ADDENDUM
                                    --------

     THIS  ADDENDUM  is entered into between PENN OCTANE CORPORATION, a Delaware
corporation  (hereinafter  referred to as "POC") and CPSC INTERNATIONAL, INC., a
Texas  corporation  (hereinafter  referred  to as "CPSC") and is intended to set
forth  additional  understandings  and agreements that have been reached between
the parties, as well as clarify that certain prior agreement entered into by the
parties  in  Houston  on  September  16,  1999  whereby  POC obtained options to
purchase  interests  in two 15-mile pipelines in the County of Cameron, State of
Texas,  and  two  7-mile  pipelines as well as a transfer terminal in Matamoros,
Tamaulipas,  Mexico  (hereinafter collectively referred to as the "Pipelines and
Transfer  Terminal  Assets"),  as  well  as  an interest in the underlying lease
documents  relating to the Pipelines and Transfer Terminal Assets (including all
amendments,  modifications,  extensions,  and renewals thereof) between CPSC and
POC  (hereinafter  referred  to  as  the  "CPSC Agreements" or the "Lease"). The
agreement  entered  into by the parties on 9/16/99 is hereinafter referred to as
the  "Houston  Agreement"  and  is attached hereto as Exhibit A and incorporated
                                                      ---------
herein  by  reference.

1.     Except  as  modified  by  this  Addendum, the terms used in this Addendum
shall  have  the  same  meanings  as  those  defined  in  the Houston Agreement.

2.     Except  as  modified by this Addendum, all of the terms and conditions of
the  Houston  Agreement  and  the  CPSC  Agreements,  including the POC purchase
options  contained therein, shall remain in full force and effect and are hereby
incorporated  by  reference.  A  dispute  has  arisen  between the parties as to
whether  those  certain  agreements  previously  entered into by Cowboy Pipeline
                                  =
Service  Company  and POC ( namely, the Consulting Services Agreement of May 29,
1998  and  the  Pipeline Project Management Services Agreement of July 20, 1998,
respectively),  were  superceded  by  the CPSC Agreements and is otherwise of no
further  force  or  effect. In an effort to move forward with this Addendum, the
parties  agree  to  try  and mediate in good faith a resolution of this dispute,
even  after  this Addendum has been executed. To the extent that the parties are
not  successful,  the issue shall be resolved by binding arbitration pursuant to
Section  20  of  this  Addendum.
-----------

3.         CPSC  hereby  grants  to  POC  the right, until December 15, 1999, to
purchase  a  fifty percent (50%) interest in the Pipelines and Transfer Terminal
Assets and the CPSC Agreements (hereinafter collectively referred to as the "POC
Interest")  for  a  total purchase price of $3,000,000. To exercise this option,
POC  must  open  an  escrow  account  into  which
$1,000,000  shall be deposited for the benefit of CPSC on or before December 15,
1999.  Said escrow account shall require the joint signatures of representatives
of  both  POC and CPSC for all disbursements made therefrom. For purposes of the
escrow account joint signatories,  the designated initial representative for POC
shall  be  Jerry Lockett. The designated initial representative of CPSC shall be
Eric  B.  Dubose. The remaining $2,000,000 option amount will be deposited on an


