Exhibit 10.10


    
      

    

    Exhibit
      10.10



    AGREEMENT

    


    


    THIS
      AGREEMENT (this “Agreement”) is entered into as of this 15th day of November
      2005 by and between Penn Octane Corporation, a Delaware corporation
      (the “Company” or “Penn Octane”) and Jerome B. Richter (“Richter”), as
      follows:

    


    Recitals

    


    WHEREAS,
      in April 1997, Richter exercised warrants to purchase 2,200,000 shares of the
      Company’s common stock at a price of $1.25 per share, the exercise price for
      which was paid with $22,000 in cash and $2,728,000 by a promissory note, bearing
      interest at the rate of 8.25% per annum, payable to the Company. Richter pledged
      certain of his Penn Octane shares to the Company to secure the original
      promissory note. 

    


    WHEREAS,
      in April 2000, Richter delivered to the Company a new promissory note
      (the “New Note”), in replacement of his original promissory note. The New
      Note has a principal amount of $3,196,693, representing the original principal
      amount and unpaid interest, and had an interest rate of 10% per annum.


    


    WHEREAS,
      under the terms of the New Note, Richter is not required to pay interest after
      September 2000 provided that he continue to provide a personal guaranty on
      behalf of the Company to RZB Finance LLC. The New Note was originally due in
      April 2001. Pursuant to the terms of a Pledge and Security Agreement dated
      April 11, 2000 (the “Pledge and Security Agreement”), Richter pledged
      1,000,000 shares of his Penn Octane common stock to the Company in order to
      secure the New Note.

    


    WHEREAS,
      the New Note was amended in November 2001 to extend the maturity date until
      October 2003 and to reduce the interest rate to the prime rate.

    


    WHEREAS,
      in July 2002, the Company agreed to waive any interest due under the New Note
      during any fiscal year provided that Richter guaranty at least $2,000,000 of
      the
      company’s indebtedness during that fiscal year. The interest rate was increased
      to prime plus 1%. The Company also agreed to extend the maturity date until
      the
      expiration date of Richter’s employment agreement with the Company, July 29,
      2005. 

    


    WHEREAS,
      in May 2005, Richter retired and resigned as an officer and director of the
      Company and its affiliates.

    


    WHEREAS,
      in order to secure his limited recourse guaranty of $1,800,000 of the Company’s
      indebtedness to certain investor noteholders (the “Noteholders”), Richter has
      pledged 2,000,000 shares (the “Pledged Shares”) of his Penn Octane common stock
      (including the 1,000,000 shares pledged to the Company) and 250,000 common
      units
      (the “Pledged Units”) of Rio Vista Energy Partners L.P. (including 125,000 units
      pledged to the Company) distributed to Richter on September 30, 2004, by
      the Company with respect to the Pledged Shares.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    WHEREAS,
      in view of Richter’s retirement and his contributions to the Company, the
      Company wishes to amend the New Note and provide for certain additional
      agreements with Richter.

    


    Agreement

    


    NOW,
      THEREFORE, in consideration of the foregoing and the covenants and agreements
      contained herein, the parties agree as follows:

    


    


    Section
      1: Restatement of Promissory Note

    


    1.1         
      Amendment
      and Restatement of New Note.
      The New
      Note is hereby amended and restated to read, in full, as set forth in
Exhibit
      A
      to this
      Agreement (the “Restated Note”), including without limitation the following
      provisions:

    


    1.1.1 The
      maturity date of the New Note shall be extended to July 29, 2007 (the “New
      Maturity Date”).

    


    1.1.2 The
      interest rate on the New Note shall be increased from prime plus one percentage
      point to prime plus two percentage points.

    


    1.1.3 The
      Company will continue to waive interest provided that Richter guarantees debt
      of
      the Company to any person in an amount equal to at least
      $1,800,000.

    


    1.1.4 Richter
      shall continue to guaranty up to $1,800,000 in indebtedness of the Company,
      if
      requested by the Company, until all obligations under the New Note are
      satisfied.

