section 3.5(b) shall be
deemed to occur on the third Trading Day following the Forced Conversion Notice
Date. As to each holder, a Forced Conversion Notice shall state: (i) the
Conversion Date; (ii) the aggregate principal amount of Notes the Company
wishes to convert; (iii) such Holder’s pro-rata portion of such aggregate
principal amount; (iv) the place or places where certificates for such
Notes are to be surrendered for conversion; (v) that the conversion is
being made pursuant to Section 3.7 hereof; and (vi) that interest on the
Notes to be converted will cease to accrue on such conversion date.
18
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
In
order
to induce the Purchaser to enter into this Agreement and to purchase the
Securities, the Company hereby represents and warrants to and agrees with the
Purchaser that on the date hereof, after giving effect to the consummation
of
the transactions contemplated hereby that:
SECTION
4.1. Company
Status.
The
Company (a) is a duly organized and validly existing corporation in good
standing under the laws of the State of Nevada, (b) has the corporate power
and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (c) is duly qualified and
is
authorized to do business and is in good standing in each jurisdiction where
the
ownership, leasing or operation of its property or the conduct of its business
requires such qualifications.
SECTION
4.2. Power
and Authority.
The
Company has the corporate power and authority to execute, deliver and perform
the terms and provisions of each of the Transaction Documents to which it is
party and has taken all necessary corporate action to authorize the execution,
delivery and performance by it of each of such Transaction Documents. The
Company has duly executed and delivered each of the Transaction Documents to
which it is party, and each of such Transaction Documents constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except
to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors’ rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
SECTION
4.3. No
Violation.
Neither the execution, delivery or performance by the Company of the Transaction
Documents to which it is a party, nor compliance by it with the terms and
provisions thereof, (a) will contravene any provision of any law, statute,
rule
or regulation or any order, writ, injunction or decree of any court or
Governmental Authority, (b) will conflict with or result in any breach of any
of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Encumbrance , upon any of the property or assets of the Company
or any of its Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement or loan agreement, or any other agreement,
contract or instrument, in each case to which Company or any of its Subsidiaries
is a party or by which it or any of its property or assets is bound or to which
it may be subject, or (c) will violate any provision of the certificate or
articles of incorporation, certificate of formation, limited liability company
agreement or by-laws (or equivalent organizational documents), as applicable,
of
the Company or any of its Subsidiaries.
SECTION
4.4. Approvals.
No
order, consent, approval, license, authorization or validation of, or filing,
recording or registration with (except for those that have otherwise been
obtained or made on or prior to the Closing Date and which remain in full force
and effect on the Closing Date), or exemption by, any Governmental Authority
is
required to be obtained or made by, or on behalf of, the Company to authorize,
or is required to be obtained or made by, or on behalf of, the Company in
connection with (i) the execution, delivery and performance of any Transaction
Document or (ii) the legality, validity, binding effect or enforceability of
any
Transaction Document.
19
SECTION
4.5. True
and Complete Disclosure.
All
factual information (taken as a whole) furnished by or on behalf of the Company
and its Subsidiaries in writing to Purchaser (including, without limitation,
all
information contained in the Transaction Documents) for purposes of or in
connection with this Agreement, the other Transaction Documents or any
transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of the
Company and its Subsidiaries in writing to Purchaser will be, true and accurate
in all material respects on the date as of which such information is dated
or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect
at
such time in light of the circumstances under which such information was
provided, it being understood and agreed that for purposes of this Section
4.5,
such factual information shall not include any budget information (including,
without limitation, any Annual Business Plan) or any pro forma
financial information.
SECTION
4.6. Use
of
Proceeds.
(a)
All
proceeds from the sale of the Securities shall be used solely for the purposes
set forth on Schedule 2.01 to the Loan Agreement.
(b)
No
part of the proceeds from the sale of the Securities will be used to purchase
or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the sale of the Securities nor the use of
the
proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, U or X.
SECTION
4.7. Capital
Stock.
(a) As
of the Closing Date, the authorized Capital Stock of the Company will consist
solely of 93,750,000 shares of Common Stock, of which 63,035,769 shares are
issued and outstanding (assuming no additional exercises of existing stock
options) no shares are held in treasury and 7,628,762 (such amount does not
include (i) any management options since they will only be exercisable upon
an
increase in the authorized common stock, (ii) the shares convertible upon the
Cornell debt since the debt will be paid off at closing or (iii) any shares
or
warrants issuable under the Binding Letter of Intent since the transaction
has
not closed and the final consideration has not yet been determined) are reserved
for issuance upon the exercise of outstanding warrants, options and other
convertible or exchangeable securities (other than the Notes and the Warrants).
Schedule
4.7
of the
Company Disclosure Schedule sets forth the capitalization of the Company as
of
the Closing Date. Each share of Capital Stock of the Company that will be issued
and outstanding immediately following the Closing will be duly authorized and
validly issued and fully paid and nonassessable, and the issuance thereof will
not have been subject to any preemptive rights or made in violation of any
Applicable Law.
(b) Except
as
set forth on Schedule
4.7
of the
Company Disclosure Schedule, as of the date of this Agreement, there are and
on
the Closing Date there will be (i) no outstanding options, warrants, agreements,
conversion rights, exchange rights, preemptive rights or other rights (whether
contingent or not) to subscribe for, purchase or acquire any issued or unissued
shares of Capital Stock of the Company or any Subsidiary, and (ii) no
restrictions upon, or Contracts or understandings of the Company or any
Subsidiary, or, to the knowledge of the Company, Contracts or understandings
of
any other Person, with respect to, the voting or transfer of any shares of
Capital Stock of the Company or any Subsidiary.
20
(c) From
and
after the Amendment Date, the Conversion Shares and the Warrant Shares will
have
been duly authorized and validly reserved for issuance in contemplation of
the
conversion of the Notes and the exercise of the Warrants and, when issued and
delivered in accordance with the terms of the Notes or the Warrants, will have
been validly issued and will be fully paid and nonassessable, and the issuance
thereof will not have been subject to any preemptive rights or made in violation
of any Applicable Law.
(d) The
holders of the Notes will, upon issuance thereof, have the rights set forth
in
the Form of Note (subject to the limitations and qualifications set forth
therein).
SECTION
4.8. Private
Offering.
Assuming the accuracy of the representations and warranties set forth in Section
5.2, the offer and sale of the Securities to the Purchaser is exempt from the
registration and prospectus delivery requirements of the Securities Act. Neither
the Company, nor anyone acting on behalf of it, has offered or sold or will
offer or sell any securities, or has taken or will take any other action
(including, without limitation, any offering of any securities of the Company
under circumstances that would require, under the Securities Act, the
integration of such offering with the offering and sale of the Securities),
which would subject the sale of the Securities contemplated hereby to the
registration provisions of the Securities Act.
SECTION
4.9. Brokers
and Finders.
Except
as set forth on Schedule 4.9 of the Company Disclosure Schedule, no agent,
broker, Person or firm acting on behalf of the Company or its Affiliates is,
or
will be, entitled to any fee, commission or broker’s or finder’s fees from any
of the parties hereto, or from any Person controlling, controlled by, or under
common control with any of the parties hereto, in connection with this Agreement
or any of the transactions contemplated hereby.
SECTION
4.10. Representations
and Warranties in Other Documents.
All
representations and warranties set forth in the other Transaction Documents
and
the Loan Documents were true and correct in all material respects at the time
as
of which such representations and warranties were made (or deemed made) and
shall be true and correct in all material respects as of the Closing Date as
if
such representations or warranties were made on and as of such date (it being
understood and agreed that any such representation or warranty which by its
terms is made as of a specified date shall be true and correct in all material
respects as of such specified date).
21
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
Purchaser
hereby represents and warrants to the Company as follows:
SECTION
5.1. Organization;
Authorization; Enforceability.
Purchaser is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all requisite power and
authority to own its properties and assets and to carry on its business as
it is
now being conducted and as currently proposed to be conducted. Purchaser has
the
power to execute, deliver and perform its obligations under each of the
Transaction Documents to which it is a party and has taken all action necessary
to authorize the execution, delivery and performance by it of such Transaction
Documents and to consummate the transactions contemplated hereby and thereby.