                                  Page 1 of 9
<PAGE>
as  needed  basis  for  Substantial  Completion  (as  defined  under  the  CPSC
Agreements)  ,  but  in no event shall be deposited later than January 17, 2000,
subject  to  the  provisions  of  Section  6  of  this Addendum.  CPSC agrees to
===============================================================
cooperate  with  POC  in  raising  the  additional  $2,000,000,  including  the
subordination  of  a  fifty percent (50%) interest in the Pipelines and Transfer
Terminal  Assets  and CPSC Agreements to the extent reasonably necessary for POC
to  raise  this  additional sum.  The parties agree that the $3,000,000 shall be
distributed  from the escrow account solely for purposes of reaching Substantial
Completion  (as that term is defined under the CPSC Agreements) of the Pipelines
and  Transfer  Terminal  Assets, and that following POC's payment into escrow of
the  $3,000,000,  POC  shall have no further obligation to contribute toward the
Substantial  Completion of the Pipelines and Transfer Terminal Assets or to make
any further advancements or investments in same. Until such time as POC pays the
$3,000,000 purchase price for the POC Interest, or otherwise obtains an interest
in  the  Pipelines  and  Transfer  Terminal Assets and CPSC Agreements under the
Houston  Agreement  or  the  CPSC  Agreements,  POC shall not be entitled to any
rental  income  under the CPSC Agreements. CPSC warrants and represents that the
$3,000,000  will  be sufficient to reach Substantial Completion of the Pipelines
and  Transfer  Terminal  Assets  and  to  the  extent  additional  monies  prove
necessary, CPSC will immediately provide said funds without delaying Substantial
Completion.  Once  the  purchase price has been paid, the parties agree that POC
shall  be  entitled  to  receive forty percent (40%) of the gross monthly income
generated  by  the  Pipelines  and Transfer Terminal Assets, which gross monthly
income shall not be subject to offset or deduction, consistent with Section 9 of
                                                                    ---------
this  Addendum.  In addition to the foregoing, and provided POC successfully and
timely  raises  the  $3,000,000  purchase price for the POC Interest (subject to
                                                                     ===========
Section  6  of  this  Addendum),  CPSC  hereby also grants to POC a one (1) year
===============================
option, commencing on the date on which the above escrow is opened,  to purchase
the  remaining fifty percent (50%) of the Pipelines and Transfer Terminal Assets
and CPSC Agreements from CPSC for the sum of $6,000,000 (hereinafter referred to
as  the  "POC  Option  Interest")  plus  the following consideration: (i) to the
extent  POC  exercises the POC Option within six (6) months of the date on which
escrow  is opened, CPSC or its assigns shall also be granted 200,000 warrants of
POC  stock, with a three (3) year life from issuance and a strike price of $4.00
per  share;  or  (ii)  to  the  extent  POC exercises the POC Option at any time
following  six  (6)  months  from  the  date on which escrow is opened until the
one-year  anniversary  date  of  the  opening  of  escrow, CPSC shall be granted
300,000  warrants  of  POC stock, with a three (3) year life from issuance and a
strike  price of $4.00 per share. POC shall have the option of requiring CPSC to
exercise the foregoing warrant, if it has not already done so, when and if POC's
shares  reach  $6.00  per  share; provided, however, that POC shall refrain from
making  the foregoing call for CPSC to exercise its warrants for a period of one
(1)  year  from the execution date of this Addendum.  To the extent POC advances
additional  funds  over  the  $3,000,000  paid  pursuant  to  this  Addendum for
Substantial  Completion after the date of this Addendum, including advances made
after  Substantial Completion occurs, whether through the escrow account or not,
POC  shall have the option to offset that amount against future rent payments or
the  $6,000,000  POC Option Interest or against any other option granted by CPSC
to POC pursuant to the Houston Agreement and/or the CPSC Agreements or to demand
reimbursement  from  CPSC  pursuant to Section 12 of this Addendum. In the event


                                  Page 2 of 9
<PAGE>
POC  does  not  pay its $3,000,000 option fee as set forth in this Section 3, it
                                                                   ---------
shall  retain  all  other  rights  and  options  to purchase as set forth in the
Houston  and  the  CPSC  Agreements.

4.     In the event of a default by POC under its obligations as a lessee in the
CPSC  Agreements,  and  except as is otherwise in accordance with the rights and
remedies  granted  POC under those agreements, POC, pursuant to its rights under
the  Houston  Agreement,  hereby  agrees  not  to  take  any action, directly or
indirectly,  as an owner of the POC Interest, to prevent CPSC from enforcing its
rights  and remedies against POC in the event of a default by POC under the CPSC
Agreements.  Nothing  contained  herein  shall  preclude  POC, as a lessee, from
asserting any defenses or counter claims it may have in response to CPSC's claim
of  default.

