ASSIGNMENT OF JUDGMENT AGREEMENT
This LITIGATION CLAIMS ASSIGNMENT AGREEMENT ("Assignment") is made as of
December 1, 1998 by and between PENN OCTANE CORPORATION, a Delaware corporation
(formerly known as "International Energy Development Corp.", and herein called
"Assignor") and CASTLE ENERGY CORPORATION, as assignee for itself and as
Collateral Agent ("Collateral Agent") for the Lenders listed on Schedule I
hereto ("Lenders").
WHEREAS, Assignor, and Lenders have entered into that certain Rollover and
Assignment Agreement dated as of December 1, 1998 (as the same may be further
amended from time to time, the "Rollover Agreement");
WHEREAS, Assignor, Collateral Agent, and the Lenders have entered into that
certain Collateral Agreement dated as of December 1, 1998 (as the same may be
amended from time to time, the "Collateral Agreement");
WHEREAS, Assignor has represented to Collateral Agent and the Creditors
that: an arbitral award was rendered against International Bank of
Commerce-Brownsville ("IBC") in favor of Assignor; the value of the arbitral
award as of July 31, 1998 was approximately $3.4 million; a judgment was entered
on February 28, 1996 by the 197th Judicial District Court of Cameron County,
Texas, in Civil Action No. 94-08-4008-C, known as International Energy
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Development Corp. v. International Bank of Commerce - Brownsville; such judgment
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modified the arbitral award in certain respects; an appeal was taken to the
Court of Appeals for the Thirteen District of Texas (the "Corpus Christi Court
of Appeals"); on June 18, 1998, the Corpus Christi Court of Appeals rendered an
Opinion and Order in No. 13-96-298-CV, known as International Bank of Commerce -
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Brownsville, Appellant v. International Energy Development Corp., Appellee; such
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Opinion and Order confirmed the original arbitral award in all respects; and IBC
has filed a motion for rehearing with the Corpus Christi Court of Appeals.
WHEREAS, by this Assignment, the respective parties to the Rollover
Agreement and the Collateral Agreement wish to provide, among other things, for
the assignment and recordation of the Judgment (as hereinafter defined)
pursuant to Section 12.014 of the Texas Property Code.
NOW, THEREFORE, in consideration of the premises and other value, the
receipt and sufficiency of which are hereby acknowledged, Assignor and
Collateral Agent for itself and the Lenders do hereby agree as follows:
1. To secure the Loans and all other obligations of Assignor under the
Rollover Agreement, the Amended Notes (as defined in the Rollover Agreement),
the Collateral Agreement, this Assignment and all documents executed or
delivered by Assignor in connection therewith (collectively, the "Obligations"),
Assignor hereby unconditionally and irrevocably assigns, transfers, conveys and
sets over to Collateral Agent for the benefit of itself and all Lenders, and
grants a security interest in and lien on, all of Assignor's right, title and
interest in and to: (a) that certain arbitral award ("Arbitral Award") in favor
of International Energy Development Corp. against IBC; the judgment known as
International Energy Development Corp. v. International Bank of Commerce -
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Brownsville, entered on February 28, 1996 by the 197th Judicial District Court
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of Cameron County, Texas, Civil Action Xx. 00-00-0000-X (xxx "Xxxxxxxx Xxxxx
Decision"); that certain Opinion and Order known as International Bank of
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Commerce - Brownsville, Appellant v. International Energy Development Corp.,
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Appellee, Court of Appeals for Thirteenth District of Texas Corpus Christi, No.
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13-96-298-CV, entered on June 18, 1998 ("Appellate Decision"; the Arbitral
Award, the District Court Decision, the Appellate Decision and any other order
related thereto or any appeal therefrom or modification thereof are collectively
referred to herein as, the "Judgment"); and (b) any and all appeal bond,
collateral, payment, realization or proceeds relating to or arising out of the
Judgment, any appeal thereof or any settlement with respect thereto, including,
without limitation, all damages, statutory damages or penalties, exemplary or
punitive damages, attorneys' fees, costs and pre-judgment and post-judgment
interest (all of the foregoing being collectively referred to herein as, the
"Proceeds"). Collateral Agent on behalf of itself and the Lenders shall be
entitled to the Proceeds subject to the terms and conditions set forth in the
Collateral Agreement until the Obligations are paid in full and the Rollover
Agreement is terminated.
2. Assignor represents and warrants that it owns all right, title and
interest in and to the Judgment, and the Proceeds, free and clear of all liens,
claims and encumbrances except as granted pursuant to the Rollover Agreement,
the Collateral Agreement and this Assignment. Assignor further represents and
warrants that it is the same entity as the plaintiff named in the Judgment,
having changed its name from International Energy Development Corp. to Penn
Octane Corporation.
3. Assignor agrees that in the event it receives any of the Proceeds,
it shall set aside and hold in trust for Collateral Agent all such Proceeds, and
pay such Proceeds to Collateral Agent subject to the Collateral Agreement
immediately upon receipt thereof by Assignor.