No
other proceedings on the part of Purchaser are necessary for such authorization,
execution, delivery and consummation. Purchaser has duly executed and delivered
this Agreement and, at the Closing, Purchaser will have duly executed and
delivered each of the other Transaction Documents to be executed and delivered
at or prior to the Closing. This Agreement constitutes, and each of the other
Transaction Documents to which Purchaser is a party, when executed and delivered
by Purchaser, will constitute, a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors’ rights generally or general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION
5.2. Private
Placement.
(a)
Purchaser understands that the offering and sale of the Securities by the
Company has not been registered under the Securities Act and state securities
laws and is intended to be exempt from registration under the Securities Act
pursuant to Section 4(2) and/or Regulation D thereof.
(b) Purchaser
has sufficient knowledge and experience in financial and business matters so
as
to be capable of evaluating the merits and risks of its investment in the
Securities and is capable of bearing the economic risks of such investment
and
is able, without impairing Purchaser’s financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss of
Purchaser’s investment.
(c) Purchaser
has sought such accounting, legal and tax advice, as it has considered necessary
to make an informed investment decision with respect to its acquisition of
the
Securities.
(d) Purchaser
is acquiring the Securities to be acquired hereunder for its own account, not
as
a nominee or agent, for investment and not with a view to the public resale
or
distribution thereof, in violation of any securities law.
22
(e) Purchaser
understands that the Securities may not be transferred except pursuant to a
registration statement under the Securities Act or in a transaction that is
exempt from registration under the Securities Act.
(f)
Purchaser
is an “Accredited
Investor”
as
that
term is defined in Rule 501(a)(3) of Regulation D.
(g) Purchaser
(i) has been furnished with or has had full access to all of the information
(financial or other) that it considers necessary or appropriate to make an
informed investment decision with respect to the Company and the Securities
and
that it has requested from the Company, (ii) has had an opportunity to discuss
with management of the Company the intended business, properties, condition
(financial or other), operations and prospects of the Company and to obtain
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify any
information furnished to it or to which it had access; it being understood
that
nothing set forth in this Section 5.2 shall affect the representations,
warranties or other obligations of the Company, or the rights and remedies
of
Purchaser, under this Agreement in any way whatsoever.
(h) Purchaser
has reviewed with its own tax advisors the U.S. federal, state, local and
foreign tax consequences of this investment and the transactions contemplated
under any of the Transaction Documents. With respect to such matters, Purchaser
relies solely on such advisors and not on any statements or representations
of
the Company or any of its agents, written or oral. Purchaser understands that
it
(and not the Company) shall be responsible for its own tax liability that may
arise as a result of this investment or the transactions contemplated under
any
of the Transaction Documents.
SECTION
5.3. Brokers
or Finders
Purchaser
has not engaged any brokers, finders or agents, and neither the Company has,
nor
will, incur, directly or indirectly, as a result of any action taken by
Purchaser, any liability for brokerage or finders’ fees or agents’ commissions
or any similar charges under any of the Transaction Documents.
SECTION
5.4. Transfer
or Resale; Legends
(a) Purchaser
understands that except as provided in the Registration Rights Agreement: (i)
the Securities have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold,
assigned or transferred unless (A) subsequently registered thereunder, (B)
Purchaser shall have delivered to the Company an opinion of counsel, in a
generally acceptable form, to the effect that such Securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration requirements, or (C) Purchaser provides the
Company with reasonable assurances (in the form of seller and broker
representation letters) that such Securities can be sold, assigned or
transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
the Securities Act, as amended (or a successor rule thereto) (collectively,
“Rule
144”),
in
each case following the applicable holding period set forth therein; (ii) any
sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules
and
regulations of the Commission thereunder; and (iii) neither the Company nor
any
other person is under any obligation to register the Securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
23
(b) Legends.
Purchaser understands and agrees that the certificates evidencing the Notes
or
the Conversion Shares, or any other securities issued in respect of the Notes
or
the Conversion Shares upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, bear the following legend (in addition
to any legend required by the Registration Rights Agreement or under applicable
state securities laws):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
AN
OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
Certificates
evidencing the Conversion Shares or Warrant Shares shall not contain any legend
(including the legend set forth above), (i) following the sale of such
Conversion Shares or Warrant Shares pursuant to a registration statement
(including the Registration Statement) covering the resale of such security
which is effective under the Securities Act, (ii) following any sale of such
Conversion Shares or Warrant Shares pursuant to Rule 144, (iii) if such
Conversion Shares or Warrant Shares are eligible for sale under Rule 144(k),
or
(iv) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued
by
the staff of the Commission). The Company shall cause its counsel to issue
a
legal opinion to the Company’s transfer agent as soon as practicable upon notice
by the Purchaser that it is selling Securities pursuant to a Registration
Statement if required by the Company’s transfer agent to effect the removal of
the legend hereunder. The Company agrees that at such time as such legend is
no
longer required under this Section 5.4(b), it will, no later than three (3)
Trading Days following the delivery by a purchaser that is not an Affiliate
of
the Company (a “Non-Affiliated Purchaser”) to the Company or the Transfer Agent
of a certificate representing Conversion Shares or Warrant Shares, as the case
may be, issued with a restrictive legend (such third Trading Day, the
“Legend
Removal Date”),
deliver of cause to be delivered to such Non-Affiliated Purchaser a certificate
representing such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to
any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section 5.4. Purchaser acknowledges that the Company’s agreement
hereunder to remove all legends from Conversion Shares or Warrant Shares is
not
an affirmative statement or representation that such Conversion Shares or
Warrant Shares are freely tradable.
24
SECTION
5.5. No
Violation; Consents.
(a) The
execution, delivery and performance by Purchaser of each of the Transaction
Documents to which it is a party and the consummation of the transactions
contemplated hereby do not and will not contravene any Applicable Law. The
execution, delivery and performance by Purchaser of each of the Transaction
Documents to which it is a party and the consummation of the transactions
contemplated hereby (i) will not violate, result in a breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise
to
any right of termination, cancellation or acceleration) under any Contract
to
which Purchaser is party or by which Purchaser is bound or to which any of
its
assets is subject, except for any such violations, breaches or defaults that
would not, individually or in the aggregate, reasonably be expected to have
a
material adverse effect on the ability of Purchaser to perform its obligations
under this Agreement, and (ii) will not conflict with or violate any provision
of the articles of incorporation or bylaws or other governing documents of
Purchaser.
(b) no
consent, authorization or order of, or filing or registration with, any
Governmental Authority or other Person is required to be obtained or made by
Purchaser for the execution, delivery and performance of any of the Transaction
Documents to which it is a party or the consummation of any of the transactions
contemplated hereby, except where the failure to obtain such consents,
authorizations or orders, or make such filings or registrations, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Purchaser to perform its obligations under
this
Agreement.
SECTION
5.6. Short
Position.
Neither
Purchaser nor any of its Affiliates have an open short position in the Common
Stock of the Company.
ARTICLE
VI
AFFIRMATIVE
COVENANTS
SECTION
6.1. Access
to Books and Records.
So long
as Purchaser holds any Securities, Conversion Shares or Warrant Shares, the
Company shall afford to Purchaser and Purchaser’s representatives (including
without limitation, its accountants and counsel) full access during normal
business hours to all its properties, books, Contracts, commitments and records
(including, but not limited to, tax returns) and permit the Purchaser and its
representatives to discuss with management and the Company’s accountants the
business and affairs of the Company and the Subsidiaries.
SECTION
6.2. Use
of
Proceeds.
The
Company shall use the proceeds from the issuance of Securities for the specific
purposes set forth in the Loan Agreement.
SECTION
6.3. Periodic
Information.
For so
long as the Notes or any Conversion Shares are outstanding the Company shall
file all reports, if any, required to be filed by the Company under Section
13
or 15(d) of the Exchange Act and, if no longer required to file such reports,
shall provide the holders of the Securities, the Conversion Shares, the Warrant
Shares and prospective purchasers of such securities with the information
specified in Rule 144A(d) under the Securities Act.
25
SECTION
6.4. Directors
and Officers Insurance; Indemnification.
