November 12, 1996
LETTER OF ASSIGNMENT
This Letter of Assignment the ("Assignment") is being entered into between
Xx.Xxxxxxx Xxxxxxxx ("Assignor") and Penn Octane Corporation ("Assignee").
Whereas Assignor has been granted a XXXX Dealership the ("Dealership") from
Grupo Xxxx, S.A. de C.V. ("Xxxx"), and Assignee wishes to purchase the rights
to the Dealership.
Assignor confirms it has obtained the full rights to a newly granted Xxxx
Dealership. The Dealership will be operational once Assignor has identified a
suitable location for the Dealership which is approved by Xxxx and Assignor
demonstrates to Xxxx that it has met the required working capital requirements
(approximately Ps. 4,000,000). The Dealership has been granted for an
unlimited period of time and may not be revoked if Assignee complies with the
terms of dealerships established by Xxxx. There are no other contingent
obligations regarding the dealership which may affect the granting of the
Dealership from Xxxx. The Assignee is aware that the Dealership will need to
be constructed and that costs associated with purchase and/or rental of
property and construction of facility (collectively the "Construction") are
responsibility of Assignee. Assignor estimates that the Construction will be
approximately Ps. 4,000,000.
Assignor further represents that it has the rights to assign the Dealership to
the Assignee.
PURCHASE PRICE
Assignor agrees to sell 100% of the rights of the Dealership of which 80% will
be owned by Assignee and 20% will be owned by three other individual parties
equally the ("Individuals"), including the Assignor in exchange or the
following:
Assignor will receive the sum of $75,000 as follows:
1) $25,000 week of November 19, 1996
2) $50,000 payable $10,000 per month for 10 months
Assignor will receive 100,000 stock purchase warrants of Penn Octane
Corporation the ("Warrant"). The Warrants will be exercised at a price of
$3.00 per share and will expire 24 months from the date of this Assignment.
Assignor will receive rights to obtain future warrants in Penn Octane
Corporation based on an incentive program which will be developed within 90
days from the date of this Assignment among Penn Octane Corporation and the
individuals, and will be subject to Penn Octane Corporation's Board approval.
Assignor will receive expense allowance of USD $5,000.00 payable in arrears
from the date of this Assignment. This monthly allowance is separate from any
other arrangements between Assignor and Assignee.
Assignor will be appointed as a director for Xxxx Dealership. (Can't read
this sentence)
ASSISTANCE TO FULFILL DEALERSHIP RESPONSIBILITIES
Assignor will cooperate with Assignee to ensure that all requirements of the
Dealership are met and complied with: (???)
NON COMPETE
Assignor agrees that any other future opportunities connected with Xxxx and/or
the dealership will be considered part of this Assignment.
CONFIRMATION FROM XXXX
Upon execution of this Assignment, Assignor will present Xxxx with details of
the Assignment and will obtain correspondence from Xxxx recognizing the
Assignment.
By signing below, all parties agree to the terms of this Assignment.
By: By:
Xxxx Dealership Penn Octane Corporation
/S/ XXXXXXX XXXXXXXX /S/ XXXXX XXXXXXX
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Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxx, President
Assignor Assignee
Dated: Dated: November 15, 1996
