COMMERCIAL LEASE


     This  lease, dated for reference purposes only this 28 day of May, 1998, is
made  between NINE-C CORPORATION (the "Landlord") and  Penn Octane Corporation &
J.B.Richter,  an  individual  (the  "Ten-ant").

     1.     PREMISES.

     1.01  Description.  Landlord  hereby leases to Tenant and Tenant hires from
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Landlord on the terms, covenants and conditions set forth herein, those premises
specifically  known  as Suite  240 designated and identified by crosshatching on
Exhibit  "A"  attached  hereto,  (the  "Leased  Premises"),  and incorporated by
reference herein.  The Leased Premises, approximately 1325 square feet of usable
space,  and  approximately  1559 square feet of rentable space (by BOMA Modified
Standards),  is  located  at  900 Veterans Boule-vard, Redwood City, Califor-nia
(the "Building").  The Building is a part of a commercial project which includes
the  Building,  an adjacent parking lot and parking structure and the underlying
real  property  (the  "Project").

     1.02  Confirmation  of  Terms.  Within  thirty  (30)  days  after  Landlord
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delivers  a fully executed copy of this Lease to Tenant, Tenant's architect may,
at  Tenant's expense, verify the rentable area contained in the Leased Premises.
The  term  "rentable  area"  as  used  in  this Lease means the rentable area as
determined  by the most recent version of the BOMA (Building Owners and Managers
Association International) American National Standard.  If tenant's verification
of the rentable area differs from the rentable area specified in Paragraph 1.01,
then  the  parties  shall  immediately  execute "Confirmation of Lease Terms" to
confirm  the  rentable  area,  the  Base Rent, Tenant's Pro Rata Share and other
changes  that  are  based  on  the  rentable  area  of  the  Premises.

     2.     BASE  RENT.

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     2.01   Tenant  agrees  to  pay  Landlord  as base rent (Base Rent), without
notice,  demand, deduction, or offset, the monthly sum of $4910.85 for the first
12  months, adjusted as provided in Paragraph 2.03 for all months thereafter, in
advance  on  or before the first day of each and every successive calendar month
during  the  term  hereof,  except  that last month's deposit shall be paid upon
execution  hereof.  Credit will be given for Tenant's current deposit.  The rent
shall  commence  on  the First day of July, 1998 (the "Commencement Date").  All
payments  to  Landlord under this Lease shall be paid to Landlord at the address
for  notice  set  forth in paragraph 32.15, or at such other address provided to
Tenant  by  Landlord  in  writing  from  time  to  time.

     2.02   Rent  for  any  period  which  is for less than one month shall be a
prorated  portion  of  the  monthly  rental  based upon a thirty (30) day month.
Tenant  acknowledges  that  late  payment by Tenant to Landlord of rent or other
sums  due  hereunder will cause Landlord to incur certain costs not contemplated
by  this  Lease,  the  exact  amount  of  which would be extremely difficult and
impractical  to  ascertain.  Such  costs  include,  but  are  not  limited  to,
processing  and  accounting  charges,  and  late charges which may be imposed on
Landlord  by  the  terms  of  any  trust  deed  covering  the  Leased  Premises.
Therefore, in the event Tenant shall fail to pay any installments of rent or any
sum  due  hereunder  within  five  (5)  days  after  receiving  notice  of  such
delinquency, Tenant shall pay to Landlord as additional rent a late charge equal
to  TEN  percent  (10%)  of each such installment or other sum.  A $15.00 charge
will  be paid by the Tenant to the Landlord for each returned check, in addition
to  the  late  charge.

     2.03  INTENTIIONALLY  OMMITTED

     3.     PROJECT  OPERATING  COSTS.

     3.01(a)   In  order  that  the  Rent  payable  during  the Term reflect any
increase  in  Project Operating Costs (described below), Tenant agrees to pay to
Landlord  as  Rent,  Tenant's Proportionate Share (defined in Paragraph 3.02) of
all increases in costs, expenses and obligations attributable to the Project and
its  operation,  all  as  provided  below.

         (b)   If,  during  any Calendar year during the Term, Project Operating
Costs exceed the Project Operating Costs for the calandar year of the Occupancy,
Tenant  shall  pay  to  Landlord,  in  addition  to the Base Rent and all of the
payments  due  under this Lease, an amount equal to Tenant's Proportionate Share
of such excess Project Operating Costs in accordance with the provisions of this
Paragraph  3.01(b).

         (c)   The  term "Project Operating Costs" shall include all those items
described  in  the  following  subparagraphs  (1)  and  (2).

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     (1)  All  taxes,  assessments,  water  and  sewer charges and other similar
governmental  charges  levied on or attributable to the Building or Project as a
whole  or their operation, including without limitation, (i) real property taxes
or  assessments  levied  or assessed against the Building or Project as a whole,
and  (ii)  assessments  or  charges  levied  or assessed against the Building or
Project  as  a whole by any redevelopment agency; but excluding any tax measured
by gross rentals received from the leasing of the Premises, Building or Project.