    


    1.2         
      Effect
      of Restated Note.
      The
      Restated Note replaces and supersedes the New Note in its entirety.

    


    Section
      2: Additional Agreements

    


    2.1         
      Delivery
      of Pledged Units.
      Not
      later than October 28, 2005, Richter shall deliver the Pledged Units to the
      Company as security for Richter’s obligations to the Company and for the
      Company’s obligations to the Noteholders. Following receipt of the Pledged
      Units, the Company shall deliver the Pledged Units to the collateral agent
      for
      the Noteholders. 

    


    2.2         
      Return
      of Pledged Shares and Pledged Units.
      Upon
      the satisfaction of the Company’s obligations to the Noteholders and the release
      of the Pledged Shares and the Pledged Units by the collateral agent for the
      Noteholders, the Company shall retain not more than 1,000,000 of the Pledged
      Shares and 125,000 of the Pledged Units, to be held in accordance with the
      terms
      of the Pledge and Security Agreement, and shall return the balance of the
      Pledged Shares and the Pledged Units to Richter.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    2.3         
      Payment
      Upon Foreclosure.
      If and
      to the extent the Noteholders foreclose on the Pledged Shares and/or the Pledged
      Units due to default by the Company in its obligations to the Noteholders,
      the
      Company shall pay Richter the fair market value of the Pledged Shares and the
      Pledged Units. The Company may offset any payment obligation to Richter under
      this Section 2.3
      against
      any remaining obligation of Richter under the Restated Note or any other payment
      obligation of Richter to the Company. The fair market value of the Pledged
      Shares and the Pledged Units shall be equal to the higher of the fair market
      value on the date of this Agreement and the date of any foreclosure by the
      Noteholders. For purposes of this Section 2.3,
      fair
      market value means, as of any date, the value of Penn Octane common stock and
      Rio Vista common units determined as follows: 

     

    (i)         
      If
      the
      common stock or common units are listed on any established stock exchange or
      a
      national market system, including without limitation The Nasdaq Stock Market,
      its fair market value will be the closing sales price for such stock (or the
      closing bid, if no sales were reported) as quoted on such exchange or system
      for
      the day of determination; 

     

    (ii)         If
      the
      common stock or common units are regularly quoted by a recognized securities
      dealer but selling prices are not reported, the fair market value of a share
      of
      common stock or a common unit will be the mean between the high bid and low
      asked prices for the common stock or the common units for the day of
      determination; or 

     

    (iii)        In
      the
      absence of an established market for the common stock or common units, the
      fair
      market value will be determined in good faith by the board of directors of
      Penn
      Octane.

    


    2.4         
      Partial
      Discount.
      Subject
      to Richter’s compliance with all provisions of this Agreement and the Restated
      Note, the Company shall discount the principal amount of the Restated Note
      by an
      amount equal to $1,500,000, on the New Maturity Date, resulting in a reduced
      principal amount of $1,696,693, plus accrued interest not waived pursuant to
      Section 1.1.3.

    


    


    Section
      3: Restrictive Covenants

    


    3.1         
      Conflict
      of Interest.
      During
      any period when Richter provides consulting services to the Company and/or
      its
      affiliates: (a) Richter shall not directly or indirectly engage in any
      employment, occupation, consulting, or other business activity which the Company
      determines in good faith to be in competition with the Company or its
      affiliates; and (b) Richter shall not usurp or take advantage of any such
      business activity without first offering the opportunity to the
      Company.

    


    3.2         
      Non-Solicitation
      of Employees and Contractors.
      For two
      (2) years after the date of this Agreement, Richter shall not, either alone
      or
      in concert with others, solicit, entice or divert, or attempt to solicit, entice
      or divert, any of the Company’s employees or independent contractors to cease
      providing services to the Company. 

