Document:

Exhibit 10.05

                                EMPLOYEE CONTRACT

     THIS  AGREEMENT  the ("Agreement") entered into and effective this 29th Day
of  July  2002, between Penn Octane Corporation, the ("Corporation"), and Jerome
B. Richter, ("Employee"), 335 Tomahawk Drive, Palm Desert, CA 92211.

                                    WITNESETH

     WHEREAS,  Employee has indicated his interest in renewing his employment as
Chief  Executive  Officer  of  the  Company  and the Company has determined that
Employee  has  the requisite skills and experience and that it desires to engage
Employee  for  this  purpose;

     NOW,  THEREFORE,  for  and  in consideration of the compensation to be paid
Employee  hereunder  and the mutual promises, covenants, and undertakings herein
contained, Employee and Corporation hereby agree as follows:

     SECTION 1. Term. The initial term of this Agreement shall be for the period
                ----
commencing  July 29, 2002 and continuing until July 29, 2005. Upon expiration of
the  initial  term,  this  Agreement  will  continue  year  to  year.

     SECTION  2.  Responsibilities.  During the term of this Agreement, Employee
                  ----------------
will,  in  the capacity of the Chief Executive Officer (CEO), remain as a member
of  the  Board  of  the  Corporation  (Chairman),  as  well as CEO of all of the
Corporation's existing and future subsidiaries. As CEO he will be responsible of
managing  all  existing  and  future  investments of the Corporation, as well as
presiding  over  and  implementing  the  corporations  policies,  direction  and
administration.

     SECTION  3.  Employee  Benefits.
                  ------------------

     (a)     It  is understood and agreed that Employee shall act as an Employee
of  the Corporation in the undertaking of this Agreement.  With the execution of
this  Agreement,  it  is  expressly  understood  and  stipulated  that  an
employer-employee  relationship will exist between the Corporation and Employee.
With  the  exception  of  the  duties created by this Agreement, it is agreed by
Employee  and  the Corporation that neither party is the agent of the other, and
neither  has  authority  to  bind  or  obligate  the  other party in any way not
beneficial  to  the  Corporation  and/or  the  Employee.

     (b)     Employee  will  be  eligible  for  all  employee  benefits, and the
Corporation  may  make  deductions from Contributions Act (F.I.C.A.), insurance,
bonds  or other subscription of any kind.  Additionally, the Corporation will be
responsible  for  collecting  taxes and/or assessments which may be attributable
under Federal or California law to the compensation paid to Employee.

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     (c)     Employee  will be granted, upon execution of this Agreement, a term
life  insurance policy commensurate with the term of this agreement, equal to $5
million.

     SECTION  4.  Compensation.
                  ------------

     (a)  Base  Compensation.  For providing his services, the Corporation shall
          ------------------
          pay  Employee  a monthly salary equal to $25,000 (Twenty Five Thousand
          Dollars).
     (b)  Incentive Bonus Program. On an annual basis, Employee will be entitled
          -----------------------
          to a minimum bonus payment equal to $100,000 plus five percent (5%) of
          Net  Income Before Taxes (but after required interest payments) of the
          Corporation.
     (c)  Incentive  Stock Options. Prior to December 31, 2002, the Compensation
          ------------------------
          Committee  of  the  Board  of  Directors shall recommend and the Board
          shall  approve an Employee stock option grant for an amount of options
          terms  of  vesting  and  exercise that are commensurate with its prior
          practices. In addition, the Corporation shall include Employee's stock
          options  in  any  re-pricing  of  stock  options  undertaken  by  the
          Corporation.
     (d)  Forgiveness  Of  Interest On Stock Loan. Pursuant to the existing note
          ---------------------------------------
          with  employee,  dated  April  11, 2000, as amended, during any fiscal
          year  of  the  Corporation, the Corporation shall forgive any interest
          due  from  Employee  pursuant  to  Employee's  Stock  Loan  due to the
          Corporation,  provided that Employee guarantees at least $2 million of
          the  Corporation's  indebtedness during any period of that fiscal year
          of  the  Corporation.
     (e)  Forgiveness  Of  Stock  Loan.  Pursuant  to  the  existing  note  with
          ----------------------------
          employee,  dated  April  11,  2000,  as amended, the existing Employee
          Stock  Loan due to the Corporation shall be forgiven in the event that
          either  of  the  following  two  conditions  are  realized:

          i.   The  share  price  of the Corporation's common stock trades for a
          --   period  of  90  days at a blended average price equal to 2x's the
               closing  price  of  the Corporation's common stock on the date of
               this  agreement,  or
          ii.  The  Corporation  is sold for a price per share (or an asset sale
          ---  realizes  revenues  per share) equal to 2x's the closing price of
               the  Corporation's  common  stock  on the date of this agreement.
     (f)  Unpaid  prior  compensation.  In  connection  with Employee's services
          ---------------------------
          prior  to  the  date  of this Agreement, Employee shall be entitled to
          receive  unpaid  compensation  earned  but not received as of July 28,
          2002  consisting  of:
          i.   A  bonus  of $100,000 plus five percent (5%) of Net Income Before
          --   Taxes  (but  after required interest payments) of the Corporation
               for the period August 1, 2001 through the date of this Agreement.
          ii.  The bonus above shall be partially paid through the offset of any
          ---  net  advances  made to Employee as of the date of this Agreement.
          iii. Any  remaining  amounts  due to Employee from (f)(i.) above shall
          ---- not be paid until Employee's $200,000 note to the Corporation has
               been  repaid.
          iv.  Any accrued but unpaid salary through the date of this Agreement.
          ---

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               Employee  is  not  entitled  to any other compensation related to
               services  performed  prior  to  the  date  of  this  Agreement
     (g)  Reimbursement  of  expenses.  Employee  shall  be  reimbursed  for all
          ---------------------------
          expenses  incurred in connection with performing services on behalf of
          the  Corporation.  Employee shall be required to provide documentation
          for  such  expenses  in  accordance  with  the  Corporation's  expense
          reimbursement  policies.

          The Corporation further agrees that it will reimburse Employee for any
          expenses  related  to  the  travel  of  Employee's  wife  to accompany
          Employee  during  any  period  in which the proper care for Employee's
          wife  cannot  be  arranged.

     SECTION  5.  The  Corporation  and  Employee hereby expressly stipulate and
agree  that  the  post-contractual  restraints agreed upon herein are reasonably
necessary  to  protect  the  business  and  goodwill of the Corporation upon the
termination  of  this  Agreement.

     SECTION  6.  Covenant  Against  Competition:  Court  Ordered  Modification.
                  -------------------------------------------------------------

     (a)     Employee  agrees  that, until one year from the termination of this
agreement,  he  will  not participate in any business venture that competes with
the  Corporation  without  the  expressed written permission of the Corporation.

     (b)     Confidentiality of Information.  Employee acknowledges that, in the
             ------------------------------
course of performing services for the Corporation, he may receive or be privy to
certain producer, end user or transporting pipeline client lists, trade secrets,
programs,  lists  of customer or trading accounts, business records or audits of
the  Corporation,  corporate  insider  information,  proprietary  financing
structures,  and  other  confidential  information  and knowledge concerning the
business  of the Corporation, its corporate parent, stockholders or subsidiaries
(herein  collectively  referred  to as the "Confidential Information") which the
Corporation  desires  to  protect.  Employee  understands  that the Confidential
Information  is  confidential  and  he  covenants  and  agrees not to reveal the
Confidential  information  to  anyone,  directly  or  indirectly,  outside  the
Corporation  so  long  as  the confidential or secret nature of the Confidential
information shall continue.  Employee further agrees that he will at no time use
the  Confidential  information  in  competing  with  the  Corporation.  Upon
termination  of  this  agreement,  Employee  shall surrender the Corporation all
papers,  documents,  writings, and other property produced by him or coming into
his  possession  by  or through his relationship with the Corporation (including
computer  programs  or information derived form Corporation's computer database)
and  Employee  agrees  that  all  such  materials  shall at all times remain the
property  of  the  Corporation.

     SECTION  7. Indemnity. Corporation hereby covenants and agrees to indemnify
                 ---------
and hold harmless Employee, (hereinafter referred to as the "Indemnified Party")
from  any and all suits, actions or claims of any character, type or description
made  for  or  in account of any injuries, damages alleged, or amounts allegedly
owed  as  a result of claims, demands, costs or judgments against it arising out
of  or  relating  to,  whether  directly  or  indirectly,  the  performance

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of  services  hereunder  by  Employee. Notwithstanding anything to they contrary
contained  herein,  this indemnity shall apply notwithstanding any negligence or
alleged  negligence on the part of the Indemnified Party. Indemnified Party may,
at  its  option,  conduct  the defense in any such third party action arising as
described  herein,  and Corporation agrees to fully cooperate with such defense.