     (2)  Operating  costs incurred by Landlord in maintaining and operating the
Building  and Project, including without limitation the following:  costs of (i)
utilities;  (ii) supplies; (iii) insurance (including public liability, property
damage,  earthquake,  and  fire  and  extended  coverage  insurance for the full
replacement  costs  of  the  Building and Project as required by Landlord or its
lenders  for  the  Project;  (iv)  services  of  independent  contractors;  (v)
compensation (including employment taxes and fringe benefits) of all persons who
perform  duties connected with the operation, maintenance, repair or overhaul of
the  Building  or  Project,  and  the  HVAC system, equipment, improve-ments and
facilities  located  within the Project, including without limitation engineers,
janitors,  painters,  floor  waxers,  window  washers,  security  and  parking
personnel,  landscapers and gardeners (but excluding persons performing services
not  uniformly  available  to  or  performed  for  substantially all Building or
Project  tenants);  (vi)  operation  and  maintenance of a room for delivery and
distribu-tion  of  mail to tenants of the Building or Project as required by the
U.S.  Postal Service (including, without limitation, an amount equal to the fair
market rental value of the mail room premises); (vii) management of the Building
or Project, whether managed by Landlord or an independent contractor (including,
without  limita-tion,  an  amount  equal to the fair market value of any on-site
manager's  office, but excluding any commission or fee for leasing or collecting
rents);  (viii)  rental expenses for (or a reasonable depreciation allowance on)
personal  property used in the main-tenance, operation or repair of the Building
or  Project:  (ix)  costs,  expenditures or charges (whether capitalized or not)
required  by  any governmental or quasi-governmental authority; (x) amortization
of capital expenses (including financing costs) (1) required for the Building as
a  whole  by  a  governmental  entity  for  energy  conservation  or life safety
purposes,  or  (2)  made by Landlord to reduce Project Operating Costs; and (xi)
any  other  costs  or  expenses  incurred  by  Landlord under this Lease and not
otherwise  reimbursed  by  tenants  of  the  Project.

     (3)  Project  Operating  Costs shall not include costs or expenses only for
the  benefit  of  other  tenants.

     (d)     Tenant's  Proportionate  Share  of Project Operating Costs shall be
payable  by  Tenant  to  Landlord  as  follows:

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     (1)     Beginning  with  the  second  year  of  the  term and for each year
thereafter  ("Comparison  Year"),  Tenant  shall pay Landlord an amount equal to
Tenant's Proportionate Share of the Project Operating Costs incurred by Landlord
in the Comparison Year which exceeds the total amount of Project Operating Costs
payable  by Landlord for the first year of the term.  This excess is referred to
as  the  "Excess  Expenses."

     (2)     To  provide  for current payments of Excess Expenses, Tenant shall,
at  landlord's  request,  pay as additional rent during each Comparison Year, an
amount  equal  to  Tenant's  Proportionate  Share of the Excess Expenses payable
during  such  Comparison Year, as estimated by Landlord from time to time.  Such
payments  shall  be made in monthly installments, commencing on the first day of
the month following the month in which Landlord notifies Tenant of the amount it
is  to  pay  hereunder and continuing until the first day of the month following
the  month  in  which  Landlord  gives  Tenant  a new notice of estimated Excess
Expenses.  It  is  the  intention  hereunder  to  estimate from time to time the
amount  of  the  Excess  Expenses  for  each  Comparison  Year  and  Tenant's
Proportionate  Share  thereof,  and  then to make an adjustment in the following
year  based  on  the  actual  Excess Expenses incurred for that Comparison Year.

     (e)     On  or  before the 90th day of each Comparison Year after the first
Comparison  Year (or as soon thereafter as is practical), Landlord shall deliver
to  Tenant  a statement setting forth Tenant's Proportionate Share of the Excess
Expenses  for the preceding Comparison Year.  If Tenant's Proportionate Share of
the actual Excess Expenses for the previous Comparison Year exceeds the total of
the  estimated  monthly  payments made by Tenant for such year, Tenant shall pay
Landlord the amount of the deficiency within ten (10) days of the receipt of the
statement.  If  such  total  exceeds  Tenant's Proportionate Share of the actual
Excess  Expenses  for  such  Comparison Year, then Landlord shall credit against
Tenant's  next ensuing monthly installment(s) of additional rent an amount equal
to  the  difference  until  the  credit  is  exhausted.  If a credit is due from
Landlord  on  the  Expiration  Date, Landlord shall pay Tenant the amount of the
credit.  The  obligations of Tenant and Landlord to make payments required under
this  Paragraph  3.01  shall  survive  the  Expiration  Date.

     (f)     Tenant's  Proportionate  Share of Excess Expenses in any Comparison
Year  having  less  than  365  days  shall  be  appropriate-ly  prorated.

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     (g)  If  any  dispute  arises  as  to the amount of any additional rent due
hereunder, Tenant shall have the right after reasonable notice and at reasonable
times  to  inspect Landlord's accounting records at Landlord's accounting office
and,  if  after  such  inspection Tenant still disputes the amount of additional
rent  owed,  Landlord  and  Tenant  shall  refer  the  dispute to an independent
certified  public  accountant  selected  by them for certification of the proper
amount.  Such  accountant's  certification of the amount and direction as to the
allocation  between  Landlord  and  Tenant of the cost of certification shall be
final  and  conclusive.

     3.02          Tenant's  Proportionate share shall be 2.78%, the usable area
of  the  Leased Premises divided by the useable area of the Building, times 100,
computed  as  follows:

     Premises  Usable  Area:     1325  =  .278  x  100  =  2.78%
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Building  Usable  Area:     47,692  sq.  ft.

     3.03          All  costs and expenses which Tenant assumes or agrees to pay
to  Landlord  under  this Lease shall be deemed additional rent (which, together
with  the Base Rent, is sometimes referred to as the "Rent").  The Rent shall be
paid  to  the  Building manager (or other person) and at such place, as Landlord
may  from  time  to time designate in writing, without any prior demand therefor
and  without  deduction  or  offset,  in  lawful  money  of the United States of
America.