    


    3.3         
      Non-Solicitation
      of Customers and Suppliers.
      For two
      (2) years after the date of this Agreement, Richter shall not, directly or
      indirectly, either alone or in concert with others, solicit, entice, work for,
      or in any way divert or take away any customers or suppliers of, or other third
      party that engaged in negotiations with, the Company or its affiliates that
      Richter had directly worked with during the twelve (12) months preceding
      termination of Richter’s employment or consulting relationship with the Company.
      Richter acknowledges that all of the foregoing limited restrictions are intended
      to protect the Company’s and its affiliates’ confidential and proprietary
      information and trade secrets, and are not intended to and do not substantially
      affect Richter’s right and ability to engage in his business, trade or
      profession.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    3.4.         
      Equitable
      Remedies.
      Richter
      acknowledges that irreparable injury will result to the Company from violation
      of any of the terms of this Agreement, specifically those identified under
      Sections
      3.1, 3.2 and 3.3.
      Therefore, Richter expressly agrees that the Company shall be entitled, in
      addition to damages and any other remedies provided by law, to an injunction
      (without notice and without the necessity of posting a bond) or other equitable
      remedy respecting such violation or continued violation.

    


    


    Section
      4: Miscellaneous

    


    4.1.         
      Assignment.
      This
      Agreement may not be assigned or otherwise transferred by Richter, or by
      operation of law, without the prior written consent of the Company. The Company
      may assign or transfer this Agreement to any affiliate, without the consent
      of
      Richter. The Company’s assignment of this Agreement to any affiliate shall in no
      way affect Richter’s obligations under this Agreement.

    


    4.2         
      Waiver
      and Agreements.
      No
      waiver, amendment or modification of any provision of this Agreement shall
      be
      effective unless consented to by both parties in writing. No failure or delay
      by
      either party in exercising any right, power or remedy under this Agreement
      shall
      operate as a waiver of any such right, power or remedy. No waiver of any breach
      of any covenant or provision contained herein shall be deemed a waiver of any
      preceding or succeeding breach thereof or of any other covenant or provision.
      No
      extension of time for performance of any obligation or act shall be deemed
      an
      extension of the time for performance of any other obligation or
      act.

    


    4.3         
      Notices.
      Any
      notice or communication provided for or required by this Agreement to be in
      writing shall be: (a) hand delivered, (b) sent by certified mail with full
      postage, or (c) sent by overnight courier service with proof of delivery. Any
      notice so sent shall be deemed received upon the earlier of an actual receipt
      or
      three business days after proper posting. The addresses of the parties shall
      be
      as indicated below, but the parties may change their notice addresses by giving
      written notice of such change to the other party at its current address in
      accordance with this Section.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to Richter:

            	
              Jerome
                B. Richter

            
	 	
              335
                Tomahawk Drive

            
	 	
              Palm
                Desert, California 92211

            
	 	 
	
              If
                to Company:

            	
              Penn
                Octane Corporation 

            
	 	
              Attn:
                Chief Financial Officer

            
	 	
              55-730
                Enfield Lane, Bldg. D

            
	 	
              Palm
                Desert, California 92211

            
	 	 
	 	
              With
                a copy to:

            
	 	 
	 	
              Kevin
                W. Finck, Esq.

            
	 	
              Two
                Embarcadero Center, Suite 1670

            
	 	
              San
                Francisco, California 94111

            


    

    


    4.4         
      Professional
      Fees.
      In the
      event of the bringing of any action, suit, or arbitration by a party hereto
      against another party hereunder by reason of any breach of any of the covenants,
      agreements, or provisions arising out of this Agreement, the prevailing party
      shall be entitled to recover all costs and expenses of that action, suit, or
      arbitration, at trial, in arbitration, or on appeal, and in collection
      therewith, including but not limited to, reasonable attorneys' fees, accounting,
      and other professional fees resulting therefrom.

    


    4.5         
      Legal
      and Equitable Remedies.
      Due
      to
      Richter’s knowledge of and access to the Company’s proprietary information, the
      Company shall have the right to enforce this Agreement and any of its provisions
      by injunction, specific performance or other equitable relief, without bond,
      and
      without prejudice to any other rights and remedies that the Company may
      otherwise have to enforce this Agreement.