     SECTION  8.  Enforcement: Attorney's Fees. If Employee must resort to legal
                  ----------------------------
action in order to enforce any of the terms of this Agreement, Employee shall be
entitled to recover the costs of such action, including, but not limited to, all
legal fees any court costs associated with such legal proceedings.

     SECTION  9.  Notices.  All  notices,  requests,  consents,  and  other
                  -------
communications  regarding this Agreement shall be in writing and shall be deemed
to  have been delivered on the dated personally delivered or on the date mailed,
postage  prepaid, by certified mail, return receipt requested, to the respective
parties  as  follows:

                        If  to  the  Corporation:

                        Mr.  Jerome  B.  Richter
                        Chairman  of  the  Board
                        Penn  Octane  Corporation
                        77-530  Enfield  Lane,  Bldg  D
                        Palm  Desert,  CA  92211

Provided,  however,  that  any party shall have the right to change such party's
address  for  notice  hereunder  to  any location by the giving of notice to the
other  party  in  the  manner  set  forth  above.

     SECTION  10.  Severability.  Whenever  possible,  each  provision  of  this
                   ------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable  law and if any provision of this Agreement shall be prohibited by or
invalid  under applicable law, such provision shall be ineffective to the extent
of  such  prohibition and invalidity, without invalidating the remainder of such
provision  or  the  remaining  provisions  of  the  Agreement.

     SECTION  11. Assignability. This Agreement is not assignable by Employee to
                  -------------
any  other  person,  partnership,  firm,  corporation  or other recognized legal
entity,  except  with  the  written  consent  of  the  Corporation.

     SECTION  12.  Governing Law. This Agreement shall be construed and enforced
                   -------------
in  accordance  with any governed by the laws of the State of California and the
United  States  of  America.

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<PAGE>
     SECTION  13. Captions. The section and paragraph headings of this Agreement
                  --------
are  for reference purposes only and shall not effect in any way the meaning and
interpretation  of  this  Agreement.

     SECTION  14.  Entire  Agreement  Amendment.  This Agreement constitutes the
                   ----------------------------
entire  Agreement  between  the  parties respecting the services of Employee and
there  are  not  representations, warranties, Agreements, or commitments between
the  parties  hereto  except  as set forth herein. This Agreement may be amended
only  by  an  instrument  in  writing  executed by the Corporation and Employee.

     SECTION  15. Execution. This Agreement may be executed in multiple original
                  ---------
counterparts,  each  of  which  shall  be  deemed  an original, but all of which
together  shall  constitute  the  same  instruments.

     SECTION  16.  Binding  Effect.  This  Agreement  is  for the benefit of the
                   ---------------
Corporation  and  Employee  and  shall  be  binding  upon and enforceable by and
against  their successors, assigns, respective heirs, donees, pledges, devisees,
transferees,  and  representatives.

     SECTION  17.  Waiver.  The waiver of any condition or breach of any term or
                   ------
condition  of this Agreement shall not be deemed to constitute the waiver of any
other  condition  or  breach  of the same or any other term or condition of this
agreement.

     SECTION  18.  Survival  of  Covenants  and  Conditions.  The  provisions of
                   ----------------------------------------
Sections 6, 7, 8 and 9 hereof shall survive the termination of this Agreement.

IN  WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by
its  duly  authorized officer, and Employee has executed this Agreement, in each
case  as  of  the date first above written.  This Agreement is to be executed in
duplicate  counterparts,  each  of  which  shall  be  considered  an  original.

PENN  OCTANE  CORPORATION

By:/s/  Emmett  Murphy                              /s/Jerome  Richter
   -------------------                              ------------------
                                                              EMPLOYEE
Name:                                               Date
     -------------------------                          ------------------------

Title:
      ------------------------

Dated:
      ------------------------

                                        5
<PAGE>EXHIBIT 10.06

                        EQUIPMENT ACQUISITION AGREEMENT
                        -------------------------------

     THIS  EQUIPMENT  ACQUISITION  AGREEMENT  (hereinafter  referred  to  as the
"Agreement")  is  effective  the  18th  day of October, 2002 by and between PENN
OCTANE  CORPORATION,  INC.,  a  Delaware corporation (hereinafter referred to as
"POC") and PENN WILSON CNG, INC., a California corporation, on the one hand, and
B&A ECO-HOLDINGS, INC., a Delaware corporation (hereinafter referred to as "B&A"
or  "Buyer") and IAN T. BOTHWELL (hereinafter referred to as "Bothwell"), on the
other  hand.