     3.04          In  addition  to the Rent and any other charges to be paid by
Tenant  hereunder,  Tenant  shall reimburse Landlord upon demand for any and all
taxes  payable by Landlord (other than net income taxes) which are not otherwise
reimbursable  under  this  Lease,  whether  or  not  now customary or within the
contemplation  of  the  parties,  where  such  taxes  are  upon,  measured by or
reasonably  attributable  to  (a)  the  cost  or  value  of  Tenant's equipment,
furniture,  fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant,  other than standard tenant improvements made by Landlord, regardless of
whether  title to such improvements is held by Tenant or Landlord; (b) the gross
or  net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of  the  Rent  hereunder;  (c)  the  possession, leasing, operation, management,
maintenance,  alteration,  repair, use or occupancy by Tenant of the Premises or
any  portion thereof; or (d) this transaction or any document to which Tenant is
a  party  creating or transferring an interest or an estate in the Premises.  If
it  becomes  unlawful for Tenant to reimburse Landlord for any costs as required
under  this  Lease,  the Base Rent shall be revised to net Landlord the same net
Rent  after  imposition  of  any tax or other charge upon Landlord as would have
been  payable  to  Landlord  but  for  the  reimbursement  being  unlawful.

     3.05          Landlord  agrees  to  operate the Project in a prudent manner
with a view to controlling costs in a manner consistent with the sound operation
of  the  Project.

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     4.     CONDITION  OF  THE  PREMISES.  Tenant's  taking  possession  of  the
Premises  shall  be  deemed  conclusive  evidence  that as of the date of taking
possession the Premises are in good order and satisfactory condition, except for
such  matters  as  to which Tenant gave Landlord written notice on or before the
Commencement  Date.  No promise of Landlord to alter, remodel, repair or improve
the  Premises  or  the  Building  and  no  representation,  express  or implied,
respecting  any  matter  or  thing  relating to the Premises or Building or this
Lease  (including,  without  limitation,  the  condition  of the Premises or the
Building)  have  been  made  to Tenant by Landlord or its Broker or Sales Agent,
other  than  as  may  be  contained  herein or in a separate exhibit or addendum
signed  by  Landlord  and  Tenant.

     5.     TERM.

     5.01          The  lease  term  shall commence on the Commencement Date and
shall  be  for  a  period  of  15  MONTHS  ending  September  30,  1999.

     6.     USE  OF PREMISES.  The Leased Premises may be used and occupied only
for  offices  and for no other purpose without Landlord's prior written consent.
Landlord  does  not represent nor warrant that the premises can be used for such
purpose,  as  it  is  incumbent  upon  Tenant  to  ascertain  from  the  proper
governmental  authorities  whether  or not the premises can be used for Tenant's
intended  use.  Tenant  shall  promptly comply with all laws, ordinances, orders
and  regulations  affecting  the  Leased Premises and their cleanliness, safety,
occupation  and  use.  Tenant  shall  not commit, or suffer to be committed, any
waste  on  the  Premises,  nor  shall  Tenant  maintain,  commit,  or permit the
maintenance  or  commission of any nuisance, as defined in California Civil Code
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Section  3479,  on the Premises.  This provision shall specifically preclude the
storage in or on the Premises, or release in or about the Premises, of hazardous
materials  as  that  term  is  defined in Federal and California laws, statutes,
rules  and  regulations.

     7.     UTILITIES  INTERRUPTION.  Landlord shall not be liable in damages or
otherwise  for  any  failure or interruption of any utility service, and no such
failure  or  interruption  shall entitle Tenant to terminate this Lease or abate
the  rent  and  other  charges.

     8.     ALTERATIONS,  MECHANICS  LIENS.

     8.01          Alterations  may  not  be made to the Leased Premises without
the prior written consent of Landlord and any alterations of the Leased Premises
except  movable  furniture  and trade fixtures shall at Landlord's option become
part  of  the  realty  and  belong  to  the  Landlord.

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     9.     FIRE  INSURANCE  HAZARDS.

     9.01          No  use  shall  be made or permitted to be made of the Leased
Premises, nor acts done, which will increase the existing rate of insurance upon
the  Building  or  cause  the  cancellation of any insurance policy covering the
Building, or any part thereof, nor shall Tenant sell, or permit to be kept, used
or sold, in or about the Leased Premises, any article which may be prohibited by
the  standard  form  of fire insurance policies.  Tenant shall, at its sole cost
and  expense,  comply  with  any  and  all requirements pertaining to the Leased
Premises of any insurance organization or company, necessary for the maintenance
of reasonable fire and public liability insurance, covering the Leased Premises,
or  the  Building  of  which  it is a part.  Tenant agrees to pay to Landlord as
additional  rent,  any  increase in premiums on policies which may be carried by
Landlord  on  the  Leased  Premises covering damages to the Building and loss of
rent  caused by fire and the perils normally included in extended coverage above
the rates for the least hazardous type of occupancy for industrial, warehousing,
office  and  distribution  operations.

     9.02          Tenant  shall maintain in full force and effect on all of its
fixtures  and  equipment in the Leased Premises a policy or policies of fire and
extended  coverage  insurance  with malicious mischief and theft endorsements to
the  extent  of  at least eighty percent (80%) of their insurable value.  During
the  term  of  this  Lease  the  proceeds  from  any  such policy or policies of
insurance  shall  be  used  for  the  repair  or replacement of the fixtures and
equipment  so  insured.  Landlord  shall  have no interest in the insurance upon
Tenant's  equipment  ad fixtures and will sign all documents necessary or proper
in connection with the settlement of any claim or loss by Tenant.  Landlord will
not  carry  insurance on Tenant's possessions, nor on any leasehold improvements
made by Tenant.  Tenant shall furnish Landlord with a certificate of such policy
within  thirty (30) days of the commencement of this Lease and whenever required
shall  satisfy  Landlord  that  such  policy  is  in  full  force  and  effect.