    


    4.6         
      Arbitration.
      Any
      controversy or claim arising out of or relating to this Agreement (other than
      claims for preliminary injunctive relief or other prejudgment or equitable
      remedies) shall be settled by binding arbitration in Los Angeles, California
      (at
      the election of the party commencing the action) in accordance with the
      Commercial Rules of the American Arbitration Association then in effect, and
      judgment upon an award rendered in such arbitration may be entered in any court
      having jurisdiction thereof.

    


    BOTH
      PARTIES HAVE READ AND UNDERSTAND THIS SECTION
      4.6,
      WHICH
      DISCUSSES ARBITRATION. THE PARTIES UNDERSTAND THAT BY SIGNING THIS AMENDMENT,
      THEY AGREE TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF RELATING TO, OR IN
      CONNECTION WITH THIS AMENDMENT, 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 CONSULTANT AND THE COMPANY. 

    


    4.7         
      Severability.
      Should
      any one or more of the provisions of this Agreement be determined to be illegal
      or unenforceable, all other provisions of the Agreement shall be given effect
      separately from those provisions of this Agreement so determined and the other
      provisions shall not be affected by the illegality or unenforceability.



    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    4.8          
      Representation
      by Counsel; Interpretation.
      Each
      party to this Agreement acknowledges that such party has caused this Agreement
      to be reviewed and/or had the opportunity to have it approved by legal counsel
      of such party’s own choice. Richter acknowledges and agrees that the Law Offices
      of Kevin Finck have represented the Company, not Richter, in connection with
      the
      preparation and execution of this Agreement and that the Law Offices of Kevin
      Finck may continue to represent the Company in matters related to this Agreement
      and otherwise. Richter has been advised to obtain independent legal counsel
      in
      such connection. The Company acknowledges and agrees that the Law Offices of
      Kevin Finck has represented and may continue to represent Richter in matters
      unrelated to this Agreement. The parties hereby waive any claim of conflict
      of
      interest based on the foregoing. The parties have negotiated the provisions
      of
      this Agreement, and any presumption that an ambiguity contained in this
      Agreement shall be construed against the party that caused this Agreement to
      be
      drafted shall not apply to the interpretation of this Agreement.

    


    4.9          
      Governing
      Law and Venue.
      This
      Agreement has been entered into in the State of California and shall be governed
      by, interpreted under, and construed and enforced in accordance with the
      internal laws of California. All claims, arbitrations and lawsuits in connection
      with this Agreement must be brought in Los Angeles County, California. Richter
      and Company hereby agree to this jurisdiction and venue.

    


    4.10         Entire
      Agreement.
      This
      Agreement, and the agreements and instruments referenced herein, constitute
      the
      entire agreement between the parties hereto with respect to the subject matter
      hereof and supersedes any and all prior or contemporaneous agreements,
      understandings, discussions, and/or commitments of any kind with respect to
      the
      subject matter hereof. This Agreement may not be amended or supplemented, nor
      may any right hereunder be waived, except in writing signed by each of the
      parties.

    


    4.11         Further
      Assurances.
      The
      parties shall, from time to time, promptly execute and deliver such further
      instruments, documents and papers and perform such further acts as may be
      necessary or proper to carry out and effect the terms of this
      Agreement.

    


    4.12         Counterparts.
      This
      Agreement 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. Facsimile signatures shall have the same legal effect as original
      signatures.

    


    {Signatures
      on following page}


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement as of the date first written
      above.

    


    
      
        	
                "The
                  Company"

              	 	
                "Richter"

              	 
	 	 	 	 	 
	
                PENN
                  OCTANE CORPORATION

              	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                By:

              	/s/
                Ian T. Bothwell	 	/s/
                Jerome B. Richter	 
	 	
                Ian
                  T. Bothwell,

              	 	
                Jerome
                  B. Richter

              	 
	 	
                Chief
                  Financial Officer

              	 	 	 


      


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    AMENDED
      AND RESTATED PROMISSORY NOTE

    


    


    
      	
              $3,196,693.00

            	
              Palm
                Desert, California

            
	 	
              November 15,
                2005

            


    

    


    This
      Amended and Restated Promissory Note (this “Restated Promissory Note”) amends,
      restates and replaces that certain Promissory Note of Jerome B. Richter dated
      April 11, 2000 (the “Prior Promissory Note”).

    


    FOR
      VALUE
      RECEIVED, Jerome B. Richter, an individual residing at 335 Tomahawk Drive,
      Palm Desert, California 92211 (the "Borrower"), hereby promises to pay to the
      order of Penn Octane Corporation, a Delaware corporation (the "Lender"), at
      its
      offices located at 55-730 Enfield Lane, Bldg. D, Palm Desert, California 92211,
      or at such other place as the Lender shall designate, the principal amount
      of
      Three Million One Hundred Ninety-Six Thousand Six Hundred Ninety-Three Dollars
      ($3,196,693.00) on or before July 29, 2007 (the “Maturity Date”). The Borrower
      shall pay interest on the unpaid principal amount hereof from the date hereof
      until paid, at the prime rate of Bank of America, N.A., plus two (2) percentage
      points, to be paid in arrears on the Maturity Date; provided however, that
      Borrower will not be required to pay or accrue interest so long as Borrower
      continues to provide a personal guaranty on behalf of the Lender of debt of
      the
      Lender to any person in an amount equal to at least $1,800,000 (the "Guaranty").
      Interest will commence immediately upon the termination of the Guaranty.
      Borrower shall continue to guaranty up to $1,800,000 in indebtedness of the
      Lender, if requested by the Lender, until all obligations under this Restated
      Promissory Note are satisfied.

    


    Should
      the indebtedness represented by this Restated Promissory Note or any part
      thereof be collected at law or in equity or in bankruptcy, receivership or
      other
      similar court proceedings or this Restated Promissory Note be placed in the
      hands of attorneys for collection before or after maturity, the Borrower, its
      successors and assigns, agree to pay, in addition to the principal and interest
      due and payable hereon, reasonable attorneys' and collection fees.

    


    If
      the
      Borrower shall fail to make payment of principal or interest on this Restated
      Promissory Note when due, and if such default is not cured within ten (10)
      days
      thereafter, or if the Borrower shall become insolvent or a voluntary or
      uncontroverted petition shall be filed under the Federal Bankruptcy Code or
      other similar Federal or state law dealing with arrangements for the relief
      of
      creditors with respect to the Borrower (in each case, an "Event of Default"),
      and in any such event, the holder shall have the right without notice to the
      Borrower to declare this Restated Promissory Note with accrued interest hereon
      to be immediately due and payable (whether or not then due by the stated terms
      hereof), whereupon the same shall become and be immediately due and payable
      without presentment, demand, protest or notice of any kind, all of which are
      hereby expressly waived by the Borrower.


    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    


    This
      Note
      is secured by and entitled to the benefits of a Pledge and Security Agreement
      dated April 11, 2000, pursuant to which Borrower's obligations under the
      Prior Promissory Note and this Restated Promissory Note are secured by one
      million (1,000,000) shares of Penn Octane Corporation common stock owned by
      Borrower and by one hundred twenty-five thousand (125,000) Rio Vista Energy
      Partners L.P. common units owned by Borrower.

    


    No
      waiver
      by the holder of any breach of any covenant of the Borrower herein contained
      or
      any term or condition hereof shall be construed as a waiver of any subsequent
      breach of the same or of any other covenant, term or condition
      herein.

    


    This
      Restated Promissory Note shall be deemed to have been made under, and in all
      respects shall be governed by and construed in accordance with, the laws of
      the
      State of California.

    


    
 

    
      	 	 
	 	
              Jerome
                B. Richter

            


    

     

    A-2