5.     Except  as  otherwise  specifically  agreed  to  in  writing  between the
parties,  CPSC  hereby  agrees  that  any  and  all  sums paid by POC to CPSC in
exercising any of the options set forth in the Houston Agreement or CPSC's share
of  any rent paid by POC pursuant to the CPSC Agreements, shall first be applied
by  CPSC to reduce CPSC's outstanding obligations, if any, owed to any financial
institution  providing financing or contractors or vendors providing services or
materials  in  connection  with  the construction of the  Pipelines and Transfer
Terminal  Assets  which  are  the  subject  of  the  CPSC  Agreements.

6.     CPSC  warrants,  represents,  and  agrees  that  CPSC shall convey to POC
and/or  its  assigns  clear,  good,  and  marketable  title to the Pipelines and
Transfer  Terminal  Assets and CPSC Agreements, which shall include all permits,
easements,  and  rights  of entry required or necessary for the operation of the
Pipelines  and  Transfer  Terminal  Assets  and  POC's  and/or its assigns' full
enjoyment  of  its  share  of  the  Pipelines  and  Transfer Assets and the CPSC
Agreements,  free  and  clear  of all liens, charges, and other encumbrances. To
the extent that CPSC cannot provide proof reasonably satisfactory to POC and POC
                                          ==========
's  counsel  that  CPSC will be in a position to transfer these interests to POC
and/or  its assigns in accordance with the foregoing, the parties agree that POC
shall  be  under  no  obligation to pay, and further, that all POC options under
this  Addendum, the CPSC Agreements, and/or the Houston Agreement shall continue
in effect until forty five (45) days after such time as CPSC is in a position to
convey  clear title to POC and/or its assigns in accordance with this Section 6.
                                                                      ---------
CPSC  agrees  to  deliver  no later than 12/31/99, in recordable form reasonably
      ==========           ======================                     ==========
satisfactory  to  POC  and  POC's  counsel, a document of conveyance adequate to
                                                                     ===========
convey  to  POC  and/or  its  assigns  clear,  good, and marketable title to the
================================================================================
Pipelines  and  Transfer  Terminal  Assets  and CPSC Agreements pursuant to this
================================================================================
Section  6,  free and clear of all liens, charges, and other encumbrances. Until
=========================================================================  =====
such  time  as  POC  and/or  its  counsel  receives  an  appropriate document of
================================================================================
conveyance  consistent  with  the foregoing, POC shall be under no obligation to
================================================================================
advance  the  additional  $2,000,000  to  CPSC  pursuant  to  Section  3 of this
================================================================================
Addendum.  In  addition to this document of conveyance, CPSC agrees to cooperate
========
with  POC  and/or  its assigns in executing whatever additional documents may be
reasonably  necessary  to  effectuate  a  legal  transfer  of  the Pipelines and