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     10.     LIABILITY  INSURANCE.  Tenant,  commencing  upon  Tenant's  initial
entry  into  the  premises,  at its own expense, shall provide and keep in force
with companies acceptable to Landlord public liability insurance for the benefit
of  Landlord and Tenant jointly against liability for bodily injury and property
damage  in  the  amount  of  not  less  than One Million Dollars ($1,000,000) in
respect  to injuries to or death of one person and in an amount of not less than
Two Million Dollars ($2,000,000) in respect to injuries to or death of more than
one  person  in  any  one  occurrence,  and  in the amount of not less than Four
Hundred  Ninety-Five  Thousand  Dollars  ($495,000) per occurrence in respect to
damage  to  property,  such  limits  to  be  in  any  greater  amounts as may be
reasonably  indicated by circumstances from time to time existing.  Tenant shall
upon  occupancy  furnish Landlord with a certificate of such policy and whenever
required  shall  satisfy  Landlord that such policy is in full force and effect.
Such  policy  shall  name Landlord as an additional insured and shall be primary
and  non-contributing  with any insurance carried by Landlord.  The policy shall
further  provide  that  it  shall not be canceled or altered without twenty (20)
days'  prior  written notice to Landlord.  Insurance required hereunder shall be
in  companies  rated  A+,  AAA  or  better  in  "Best's  Insurance  Guide."

     11.     INDEMNIFICATION  BY  TENANT.

     11.01     This  Lease  is made on the express condition that Landlord shall
not  be liable for or suffer loss by reason of injury to person or property from
any  cause  (excluding  Landlord's  negligent  act or omission and excluding any
environmental  matters  not  caused  by  Tenant)  in  any way connected with the
condition  or  use of the Leased Premises or the installation or construction of
improvements  or  personal  property  therein,  including without limitation any
liability  for injury to the person or property of Tenant, its agents, officers,
employees or invitees.  Tenant agrees to indemnify Landlord and hold it harmless
from  any and all liability, loss, cost, or obligation on account of, or arising
out  of,  any  such  injury  or  loss.

     11.02     In  case  any  action,  suit  or  proceeding  is  brought against
Landlord  by  reason  of any such occurrence, under the paragraph above, Tenant,
upon  Landlord's  request,  will  at  Tenant's  expense,  resist and defend such
action,  suit  or  proceeding,  or cause the same to be resisted and defended by
counsel  designated  by  the  insurer  whose  policy covers the occurrence or by
counsel  designated  by  Tenant  and  approved  by Landlord.  The obligations of
Tenant  under  this  section  arising  by  reason of any occurrence taking place
during  the  Lease  Term  shall  survive  any  termination  of  this  Lease.

     12.     REPAIRS.

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     12.01     Tenant  shall,  at  Tenant's  sole  cost  and  expense,  keep the
Premises  and  every  part  thereof  in  good  condition  and  repair (except as
hereinafter  provided  with respect to Landlord's obligations) including without
limitation,  the  maintenance,  replacement and repair of any storefront, doors,
window  casements  and  glazing.  Tenant  shall,  upon  the expiration or sooner
termina-tion of this Lease hereof, surrender the Leased Premises to the Landlord
in  good  condition,  broom clean, ordinary wear and tear and damage from causes
beyond  the  reasonable  control  of  Tenant  excepted.  Any  damage to adjacent
premises  caused  by  Tenant's use of the Premises shall be repaired at the sole
cost  and  expense  of  Tenant.

     12.02     Notwithstanding  the  Provisions  of Paragraph 12.01 hereinabove,
Landlord  shall  repair  and  maintain  the  structural  portions  of the Leased
Premises,  including  the  exterior  walls and roof, plumbing, pipes, electrical
wiring  and  conduits, unless such maintenance and repairs are caused in part or
in  whole  by the act, neglect, fault or omission of any duty by the Tenant, its
agents,  servants,  employees,  invitees,  or  any damage caused by breaking and
entering, in which case Tenant shall pay to Landlord the reasonable cost of such
maintenance  and  repairs.  All  costs  and  expenses  of  Landlord  under  this
Paragraph 12.02 shall be Project Operating Costs under Paragraph 3.01.  Landlord
shall  not  be liable for any failure to make any such repairs or to perform any
maintenance  unless  such  failure  shall persist for an unreasonable time after
written  notice  of the need of such repairs or maintenance is given to Landlord
by Tenant.  Except as provided in Article 16 hereof, there shall be no abatement
of  rent and no liability of Landlord by reason of any injury to or interference
with  Tenant's  business  arising from the making of any repairs, alterations or
improvements  in  or  to any portion of the Leased Premises or building of which
the  Leased  Premises  are  a  part,  or  in  or  to fixtures, appurtenances and
equipment  therein.  Tenant  waives  the  right  to  make  repairs at Landlord's
expense  under  any  law,  statute  or  ordinance  now  or  hereafter in effect.

     13.     PARKING  AND  COMMON  AREAS.  Tenant,  for  the  use and benefit of
Tenant,  its  agents, employees, customers, licensees and subtenants, shall have
the  non-exclusive  right  in common with Landlord, and other present and future
owners,  tenants  and  their  agents,  employees,  customers,  licensees  and
subtenants,  to use the Common areas and parking garage adjacent to the building
during  the  entire  term  of this Lease, for ingress and egress, and automobile
parking.

     14.     SIGNS.  The  Tenant  shall  obtain Landlord's approval before signs
are  placed  on  the  exterior  and/or  interior  of  the  Building.