4. For the purpose of carrying out the terms of this Assignment,
Assignor hereby irrevocably constitutes and appoints Collateral Agent and any
officer or agent thereof, with full power of substitution, as its
attorney-in-fact with full irrevocable power and authority in the place and
stead of Assignor and in the name of Assignor or in its own name, from time to
time in Collateral Agent's sole discretion, without notice to or assent by
Assignor, to do the following on behalf of Assignor:
(i) to direct any party liable for any payment under the Judgment
(including any entity that has posted a bond related thereto) to make payment of
any and all Proceeds directly to Collateral Agent subject to the Collateral
Agreement;
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(ii) to ask, demand, collect, receive and give acquittances and
receipts for any and all Proceeds (each of which acquittances and receipts shall
be a full and complete release, discharge and acquittance to the extent of any
amount paid to Collateral Agent) and, in the name of Assignor or its own name or
otherwise, to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of Proceeds; and
This power of attorney is a power coupled with an interest and shall be
irrevocable until the discharge by the Assignor of all the Obligations owing to
the Collateral Agent and the Lenders including, without limitation, payment in
full of the indebtedness of Assignor to Collateral Agent and the Lenders.
The parties hereto acknowledge and agree that Collateral Agent shall not be
entitled to compromise, settle, or otherwise affect the Judgment or to
participate in or control any appeal, settlement, or prosecution of the
Judgment.
5. If any Event of Default (as such term is defined in any Amended Note
or used in the Rollover Agreement) shall have occurred and be continuing,
Collateral Agent shall have, in addition to all other rights granted to it in
the Rollover Agreement, the Amended Notes, this Assignment, or in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights of a secured party under applicable law as if (and whether or not) the
Judgment and/or the Proceeds are collateral subject to Chapter 9 of the Texas
Business and Commerce Code.
6. This Assignment shall be binding upon and inure to the benefit of
Assignor, Collateral Agent and the Lenders and their respective successors and
assigns.
7. This Assignment shall be governed by and construed in accordance
with the laws of the State of Texas other than the conflicts of laws rules
thereof.
8. If any provision of this Assignment shall for any reason be held to
be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision of such document, and such
invalid, illegal or unenforceable provision shall be interpreted in such a
manner to render it valid, legal and enforceable and to most nearly achieve the
intents and purposes hereof.
9. Each party hereto agrees to promptly execute and deliver to the
other party hereto any and all further or additional instruments and documents
including, without limitation, Uniform Commercial Code-1 financing statements,
and take such further action as such other party may reasonably request in order
to fully effect the purposes of this Assignment. The provisions of this
Assignment shall continue in full force and effect notwithstanding any
commencement of a case under the federal bankruptcy code. Neither this
Assignment nor any of the terms hereof may be amended, waived, discharged,
modified or terminated in any respect unless such amendment, waiver, discharge,
modification, or termination is by an instrument in writing signed by each party
hereto.
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10. All notices, consents, approvals, or other communications required
or permitted to be given pursuant hereto shall be in writing and shall either
(i) be mailed by first-class United States mail, postage prepaid, registered or
certified with return receipt requested, (ii) delivered in person to the
intended addressee, (iii) sent by telecopy, or (iv) sent by express mail (such
as Federal Express or United States Express Mail). Notice mailed pursuant to
alternative (i) shall be effective three days after its deposit in the United
States mail. Notice given in any other manner shall be effective only on the
date actually received by the addressee. For purposes of notice, the addresses
of the parties shall be as follows:
To Assignor: Penn Octane Corporation
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, President
With a copy to: Coudert Brothers
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esquire
To Collateral Agent: Castle Energy Corporation
c/o CEC, Inc.
One Radnor Corporate Center
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxx
With a copy to: Duane, Morris & Heckscher, L.L.P.
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxx, Esquire
Each party shall have the right to change its address for notice to any other
location by the giving of 10 days' notice to the other party in the manner set
forth in this Paragraph.
11. Assignor may not assign, encumber or transfer, voluntarily or by
operation of law, its interest in the Judgment or the Proceeds without the prior
written consent of Collateral Agent, and any attempt to do so shall be void.
12. This Assignment may be executed in any number of counterparts, each
of which shall be deemed an original and all of which shall constitute one and
the same instrument.
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13. Assignor hereby acknowledges and agrees that this Assignment may be
recorded in accordance with Texas Property Code Section 12.014, and Collateral
Agent and the Lenders shall be entitled to all of the benefits of such statute.
IN WITNESS WHEREOF, this Assignment is executed as of the date first above
mentioned.
PENN OCTANE CORPORATION
(formerly International Energy Development Corp.)
By:
Name: Xxxxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
CASTLE ENERGY CORPORATION
for itself and as Collateral Agent for the Lenders
By:
Name: Xxxxxx Xxxxxx
Title: Chairman and Chief Executive Officer
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SCHEDULE I
LIST OF LENDERS
1. Castle Energy Corporation
2. Xxxxx Xxxxxx
3. Southwest Concept Inc.
4. Xxxxx X. Xxxxx, Xx.
5. Xxxxxxxxx Lufkin Xxxxxxxx Securities Corporation Custodian
SEP FBO Xxxxx X. Xxxxx XXX
6. Lincoln Trust Company FBO Xxxxx X. Xxxxxxx XXX
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THE STATE OF TEXAS :
:
COUNTY OF DALLAS :
This instrument was acknowledged before me on November, 1998 by Xxxxxx X.
Xxxxxxx, Chairman of the Board, President and Chief Executive Officer of Penn
Octane Corporation, Incorporated, a Delaware corporation (formerly International
Energy Development Corp.), on behalf of said corporation.
Notary Public in and for the
State of Texas
My Commission Expires:
______________
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THE STATE OF TEXAS :
:
COUNTY OF DALLAS :
This instrument was acknowledged before me on November, 1998, by Xxxxxx
Xxxxxx, Chairman of the Board and President of Castle Energy Corporation, a
Delaware corporation, on behalf of said corporation.
Notary Public in and for the
Commonwealth of Pennsylvania
My Commission Expires:
______________
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