                                    RECITALS
                                    --------

     A.     B&A  desires  to  transfer, and POC desires to acquire, that certain
equipment  set  forth  in  this  Agreement, on the terms and conditions provided
herein,  as  payment in full of the remaining balance on that promissory note in
the  amount  of  $300,000 in which POC is the payee and B&A and Bothwell are the
makers  (the "$300,000 Note") and payment in full of that promissory note in the
amount  of  $498,000  in  which  Bothwell is the maker and POC is the payee (the
"$498,000  Note").

     B.     The  equipment, further described herein, is currently owned by B&A,
some  which  was  acquired  by  B&A  from  POC  and  CNG  pursuant to that asset
acquisition  agreement  dated  April  15,  1999,  as amended (the "1999 Purchase
Agreement").  The  1999 Purchase Agreement consisted of a sale of certain assets
to B&A in exchange for two promissory notes - the $300,000 Note and a promissory
note  in the amount of $900,000 in which B&A was the maker and POC was the payee
(the  "$900,000  Note"), a stock pledge and security agreement by Bothwell dated
April  15, 1999 (the "Security Agreement") and two (2) UCC-1 security filings in
the  acquired  assets.

     C.     B&A  and  Bothwell each have knowledge and experience related to the
industry  and  have determined that this transaction is in their respective best
interest.

     D.     POC  and CNG  each  have  knowledge and experience  related to  the
industry  and  have determined that this transaction is in their respective best
interest.

     NOW,  THEREFORE, IN CONSIDERATION OF the mutual covenants, representations,
and  warranties  contained  in  this  Agreement,  and  other  good  and valuable
consideration,  the  receipt  and  adequacy of which is hereby acknowledged, the
parties  hereto  agree  as  follows:

                                    AGREEMENT
                                    ---------

                          SECTION 1. SALE OF EQUIPMENT
                                     -----------------

          1.1  Agreement  To  Sell.  Upon  the  terms  and subject to all of the
               -------------------
conditions  contained  herein,  B&A hereby agrees to sell, assign, transfer, and
deliver  to  POC on October 18, 2002 (the "Closing Date"), and POC hereby agrees
to purchase and accept from B&A on the Closing Date, the Equipment (as described
in  Section 1.2 herein). B&A shall deliver at the Closing Date appropriate bills
    -----------
of  sale,  assignments, or other documents of conveyance necessary to effectuate

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or  perfect  the  transfer  of  title  to the Equipment to POC, on and as of the
Closing  Date,  in  form  and substance reasonably satisfactory to POC and POC's
counsel.

          1.2 Description of Equipment. For purposes of this Agreement, the term
              ------------------------
"Equipment"  shall mean only that equipment described on the attached Exhibit A,
which  is incorporated herein by this reference, and all of the right, title and
interest  associated  therewith,  including  any  and all rights B&A may have to
designs,  plans, inventions or technology associated with the equipment existing
on  and  as  of  the  Closing  Date.

           SECTION 2. LIABILITIES ASSUMED AND LIABILITIES NOT ASSUMED
                      -----------------------------------------------

     2.1  Liabilities Assumed.  POC does not and will not assume or be obligated
          -------------------
to satisfy any liabilities, or to perform any obligations or commitments of B&A,
associated  with  the  Equipment.

                   SECTION 3. PURCHASE PRICE AND OTHER ISSUES
                              -------------------------------

     3.1     Purchase Price.  In return for the transfer of the Equipment by B&A
             --------------
to  POC,  POC  and CNG shall: (a) forgive and terminate the remaining balance of
the $300,000 Note; (b) forgive and terminate the UCC-1 filings filed as security
for  the  1999 Purchase Agreement; (c) consider all of the obligations under the
Security  Agreement  satisfied  and  release  the  pledged  assets and all other
collateral from Bothwell and B&A related to the 1999 Purchase Agreement; and (d)
forgive  and  terminate  the  $498,000  Note.