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     15.     ENTRY  BY  LANDLORD.  Tenant  shall  permit Landlord and Landlord's
agents  to  enter  the  Leased Premises after business hours on weekdays, and on
weekends,  for  the  purpose  of  inspecting  the  same  or  for  the purpose of
maintaining  the  Leased  Premises  or  adjacent  premises or for the purpose of
making  repairs, altera-tions, or additions to any portion of same including the
erection and maintenance of such scaffolding, canopies, fences, and props as may
be  required,  or  for  the purpose of posting notices of non-responsibility for
alterations,  additions,  or  repairs without any rebate of rent and without any
liability  to Tenant for any loss of occupation or quiet enjoyment of the Leased
Premises thereby occasioned.  For each of the aforesaid purposes, Landlord shall
at  all  times  have  and retain a key with which to unlock all of the doors in,
upon  and  about  the Leased Premises, excluding Tenant's vaults and safes.  The
tenant  shall not alter any lock or install a new or additional lock or any bolt
on  any  door  of  the  Leased  Premises  without  prior  written consent of the
Landlord.  If  Landlord  shall  give  its consent, the Tenant shall in each case
furnish  the  Landlord  with  a  key  for  any  such  lock.

     16.     DESTRUCTION  OR  DAMAGE.

     16.01     If  the  Premises  or  the  portion of the Building necessary for
Tenant's  occupancy  is damaged by fire, earthquake, act of God, the elements or
other  casualty,  Landlord  shall,  subject  to  the provisions of this Article,
promptly  repair  the  damage,  if  such  repairs can, in Landlord's opinion, be
completed  within  (90) ninety days.  If Landlord determines that repairs can be
completed  within  ninety  (90)  days, this Lease shall remain in full force and
effect,  except  that  if  such  damage  is  not the result of the negligence or
willful  misconduct  of  Tenant  or  Tenant's  agents,  employees,  contractors,
licensees  or invitees, the Base Rent shall be abated to the extent Tenant's use
of  the  Premises is impaired, commencing with the date of damage and continuing
until  completion  of  the  repairs  required of Landlord under Paragraph 16.04.

     16.02.     If  in  Landlord's  opinion,  such  repairs  to  the Premises or
portion  of  the  Building  necessary for Tenant's occupancy cannot be completed
within ninety (90) days, Landlord shall notify Tenant of that opinion in writing
within  thirty (30) days after the date of such fire or other casualty.  In such
event,  Landlord and Tenant may each terminate this Lease unilaterally by giving
the  other  party  written  notice  of  such  termination  within 15 days of the
effective  date of the notice described above, and this Lease shall terminate as
of  the  date  of such fire or casualty.  If neither party notifies the other of
such  termination,  this  Lease shall continue in full force and effect, but the
Base  Rent  shall  be  partially  abated  as  provided  in  Paragraph  16.01.

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     16.03(a)     If  any  other  portion  of the Building or Project is totally
destroyed  or  damaged  to  the extent that in Landlord's opinion repair thereof
cannot  be  completed within ninety (90) days, Landlord may elect upon notice to
Tenant  given  within  thirty  (30)  days  after  the date of such fire or other
casualty,  to  repair  such  damage, in which event this Lease shall continue in
full  force  and effect, but the Base Rent shall be partially abated as provided
in Paragraph 16.01.  If Landlord does not elect to make such repairs, this Lease
shall  terminate  as  of  the  date  of  such  fire  or  other  casualty.

     16.03(b)     If  any  other  such  portion  of  the  Building or Project is
totally  destroyed  or  damaged  to the extent that in Landlord's opinion repair
thereof  cannot  be  completed  within  ninety  (90) days, and Tenant's business
operations are substantially and adversely impacted by such damage, and Landlord
elects to repair such damage, then, nevertheless, Tenant shall have the right to
terminate  this Lease if the substantial adverse impact is not cured by Landlord
within  one  hundred  fifty  (150)  days  of  the date of such fire or casualty.
Tenant  shall  exercise this right by giving written notice to Landlord no later
than  one hundred fifty-five (155) days after the date of such fire or casualty.

     16.04     If  the  Premises are to be repaired under this Article, Landlord
shall  repair  at  its  cost  any  injury or damage to the Building and standard
tenant  improvements  in  the Premises.  Tenant shall be responsible at its sole
cost  and  expense  for  the  repair,  restoration  and replacement of any other
Leasehold  improvements and Tenant's Property.  Landlord shall not be liable for
any  loss  of  business,  inconvenience  or annoyance arising from any repair or
restoration of any portion of the Premises or Building as a result of any damage
from  fire  or  other  casualty.

     16.05     This Lease shall be considered an express agreement governing any
case  of  damage  to or destruction of the Premises or Building by fire or other
casualty,  and  any present or future law which purports to govern the rights of
Landlord  and  Tenant in such circumstances in the absence of express agreement,
shall  have  no  application.  The opinions and determinations of Landlord under
this  Section  16  shall  be  reasonable.

<PAGE>
     17.     ASSIGNMENT AND SUBLETTING.  Tenant shall not either voluntarily, or
by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber
this  Lease or any interest therein, and shall not sublet the Leased Premises or
any  part  thereof,  or any right or privilege appurtenant thereto, or allow any
other  person  (the employees, agents, servants and invitees or Tenant excepted)
to  occupy  or  use  the  Leased  Premises,  or any portion thereof, without the
written  consent  of Landlord first had and obtained, which consent shall not be
unreasonably  withheld.  A  consent to one assignment, subletting, occupation or
use  by  any  other person shall not be deemed to be a consent to any subsequent
assignment,  subletting,  occupation  or use by another persona.  Consent to any
such  assignment  or  subletting shall not relieve Tenant of any liability under
this  Lease.  Any  such  assignment  or subletting without such consent shall be
void,  and  shall, at the option of the Landlord, constitute a default under the
terms  of  this  Lease.