For so
long as Purchaser holds any Notes, the Company shall maintain directors’ and
officers’ insurance with policy limits and deductibles at least as favorable to
the beneficiaries of such insurance as are cur-rently maintained and otherwise
on terms reasonably comparable to the coverage maintained by the Company on
the
date hereof, such insurance to be maintained with either (i) a Lloyds of London
syndicate reasonably acceptable to Purchaser or (ii) an insurer with an A.M.
Best financial strength rating of “A” or better. For purposes of this Section
6.4, it is understood that the directors’ and officers’ insurance maintained by
the Company on the date hereof is acceptable to Purchaser and that the
indemnification provisions of the Company bylaws are acceptable to Purchaser.
For so long as Purchaser holds any Notes, the Company shall indemnify the
Company’s directors and officers to the fullest extent permitted under the NGCL
and shall enter into all such agreements and use its best efforts to obtain
any
necessary amendments to its articles of incorporation or bylaws to give effect
to this Section 6.4.
SECTION
6.5. Conversion
Shares.
The
Company agrees to use its best efforts to cause the Articles of Incorporation
to
be amended as soon as practicable to increase the authorized common stock to
a
number sufficient to support the issuance of the Common Stock underlying the
Notes and the Warrants (the effective date of such amendment, the “Amendment
Date”).
Thereafter, the Company shall at all times reserve and keep available, free
from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Notes, the full number of shares of
common of the Company then issuable upon the conversion into Common Stock of
all
of the outstanding principal (including PIK Interest) and accrued interest
that
are outstanding from time to time under the provisions of the Note Documents.
The Company covenants that all of the Conversion Shares that may be issued
upon
the conversion of Notes will, upon issuance, be fully paid and nonassessable,
and the Company will pay all taxes (including transfer and stamp), liens and
charges with respect to the issue thereof.
SECTION
6.6. Stockholders
Meeting.
The
Company shall hold the stockholders meeting contemplated by the Voting Agreement
by no later than November 30, 2007; provided,
however,
that in
the event that the Commission reviews the preliminary proxy statement filed
in
connection with such stockholders meeting, such stockholders meeting shall
be
held no later than January 31, 2008.
SECTION
6.7. Plainfield
Director.
(a)
From and after the Closing Date, Purchaser or its Affiliates (or any transferee
of more than 50% of the Notes held by Purchaser) shall have the right to
designate one Director (the “Plainfield
Director”).
As
promptly as practicable after the Closing Date, the Board of Directors shall
increase the number of Directors to permit the addition of the Plainfield
Director and elect the person so designated to the Board of Directors. In
connection with any annual or special meeting of stockholders of the Company
where Directors are to be elected, the person designated by to be the Plainfield
Director shall be nominated by the Board of Directors or any nominating
committee thereof.
26
(b)
Purchaser or its Affiliates shall have the right to designate any replacement
for a Plainfield Director designated for nomination or nominated in accordance
with this Section 6.7 upon the death, resignation, retirement,
disqualification or removal from office for other cause of such Director. The
Board of Directors of the Company shall elect each person so
designated.
(c)
The
Company shall use its best efforts to solicit from the stockholders of the
Company eligible to vote for the election of Directors proxies in favor of
the
nominee selected in accordance with this Section 6.7.
(d)
If at
any time Purchaser has the right to nominate a director pursuant to this Section
6.7 but fails to exercise this right, then Purchaser or its Affiliates shall
have the right to appoint one (1) representative (the “Observer”).
The
Observer shall have the right to attend meetings of the Board of Directors
in a
nonvoting observer capacity, to receive notice of such meetings and to receive
the information provided by the Company to the Board of Directors.
(e)
Purchaser will have a right to effectuate their rights pursuant to this
Section 6.7 so long as any Notes remain outstanding or Purchaser holds at
least 5% of the Company’s outstanding Common Shares.
(f)
A
quorum of the Board of Directors shall require the presence of the Plainfield
Director.
(g)
The
Company will not increase the number of Directors above six.
SECTION
6.8. Information
Covenants.
Holdings will furnish to each Holder:
(a) Monthly
Reports.
Within
30 days after the end of each fiscal month of the Company (other than the last
fiscal month of any fiscal quarter of the Company ), the balance sheet of the
Company as at the end of such fiscal month and the related statements of income
and statement of cash flows for such fiscal month and for the elapsed portion
of
the fiscal year ended with the last day of such fiscal month, and setting forth
(x) comparable budgeted income statement figures for such fiscal month as set
forth in the respective Annual Business Plan delivered pursuant to Section
6.17
and (y) beginning with the fiscal month of the Company ending September 30,
2007
comparative figures for all such financial information for the corresponding
fiscal month in the prior fiscal year. All of the foregoing financial statements
shall be certified by an Authorized Representative of the Company that they
fairly present in all material respects in accordance with GAAP the financial
condition of the Company and its Subsidiaries as of the dates indicated and
the
consolidated results of their operations for the periods indicated, subject
to
normal year-end audit adjustments and the absence of footnotes.
(b) Quarterly
Financial Statements.
Within
45 days after the close of the first three quarterly accounting periods in
each
fiscal year of the Company, (i) the balance sheet of the Company as at the
end
of such quarterly accounting period and the related statements of income and
statement of cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly accounting
period, and setting forth (x) comparable budgeted income statement figures
for
such quarterly accounting period as set forth in the respective Annual Business
Plan delivered pursuant to Section 6.17 and (y) beginning with the quarterly
accounting period ending September 30, 2007 comparative figures for all such
financial information for the corresponding quarterly accounting period in
the
prior fiscal year, and (ii) management’s discussion and analysis of the
important operational and financial developments during such quarterly
accounting period. All of the foregoing financial statements shall be certified
by an Authorized Representative of the Company that they fairly present in
all
material respects in accordance with GAAP the financial condition of the Company
and its Subsidiaries as of the dates indicated and the results of their
operations for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes. Notwithstanding the foregoing, the
filing with the Commission of a quarterly report on Form 10-Q or Form 10-QSB
within the time frame allotted by the Commission for such filing, including
any
extension pursuant to Rule 12b-25, shall be deemed to fulfill the obligations
under this Section 6.8(b).
27
(c) Annual
Financial Statements.
Within
120 days after the close of each fiscal year of the Company, (i) the balance
sheet of the Company as at the end of such fiscal year and the related
statements of income and retained earnings and statement of cash flows for
such
fiscal year setting forth, commencing with the fiscal year of the Company ending
December 31, 2007, comparative figures for the preceding fiscal year and
certified by Xxxxx Xxxxxxxx Worth Xxxxxx and Xxxxxxx, LLP or other independent
certified public accountants of recognized national standing reasonably
acceptable to Purchaser, accompanied by an opinion of such accounting firm
(which opinion shall be without a “going concern” or like qualification or
exception and without any qualification or exception as to scope of audit)
stating that in the course of its regular audit of the financial statements
of
the Company, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm obtained no knowledge of any Default
or
an Event of Default relating to financial or accounting matters which has
occurred and is continuing or, if in the opinion of such accounting firm such
a
Default or an Event of Default has occurred and is continuing, a statement
as to
the nature thereof, and (ii) management’s discussion and analysis of the
important operational and financial developments during such fiscal year.
Notwithstanding the foregoing, the filing with the SEC of an annual report
on
Form 10-K or Form 10-KSB within the time frame allotted by the SEC for such
filing, including any extension pursuant to Rule 12b-25, shall be deemed to
fulfill the obligations under this Section 6.8(c).
(d) Management
Letters.
Promptly after receipt thereof by the Company or any of its Subsidiaries, a
copy
of any “management letter” received from its certified public accountants and
management’s response thereto.
(e) Certificates.
At the
time of the delivery of the financial statements provided for in Sections 6.8
(b) and (c), a compliance certificate from an Authorized Representative of
the
Company in the form of Exhibit G certifying on its behalf that, to such Person’s
knowledge after due inquiry, no Default or Event of Default has occurred and
is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof.
28
(f) Notice
of Default, Litigation and Material Adverse Effect.