                                  Page 3 of 9
<PAGE>
Transfer  Terminal Assets and the CPSC Agreements to POC and/or its assigns upon
POC's  request.  CPSC  shall  fully  (100%) indemnify, defend, and hold POC, its
affiliates,  shareholders,  directors,  officers, agents, and attorneys harmless
from  and  against  any  and  all  third  party  claims, demands, or liabilities
incurred  or  arising  prior to Substantial Completion against the Pipelines and
Transfer  Terminal Assets and the CPSC Agreements. In connection therewith, CPSC
shall  reimburse  POC  for all expenses (including attorneys' fees and expenses)
incurred  in  connection  with the investigation of, preparation for, or defense
of,  any  such  claim,  whether  or  not  POC is actually made a party. Upon POC
obtaining  a fifty percent (50%) interest in the Pipelines and Transfer Terminal
Assets,  CPSC  and  POC  shall  jointly (50/50)  indemnify, defend, and hold the
other,  its  affiliates,  shareholders,  directors,  officers,  agents,  and
attorneys, harmless from and against any and all third party claims, demands, or
liabilities incurred or arising after Substantial Completion with respect to the
Pipelines  and  Transfer  Terminal Assets and the CPSC Agreements. In connection
therewith,  each  party  shall  bear  fifty  percent  (50%) of the other party's
expenses  (including  attorneys'  fees and expenses) incurred in connection with
the  investigation  of, preparation for, or defense of, any such claim. Upon POC
                                                                        ========
obtaining  a  one  hundred percent (100%) interest in the Pipelines and Transfer
================================================================================
Terminal  Assets, POC shall fully (100%)  indemnify, defend, and hold CPSC,  its
================================================================================
affiliates,  shareholders,  directors, officers, agents, and attorneys, harmless
================================================================================
from  and  against any and all third party claims, demands, or liabilities based
================================================================================
upon  events  occurring  after POC's acquisition of a one hundred percent (100%)
================================================================================
ownership  interest  in  the Pipelines and Transfer Terminal Assets and the CPSC
================================================================================
Agreements.  Notwithstanding  the foregoing, however, neither CPSC nor POC shall
===========
be  obligated to indemnify the other pursuant to this Section 6 for claims based
                                                      ---------
upon  the  other party's breach of contract, mismanagement, intentional, wilful,
or reckless conduct, negligence, and/or omissions, nor shall POC be obligated to
                                                   =============================
indemnify  CPSC  for  any  claims  based  upon  faulty, inadequate, or defective
================================================================================
construction  of  the Pipelines and/or Transfer Terminal Assets. Within ten (10)
===============================================================
days  of  the  execution  of  this Addendum, CPSC shall deliver to POC and POC's
counsel,  letters from all financial institutions providing financing to CPSC in
connection  with the construction of the Pipelines and Transfer Terminal Assets,
including  but  not limited to Bank One, and all other entities to whom CPSC has
granted  a  security interest in the Pipelines and the Transfer Terminal Assets,
acknowledging that said financial institutions do not have as of the date of the
letter,  any  outstanding  claims  against  the  Pipelines and Transfer Terminal
Assets  and  the  CPSC  Agreements and further, that said financial institutions
waive  any  and  all future claims in said assets pursuant to this Addendum, the
Houston  Agreement,  and/or  the CPSC Agreements.  CPSC agrees that it shall not
encumber  the  Pipelines  and  Transfer  Terminal Assets and the CPSC Agreements
absent POC's prior written approval.  In addition to the foregoing, in the event
POC and/or its assigns ever acquires 100% of the Pipelines and Transfer Terminal
Assets  and  CPSC  Agreements  , POC and/or its assigns shall have the option of
also  requiring  CPSC  to  transfer  to  POC  and/or  its assigns 100% of CPSC's
outstanding  shares of stock in consideration of the POC's (and/or its assigns')
payment of $1.00, provided, however, that CPSC shall be entitled to make a third
party  transfer  of  any warrants granted pursuant to Section 3 of this Addendum
                                                      ---------
prior  to  the  transfer  of  CPSC's  outstanding  shares.


                                  Page 4 of 9
<PAGE>
7.     The  "Lease  Effective Date" as defined under the CPSC Agreements, and as
used  in  the Operating Agreement which is Exhibit C to the CPSC Agreements,  is
                                           ---------
hereby  clarified  to reflect that it commences on that day on which Substantial
Completion  occurs,  rather  than that day which is twelve (12) months after the
                     ------  ----
first  day  of  the  month  that  Substantial  Completion  occurs.

The  parties  acknowledge  that  pursuant  to  the  CPSC  Agreements, CPSC had a
Substantial  Completion deadline of May 1, 1999, which deadline has not yet been
met  as  of  the  execution  date  of  this  Addendum.  The parties hereby waive
compliance  with  the  original  May  1,  1999  Substantial  Completion deadline
provided  that Substantial Completion is obtained on or before February 1, 2000.
--------  ----
CPSC  also  waives  any and all current claims of breach it may have against POC
in  connection  with or arising under the CPSC Agreements up to the date of this
Addendum,  including,  without  limitation, POC's inability to deliver to CPSC a
subordination  agreement  from  RZB  Bank  consistent  with the CPSC Agreements.

8.     The "Lease Term" as defined under the CPSC Agreements, and as used in the
Operating  Agreement  which  is  Exhibit  C  to  the CPSC Agreements,  is hereby
                                 ----------
clarified  to reflect that it shall terminate at the end of the fifteenth (15th)
lease year or such earlier date that POC timely exercises its options under this
Addendum,  the Houston Agreement, and/or the CPSC Agreements and acquires a 100%
interest  in  the  Pipelines and Transfer Terminal Assets from CPSC. In no event
shall  the  Lease Term expire earlier than the end of the 15th lease year absent
POC's  exclusive  ownership  of  the  Pipelines  and  Transfer  Terminal Assets.