     3.2     Promissory  Note.  POC  and CNG acknowledge  payment in full by B&A
             ----------------
of  the  $900,000  Note in late year 2000 and receipt of prior payments totaling
$100,000  on  the  $300,000  Note  upon  the  completion  of  the  transactions
contemplated  in  this Agreement. CNG acknowledges receipt of payment in full of
all  amounts  due  to  it pursuant to the 1999 Purchase Agreement and waives any
claim  it  may  have  against POC regarding the Equipment.  In exchange for said
waiver,  POC  agrees to waive its right of reimbursement from CNG for those past
and  future attorneys' fees and costs incurred by POC, on behalf of CNG, related
to  the  Omnitrans  litigation  and  appeal(s).

     3.3     Sales  and  Use  Taxes, Personal Property Taxes.  All sales and use
             -----------------------------------------------
taxes  imposed  by California or any other state or taxing authority as a result
of  the sale of the Equipment hereunder shall be paid by B&A at the Closing Date
to  the  proper  taxing  authorities.  POC  will  assume  responsibility for the
personal  property  taxes  assessed  on  the  Equipment beginning tax year 2003.
Bothwell  acknowledges  that POC has made no representation to him as to his tax
liability  as  a result of this transaction. Bothwell voluntarily hereby assumes
and  agrees  to  pay  any and all personal taxes imposed upon him as a result of
this  transaction.

               SECTION 4. SELLER'S REPRESENTATIONS AND WARRANTIES
                          ---------------------------------------

     B&A,  as the Seller, and Bothwell hereby represents and warrants to POC and
CNG  as  follows:

     4.1  Authority.  B&A has full power and authority to enter into and execute
          ---------
this  Agreement  and  to  carry out the transactions contemplated hereby, and no
further  action  is  required by B&A to make this Agreement binding upon it.  At

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the  Closing,  this  Agreement  shall  be  a valid and binding agreement of B&A,
enforceable  in  accordance  with  its  terms, except as such enforcement may be
limited  by  bankruptcy, insolvency, or similar laws affecting creditors' rights
generally  or  by  the  scope  of  equitable  remedies  which  may be available.

     4.2  Title  To  Acquired  Assets.  All  Equipment  is,  and  will be on the
          ---------------------------
Closing Date, owned by B&A, and will be eligible for transfer to POC.  As of the
Closing  Date,  POC will obtain good title to the Equipment upon delivery of the
executed  bill  of sale, attached hereto as Exhibit B and incorporated herein by
reference,  and  the  consummation  of  the  transactions  contemplated  by this
Agreement,  free  of  any  and  all  encumbrances  and  liens.  B&A and Bothwell
represent  and  warrant that the Equipment, that other than moving the Equipment
from  its  prior  location at the time of the 1999 Purchase Agreement to the its
current  location, the Equipment has not been altered or used since its purchase
from  POC  and  CNG  pursuant  to  the 1999 Purchase Agreement. B&A and Bothwell
represent  and warrant that the Equipment is in that condition described in that
Appraisal  dated  October  17,  2002 performed and prepared by Arthur Lloyd, LLC
(the  "Appraisal"),  a  copy  of  which  is  attached and incorporated herein as
Exhibit  C,  and  is  being  delivered  as-is,  where-is.

     4.3  No Consents.  No consent, approval, or other action of any third party
          -----------
is  required  to  be  obtained  by  B&A  and  Bothwell  in  connection  with the
transactions  contemplated  by  this  Agreement.  To  the  best  of  B&A's  and
Bothwell's  knowledge, the consummation of the transactions contemplated by this
Agreement  will  not  conflict with, or result in a breach of, or default (or an
event  which,  with  or  without  due  notice  or  lapse of time, or both, would
constitute  a  default)  under  the  terms,  conditions,  or  provisions  of any
agreement  to  which  B&A or Bothwell is a party or by which it and/or he may be
bound,  or  any judgment, order, injunction, decree, law, regulation, or rule of
any  court,  agency,  or  other governmental authority, or any debt, obligation,
lease,  commitment, license, permit, contract, or other agreement to which Buyer
or  Bothwell  is  a  party  or  by  which  it  and/or  he  may  be  bound.

     4.4  No  Options.  No options to acquire the Equipment have been previously
          -----------
granted  by  B&A  to  any  other person or entity not a party to this Agreement.

     4.5  Material Misstatements or Omissions.  To the best of B&A's and Buyer's
          -----------------------------------
knowledge,  no  representation  or warranty by B&A or Bothwell contained in this
Agreement, and no document or certificate furnished or to be furnished to POC or
CNG  in  connection  herewith  or  with  the  transactions  contemplated by this
Agreement,  taken as a whole, contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statement of fact contained
herein  or  therein  not  misleading.

     4.6     Continued  Cooperation.  B&A  agrees  to  cooperate and execute and
             ----------------------
deliver  such  further instruments or documents as POC may reasonably require in
order  to  carry out the terms of this Agreement and consummate the transactions
contemplated  herein.

     4.7     Delivery.  B&A and Bothwell agree that the Equipment will remain at
             --------
its current location as set forth in the Appraisal.

             SECTION 5. REPRESENTATIONS AND WARRANTIES OF POC & CNG
                        -------------------------------------------

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     POC,  as Buyer, and CNG hereby represent and warrant to B&A and Bothwell as
follows:

     5.1  Authority.  This  Agreement  has  been duly authorized by the Board of
          ---------
Directors  of POC and CNG, and no further action is necessary on the part of POC
or CNG to make this Agreement valid and binding upon them.  At the Closing, this
Agreement  shall be a valid and binding agreement of POC and CNG, enforceable in
accordance  with  its  terms,  except  as  such  enforcement  may  be limited by
bankruptcy,  insolvency or similar laws affecting creditors' rights generally or
by  the  scope  of  equitable  remedies  which  may  be  available.

     5.2  No  Violation  by  Buyer.  To the best of POC's knowledge, neither the
          ------------------------
execution  nor  delivery  of  this  Agreement, nor compliance with the terms and
provisions  hereof  by  POC  will  breach  any  statute  or  regulation  of  any
governmental  authority  regulating  or  affecting  POC's  business  which could
materially and adversely affect the transactions contemplated hereunder.

     5.3.  No  Consents.  To  the best of POC's and CNG's knowledge, no consent,
           ------------
approval,  or  other  action  of  any  third party is required to be obtained by
either  of  them  in  connection  with  the  transactions  contemplated  by this
Agreement.

                        SECTION 6. B&A'S INDEMNIFICATION
                                   ---------------------

     B&A  and  Bothwell shall, jointly and severally, indemnify, defend and hold
harmless POC against and in respect to claims, demands, losses, costs, expenses,
obligations,  liabilities,  damages,  recoveries  and  deficiencies  including
penalties, interest and attorney fees that POC incurs or suffers that: (a) arise
from any breach of their representations, warranties, covenants or agreement set
forth  in  this  Agreement;  (b)  relate  to  or  arise  from events, incidents,
occurrences,  acts  or omissions by B&A and/or Bothwell related to the Equipment
that  began  or  occurred  prior  to  the  Closing  Date;  or  (c) are debts and
obligations  of  B&A  and/or  Bothwell  not  assumed  by  POC.

                        SECTION 7. POC'S INDEMNIFICATION
                                   ---------------------

     POC  will indemnify, defend and hold harmless B&A against and in respect to
claims,  demands,  losses,  costs,  expenses, obligations, liabilities, damages,
recoveries and deficiencies including penalties, interest and attorney fees that
B&A  incurs or suffers that arise from any material breach of, or failure by POC
to  substantially  perform, any of its representations, warranties, covenants or
agreement  set  forth  in this Agreement or that relate to or arise from events,
incidents, occurrences, acts or omissions by POC relating to the Equipment after
the  Closing  Date.

                          SECTION 8. GENERAL PROVISIONS
                                     ------------------

     8.1     Representation  by  Legal  Counsel.  The  parties  hereto agree and
             ----------------------------------
acknowledge that the Law Offices of Kevin W. Finck have acted and shall continue
to  act  as  counsel  to POC and CNG at their discretion of the Company and that
such legal counsel has not provided representation on behalf of Bothwell or B&A.
in  connection  with this Agreement. In addition, the parties hereto acknowledge
that  said legal counsel has not been asked to, nor has it attempted to, provide
tax  advice  regarding  the  proposed  transaction.

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<PAGE>
Bothwell  and  B&A  also acknowledges that he and it have had the opportunity to
consult  with legal counsel to review this Agreement prior to its execution, and
by  signature  hereto  have  either  done so or waived such right to do so. Each
party  further  acknowledges  that  he  or  it  signs  this Agreement freely and
voluntarily  with  full  knowledge  of  the  terms and effect of this Agreement.