Promptly, and in any event within three Business Days after any Authorized
Representative of the Company or any of its Subsidiaries obtains knowledge
thereof, notice of (i) the occurrence of any event which constitutes a Default
or an Event of Default, (ii) any litigation or governmental investigation or
proceeding pending against the Company or any of its Subsidiaries (A) which,
either individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect or (B) with respect to any
Transaction Document, or (iii) any other event, change or circumstance that
has
had, or could reasonably be expected to have, a Material Adverse
Effect.
(g) Environmental
Matters.
Promptly after the Company or any of its Subsidiaries obtains knowledge thereof,
notice of one or more of the following environmental matters to the extent
that
such environmental matters, either individually or when aggregated with all
other such environmental matters, could reasonably be expected to have a
Material Adverse Effect:
(i) any
pending or threatened Environmental Claim against any of the
Company or its Subsidiaries or
any
Real Property owned, leased or operated by it;
(ii) any
condition or occurrence on or arising from any Real Property owned, leased
or
operated by the Company or any of its Subsidiaries that (A) results in
noncompliance by it with any applicable Environmental Law or (B) could
reasonably be expected to form the basis of an Environmental Claim against
it or
any such Real Property;
(iii) any
condition or occurrence on any Real Property owned, leased or operated by the
Company or any of its Subsidiaries that could reasonably be expected to cause
such Real Property to be subject to any restrictions on the ownership, lease,
occupancy, use or transferability by it of such Real Property under any
Environmental Law; and
(iv) the
taking of any removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on any Real Property owned, leased or
operated by the Company or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency;
provided
that in
any event the Company and its Subsidiaries shall deliver to Purchaser all
notices received by it from any government or governmental agency under, or
pursuant to, any Environmental Law (including, without limitation, CERCLA)
which
identifies it as a potentially responsible party for remediation costs or which
otherwise notify such Borrower or any Guarantor of potential liability under
any
Environmental Law (including, without limitation, CERCLA).
29
All
such
notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Company’s response thereto.
(h) Other
Information.
From
time to time, such other information or documents (financial or otherwise)
with
respect to the Company and its Subsidiaries as the Purchaser may reasonably
request.
SECTION
6.9. Information
Covenants.
Each of
the Company and its Subsidiaries will keep proper books of record and accounts
in which full, true and correct entries in conformity with GAAP, with respect
to
the Company and its Domestic Subsidiaries, or International GAAP, with respect
to Foreign Subsidiaries, as applicable, and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities
SECTION
6.10. Maintenance
of Property; Insurance.
The
Company will, and will cause its Subsidiaries to, (i) keep all property
necessary to its business in good working order and condition, ordinary wear
and
tear excepted and subject to the occurrence of casualty events, (ii) maintain
with financially sound and reputable insurance companies insurance on all such
property and against all such risks as is consistent and in accordance with
industry practice for companies similarly situated owning similar properties
and
engaged in similar businesses as it, and (iii) furnish to Purchaser, upon its
request therefor, full information as to the insurance carried. Such insurance
shall include physical damage insurance on all real and personal property
(whether now owned or hereafter acquired) on an all risk basis and business
interruption insurance.
SECTION
6.11. Maintenance
of Property; Insurance.
The
Company will, and will cause its Subsidiaries to, do or cause to be done all
things necessary to preserve and keep in full force and effect its existence
and
its material rights, franchises, licenses, permits, copyrights, trademarks
and
patents; provided,
however,
that
nothing in this Section 6.11 shall prevent sales of assets and other
transactions by the Company or its Subsidiaries in accordance with Section
7.2.
SECTION
6.12. Compliance
with Statutes, etc..
The
Company will, and will cause its Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by,
all Governmental Authorities in respect of the conduct of its business and
the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls).
SECTION
6.13. Compliance
with Environmental Laws.
(a) The
Company will, and will cause its Subsidiaries to, comply with all Environmental
Laws and permits applicable to, or required by, the ownership, lease or use
of
its Real Property now or hereafter owned, leased or operated by it, and will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Encumbrances imposed pursuant to such Environmental Laws.
The Company will not, and will not permit any of its Subsidiaries to, generate,
use, treat, store, Release or dispose of, or permit the generation, use,
treatment, storage, Release or disposal of Hazardous Materials on any Real
Property now or hereafter owned, leased or operated by it or transport or permit
the transportation of Hazardous Materials to or from any such Real Property,
except for Hazardous Materials generated, used, treated, stored, Released or
disposed of at any such Real Properties in compliance in all material respects
with all applicable Environmental Laws and as required in connection with the
normal operation, use and maintenance of its business or
operations.
30
(b) (i)
After
the receipt by Purchaser of any notice of the type described in Section 6.8(g),
(ii) at any time that the Company is not in compliance with Section 6.13(a)
or
(iii) in the event that the Holders have exercised any of the remedies pursuant
to Article X, the Company will provide, at the sole expense of the Company
and
at the request of Purchaser, an environmental site assessment report concerning
any Real Property owned, leased or operated by any of the Company or its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by Purchaser, indicating the presence or absence of Hazardous Materials and
the
potential cost of any removal or remedial action in connection with such
Hazardous Materials on such Real Property. If the Company fails to provide
the
same within 30 days after such request was made, Purchaser may order the same,
the cost of which shall be borne by the Company, and the Company shall grant
and
hereby grant to Purchaser and the Holders and their respective agents access
to
such Real Property and specifically grant Purchaser and the Holders an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment at any reasonable time upon reasonable notice
to
the Company, all at the sole expense of the Company.
SECTION
6.14. End
of
Fiscal Years; Fiscal Quarters.
(a) The
Company will cause (a) its fiscal year to end on December 31 of each calendar
year and (b) its fiscal quarters to end on dates consistent with a fiscal year
end as provided in preceding clause (a).
SECTION
6.15. Performance
of Obligations.
The
Company will, and will cause each of its Subsidiaries to, perform all of its
obligations under the terms of each mortgage, indenture, security agreement,
loan agreement or credit agreement and each other agreement, contract or
instrument by which it is bound.
SECTION
6.16. Payment
of Taxes.
The
Company will, and will cause each of its Subsidiaries to, pay and discharge
all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it, prior to the
date
on which penalties attach thereto, and all lawful claims which, if unpaid,
might
become an Encumbrance or charge upon any of its properties not otherwise
permitted under Section 7.1(a); provided
that
none of the Company and its Subsidiaries shall be required to pay any such
tax,
assessment, charge, levy or claim which is being contested in good faith and
by
proper proceedings if it has maintained adequate reserves with respect thereto
in accordance with GAAP, with respect to the Company and its Domestic
Subsidiaries, or International GAAP, with respect to Foreign Subsidiaries,
as
applicable.
SECTION
6.17. Annual
Business Plan.
No
later than thirty (30) days prior to the end of the then current calendar year,
the Company shall prepare (or cause to be prepared) an annual business plan
for
the Company and its Subsidiaries for 2008 or the next calendar year, as
applicable, which plan must be approved in writing by Purchaser, which approval
shall not be unreasonably withheld. A plan approved by Purchaser is referred
to
herein as the “Annual
Business Plan.”
No
changes or departures from any item in an Annual Business Plan approved by
Purchaser, shall be made without the prior written approval of Purchaser, which
approval shall not to be unreasonably withheld. Each Annual Business Plan shall
include such information as Purchaser may reasonably request. All actual costs
incurred by Purchaser in reviewing and approving any Annual Business Plan shall
be reimbursed by the Company promptly following demand.
31
SECTION
6.18. ERISA.
None of
the Company or its Subsidiaries or any ERISA Affiliate thereof will maintain
or
contribute to (or have an obligation to contribute to) a Plan except as may
be
required by Peruvian Law.
ARTICLE
VII
NEGATIVE
COVENANTS
The
Company hereby covenants and agrees that on and after the Closing Date and
until
the Notes (in each case, together with interest thereon) and all other
obligations under the Transaction Documents (other than any indemnities
described in Section 13.1 that are not then due and payable) are paid in full,
the Company will not, and will not permit any of its Subsidiaries
to:
SECTION
7.1. Encumbrances.
Create,
incur, assume or suffer to exist any Encumbrance upon or with respect to any
of
its property or assets (real or personal, tangible or intangible), whether
now
owned or hereafter acquired, or sell any such property or assets subject to
an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to it), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Encumbrance under any
similar recording or notice statute; provided
that the
provisions of this Section 7.1 shall not prevent the creation, incurrence,
assumption or existence of the following (Encumbrances described below are
herein referred to as “Permitted
Encumbrances”):
(a) inchoate
Encumbrances for taxes, assessments or governmental charges or levies not yet
due or Encumbrances for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, with respect to the
Company and its Domestic Subsidiaries, or International GAAP, with respect
to
Foreign Subsidiaries, as applicable;
(b) Encumbrances
in respect of its property or assets imposed by law, which were incurred in
the
ordinary course of business and do not secure Indebtedness for borrowed money,
such as carriers’, warehousemen’s, materialmen’s and mechanics’ Encumbrances and
other similar Encumbrances arising in the ordinary course of business, and
(i)
which do not in the aggregate materially detract from the value of its property
or assets or materially impair the use thereof in the operation of its business
or (ii) which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Encumbrance;
32
(c) Encumbrances
created by or pursuant to this Agreement and the Loan Documents;
(d) easements,
rights-of-way, restrictions, encroachments and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing
Indebtedness and not materially interfering with the conduct of its business;
and
(e) Encumbrances
arising out of the existence of judgments or awards in respect of which it
shall
in good faith be prosecuting an appeal or proceedings for review and in respect
of which there shall have been secured a subsisting stay of execution pending
such appeal or proceedings; provided
that the
aggregate amount of all cash and the Fair Market Value of all other property
subject to such Encumbrances does not exceed $100,000 at any time
outstanding.
SECTION
7.2. Consolidation,
Merger, Purchase or Sale of Assets, etc..
Wind
up,
liquidate or dissolve its affairs or enter into any partnership, joint venture,
or transaction of merger or consolidation, convey, sell or otherwise dispose
of
all or any part of their property or assets, or enter into any sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets of any Person (or agree to
do
any of the foregoing at any future time), except that:
(i) Capital
Expenditures by it shall be permitted to the extent not in violation of Section
7.7;
(ii) the
Company and its Subsidiaries may enter into or complete the transaction
contemplated by the Binding Letter of Intent by means of a merger of
Interpacific Oil S.A.C, into Pure Biofuels del Peru S.A.C., in accordance with
the Peruvian General Corporations Act (Ley General de Sociedades).;
(iii) Investments
may be made to the extent permitted by Section 7.5; and
(iv) it
may
liquidate or otherwise dispose of Cash Equivalents in the ordinary course of
business, in each case for cash at Fair Market Value.
SECTION
7.3. Dividends.
Authorize, declare or pay any Dividends with respect to it, except Dividends
payable to the Company or its Subsidiaries.
SECTION
7.4. Indebtedness.
Contract, create, incur, assume or suffer to exist any Indebtedness,
except:
(a) The
Notes
and Indebtedness incurred pursuant to the Loan Documents;
(b) Indebtedness
incurred pursuant to the Working Capital Facility in an aggregate principal
amount at any time outstanding not to exceed $5,000,000;
(c) Indebtedness
in the ordinary course of its business (including, without limitation,
Indebtedness such as bonds, guarantees and letters of credit, which may be
deemed to exist in connection with agreements providing for indemnification,
purchase price adjustments and similar obligations in connection with the
disposition of assets in accordance with the requirements of this Agreement,
so
long as any such obligations are those of the Person making the respective
acquisition or sale, and are not guaranteed by any other Person); and
33
(d) Existing
Indebtedness.
SECTION
7.5. Advances,
Investments and Loan.
Directly or indirectly, lend money or credit or make advances to any Person,
or
purchase or acquire any stock, obligations or securities of, or any other Equity
Interest in, or make any capital contribution to, any other Person, or purchase
or own a futures contract or otherwise become liable for the purchase or sale
of
currency or other commodities at a future date in the nature of a futures
contract (each of the foregoing an “Investment”
and,
collectively, “Investments”),
except that the following shall be permitted:
(a) it
may
acquire and hold accounts receivable owing to it, if created or acquired in
the
ordinary course of its business and payable or dischargeable in accordance
with
its customary trade terms;
(b) it
may
acquire and hold cash and Cash Equivalents;
(c) Contingent
Obligations permitted by Section 7.4, to the extent constituting Investments;
and
(d) the
Company may make Investments in its Subsidiaries.
SECTION
7.6. Transactions
with Affiliates.
Enter
into any transaction or series of related transactions with any Affiliate,
other
than in the ordinary course of business and on terms and conditions
substantially as favorable to it as would reasonably be obtained by it at that
time in a comparable arm’s-length transaction with a Person other than an
Affiliate, except that the following in any event shall be
permitted:
(a) Dividends
may be paid by it to the extent provided in Section 7.3; and
(b) Loans
may
be made and other transactions may be entered into by it to the extent permitted
by Sections 7.2, 7.4 and 7.5.
SECTION
7.7. Capital
Expenditures.
Make
any Capital Expenditures except (a) Capital Expenditures set forth in the
applicable Annual Business Plan and (b) Capital Expenditures made with the
amount of Net Insurance Proceeds received by it from any Recovery Event so
long
as such Net Insurance Proceeds are used to replace or restore any properties
or
assets in respect of which such Net Insurance Proceeds were paid.
SECTION
7.8. Modifications
of Certificate of Incorporation, By-Laws and Certain Other Agreements;
Limitations on Voluntary Payments, etc..
(a)
Amend, modify or change its certificate or articles of incorporation (including,
without limitation, by the filing or modification of any certificate or articles
of designation), certificate of formation, limited liability company agreement
or by-laws (or the equivalent organizational documents), as applicable, or
any
agreement entered into by it with respect to their Capital Stock (including
any
stockholders agreement), or enter into any new agreement with respect to their
Capital Stock, unless such amendment, modification, change or other action
contemplated by this clause (a) could not reasonably be expected to be adverse
to the interests of Purchaser and the terms of any such amendment, modification,
change or other action will not violate any of the other provisions of this
Agreement or any other Transaction Document; or
34
(b) amend,
modify or change any provision of any Management Agreement unless such
amendment, modification or change could not reasonably be expected to be adverse
to the interests of Purchaser (although no amendment, modification or change
may
be made to any monetary term thereof); or
(c) amend,
modify or change any provision of any material agreement set forth on Schedule
8.23 to the Loan Agreement unless such amendment, modification or change could
not reasonably be expected to be adverse to the interests of Plainfield
(although no amendment, modification or change may be made to any monetary
term
thereof).
SECTION
7.9. Limitation
on Issuance of Capital
Stock.
(a)
Issue any Capital Stock or securities convertible into Capital Stock (other
than
issuances of Excluded Stock) or (b) create, or make any amendments to, any
equity incentive plan of the Company or any of its Subsidiaries other than
to
the 2006 Stock Option and Award Plan as amended and restated as the Pure
Biofuels Corp. Stock Incentive Plan as described in the definitive proxy
statement filed with the Commission on July 2, 2007.
SECTION
7.10. Business;
etc..
Engage,
directly or indirectly, in any business other than the businesses engaged in
by
it as of the Closing Date and reasonable extensions thereof and businesses
ancillary or complimentary thereto.
ARTICLE
VIII
CONDITIONS
PRECEDENT TO CLOSING
SECTION
8.1. Conditions
to the Company’s Obligations. The
issuance of the Securities by the Company shall be subject to the satisfaction,
at or prior to the Closing, of the following conditions:
(a) The
representations and warranties of Purchaser contained in this Agreement which
are qualified by any “materiality”, “material adverse effect” or any similar
qualifier shall be true and correct in all respects and the representations
and
warranties of Purchaser which are not so qualified shall be true and correct
in
all material respect, in each case on and as of the Closing Date.
(b) Purchaser
shall have performed in all material respects all obligations and agreements,
and complied in all material respects with all covenants, contained in this
Agreement to be performed and complied with by Purchaser at or prior to the
Closing Date.
35
(c) No
provision of any Applicable Law, injunction, order or decree of any Governmental
Authority shall be in effect which has the effect of making the transactions
contemplated hereby illegal or shall otherwise restrain or prohibit the
consummation of the transactions contemplated hereby.
SECTION
8.2. Conditions
to Purchaser’s Obligations.