     In  the  event  that  Landlord  shall  consent  to a sublease or assignment
hereunder, Tenant shall pay Landlord reasonable fees, not to exceed One Thousand
Dollars  ($1,000.00),  incurred  in  connection with the processing of documents
necessary  to  giving  of  such  consent  and  assumption  by  the  assignee.

     18.     TENANT'S  DEFAULT.  The  occurrence  of  any  one  or  more  of the
following  events shall constitute a default and breach of this Lease by Tenant:

     A.     The  vacating  or  abandonment  of  the  Premises  by  Tenant.

     B.     The  failure  by  Tenant  to  make  any payment or rent or any other
payment  required  to  be  made  by  Tenant  hereunder,  as  and  when  due.

     C.     The  failure  by  Tenant to observe or perform any of the covenants,
conditions  or  provisions  of  this  Lease  to  be observed or performed by the
Tenant,  other than described in B, above, where such failure shall continue for
a  period  of  fifteen  (15)  days  after  written notice thereof by Landlord to
Tenant;  provided,  however, that if the nature of Tenant's default is such that
more  than  fifteen  (15) days are reasonably required for its cure, then Tenant
shall  not  be deemed to be in default if Tenant commences such cure within said
fifteen  (15)  days  period  and  thereafter  diligently prosecutes such cure to
completion.

     D.     The  making  by  Tenant  of  any  general  assignment  or  general
arrangement  for the benefit of creditors; or the filing by or against Tenant of
a  petition  to have Tenant adjudged a bankrupt, or a petition or reorganization
or  arrangement  under  any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days); or
the  appointment  of a trustee or a receiver to take possession of substantially
all  of  Tenant's assets located at the Premises or of Tenant's interest in this
Lease,  where  possession  is not restored to Tenant within thirty (30) days; or
the  attachment,  execution  or  other  judicial seizure of substantially all of
Tenant's  assets  located at the Leased Premises or of Tenant's interest in this
Lease,  where  such  seizure  is  not  discharged  in  thirty  (30)  days.

<PAGE>
     19.     REMEDIES ON DEFAULT.  In the event of any such default or breach by
Tenant,  Landlord  may  at any time thereafter, with or without notice or demand
and  without  limiting  Landlord  in  the  exercise  of  a right or remedy which
Landlord  may  have  by  reason  of  such  default  or  breach:

     A.     Terminate Tenant's right to possession of the Premises by any lawful
means,  in  which  case  this Lease shall terminate and Tenant shall immediately
surrender  possession of the Premises to Landlord.  In such event Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's  default  including,  but  not  limited  to:  the  cost  of  recovering
possession  of  the  Premises;  expenses  of  reletting,  including  necessary
renovation and alteration of the Premises; reasonable attorney's fees; the worth
at  the  time of award by the court having jurisdiction thereof of the amount by
which  the  unpaid  rent and other charges and adjustments called for herein for
the  balance of the term after the time of such award exceeds the amount of such
loss  for  the  same  period that Tenant proves could be reasonably avoided; and
that portion of the tenant improvements installed by the Landlord for the Tenant
&  applicable  to  the  unexpired  term  of  this lease; and that portion of any
leasing commission paid by Landlord and applicable to the unexpired term of this
Lease.  Unpaid  installments  of rent or other sums shall bear interest from the
date  due  at  the rate of ten percent (10%) per annum.  "Worth" as used in this
provision,  is  computed  by  discount-ing the total at the discount rate of the
Federal  Reserve  Bank  of  San Francisco at the time of the judgment, or award,
plus  one  percent  (1%).

     B.     Maintain  Tenant's  right  to  possession,  in which case this Lease
shall  continue  in  effect  whether  or  not  Tenant  shall  have abandoned the
Premises.  In  such  event,  Landlord  shall  be  entitled  to  enforce  all  of
Landlord's  rights and remedies under this Lease, including the right to recover
the  rent  and any other charges and adjustments as may become due hereunder; or

     C.     Pursue any other remedy now or hereafter available to Landlord under
the  laws  or judicial decisions of the State in which the Premises are located.

     20.     LANDLORD'S  RIGHT TO CURE DEFAULTS.  Landlord may, but shall not be
obligated  to,  cure,  any  anytime, without notice, any default by Tenant under
this  Lease; and whenever Landlord so elects, all costs and expenses incurred by
Landlord  including  without limitation reasonable attorney's fees and expenses,
together  with  interest  on the amount of costs and expenses so incurred at the
maximum  legal  rate  then in effect in the State of California shall be paid by
Tenant  to  Landlord  on  demand.

<PAGE>
     21.     DEFAULT  BY  LANDLORD.  Landlord  shall  not  be  in default unless
Landlord or the beneficiary under any deed of trust fails to perform obligations
required of Landlord within a reasonable time, but in no event later than thirty
(30)  days  after written notice by Tenant to Landlord and to the beneficiary of
any  deed  of  trust  covering  the  Premises  whose name and address shall have
theretofore been furnished to Tenant in writing, specifying wherein Landlord has
failed  to  perform  such  obligation;  provided, however, that if the nature of
Landlord's  obligation  is such that more than thirty (30) days are required for
performance,  then  Landlord  shall  not  be  in  default  if  Landlord  or said
beneficiary  commences  performance  within  such  thirty  (30)  day  period and
thereafter  diligently  prosecutes  the  same  to completion.  In no event shall
Tenant  have the right to terminate this Lease as a result of Landlord's default
and  Tenant's  remedies  shall  be  limited  to  damages  and/or  an injunction.