     8.2     Notices. All notices, requests,  demands  or  other  communications
             -------
required or permitted under this Note shall be in writing and shall be deemed to
have duly given or made on the date of service if served personally on the party
to whom notice is to be given, on the date of transmission if sent by facsimile,
telex,  telecopier  or  telegraph,  or  on  the fifth (5th) day after mailing if
mailed  to  the  party  to  whom  notice  is  to  be given, by first class mail,
registered or certified, postage prepaid, properly addressed as follows:

If  to  POC  and/or  CNG:               Penn  Octane  Corporation,  Inc.
                                        c/o  Jerome  Richter,  President
                                        77530  Enfield Lane, Suite D
                                        Palm Desert, California  92211

With  a  copy  to:                      Kevin  W.  Finck,  Esq.
                                        Law Offices of Kevin W. Finck
                                        Two  Embarcadero  Center,  Suite  1670
                                        San  Francisco,  California  94111

If  to  B&A:                            B&A  Eco-Holdings,  Inc.
                                        840  Apollo  Street,  Suite  313
                                        El  Segundo,  California  90245

If  to  Bothwell:                       Ian  Bothwell
                                        840  Apollo  Street,  Suite  313
                                        El  Segundo,  California  90245

     8.3     Invalidity.  Should  any  term of this Agreement or the application
             ----------
thereof to any person or circumstances be held to be invalid or unenforceable by
a  court  of  competent  jurisdiction,  the  remainder of this Agreement, or the
application  of  such  term  or provision to persons or circumstances other than
those  as  to  which  it is held invalid or unenforceable, shall not be affected
thereby,  and each such remaining term and provision shall be valid and enforced
to  the  fullest  extent  permitted  by  law.

     8.4     No  Waiver.  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.

     8.5     Modifications.  This  Agreement,  and  the  obligations  contained
             -------------
herein, may not be amended, altered, or modified except in writing signed by the
parties  hereto.

     8.6     Entire  Agreement. This Agreement and, its Exhibits, constitute the
             -----------------
entire  agreement  among  the  parties hereto with respect to the subject matter
hereof,  and  supersede all prior and contemporaneous agreements or negotiations
with  respect  to  said  subject  matter,  both  written  or oral, including the

                                        5
<PAGE>
$300,000  Note,  the  $498,000  Note,  the  $900,000  Note,  the  1999  Purchase
Agreement,  as  amended  and supplemented,  the Security Agreement and the prior
Bills  of  Sale  related  thereto.

     8.7     Successors.  This  Agreement  shall be binding upon and shall inure
             ----------
to the benefit of permitted successors and assigns of the parties hereto.

     8.8     Attorneys'  Fees.  In  the  event  of  the  bringing of any action,
             ----------------
proceeding,  arbitration  or  suit  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  or  suit, or at trial,
arbitration  or  on  appeal, and in collection of judgment, including reasonable
attorneys'  fees,  accounting,  and other professional fees resulting therefrom.

     8.9     Authority.  The undersigned signatories each warrants his authority
             ---------
to  enter  into and execute this Agreement on behalf of the party for whom he or
she  is  signing.

     8.10     Construction.  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 laws of that State. All parties acknowledge that
they  have  had  substantial  input  in  the  drafting  of  the final Agreement.
Consequently,  the parties acknowledge that the statutory inferences referred to
in  California  Civil  Code  section  1654  shall have no effect in the event of
dispute  upon  interpretation.

     8.11     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.

                                        6
<PAGE>
     IN  WITNESS WHEREOF, this Agreement is effective on the date and year first
above  written.

"POC"

PENN OCTANE CORPORATION, INC.,
a Delaware corporation
By: /s/ Jerome Richter
   ----------------------
   Jerome Richter, President

By: /s/ Jorge Bracamontes
   ------------------------
   Jorge Bracamontes
   Executive Vice President/Secretary

"CNG"

PENN WILSON CNG, INC.
a California corporation

By:  /s/ Jerome Richter
   ----------------------
   Jerome Richter, President

By:  /s/  Jorge  Bracamontes
   -------------------------
   Jorge Bracamontes, Vice President

"B&A"

B&A  ECO-HOLDINGS,  INC.
a  Delaware  corporation

By:  /s/  Ian  T.  Bothwell
   ------------------------
     Ian T. Bothwell
     Chief Executive Officer