The
obligations of Purchaser to purchase the Securities contemplated by this
Agreement shall be subject to the satisfaction, at or prior to the Closing,
of
the following conditions:
(a) On
the
Closing Date and also after giving effect to the sale of the Notes on such
date
(a) there shall exist no Default or Event of Default and (b) all representations
and warranties contained herein and in the other Transaction Documents shall
be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on the Closing Date (it being
understood and agreed that any representation or warranty which by its terms
is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
(b) Purchaser
shall have received a certificate, dated the Closing Date and signed on behalf
of the Company by an Authorized Representative, certifying on behalf of the
Company that all of the conditions in Sections 8.2(a), (f), (g) and (h) have
been satisfied on such date.
(c) Purchaser
shall have received (from each of DLA Piper US LLP and Xxxxx
and
Xxxx LLP,
special
counsel to the Company, an opinion addressed to Purchaser and dated the Closing
Date covering such matters incident to the transactions contemplated herein
as
the Purchaser may reasonably request.
(d) Purchaser
shall have received a certificate from the Company, dated the Closing Date,
signed by an Authorized Representative, and attested to by another Authorized
Representative, in the form of Exhibit F with appropriate insertions, together
with copies of the articles of incorporation and by-laws of the Company and
the
resolutions of the Company referred to in such certificate, and each of the
foregoing shall be in form and substance reasonably acceptable to
Purchaser.
(e) On
the
Closing Date, all corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Transaction Documents shall be reasonably satisfactory in form
and
substance to Purchaser, and Purchaser shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams
or
facsimiles, if any, which Purchaser reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate officials or Governmental Authorities.
(f) Nothing
shall have occurred since June 30, 2007 (and Purchaser shall have not have
become aware of any facts or conditions not previously known) which Purchaser
shall determine has had, or could reasonably be expected to have, (i) a Material
Adverse Effect or (ii) a material adverse effect on the
Transactions.
36
(g) All
necessary governmental and third party approvals and/or consents in connection
with the Transactions shall have been obtained and remain in effect, and all
applicable waiting periods with respect thereto shall have expired without
any
action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of the Transactions.
On the Closing Date, there shall not exist any judgment, order, injunction
or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Transactions.
(h) Except
as
set forth in Schedule 5.07 to the Loan Agreement, on the Closing Date, there
shall be no actions, suits or proceedings pending or threatened (a) with respect
to the Transactions, this Agreement or any other Transaction Document, or (b)
which Purchaser shall determine has had, or could reasonably be expected to
have, a Material Adverse Effect.
(i) The
Company shall have executed and delivered the Loan Agreement and all conditions
precedent to the effectiveness of the Loan Agreement and the initial borrowings
thereunder shall have been satisfied and the initial borrowings shall have
been
made.
(j) The
Company and the stockholders party thereto shall have executed and delivered
the
Stockholders Agreement and the Voting Agreement.
(k) The
Company shall have executed and delivered the Registration Rights
Agreement.
(l) The
bylaws of the Company shall have been amended in form and substance satisfactory
to the Purchaser.
(m) Purchaser
shall have received certificates representing the Issue Date Common Stock,
the
Notes and the Warrants purchased by Purchaser.
(n) Purchaser
shall have received such other documents and evidence as are customary for
transactions of this type or as Purchaser may reasonably request in order to
evidence the satisfaction of the other conditions set forth above.
ARTICLE
IX
EVENTS
OF
DEFAULT.
SECTION
9.1. Events
of Default.
One
or
more of the following events shall constitute an “Event of Default”
37
(a) The
Company shall default in the payment when due of any principal of any Note,
or
(b) default, and such default shall continue unremedied for three or more
Business Days, in the payment when due of any interest on any Note;
or
(b)
Any
representation, warranty or statement made or deemed made by the Company herein
or in any other Transaction Document or in any certificate delivered to
Purchaser or any Holder pursuant hereto or thereto shall prove to be untrue
in
any material respect on the date as of which made or deemed made;
or
(c) The
Company shall (a) default in the due performance or observance by it of any
term, covenant or agreement contained in Sections 6.2 and 6.8(g)(i) or Article
X
or (b) default in the due performance or observance by it of any other term,
covenant or agreement contained in this Agreement (other than those set forth
in
Sections 9.1(a) and (b)) and such default shall continue unremedied for a period
of 30 days; or
(d) (i)
The
Company or any of its Subsidiaries shall (A) default in any payment of any
Indebtedness (other than the Notes) beyond the period of grace, if any, provided
in an instrument or agreement under which such Indebtedness was created or
(B)
default in the observance or performance of any agreement or condition relating
to any Indebtedness (other than the Notes) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Notes) of the Company or any its Subsidiaries shall be declared to be (or
shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided
that it
shall not be a Default or an Event of Default under this Section 9.1(d) unless
the aggregate principal amount of all Indebtedness as described in preceding
clauses (i) and (ii) is at least $100,000; or
(e) The
Company or any of its Subsidiaries shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto (the “Bankruptcy
Code”);
or an
involuntary case is commenced against the Company or any of its Subsidiaries,
and the petition is not controverted within 10 days, or is not dismissed within
60 days after the filing thereof; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Company or any of its Subsidiaries, to operate all or any
substantial portion of the business of the Company or any of its Subsidiaries,
or the Company or any of its Subsidiaries commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any of its
Subsidiaries, or there is commenced against the Company or any of its
Subsidiaries any such proceeding which remains undismissed for a period of
60
days after the filing thereof, or the Company or any of its Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Company or any of
its
Subsidiaries makes a general assignment for the benefit of creditors; or any
action is taken by the Company or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
any
Subsidiary of the Company organized under the laws of Peru (a “Peruvian
Subsidiary”) shall commence a voluntary insolvency, liquidation, dissolution or
reorganization proceeding under the bankruptcy laws of Peru (Ley General
Concursal) or the General Corporations Act of Peru (Ley General de Socíedades)
as now hereafter in effect; or a proceeding or case shall be commenced against
any Peruvian Subsidiary, without application or consent, seeking (i) its
reorganization, liquidation, dissolution, arrangement or warranty, (ii) the
appointment of a receiver, custodian, trustee, examiner, liquidator or the
like
of it or of all or any substantial part of its property or (iii) similar relief
in respect of it under any law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or adjustment of debts, and such
proceeding shall continue undismissed, or in order, judgment or decree approving
or ordering any of the foregoing shall be entered and continued unstayed and
in
effect, for a period of 60 or more days, or a declaration of bankruptcy or
suspension of payment shall be entered against any Peruvian Subsidiary under
the
bankruptcy laws of Peru (Ley General Concursal) or the General Corporations
Act
of Peru (Ley General de Sociedades) as now or hereafter in effect;
or
38
(f) Any
of
the Transaction Documents shall cease to be in full force and effect, or shall
cease to give Purchaser and the Holders the rights, powers and privileges
purported to be created thereby, or the Company shall default in the due
performance or observance of any term, covenant or agreement on its part to
be
performed or observed pursuant to any such Transaction Document and such default
shall continue beyond the period of grace, if any, specifically applicable
thereto pursuant to the terms of such Transaction Document; or
(g) One
or
more judgments or decrees shall be entered against the Company or any of its
Subsidiaries involving in the aggregate for such Person a liability (to the
extent not paid or not covered by a reputable and solvent insurance company)
and
such judgments and decrees either shall be final and non-appealable or shall
not
be vacated, discharged or stayed or bonded pending appeal for any period of
30
consecutive days, and the aggregate amount of all such judgments equals or
exceeds $100,000; or
(h) The
Amendment Date shall not have occurred on or prior to November 30, 2007;
provided,
however,
that
such date shall be extended until January 31, 2008 in the event that the
Commission reviews the preliminary proxy statement filed in connection with
the
stockholders meeting contemplated by the Voting Agreement.
ARTICLE
X
REMEDIES
ON DEFAULT, ETC.
SECTION
10.1. Acceleration.
(a)
If
an
Event of Default with respect to the Company or any Subsidiary described in
Section 9.1(e) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If
any
other Event of Default has occurred and is continuing, any Holder or Holders
of
more than 50% in principal amount of the Notes at the time outstanding may
at
any time, at its or their option, by notice or notices to the Company, declare
all the Notes then outstanding to be immediately due and payable.
39
(c) If
any
Event of Default described in Section 9.1(a) has occurred and is continuing,
any
Holder or Holders of Notes at the time outstanding affected by such Events
of
Default may at any time, at its or their option, by notice or notices to the
Company, declare all the Notes held by it or them to be immediately due and
payable.
(d) Upon
any
Notes becoming due and payable under this Section, whether automatically or
by
declaration, such Notes will forthwith mature and the entire unpaid principal
amount of such Notes, plus (i) all accrued and unpaid interest thereon, and
(ii)
all fees, expense reimbursements obligations and other obligations of the
Company accrued hereunder and under the Notes and the other Note Documents,
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby
waived.
(e) Subject
to applicable law, all proceeds received from the Company after maturity of
the
Notes, whether by acceleration or otherwise, shall be applied:
(i) | first, pro rata to payment or reimbursement of fees, expenses and indemnities payable to the Purchaser; |
(ii) | second, pro rata to payment of principal amount outstanding on the Notes; |
(iii) |
third,
pro rata to any other obligations outstanding under the Note Documents;
and
|
(iv) |
fourth,
any excess, after all obligations under the Note Documents shall
have been
indefeasibly paid in full in cash, shall be paid to the Company or
as
otherwise required by law.
|
SECTION
10.2. Other
Remedies.
If any
Default or Event of Default has occurred and is continuing, and irrespective
of
whether any Notes have become or have been declared immediately due and payable
under Section 10.1, the Holder of any Note at the time outstanding may proceed
to protect and enforce the rights of such Holder by an action at law, suit
in
equity or other appropriate proceeding, whether for the specific performance
of
any agreement contained herein or in any Note, or for an injunction against
a
violation of any of the terms hereof or thereof, or in aid of the exercise
of
any power granted hereby or thereby or by law or otherwise.
SECTION
10.3. Rescission.
At any
time after any Notes have been declared due and payable pursuant to clause
(b)
or (c) of Section 10.1, the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if
(a)
the Company has paid all overdue interest on the Notes, all principal of any
Notes that is due and payable and is unpaid other than by reason of such
declaration, and all interest on such overdue principal and (to the extent
permitted by applicable law) overdue interest in respect of the Notes, (b)
all
Events of Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 11.1, and (c) no judgment or decree has been entered
for the payment of any monies due pursuant hereto or to the Notes. No rescission
and annulment under this Section 10.3 will extend to or affect any subsequent
Event of Default or Default or impair any right consequent thereon.
40
SECTION
10.4. No
Waivers or Election of Remedies, Expenses, etc.
No
course of dealing and no delay on the part of any Holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such Holder’s rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any Holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise. The
Company will pay to the Purchaser on demand such further amount as shall be
sufficient to cover all reasonable costs and expenses of the Holders incurred
in
any enforcement or collection under this Section 10, including, without
limitation, reasonable attorneys’ fees, expenses and disbursements.
ARTICLE
XI
AMENDMENT
AND WAIVER.
SECTION
11.1. Requirements.
This
Agreement and the Notes may be amended, and the observance of any term hereof
or
of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required Holders, except
that (a) no amendment or waiver of any of the provisions of Article II, III,
IV,
V, VIII and Section 13.13 hereof, or any defined term (as it is used therein),
will be effective as to Purchaser unless consented to by Purchaser in writing,
and (b) no such amendment or waiver may, without the written consent of Holder
of each Note at the time outstanding affected thereby, (i) subject to the
provisions of Article X relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the
rate
or change the time of payment or method of computation of interest on the Notes,
(ii) change the percentage of the principal amount of the Notes the Holders
of
which are required to consent to any such amendment or waiver or (iii) amend
any
of Article III, X or XI Section 9.1(a).
SECTION
11.2. Solicitation
of Holders of Notes.
(a) Solicitation.
The Company will provide each Holder of the Notes (irrespective of the amount
of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Holder to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The Company
will deliver executed or true and correct copies of each amendment, waiver
or
consent effected pursuant to the provisions of this Section 11 to each Holder
of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite Holders
of
Notes.
(b) Payment.
The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any Holder of Notes as consideration for
or
as an inducement to the entering into by any Holder of Notes or any waiver
or
amendment of any of the terms and provisions hereof unless such remuneration
is
concurrently paid, or security is concurrently granted, on the same terms,
ratably to each Holder of Notes then outstanding even if such Holder did not
consent to such waiver or amendment.
41
SECTION
11.3. Binding
Effect, etc.
Any
amendment or waiver consented to as provided in this Section 11 applies equally
to Holders of Notes and is binding upon them and upon each future Holder of
any
Note and upon the Company without regard to whether such Note has been marked
to
indicate such amendment or waiver. No such amendment or waiver will extend
to or
affect any obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent thereon. No course
of
dealing between the Company, on the one hand, and the Holder of any Note, on
the
other, nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any Holder of such Note.
SECTION
11.4. Notes
held by Company, etc.
Solely
for the purpose of determining whether the Holders of the requisite percentage
of the aggregate principal amount of Notes then outstanding approved or
consented to any amendment, waiver or consent to be given under this Agreement
or the Notes, or have directed the taking of any action provided herein or
in
the Notes to be taken upon the direction of the Holders of a specified
percentage of the aggregate principal amount of Notes then outstanding, Notes
directly or indirectly owned by the Company or any of the Company’s Affiliates
shall be deemed not to be outstanding.
ARTICLE
XII
REGISTRATION;
EXCHANGE; SUBSTITUTION AND PAYMENT OF NOTES.
SECTION
12.1. Registration
of Notes.
The
Company shall keep at its principal executive office a register for the
registration and registration of transfers of Notes. The name and address of
each Holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose
name
any Note shall be registered shall be deemed and treated as the owner and Holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any Holder of
a
Note upon request therefor, a complete and correct copy of the names and
addresses of all registered Holders of Notes.
SECTION
12.2. Transfer
and Exchange of Notes.
Upon
surrender of any Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered Holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company’s expense (except as provided below), one or more new Notes (as
requested by the Holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such Holder may request and shall
be
substantially in the form of Exhibit A. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient
to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less
than
$100,000, provided
that if
necessary to enable the registration of transfer by a Holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000.
Any
transferee, by its acceptance of a Note registered in its name (or the name
of
its nominee), shall be deemed to have made the representation set forth in
Section 5.2
42
SECTION
12.3. Replacement
of Notes.
Upon
receipt by the Company of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Note,
and
(a) in
the
case of loss, theft or destruction, of indemnity reasonably satisfactory to
it
(provided
that if
the Holder of such Note is, or is a nominee for, the Purchaser or another Holder
of a Note with a minimum net worth of at least $10,000,000, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory),
or
(b) in
the
case of mutilation, upon surrender and cancellation thereof,
within
ten (10) Business Days thereafter, the Company at its own expense shall execute
and deliver, in lieu thereof, a new Note, dated and bearing interest from the
date to which interest shall have been paid on such lost, stolen, destroyed
or
mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
ARTICLE
XIII
MISCELLANEOUS
SECTION
13.1. Indemnification.
The
Company hereby agrees to: (i) after the occurrence of an Event of Default,
pay
all reasonable out-of-pocket costs and expenses of Purchaser in connection
with
the enforcement of this Agreement and the other Transaction Documents and the
documents and instruments referred to herein and therein or in connection with
any refinancing or restructuring of the Notes in the nature of a “work-out” or
pursuant to any insolvency or bankruptcy proceedings (including, in each case
without limitation, the reasonable fees and disbursements of counsel and
consultants for Purchaser); (ii) pay and hold Purchaser harmless from and
against any and all present and future stamp, excise and other similar
documentary taxes with respect to the foregoing matters and save the Purchaser
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to Purchaser)
to pay such taxes; and (iii) indemnify Purchaser, and its officers, directors,
employees, representatives, agents, affiliates, trustees and investment advisors
from and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys’ and consultants’ fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of,
or
in any way related to, or by reason of, (x) any investigation, litigation or
other proceeding (whether or not Purchaser is a party thereto and whether or
not
such investigation, litigation or other proceeding is brought by or on behalf
of
the Company) related to the entering into and/or performance of this Agreement
or any other Transaction Document or the use of the proceeds of from the sale
of
the Notes or the consummation of the Transactions or the exercise of any of
their rights or remedies provided herein or in the other Transaction Documents,
(y) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property at
any
time owned, leased or operated by the Company or any of its Subsidiaries, the
generation, storage, transportation, handling or disposal of Hazardous Materials
by the Company or any of its Subsidiaries at any location, whether or not owned,
leased or operated by the Company or any of its Subsidiaries, the non-compliance
by the Company or any of its Subsidiaries with any Environmental Law (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Company or any of its Subsidiaries,
or
any Real Property at any time owned, leased or operated by the Company or any
of
its Subsidiaries or (z) claims asserted or alleged by any broker, consultant
or
other advisor of any Credit Party, including, in each case, without limitation,
the reasonable fees and disbursements of counsel and other consultants incurred
in connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified (as determined by a court of competent jurisdiction in a
final
and non-appealable decision)). To the extent that the undertaking to indemnify,
pay or hold harmless Purchaser set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Company
shall make the maximum contribution to the payment and satisfaction of each
of
the indemnified liabilities which is permissible under applicable
law.
43
SECTION
13.2. 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:
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
|
44
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
|
||
if
to Purchaser:
|
|
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
|
SECTION
13.3. Governing
Law; Submission to Jurisdictionl Venue; Waiver of Jury Trial.
(a)
THIS
AGREEMENT AND THE OTHER NOTE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER 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 OR ANY OTHER NOTE DOCUMENT 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 OR ANY OTHER NOTE DOCUMENT, 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 OR ANY OTHER NOTE DOCUMENT 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 SECTION 13.2, 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 AGREE NOT TO PLEAD
OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER NOTE
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE PURCHASER 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 BORROWER IN ANY OTHER
JURISDICTION.
45
(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 OR ANY OTHER NOTE DOCUMENT
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.
(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, THE OTHER NOTE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
SECTION
13.4. 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
13.5. Exhibits
and Schedules.
Each of
the exhibits and schedules referred to herein and attached hereto is an integral
part of this Agreement and is incorporated herein by reference.
SECTION
13.6. Expenses.
The
Company shall reimburse the Purchaser for all reasonable disbursements and
out-of-pocket expenses incurred by the Purchaser in connection with the
transactions contemplated hereby, including, without limitation, the fees and
disbursements of White & Case LLP, counsel to the Purchaser, Estudio
Echecopar, Peruvian counsel to the Purchaser, and Xxxxxx Xxxxxx & Xxxxxxx,
Nevada counsel to the Purchaser. On the Closing Date, Purchaser shall provide
the Company with documentation reasonably satisfactory to the Company for such
disbursements and out-of-pocket expenses.
46
SECTION
13.7. Press
Releases and Public Announcements.
All
public announcements or disclosures relating to this Agreement and the
transactions contemplated hereby shall be made only if mutually agreed upon
by
the Company and Purchaser, except to the extent such disclosure is, in the
opinion of counsel, required by or advisable under Applicable Law, provided
that (a)
any such required disclosure shall only be made, to the extent consistent with
Applicable Law and (b) no such announcement or disclosure (except as required
by
Applicable Law) shall identify Purchaser without Purchaser’s prior
consent.
SECTION
13.8. Assignment;
No Third Party Beneficiaries.
This
Agreement and the rights, duties and obligations hereunder may not be assigned
or delegated by the Company without the prior written consent of Purchaser,
and
may not be assigned or delegated by Purchaser without the Company’s prior
written consent except that Purchaser may assign any or all of its rights and
obligations under this Agreement to any Purchaser Affiliate, provided Purchaser
notifies the Company in writing, and Purchaser may transfer the Notes as
provided in Article XII. Any attempted assignment or delegation of rights,
duties or obligations hereunder other than as contemplated in the preceding
sentence shall be void and of no effect. This Agreement and the provisions
hereof shall be binding upon and shall inure to the benefit of each of the
parties and their respective successors and permitted assigns. This Agreement
is
not intended to confer any rights or benefits on any Persons other than the
parties hereto and their permitted successors and assigns (including any
subsequent Holder of a Note), except as expressly set forth in Section 13.1
or
this Section 13.8.
SECTION
13.9. Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible and be
valid
and enforceable.
SECTION
13.10. 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.
SECTION
13.11. Further
Assurances.
Each
party hereto, upon the request of any other party hereto, shall do all such
further acts and execute, acknowledge and deliver all such further instruments
and documents as may be necessary or desirable to carry out the transactions
contemplated hereby, including, in the case of the Company, such acts,
instruments and documents as may be necessary or desirable to convey and
transfer to Purchaser the Notes to be purchased by it hereunder.
SECTION
13.12. No
Waiver; Remedies Cumulative.
No
failure or delay on the part of the Purchaser or any Holder in exercising any
right, power or privilege hereunder or under any other Note Document and no
course of dealing between the Company and the Purchaser or any Holder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Note Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein
or
in any other Note Document expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Purchaser or any Holder would
otherwise have. No notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Purchaser or any
Holder to any other or further action in any circumstances without notice or
demand.
47
SECTION
13.13. Specific
Performance.
The
parties hereto agree that the remedy at law for any breach of this Agreement
may
be inadequate, and that as between the Company and Purchaser any party by whom
this Agreement is enforceable shall be entitled to specific performance in
addition to any other appropriate relief or remedy. Such party may, in its
sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement as between the Company and Purchaser, or prevent
any violation hereof, and, to the extent permitted by applicable as between
the
Company and Purchaser law, each party waives any objection to the imposition
of
such relief.
SECTION
13.14. Confidentiality.
The
Purchaser and each of the Holders agrees that, without the prior consent of
the
Company, it will use its best efforts not to disclose any information with
respect to the Company that is furnished pursuant to this Agreement, any other
Note Document or any documents contemplated by or referred to herein or therein
and which is designated by the Company to the Holders in writing as confidential
or as to which it is otherwise reasonably clear such information is not public,
except that any Holder may disclose any such information (a) to its employees,
Affiliates, auditors and counsel, advisors or to another Holder, (b) as has
become generally available to the public other than by a breach of this Section
13.14, (c) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having
or
claiming to have jurisdiction over such Holder or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or the Office of the Comptroller
of
the Currency, the NAIC, the SVO or similar organizations (whether in the United
States or elsewhere) or their successors, (d) as may be required or appropriate
in response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Holder, (e) to any prospective Holder in connection with
any
contemplated transfer pursuant to Article XII; provided
that
such prospective Holder shall have been made aware of this Section 13.14 and
shall have agreed to be bound by its provisions as if it were a party to this
Agreement, (f) to Gold Sheets and other similar bank trade publications; such
information to consist of deal terms and other information regarding the this
Agreement customarily found in such publications, (g) in connection with any
suit, action or proceeding for the purpose of defending itself, reducing its
liability, or protecting or exercising any of its claims, rights, remedies
or
interests under or in connection with the Note Documents, (h) to a Person that
is an investor or prospective investor in the Holder or any Affiliate thereto,
that, in each case, agrees that its access to information regarding the Company
and the Notes is solely for purposes of evaluating an investment in such entity,
(i) to a Person that is an investor or prospective investor in a Securitization
(as defined below) that agrees that its access to information regarding the
Company and the Notes is solely for purposes of evaluating an investment in
such
Securitization, (j) to a Person that is a trustee, collateral manager, servicer,
noteholder or secured party in a Securitization in connection with the
administration, servicing and reporting on the assets serving as collateral
for
such Securitization, or (k) to a nationally recognized rating agency that
requires access to information regarding the Company, the Notes and the Note
Documents in connection with ratings issued with respect to a Securitization.
For purposes of this Section, “Securitization”
means
a
public or private offering by a Holder or any of its Affiliates or their
respective successors and assigns, of securities which represent an interest
in,
or which are collateralized, in whole or in part, by the Notes or the Note
Documents.
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[SIGNATURE
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|
|
PURE
BIOFUELS CORP. |
Date: | By /s/ Xxxx Xxxxxxxx | |
Name: Xxxx Goyzeuta |
||
Title: Chief Executive Officer |