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