     22.     ATTORNEY'S  FEES/COLLECTION  CHARGES.  In  the  event  of any legal
action  or proceeding between the parties hereto, reasonable attorney's fees and
expenses  of  the prevailing party in any such action or proceeding may be added
to  the  judgment  therein, including attorney's fees on appeal.  In addition to
the  charges provided for above, Tenant shall pay a charge of $25.00 to Landlord
for  preparation  of  each  demand  for  delinquent  rent.

     23.     SURRENDER OF LEASE NOT MERGER.  The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and  shall,  at  the option of Landlord terminate all or any existing subleases,
and/or  subtenan-cies,  or  may,  at  the  option  of  Landlord,  operate  as an
assignment  to  it  of  any  or  all  of  such  subleases  or  subtenancies.

     24.     CONDEMNATION.     If  any  part  of  the  Leased  Premises  or  the
building  of  which  it  is  a  part,  or  the Center or parking or common areas
therein,  shall  be  taken  or condemned for a public or quasi-public use, and a
part  thereof  remains  which  is  reasonably  suitable  for  Tenant's  purposes
hereunder,  this  Lease shall, as to the part so taken, terminate as of the date
title  shall  vest  in  the  condemnor,  and the rent payable hereunder shall be
equitably  adjusted.  If  all the Leased Premises, or such part thereof be taken
or  condemned  so  that  there does not remain a portion reasonably suitable for
Tenant's  purposes  hereunder,  this  Lease  shall  thereupon  terminate.

<PAGE>
     25.     WAIVER.     The  waiver  by  Landlord  of  any  breach of any term,
covenant,  or  condition  herein contained shall not be deemed to be a waiver of
such  term,  covenant,  or condition or any subsequent breach of the same or any
other  term, covenant, or condition herein contained.  The subsequent acceptance
of  rent  hereunder  by  Landlord  shall  not  be  deemed  to be a waiver of any
preceding  breach  by  Tenant of any term, covenant, or condition of this Lease,
other  than  the  failure  of  Tenant  to pay the particular rental so accepted,
regardless  of  Landlord's  knowledge  of  such  preceding breach at the time of
acceptance  of  such  rent.

     26.     EFFECT  OF  HOLDING OVER.     If Tenant should remain in possession
of  the  Leased  Premises  after  the  expiration  of the Lease Term and without
executing  a  new  Lease, then such holding over shall be construed as a tenancy
from  month-to-month, subject to all the conditions, provisions, and obligations
of  this  Lease  insofar as the same are applicable to a month-to-month tenancy;
provided,  however, that Base Rent during any such holding over shall be 150% of
the  Base  Rent in effect immediately prior to the expiration of the Lease term.

     27.     TENANT'S  STATEMENT.     Tenant  shall at any time and from time to
time  upon  not  less  than  five  (5)  days  prior written notice from Landlord
execute,  acknowledge  and  deliver  to  Landlord  a  statement  in  writing (a)
certifying  that  this  Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this Lease
as  so  modified  is in full force and effect), and the date to which the rental
and +other charges are paid in advance, if any, and (b) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of the Landlord
hereunder, or specifying such defaults if any are claimed, and (c) setting forth
the  date  of commencement of rents and expiration of the term hereof.  Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all
or  any  portion  of  the  real  property  of  which  the  Premises  are a part.

     28.     TENANT'S  FINANCIAL  INFORMATION.     Tenant shall promptly furnish
to  Landlord,  from  time  to  time,  financial  statements  and annual reports,
reflecting Tenant's current financial condition, whenever requested by Landlord.

     29.     RELATIONSHIP  OF THE PARTIES.     Nothing contained herein shall be
deemed  or  construed  by the parties hereto nor by any third party, as creating
the  relationship  of  principal and agent or of partnership or of joint venture
between  the  parties  hereto,  it  being understood and agreed that neither the
method  of computation of rent nor any other provision contained herein, nor any
acts  of  the  parties  hereto, shall be deemed to create any relationship other
than  Landlord  and  Tenant.

<PAGE>
     30.     RULES  AND  REGULATIONS.     Tenant  shall  faithfully  observe and
comply  with  all reasonable rules and regulations that Landlord shall from time
to  time  promulgate and/or modify (see Exhibit "C" attached hereto).  The rules
and regulations shall be binding upon the Tenant upon delivery of a copy of them
to  Tenant.  Landlord  shall not be responsible to Tenant for the nonperformance
of any said rules and regulations by any other tenants or occupants.  Said rules
may include (1) the restricting of employee parking, and (2) regulation of waste
removal.

     31.     GENERAL  PROVISIONS.

     31.01     Plats  and Riders.  Clauses, plats, riders and addendums, if any,
               ------------------
affixed  to  this  Lease  are  a  part  hereof.

     31.02     Venue.  Landlord  will  execute  this  Lease and will receive the
               ------
rent  and  other  payments  at Landlord's office.  Therefore the county in which
Landlord's  office is located is hereby deemed to be a proper place of venue for
transitory  actions.

     31.03     Marginal  Headings.  The  marginal headings and article titles to
               -------------------
the articles of this Lease are not a part of this Lease and shall have no effect
upon  the  construction  or  interpreta-tion  of  any  part  hereof.

     31.04     Time.  Time  is  of the essence of this Lease and each and all of
               -----
its  provisions  in  which  performance  is  a  factor.

     31.05.     Successors  and  Assigns.  The  covenants and condi-tions herein
                -------------------------
contained,  subject  to  the  provisions as to assignment, apply to and bind the
heirs,  successors, executors, administrators and assigns of the parties hereto.

     31.06.     Recordation.  Neither  Landlord  nor  Tenant  shall  record this
                ------------
Lease,  but a short form memorandum hereof may be recorded at the request of the
Landlord.