By:________________________________

Print Name:________________________

Title: ____________________________

"Bothwell"

:  /s/ Ian T. Bothwell
----------------------
IAN  T.  BOTHWELL

                                        7
<PAGE>
                                    EXHIBIT A
                                    ---------
                                    EQUIPMENT

1)  Two  Henderson  Compressors  (rebuilt),  each  of  which  have the following
equipment  specifications:

     []        a  Sound  Barrier(TM)  Enclosure,  including  Skid  Base

     []        a  Henderson  Compressor  Frame
          -    20  PSIG  Suction,  325  SCFM  Capacity
          -    4,000  PSIG  Discharge
          -    Toshiba  Motor:  200HP,  Class  1,  Div.  1  SF  115
          -    Energy  Industries,  Inc.  Heat  Exchanger-Compressor  Driven
          -    Non-Lubricated  Cylinders
          -    XEBC  Suction  Filter  (optional)
          -    (2)  Finite  Discharge  Filters

     []         a  Recovery  System
          -    200  PSIG,  160  Gallon  Capacity

     []        a  Penn  Wilson  Control  System
          -    Station  Fault  Dial-Out  System
          -    Remote  Monitoring  'Real-Time'  Interface
          -    GE  Fanuc  90-30  PLC  Control  System
          -    Operator  Interface  for  Fault  Detection,  System  Operating
               Conditions,
          -    Pressure,  Temperature,  Flowrate  and  Hours
          -    Motor  Starters
          -    Card  Reader  Interface  System
          -    Panel  Purge  System  (for  Division  2  Requirements)
          -    Vortex  Panel  Cooling  System

     []        a  Penn  Wilson  SMARTFILL(TM)  Natural  Gas  Dispenser
          -    Two  hoses  each
          -    Temperature  compensated  to  either  300  PSI @70oF or 3,600 PSI
               @70oF
          -    Universal  Epsco  Model  33  Computer  Display  Heads
          -    Dispenser  Pit  (for  added  safety)

     []        a Penn Wilson SMARTFILL(TM) Combination Buffer Cascade
               Sequence Panel

2)  One  Gemini  Compressor  (new),  which  has  the  following  equipment
specifications:
     []        a  Sound  Barrier(TM)  Enclosure,  including  Skid  Base

     []        two  Gemini  H302  Frame  Natural  Gas  Compressors
          -    300  PSIG  Suction,  560  SCFM  Capacity  Each
          -    Total  Package  Capacity:  1,120  SCFM
          -    4,500  PSIG  Discharge
          -    General  Electric  Motors:  125HP,  TEFC,  SF  115
          -    GEA  Rainey  Heat  Exchangers
          -    Compressors  Capable  of  Independent  or  Tandem  Operations
          -    XEBC  Suction  Filter
          -    Nowatta  Discharge  Filter

     []        a  Recovery  System
          -    500  PSIG,  400  Gallon  Capacity

<PAGE>
                               EXHIBIT A (cont'd)
                               ------------------
                                    EQUIPMENT

     []        a  Penn  Wilson  Control  System
          -    Station  Fault  Dial-Out  System
          -    Remote  Monitoring  'Real-Time'  Interface
          -    GE  Fanuc  90-30  PLC  Control  System
          -    Operator  Interface  for  Fault  Detection,  System  Operating
               Conditions,
          -    Pressure,  Temperature,  Flowrate  and  Hours
          -    Motor  Starters
          -    Card  Reader  Interface  System
          -    Panel  Purge  System  (for  Division  2  Requirements)

     []        two  Penn  Wilson  SMARTFILL(TM)  Natural  Gas  Dispensers
          -    Two  hoses  each
          -    Temperature  compensated  to  either  300  PSI @70oF or 3,600 PSI
               @70oF
          -    Universal  Epsco  Model  33  Computer  Display  Heads
          -    Dispenser  Pit  (for  added  safety)

     []        a  Penn  Wilson  SMARTFILL(TM) Combination Buffer Cascade
               Sequence Panel

3) All rights, title and interest that B&A may have in and to the design, plans,
inventions  or  technology  associated  with  the  said  equipment.

<PAGE>
                                    EXHIBIT B
                                    ---------

                                  BILL OF SALE

<PAGE>
                                    EXHIBIT C

                                    APPRAISAL

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]