9.     CPSC  shall  continue  to  be  the  Initial Operator pursuant to the CPSC
Agreements  and to perform all functions and responsibilities and bear all costs
and  expenses, including insurance and taxes,  associated with being the Initial
Operator  until  such  time  as  POC  owns  a 100% interest in the Pipelines and
Transfer  Terminal  Assets.   CPSC  represents  and  warrants  that  the minimum
monthly income generated by the POC Interest (provided that the lessee is not in
monetary  default  in  making the lease payments) shall be $62,800.  The parties
further agree that such operating costs and expenses shall not be used to offset
POC's  right  to  receive  the  greater of $62,800 or forty percent (40%) of the
monthly  gross  income generated from the Pipelines and Transfer Terminal Assets
pursuant  to  Section  3  of  this  Addendum  .
              ----------

10.     With  regard  to  the two 7-mile pipelines and the LPG transfer terminal
being  constructed  by  CPSC  in  Matamoros,  Tamaulipas,  Mexico  (hereinafter
collectively referred to as the "Mexico Facilities"), the parties hereby confirm
and  agree  that CPSC's construction obligations for the Mexico facilities shall
be  no  greater  and  no  less  than those anticipated and specified in the CPSC
Agreements.

11.     At  POC's  option, POC may elect to offset the monthly income guaranteed
to POC under Paragraph 1 of the Houston Agreement and Section 9 of this Addendum
             -----------                              ---------
against  its  monthly  rental  obligations  to  CPSC  under the CPSC Agreements,
remitting  the  difference  where  the monthly rental amount exceeds the monthly


                                  Page 5 of 9
<PAGE>
guaranteed  income  to CPSC. As long as POC is not in monetary default under the
Lease,  CPSC  shall  not  have  the option of withholding any monthly guaranteed
income  payments owed to POC, as an owner of the Pipelines and Transfer Terminal
Assets and the CPSC Agreements, against POC's  non-monetary obligations owing to
CPSC  under  the  Lease.

12.     To  the  extent  that  POC has advanced or will advance sums towards the
construction  of  the Pipelines, Transfer Terminal, and/or LPG transfer terminal
on  either  the U.S. or Mexico side in addition to the $3,000,000 required to be
provided under Section 3 of this Addendum, CPSC agrees to reimburse POC for such
               ---------
advancements  within  thirty  (30)  days  of  invoicing  by  POC,  and  that any
advancements  not so timely reimbursed shall bear interest on the unpaid balance
at  Bank  of  America's  prime  rate  plus  1%. CPSC further agrees that, to the
extent  that  any such advancements remain unreimbursed and due and owing to POC
at the time that POC exercises any of its options pursuant to this Addendum, the
CPSC  Agreements,  and/or the Houston Agreement, then, consistent with Section 3
of  this  Addendum, POC, at POC's election, may apply such unpaid amounts to any
purchase  or option exercise price. In the alternative, POC shall have the right
to  apply  any sums not timely reimbursed by CPSC pursuant to this Section 12 to
                                                                   ----------
any  rental obligations then due and owing by POC to CPSC pursuant to the Lease.
These  remedies  are  in  addition  to  any  other  remedies POC may be entitled
pursuant  to  law.  POC  agrees  to  provide  to  CPSC  upon request appropriate
reasonable  documentation  of  all expenses for which reimbursement hereunder is
sought.

13.     CPSC  hereby  agrees  to partially release collateral POC has granted to
CPSC to secure its rental obligations under the CPSC Agreements in proportion to
POC's  percentage  ownership  interest  in  the  Pipelines and Transfer Terminal
Assets to the extent that POC  timely exercises its options under this Addendum,
the  Houston  Agreement  ,and/or  the CPSC Agreements. Thus, for example, to the
extent  that  $1,000,000  worth  of collateral has been pledged by POC to secure
its  obligations  to  CPSC  under the Lease, upon acquisition of a fifty percent
(50%) interest in the Pipelines and Transfer Terminal Assets and CPSC Agreement,
POC  shall  be  entitled  to have fifty percent (50%), or $500,000 worth of said
collateral,  released  by  CPSC. In connection with any such release, POC agrees
that  all  of  the  remaining  POC  pledged  collateral  ($500,000  worth in the
preceding  example),  shall secure POC's remaining obligations to CPSC under the
Lease  and  that  said  collateral  shall  not be applied to secure POC's lessor
interest.  The  parties  agree  to work in good faith and in a prompt and timely
manner  to  mutually  identify  the collateral to be released and to effectively
consummate  such  releases.

14.     The  parties  hereby  agree  that  POC's  post-closing  indemnification
obligations  (as  the  term "Closing" was redefined under the Houston Agreement)
pursuant  to  Section  8.1  of  the CPSC Agreements, which shall arise only upon
              ------------
POC's  acquisition  of  an  ownership  interest in the POC Interest, shall be in
proportion  to POC's percentage ownership interest in the Pipelines and Transfer
Terminal  Assets and CPSC Agreements. For example, to the extent that POC owns a
50% interest, then its indemnification obligations shall only be relative to the
50%  interest  it  has  acquired.


                                  Page 6 of 9
<PAGE>
15.     POC shall be under no obligation to assign or pledge its judgment in the
International  Energy  Development  Corporation  case, also known as Penn Octane
                                                                     -----------
Corporation v. International Bank of Commerce Brownsville (197th District Court,
---------------------------------------------------------
Cameron  County,  Case  No.  94-08-4008-C) to CPSC except as provided under this
Section  15,  and  then it shall only be obligated to assign that portion of the
-----------
judgment  necessary to meet the balance then owing toward the appropriate unpaid
option  purchase  price.  It is the intention of the parties that, to the extent
that POC fails to timely exercise its option under Section 3 of this Addendum to
                                                   ---------
acquire  a  fifty percent (50%) interest in the POC Interest or fails to come up
with  the  $3,000,000  purchase  price  on  a timely basis, then POC shall still
retain an option to acquire a thirty percent (30%) interest in the Pipelines and
Transfer  Terminal Assets and CPSC Agreements pursuant to the Houston Agreement.
To  the  extent,  however,  that  POC  does  not  pay  the  $3,000,000  option
consideration  when  due  under the Houston Agreement, and provided that at that
time  the  judgment  in  favor  of  POC  in  International  Energy  Development
                                             ----------------------------------
Corporation  v.  International  Bank  of  Commerce-Brownsville  has  not  been
--------------------------------------------------------------
satisfied,  CPSC  shall  have  the  right  to  either:  (i)  accept  from POC an
assignment  of  the  unpaid purchase price portion of the judgment as payment in
full  for  the  remainder  of  the  purchase  price  and, upon collection of the
judgment,  remitting  any  sums  in  excess of unpaid purchase price back to POC
,but  retaining  all  interest  on  the  unpaid  purchase  price pursuant to the
judgment  interest  rate accruing from the date of transfer of the judgment from
POC  to  CPSC  until  the  judgment  is  collected; or (ii) treating the Houston
Agreement as null and void between POC and CPSC, thereby entitling CPSC to enter
into  other  agreements  covering  the  same  subject  matter with third parties
interested  in obtaining interests in the Pipelines and Transfer Terminal Assets
and  CPSC Agreements.  To the extent that POC is only able to raise a portion of
the  $3,000,000  required  for  either  the  fifty  percent (50%) interest under
Section  3  of  this  Addendum  or  the  thirty percent (30%) interest under the
----------
Houston Agreement and is therefore unsuccessful in obtaining any interest in the
Pipelines  and Transfer Terminal Assets and the CPSC Agreements, POC shall still
have  the  right  to  reimbursement  from  CPSC  pursuant  to Section 12 of this
                                                              ----------
Addendum  for all monies to-date advanced by POC to CPSC towards the purchase of
the  fifty  percent  (50%) interest or the thirty percent (30%) interest, as the
case may be.  Any sum advanced by POC towards the purchase of an interest in the
Pipelines  and  Transfer  Terminal  Assets and the CPSC Agreements that does not
result in POC obtaining an interest in same may also be applied by POC, at POC's
option,  to the exercise of any other option or purchase right it may have under
the  Houston  and  CPSC  Agreements.

16.      This  Addendum  may  not  be  amended,  altered,  or modified except in
writing  signed  by  the  parties  hereto.

17.      This  Addendum  shall be binding upon and shall inure to the benefit of
permitted  successors  and  assigns  of  the  parties  hereto.


                                  Page 7 of 9
<PAGE>
18.     In  the event of the bringing of any action or suit by a party hereto by
reason  of any breach of any of the covenants, agreements, or provisions arising
out  of  this  Addendum,  the  prevailing party shall be entitled to recover all
costs  and  expenses  of  that  action  or  suit,  at trial or on appeal, and in
collection  of  judgment,  including reasonable attorneys' fees, accounting, and
other  professional  fees  resulting  therefrom.

19.     Except  for  POC's initial taking of title to the Pipelines and Transfer
Terminal  Assets  and  the  CPSC Agreements pursuant to Section 6, this Addendum
                                                        ---------
shall  not be assignable by either party hereto absent the prior written consent
of  the  other  party.

20.     Any  controversy  or claim (other than claims for preliminary injunctive
relief  or  other pre-judgment or equitable remedies) arising our of or relating
to  this Addendum, including any controversy or claim as to the arbitrability of
any  controversy  or  claim  and  any  claim for rescission, shall be settled by
binding  arbitration in Houston, Texas, in accordance with the then rules of the
American  Arbitration  Association,  and judgment upon an award rendered in such
arbitration  may  be  entered  in  any court having proper jurisdiction thereof.

     BOTH  PARTIES  HAVE  READ  AND  UNDERSTAND THIS SECTION 20, WHICH DISCUSSES
                                                     ----------
ARBITRATION.  THE  PARTIES  UNDERSTAND THAT BY SIGNING THIS ADDENDUM, THEY AGREE
TO  SUBMIT  ANY  FUTURE CLAIMS ARISING OUT OF RELATING TO, OR IN CONNECTION WITH
THIS  ADDENDUM,  OR  THE  INTERPRETATION,  VALIDITY,  CONSTRUCTION, PERFORMANCE,
BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE  CONSTITUTES  A WAIVER OF EACH PARTIES' RIGHT TO A JURY TRIAL AND RELATES
TO  THE  RESOLUTION  OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP
BETWEEN  CPSC  AND  POC.  IN THE EVENT ANY DISPUTE IS IN EXCESS OF $10,000, THEN
EACH  OF  THE PARTIES SHALL BE ENTITLED TO PURSUE FORMAL DISCOVERY TO THE EXTENT
THEY  WOULD  OTHERWISE  BE ENTITLED IF THE DISPUTE WAS BEFORE THE FEDERAL UNITED
STATES  DISTRICT  COURT  IN  HOUSTON.

21.      This  Addendum  may  be  executed  in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and  the  same  instrument.

22.     The  parties  hereby  clarify  that for purposes of notice under Section
                                                                         -------
10.3  of  the  CPSC Agreements, and wherever notice is otherwise required by any
----
other  agreement  between  POC and CPSC, notice to CPSC shall be sent to Eric B.
Dubose,  President of CPSC, rather than to A.C. Dubose, at the address set forth
under  Section  10.3,  and  that  notice to POC shall be sent to Jerome Richter,
       -------------
President  of  POC, at the following new California address: 77530 Enfield Lane,
Building  D,  Palm  Desert,  California  92211.


                                  Page 8 of 9
<PAGE>
     EFFECTIVE  the  ______  day  of  _________________,  1999.

"POC"                            "CPSC"
PENN  OCTANE  CORPORATION,       CPSC  INTERNATIONAL,  INC.,
a  Delaware  corporation         a  Texas  corporation
By: /s/ Jerome Richter           By: /s/ Eric B. Dubose
    -------------------------        -----------------------
    Jerome  Richter                  Eric  B.  Dubose
Title:     President             Title:  President

By:__________________________    By:_______________________
Title:_______________________    Title:____________________


                                  Page 9 of 9
<PAGE>