     31.07.     Quiet  Possession.  Upon  Tenant  paying  the  rent  reserved
                ------------------
hereunder  and  observing  and  performing  all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have  quiet  posses-sion  of the Premises for the entire term hereof, subject to
all  the  provisions  of  this  Lease.

     31.08.     Prior  Agreements.  This Lease contains all of the agreements of
                ------------------
the  parties  hereto  with  respect  to  any matter covered or mentioned in this
Lease,  and  no prior agreements or understand-ing pertaining to any such matter
shall  be  effective for any purpose.  No provision of this Lease may be amended
or  added  to  except by an agreement in writing signed by the parties hereto or
their  respective  successors in interest.  This Lease shall not be effective or
binding  on  any  party  until  fully  executed  by  both  parties  hereto.

<PAGE>
     31.09.     Inability  to  Perform.  This  lease and the obliga-tions of the
                ----------------------
Tenant  hereunder  shall  not  be  affected  or impaired because the Landlord is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such  inability  or delay is caused by reason of strike, labor troubles, acts of
God,  or  any  other  cause  beyond  the  reasonable  control  of  the Landlord.

     31.10.     Partial  Invalidity.  Any  provision  of  this Lease which shall
                --------------------
prove  to  be  invalid,  void,  or  illegal  shall  in  no  way affect,impair or
invalidate  any other provisions hereof and such other provision shall remain in
full  force  and  effect.

     31.11.     Cumulative  Remedies.  No  remedy or election hereunder shall be
                ---------------------
deemed  exclusive  but  shall,  wherever  possible, be cumulative with all other
remedies  at  law  or  in  equity.

     31.12.     Choice  of Law.  This Lease shall be governed by the laws of the
                ---------------
State  of  California.

     31.13.     Sale  of  Premises by Landlord.  In the event of any sale of the
                -------------------------------
Premises  by  Landlord,  Landlord  shall  be  and  is  hereby entirely freed and
relieved  of  all  liability  under any and all of its covenants and obligations
contained  in  or  derived from this Lease arising out of any act, occurrence or
omission  occurring  after  the  consummation  of  such  sale;  but  only if the
purchaser at such sale or any subsequent sale of the Premises shall have assumed
and  agreed  to  carry  out any and all of the covenants and obliga-tions of the
Landlord  under  this  Lease.

     31.14.     Subordination, Attornment.  Upon request of the Landlord, Tenant
                --------------------------
will in writing subordinate its rights hereunder to the lien of any mortgage, or
deed  of  trust,  to  any bank, insurance company or other lender (including the
Building owner and its successors and assigns) now or hereafter in force against
the premises, and to all advances made or hereafter to be made upon the security
thereof,  provided  that  such company or institution agrees to honor this Lease
for  the  full  term  hereof  so  long  as  Tenant  is not in default hereunder.

     In  the  event any proceedings are brought for foreclosure, or in the event
of the exercise of the power of sale under any mortgage or deed of trust made by
the  Landlord  covering  the  Premises, the Tenant shall attorn to the purchaser
upon  any  such foreclosure or sale and recognize such purchaser as the Landlord
under  this  Lease.

<PAGE>
     31.15.     Notices.  All  notices  and demands which may be or are required
                --------
or  permitted  to  be  given  by either party on the other hereunder shall be in
writing.  All notices and demands by the Landlord to the Tenant shall be sent by
United  States  Mail,  postage prepaid, addressed to the Tenant at the Premises,
and  to  the address hereinbelow, or to such other place as Tenant may from time
to  time  designate in a notice to the Landlord.  All notices and demands by the
Tenant  to  the  Landlord  shall be sent by United States Mail, postage prepaid,
addressed  to  the  Landlord  at the address set forth herein, and to such other
person  or  place as the Landlord may from time to time designate in a notice to
the  Tenant.

     To  Landlord  at:  NINE  C  CORPORATION
                        900  Veterans  Blvd.  #540
                        Redwood  City,  CA  94063

     To  Tenant  at:    Penn  Octane  Corporation
                        900  Veterans  Blvd.  #240
                        Redwood  City,  CA  94063

     32.     SERVICES  TO  PREMISES.  Notwithstanding  anything  herein  to  the
contrary,  the  Landlord  shall provide water, power, heating, air conditioning,
janitorial  and other services, including but not limited to floor waxing, trash
removal, window washing and all facilities regarding maintenance of the exterior
of  the  building,  including  gardening, subject to payment or reimbursement by
Tenant  as  provided  herein.

     Exhibit  "B"  hereto  more completely sets forth the types and frequency of
service  and  the  minimum  acceptable  service  standard  levels.

     33.     VALIDITY  OF  LEASE.     The  Lease  shall  be effective only after
Tenant  has  received  a  fully  executed  copy  of  this  Lease  from Landlord.

     34.  TOXIC/HAZARDOUS  MATERIALS  CONSIDERATION.  Upon  request  Lessor will
make available a Toxic Report that shows Benzene under the garage area.  This is
being  monitored  by the County Health Department at this time.  Lessor believes
it  does  not  present  a  hazard.

<PAGE>
     THE  PARTIES HAVE EXECUTED THIS LEASE THE DATE AND YEAR SET     BELOW THEIR
SIGNATURE:


     LANDLORD                         TENANT
     --------                         ------

     NINE-C  CORPORATION               PENN  OCTANE  CORPORATION



By:____________________________     By:____________________________
     James  E.  Burney                   J.  B.  Richter

Title:  President                   Title:  Principal           -


Date:__________________________     Date:__________________________


     By:___________________________

     J.B.  Richter,  an  individual


Address:
Date: